-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J1xlPpPV6gEQAncO7PuQIyNicVkDFVvCyybi1mF75ep2zWp0VEo0rE3iREYKx6qy eYk2924SuVFLXJF/zchwQQ== 0000016099-98-000004.txt : 19980414 0000016099-98-000004.hdr.sgml : 19980414 ACCESSION NUMBER: 0000016099-98-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980413 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LUBYS CAFETERIAS INC CENTRAL INDEX KEY: 0000016099 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 741335253 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08308 FILM NUMBER: 98592126 BUSINESS ADDRESS: STREET 1: 2211 NE LOOP 410 STREET 2: P O BOX 33069 CITY: SAN ANTONIO STATE: TX ZIP: 78265-3069 BUSINESS PHONE: 2106549000 FORMER COMPANY: FORMER CONFORMED NAME: CAFETERIAS INC DATE OF NAME CHANGE: 19810126 10-Q 1 TEXT OF 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 1-8308 LUBY'S CAFETERIAS, INC. ______________________________________________________________________________ (Exact name of registrant as specified in its charter) Delaware 74-1335253 __________________________ ________________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2211 Northeast Loop 410, P. O. Box 33069 San Antonio, Texas 78265-3069 ______________________________________________________________________________ (Address of principal executive offices) (Zip Code) 210/654-9000 ______________________________________________________________________________ (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ ____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock: 23,270,675 shares outstanding as of February 28, 1998 (exclusive of 4,132,392 treasury shares) Part I - FINANCIAL INFORMATION Item 1. Financial Statements. LUBY'S CAFETERIAS, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Six Months Ended February 28, February 28, 1998 1997 1998 1997 ____ ____ ____ ____ (Amounts in thousands except per share data) Sales $123,204 $118,830 $247,876 $241,117 Costs and expenses: Cost of food 30,889 28,654 62,746 59,043 Payroll and related costs 37,402 35,268 76,712 71,279 Occupancy and other operating expenses 37,866 36,324 75,874 73,230 General and administrative expenses 5,232 5,617 10,506 11,180 _______ _______ _______ _______ 111,389 105,863 225,838 214,732 Income from operations 11,815 12,967 22,038 26,385 _______ _______ _______ _______ Interest expense (1,259) (955) (2,525) (1,608) Other income, net 222 453 903 754 Income before income taxes 10,778 12,465 20,416 25,531 Provision for income taxes 3,837 4,061 7,268 8,961 _______ _______ _______ _______ Net income $ 6,941 $ 8,404 $ 13,148 $ 16,570 _______ _______ _______ _______ Net income per share - basic and assuming dilution $.30 $.36 $.57 $.71 Cash dividends per share $.20 $.20 $.40 $.40 Average number of shares outstanding 23,271 23,380 23,270 23,498 See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued). LUBY'S CAFETERIAS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) February 28, August 31, 1998 1997 ____ ____ (Thousands of dollars) ASSETS Current assets: Cash and cash equivalents $ 3,730 $ 6,430 Trade accounts and other receivables 683 510 Food and supply inventories 5,939 4,507 Prepaid expenses 4,530 3,586 Deferred income taxes 1,258 937 ________ ________ Total current assets 16,140 15,970 Property held for sale 9,650 12,680 Investments and other assets - at cost 8,592 6,111 Property, plant, and equipment - at cost, net 334,383 334,017 ________ ________ $368,765 $368,778 ________ ________ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable - trade $ 11,200 $ 13,584 Dividends payable 4,654 4,653 Accrued expenses and other liabilities 22,090 25,038 Income taxes payable 1,453 2,406 ________ ________ Total current liabilities 39,397 45,681 Long-term debt 86,000 84,000 Deferred income taxes and other credits 20,646 20,257 Shareholders' equity: Common stock 8,769 8,769 Paid-in capital 26,945 26,945 Retained earnings 279,915 276,140 Less cost of treasury stock (92,907) (93,014) ________ ________ Total shareholders' equity 222,722 218,840 ________ ________ $368,765 $368,778 ________ ________ See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued). LUBY'S CAFETERIAS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended February 28, 1998 1997 ____ ____ (Thousands of dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,148 $ 16,570 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,422 9,793 Decrease in accrued expenses and other liabilities (2,948) (5,915) Other, net (7,778) (4,695) ________ ________ Net cash provided by operating activities 12,844 15,753 ________ ________ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposal of property held for sale 3,568 1,052 Purchases of land held for future use (948) (11,608) Purchases of property, plant, and equipment (10,899) (30,617) ________ ________ Net cash used in investing activities (8,279) (41,173) ________ ________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock under stock option plan 42 2,775 Proceeds from long-term debt 454,000 486,000 Reductions of long-term debt (452,000) (432,000) Purchases of treasury stock --- (18,260) Dividends paid (9,307) (9,450) ________ ________ Net cash provided by (used in) financing activities (7,265) 29,065 ________ ________ Net increase (decrease) in cash and cash equivalents (2,700) 3,645 Cash and cash equivalents at beginning of period 6,430 2,687 ________ ________ Cash and cash equivalents at end of period $ 3,730 $ 6,332 ________ ________ See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued). LUBY'S CAFETERIAS, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the Six Months Ended February 28, 1998 and 1997 (UNAUDITED)
Total Common Stock Paid-in Retained Shareholders' Issued Treasury Capital Earnings Equity ______ ________ ________ ________ _____________ (Thousands of dollars) Balance at August 31, 1996 $8,769 $(77,415) $26,945 $267,374 $225,673 Net income for the period --- --- --- 16,570 16,570 Common stock issued under employee benefit plans, net of shares tendered in partial payment and including tax benefits --- 4,195 --- (1,055) 3,140 Cash dividends --- --- --- (9,336) (9,336) Purchases of treasury stock --- (17,102) --- --- (17,102) ______ ________ _______ ________ ________ Balance at February 28, 1997 $8,769 $(90,322) $26,945 $273,553 $218,945 ______ ________ _______ ________ ________ Balance at August 31, 1997 $8,769 $(93,014) $26,945 $276,140 $218,840 Net income for the period --- --- --- 13,148 13,148 Common stock issued under employee benefit plans, net of shares tendered in partial payment and including tax benefits --- 107 --- (65) 42 Cash dividends --- --- --- (9,308) (9,308) ______ ________ _______ ________ ________ Balance at February 28, 1998 $8,769 $(92,907) $26,945 $279,915 $222,722 ______ ________ _______ ________ ________ See accompanying notes.
Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued). LUBY'S CAFETERIAS, INC. NOTES TO FINANCIAL STATEMENTS February 28, 1998 (UNAUDITED) Note 1: The accompanying unaudited financial statements are presented in accordance with the requirements of Form 10-Q and, consequently, do not include all of the disclosures normally required by generally accepted accounting principles. All adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods have been made. All such adjustments are of a normal recurring nature. The results for the interim period are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and footnotes included in Luby's annual report on Form 10-K for the year ended August 31, 1997. The accounting policies used in preparing these consolidated financial statements are the same as those described in Luby's annual report on Form 10-K. Note 2: During the quarter ended February 28, 1998, the company adopted Statement of Financial Accounting Standards No. 128, Earnings Per Share. Statement 128 replaced the previously reported primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. Earnings per share amounts for all periods have been restated to conform to the requirements of Statement 128. Part I - FINANCIAL INFORMATION (continued) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources _______________________________ Cash and cash equivalents decreased by $2,700,000 from the end of the preceding fiscal year to February 28, 1998. All capital expenditures for fiscal 1998 are being funded from cash flows from operations, cash equivalents, and long-term debt. Capital expenditures for the six months ended February 28, 1998, were $11,847,000. As of February 28, 1998, the company owned four undeveloped land sites and one Water Street joint venture restaurant was under construction. During fiscal year 1997 the company purchased 897,500 shares of its common stock at a cost of $19,918,000, which are being held as treasury stock. To complete the treasury stock purchases and fund capital expenditures, the company required external financing and borrowed funds under a $125,000,000 line-of-credit agreement. As of February 28, 1998, the amount outstanding under this line of credit was $86,000,000. The company believes that additional financing from external sources can be obtained on terms acceptable to the company in the event such financing is required. Results of Operations _____________________ Quarter ended February 28, 1998 compared to the quarter ended February 28, 1997. ______________________________________________________________________________ Sales increased $4,374,000, or 3.7%, due to the addition of five new cafeterias in fiscal 1998 and 27 in fiscal 1997, and due to a slight increase in average sales volume at cafeterias opened over one year. This increase was partially offset by the closing of five units, two in August 1997, two in September 1997, and one in January 1998. Cost of food increased $2,235,000, or 7.8%, due primarily to the increase in sales. As a percentage of sales, food costs were higher versus the prior year due to higher commodity prices resulting from poor weather conditions. Payroll and related costs increased $2,134,000, or 6.1%, due primarily to the increase in sales and the higher federal minimum wage which increased first on October 1, 1996, and again on September 1, 1997. Occupancy and other operating expenses increased $1,542,000, or 4.2%, due primarily to the increase in sales. This increase was partially offset by lower preopening expenses due to fewer new store openings as compared to the prior year. General and administrative expenses decreased $385,000, or 6.9%, due primarily to a lower profit sharing contribution estimated for fiscal 1998 as compared to the estimate of the contribution for the same period in the prior year. The decline was partially offset by higher legal and professional fees associated with the company's strategic planning project. Interest expense increased $304,000 due to higher average borrowings under the line-of-credit agreement and lower capitalized interest on qualifying properties as a result of less construction in the current period. The provision for income taxes decreased $224,000, or 5.5%, due primarily to lower income from operations. The effective income tax rate increased from 32.6% to 35.6% since the rate in the second quarter of fiscal 1997 was significantly impacted by the company's restructuring into a holding company. Six months ended February 28, 1998 compared to the six months ended February 28, 1997. ______________________________________________________________________________ Sales increased $6,759,000, or 2.8%, due primarily to the addition of five new cafeterias in fiscal 1998 and 27 in fiscal 1997. The sales increase from new cafeterias was partially offset by a decrease in sales volume at cafeterias opened over one year and the closing of five units, two in August 1997, two in September 1997, and one in January 1998. Cost of food increased $3,703,000, or 6.3%, due primarily to the increase in sales. As a percentage of sales, food costs were higher versus the prior year due to higher commodity prices resulting from poor weather conditions and product promotions featured during the period which had slightly higher food costs. Payroll and related costs increased $5,433,000, or 7.6%, due primarily to the increase in sales and the higher federal minimum wage which increased first on October 1, 1996, and again on September 1, 1997. Occupancy and other operating expenses increased $2,644,000, or 3.6%, due primarily to the increase in sales. With the decline in same-store sales for the six months ended February 28, 1998`, certain fixed expenses in this category have increased as a percentage of sales, including depreciation, property taxes, utilities, and repairs. These increases were partially offset by lower preopening expenses due to fewer store openings as compared to the prior period. In addition, managers' salaries, which are based on the profitability of the cafeterias, decreased as a percent of sales due to lower store profits. General and administrative expenses decreased $674,000, or 6.0%, due primarily to a lower profit sharing contribution estimated for fiscal 1998 as compared to the estimate of the contribution for the same period in the prior year. Interest expense increased $917,000 due to higher average borrowings under the line-of-credit agreement and lower capitalized interest on qualifying properties as a result of less construction in the current period. The provision for income taxes decreased $1,693,000, or 18.9%, due primarily to lower income from operations. The effective income tax rate increased from 35.1% to 35.6%. The Year 2000 _____________ Some of the company's older computer programs were written using two digits rather than four to define the applicable year. As a result, those computer programs have time-sensitive software that recognizes a date using "00" as the year 1900 rather than the year 2000. This could cause a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, code invoices, or engage in similar normal business activities. The company has assessed the issue and will modify or replace its software so that its computer systems function properly with respect to dates in the year 2000 and thereafter. The company does not expect that the year 2000 issue will materially affect future financial results. Forward-Looking Statements __________________________ The company wishes to caution readers that various factors could cause the actual results of the company to differ materially from those indicated by forward-looking statements made from time to time in news releases, reports, proxy statements, registration statements, and other written communications (including the preceding sections of this Management's Discussion and Analysis), as well as oral statements made from time to time by representatives of the company. Except for historical information, matters discussed in such oral and written communications are forward-looking statements that involve risks and uncertainties, including but not limited to general business conditions, the impact of competition, the success of operating initiatives, changes in the cost and supply of food and labor, the seasonality of the company's business, taxes, inflation, and governmental regulations. Part II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. (a) The 1998 annual meeting of shareholders of Luby's Cafeterias, Inc. was held on January 9, 1998. (b) The directors elected at the meeting were Lauro F. Cavazos, John B. Lahourcade, and George H. Wenglein. The other directors whose terms continued after the meeting are David B. Daviss, Roger R. Hemminghaus, Barry J.C. Parker, William E. Robson, Walter J. Salmon, and Joanne Winik. (c) The matters voted upon at the meeting were (i) the election of three directors to serve until the 2001 annual meeting of shareholders and (ii) the approval of the appointment of Ernst & Young LLP as auditors for the 1998 fiscal year. (d) With respect to the election of directors, the results of the voting were: Shares Voted Shares Broker Nominee For Abstained Nonvotes ____________________ _____________ _________ ________ Lauro F. Cavazos 19,603,134 1,173,185 -0- John B. Lahourcade 19,913,321 862,998 -0- George H. Wenglein 19,914,645 861,674 -0- (e) With respect to approval of the appointment of auditors, the results of the voting were: Shares voted "for" 20,688,629 Shares voted "against" 22,469 Shares abstaining 65,221 Broker nonvotes -0- Part II - OTHER INFORMATION (continued) Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 2 Agreement and Plan of Merger dated November 1, 1991, between Luby's Cafeterias, Inc., a Texas corporation, and Luby's Cafeterias, Inc., a Delaware corporation (filed as Exhibit 2 to the company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 3(a) Certificate of Incorporation of Luby's Cafeterias, Inc., a Delaware corporation, as in effect February 28, 1994 (filed as Exhibit 3(a) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1994, and incorporated herein by reference). 3(b) Amendment to Bylaws of Luby's Cafeterias, Inc. adopted by the Board of Directors on March 19, 1998. 3(c) Bylaws of Luby's Cafeterias, Inc. as currently in effect. 4(a) Description of Common Stock Purchase Rights of Luby's Cafeterias, Inc. in Form 8-A (filed April 17, 1991, effective April 26, 1991, File No. 1-8308, and incorporated herein by reference). 4(b) Amendment No. 1 dated December 19, 1991, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(b) to the company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and incorporated herein by reference). 4(e) Credit Agreement dated February 27, 1996, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(e) to the company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 4(f) First Amendment to Credit Agreement dated January 24, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(f) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 4(g) ISDA Master Agreement dated June 17, 1997, between Luby's Cafeterias, Inc. and NationsBank, N.A., with Schedule and Confirmation dated July 7, 1997 (filed as Exhibit 4(g) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(h) ISDA Master Agreement dated July 2, 1997, between Luby's Cafeterias, Inc. and Texas Commerce Bank National Association, with Schedule and Confirmation dated July 2, 1997 (filed as Exhibit 4(h) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(i) Second Amendment to Credit Agreement dated July 3, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(i) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(a) Form of Deferred Compensation Agreement entered into between Luby's Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1981, and incorporated herein by reference). 10(b) Form of Amendment to Deferred Compensation Agreement between Luby's Cafeterias, Inc. and various officers and former officers adopted January 14, 1997 (filed as Exhibit 10(b) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(c) Annual Incentive Plan for Area Vice Presidents of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(d) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(d) Amendment to Annual Incentive Plan for Area Vice Presidents of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(d) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(e) Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(e) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(f) Amendment to Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(f) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(g) Luby's Cafeterias, Inc. Incentive Bonus Plan for Fiscal 1998 adopted by the Board of Directors on January 9, 1998. 10(h) Performance Unit Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 12, 1984 (filed as Exhibit 10(f) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1984, and incorporated herein by reference). 10(i) Amendment to Performance Unit Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(h) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(j) Employment Contract dated January 8, 1988, between Luby's Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1988, and incorporated herein by reference). 10(k) Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed as Exhibit 10(i) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1989, and incorporated herein by reference). 10(l) Amendment to Management Incentive Stock Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(k) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(m) Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit 10(g) to the company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994, and incorporated herein by reference). 10(n) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(m) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(o) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted by the Board of Directors on March 19, 1998. 10(p) Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 13, 1995 (filed as Exhibit 10(h) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 10(q) Amendment to Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(o) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(r) Employment Contract dated January 12, 1996, between Luby's Cafeterias, Inc. and John B. Lahourcade (filed as Exhibit 10(i) to the company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 10(s) Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan dated May 30, 1996 (filed as Exhibit 10(j) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference). 10(t) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 14, 1997 (filed as Exhibit 10(r) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(u) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted by the Board of Directors on January 9, 1998. 10(v) Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July 18, 1996 (filed as Exhibit 10(k) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference). 10(w) Retirement Agreement dated March 17, 1997, between Luby's Cafeterias, Inc. and Ralph Erben (filed as Exhibit 10(t) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(x) Employment Agreement dated September 15, 1997, between Luby's Cafeterias, Inc. and Barry J.C. Parker (filed as Exhibit 10(u) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(y) Term Promissory Note of Barry J.C. Parker in favor of Luby's Cafeterias, Inc., dated November 10, 1997, in the original principal sum of $199,999.00 (filed as Exhibit 10(v) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(z) Stock Agreement dated November 10, 1997, between Barry J.C. Parker and Luby's Cafeterias, Inc. (filed as Exhibit 10(w) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(aa) Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted by the Board of Directors on March 19, 1998. 11 Statement re computation of per share earnings. 99 Corporate Governance Guidelines of Luby's Cafeterias, Inc. adopted by the Board of Directors on March 19, 1998. (b) Reports on Form 8-K No reports on Form 8-K have been filed during the quarter for which this report is filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LUBY'S CAFETERIAS, INC. (Registrant) By: BARRY J.C. PARKER _____________________________ Barry J. C. Parker President and Chief Executive Officer By: LAURA M. BISHOP _____________________________ Laura M. Bishop Senior Vice President and Chief Financial Officer Dated: April 13, 1998 EXHIBIT INDEX Number Document 2 Agreement and Plan of Merger dated November 1, 1991, between Luby's Cafeterias, Inc., a Texas corporation, and Luby's Cafeterias, Inc., a Delaware corporation (filed as Exhibit 2 to the company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 3(a) Certificate of Incorporation of Luby's Cafeterias, Inc., a Delaware corporation, as in effect February 28, 1994 (filed as Exhibit 3(a) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1994, and incorporated herein by reference). 3(b) Amendment to Bylaws of Luby's Cafeterias, Inc. adopted by the Board of Directors on March 19, 1998. 3(c) Bylaws of Luby's Cafeterias, Inc. as currently in effect. 4(a) Description of Common Stock Purchase Rights of Luby's Cafeterias, Inc. in Form 8-A (filed April 17, 1991, effective April 26, 1991, File No.1-8308, and incorporated herein by reference). 4(b) Amendment No. 1 dated December 19, 1991, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(b) to the company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and incorporated herein by reference). 4(e) Credit Agreement dated February 27, 1996, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(e) to the company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 4(f) First Amendment to Credit Agreement dated January 24, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(f) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 4(g) ISDA Master Agreement dated June 17, 1997, between Luby's Cafeterias, Inc. and NationsBank, N.A., with Schedule and Confirmation dated July 7, 1997 (filed as Exhibit 4(g) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(h) ISDA Master Agreement dated July 2, 1997, between Luby's Cafeterias, Inc. and Texas Commerce Bank National Association, with Schedule and Confirmation dated July 2, 1997 (filed as Exhibit 4(h) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(i) Second Amendment to Credit Agreement dated July 3, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(i) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(a) Form of Deferred Compensation Agreement entered into between Luby's Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1981, and incorporated herein by reference). 10(b) Form of Amendment to Deferred Compensation Agreement between Luby's Cafeterias, Inc. and various officers and former officers adopted January 14, 1997 (filed as Exhibit 10(b) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(c) Annual Incentive Plan for Area Vice Presidents of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(d) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(d) Amendment to Annual Incentive Plan for Area Vice Presidents of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(d) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(e) Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(e) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(f) Amendment to Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(f) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(g) Luby's Cafeterias, Inc. Incentive Bonus Plan for Fiscal 1998 adopted by the Board of Directors on January 9, 1998. 10(h) Performance Unit Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 12, 1984 (filed as Exhibit 10(f) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1984, and incorporated herein by reference). 10(i) Amendment to Performance Unit Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(h) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(j) Employment Contract dated January 8, 1988, between Luby's Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1988, and incorporated herein by reference). 10(k) Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed as Exhibit 10(i) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1989, and incorporated herein by reference). 10(l) Amendment to Management Incentive Stock Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(k) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(m) Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit 10(g) to the company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994, and incorporated herein by reference). 10(n) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(m) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(o) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted by the Board of Directors on March 19, 1998. 10(p) Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 13, 1995 (filed as Exhibit 10(h) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 10(q) Amendment to Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(o) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(r) Employment Contract dated January 12, 1996, between Luby's Cafeterias, Inc. and John B. Lahourcade (filed as Exhibit 10(i) to the company's Quarterly Report on Form 10Q for the quarter ended February 29, 1996, and incorporated herein by reference). 10(s) Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan dated May 30, 1996 (filed as Exhibit 10(j) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference). 10(t) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 14, 1997 (filed as Exhibit 10(r) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(u) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted by the Board of Directors on January 9, 1998. 10(v) Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July 18, 1996 (filed as Exhibit 10(k) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference). 10(w) Retirement Agreement dated March 17, 1997, between Luby's Cafeterias, Inc. and Ralph Erben (filed as Exhibit 10(t) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 10(x) Employment Agreement dated September 15, 1997, between Luby's Cafeterias, Inc. and Barry J.C. Parker (filed as Exhibit 10(u) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(y) Term Promissory Note of Barry J.C. Parker in favor of Luby's Cafeterias, Inc., dated November 10, 1997, in the original principal sum of $199,999.00 (filed as Exhibit 10(v) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(z) Stock Agreement dated November 10, 1997, between Barry J.C. Parker and Luby's Cafeterias, Inc. (filed as Exhibit 10(w) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 10(aa) Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted by the Board of Directors on March 19, 1998. 11 Statement re computation of per share earnings. 99 Corporate Governance Guidelines of Luby's Cafeterias, Inc. adopted by the Board of Directors on March 19, 1998. EX-3 2 AMENDMENT OF BYLAWS/ BYLAWS Exhibit 3(b) AMENDMENT TO BYLAWS OF LUBY'S CAFETERIAS, INC. On March 19, 1998, the Board of Directors of Luby's Cafeterias, Inc., by unanimous vote of the whole Board, elected to be governed by paragraph (2) of subsection (c) of Section 141 of the Delaware General Corporation Law and unanimously adopted the following resolution: RESOLVED: That Section 9 of Article III of the Bylaws of Luby's Cafeterias, Inc. is hereby amended so as to read in its entirety as follows: Section 9. Executive Committee. The Board of Directors, by resolution adopted by a majority of the number of directors constituting the whole Board, may designate two or more directors to constitute an Executive Committee, one of whom shall be designated as Chairman. The Executive Committee shall meet at such times as the Committee may determine to be appropriate. A majority of the Committee shall constitute a quorum and the act of a majority of a quorum shall constitute the act of the Committee. Meetings of the Executive Committee may be called at any time by the Chairman upon three days' notice. During the intervals between the meetings of the Board, the Executive Committee shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that the Executive Committee shall have no power or authority with reference to (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval or (ii) adopting, amending or repealing any Bylaw of the Corporation. The Executive Committee shall keep regular minutes of its proceedings and all actions of the Executive Committee shall be reported promptly to the Board. Such actions shall be subject to review by the Board, provided that no rights of third parties shall be affected by such review. Any member of the Executive Committee may be removed, for or without cause, by vote of a majority of the number of directors constituting the whole Board. Exhibit 3(c) BYLAWS OF LUBY'S CAFETERIAS, INC. ARTICLE I OFFICES Section 1. Registered Office. The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Time and Place of Meeting. All meetings of the stockholders shall be held at such time and at such place within or without the State of Delaware as shall be designated by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual Meetings. An annual meeting of the stockholders shall be held each year on such date and at such time as shall be designated from time to time by the Board of Directors, and stated in the notice of the meeting, at which meeting the stockholders shall elect, in accordance with the Certificate of Incorporation, a board of directors and transact such other business as may properly be brought before the meeting. Section 3. Special Meetings. Special meetings of the stockholders, for any proper purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation of the Corporation, may be called at any time by (a) the Board of Directors, (b) the President or (c) the holders of at least fifty percent of all shares entitled to vote at the proposed special meeting. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at special meetings shall be confined to the purpose or purposes stated in the notice of the meeting. Section 4. Notice. Written or printed notice stating the place, date and hour of any meeting of stockholders, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than 10 nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the person calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his address as it appears on the stock ledger of the Corporation. Section 5. Record Date. The Board of Directors may fix in advance a record date for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such record date to be not less than 10 nor more than 60 days prior to such meeting; or the Board of Directors may close the stock ledger for a stated period which shall not exceed 60 days and shall be for at least 10 days immediately preceding such meeting. In the absence of any action by the Board of Directors, the date upon which the notice of the meeting is mailed shall be the record date. Section 6. List of Stockholders. The officer or agent of the Corporation having charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before each meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list, for a period of 10 days prior to such meeting, shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine such list or stock ledger, or to vote at any meetings of stockholders. Section 7. Quorum. The holders of a majority of the capital stock issued and outstanding and entitled to be cast thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time until a quorum shall be present or represented without notice of the adjourned meeting other than announcement of the time and place thereof at the meeting at which the adjournment is taken. When any adjourned meeting is reconvened and a quorum shall be present or represented, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Voting. When a quorum is present at any meeting, the vote of the holders of the shares present or represented by proxy at such meeting and representing a majority of the votes entitled to be cast by each class of stock shall decide any question brought before such meeting, unless the vote of a different number is expressly required by statute, the Certificate of Incorporation or these Bylaws. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders in his discretion, may require that any votes cast at such meeting shall be cast by written ballot. Section 9. Proxy. Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share having voting power held by such stockholder. Every proxy must be executed in writing (which shall include telegraphing, facsimile transmission or cabling) by the stockholder or by his duly authorized attorney-in-fact, but no proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Section 10. Notice of Business. At any meeting of stockholders, only such business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who is a stockholder of record entitled to vote at such meeting who complies with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder. ARTICLE III DIRECTORS Section 1. Number, Election and Terms of Directors. The business and affairs of the Corporation shall be managed by a Board of Directors which shall consist of not less than nine nor more than fifteen persons, who need not be residents of the State of Delaware or stockholders of the Corporation. The exact number of directors within the minimum and maximum limitations specified in the preceding sentence shall be fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority of the entire Board of Directors. The directors shall be divided into three classes, as nearly equal in number as possible, with the term of office of the first class to expire at the first following Annual Meeting of Stockholders, the term of office of the second class to expire at the second following Annual Meeting of Stockholders and the term of office of the third class to expire at the third following Annual Meeting of Stockholders. At each Annual Meeting of Stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding Annual Meeting of Stockholders after their election. A directorship to be filled by reason of an increase in the number of directors may be filled (i) by election at an Annual or Special Meeting of Stockholders called for that purpose or (ii) by the Board of Directors for a term of office continuing only until the next election of one or more directors by the stockholders; provided that the Board of Directors may not fill more than two such directorships during the period between any two successive Annual Meetings of Stockholders. Candidates to stand for election as directors at an annual meeting of stockholders shall be nominated by the Board of Directors; and candidates may also be nominated by any stockholder of record entitled to vote at the meeting, provided the stockholder gives timely notice thereof. To be timely, such notice shall be delivered in writing to the Secretary of the Corporation at the principal executive offices of the Corporation not later than 90 days prior to the date of the meeting of stockholders at which directors are to be elected and shall include (i) the name and address of the stockholder who intends to make the nomination, (ii) the name, age and business address of each nominee, and (iii) such other information with respect to each nominee as would be required to be disclosed in a proxy solicitation relating to an election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934. Section 2. Vacancies in the Board of Directors and Removal of Directors. Any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled by a majority vote of the directors then in office, and directors so chosen shall hold office for a term expiring at the Annual Meeting of Stockholders at which the term of the class to which they have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 80% of the voting power of all of the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Section 3. General Powers. The business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all powers of the Corporation and do all such lawful acts and things as are not by statute, or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. Section 4. Place of Meetings. The Directors of the Corporation may hold their meetings, both regular and special, either within or without the State of Delaware. Section 5. Annual Meetings. The first meeting of each newly elected Board of Directors shall be held without notice immediately following the annual meeting of stockholders, and at the same place, unless by unanimous consent of the directors then elected and serving such time or place shall be changed. Section 6. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board of Directors. Section 7. Special Meetings. Special meetings of the Board of Directors may be called by the President on five days' written notice to each director delivered personally or by mail or telegram. Special meetings shall be called by the President or Secretary in like manner and on like notice on the written request of a majority of the directors. Section 8. Quorum. Unless otherwise provided by statute, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors, the presence of a majority of the number of directors constituting the whole Board shall be necessary and sufficient to constitute a quorum for the transaction of business, and the affirmative vote of a majority of the number of Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of directors, the directors present may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present. Section 9. Executive Committee. The Board of Directors, by resolution adopted by a majority of the number of directors constituting the whole Board, may designate two or more directors to constitute an Executive Committee, one of whom shall be designated as Chairman. The Executive Committee shall meet at such times as the Committee may determine to be appropriate. A majority of the Committee shall constitute a quorum and the act of a majority of a quorum shall constitute the act of the Committee. Meetings of the Executive Committee may be called at any time by the Chairman upon three days' notice. During the intervals between the meetings of the Board, the Executive Committee shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that the Executive Committee shall have no power or authority with reference to (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval or (ii) adopting, amending or repealing any Bylaw of the Corporation. The Executive Committee shall keep regular minutes of its proceedings and all actions of the Executive Committee shall be reported promptly to the Board. Such actions shall be subject to review by the Board, provided that no rights of third parties shall be affected by such review. Any member of the Executive Committee may be removed, for or without cause, by vote of a majority of the number of directors constituting the whole Board. Section 10. Other Committees. The Board of Directors, by resolution adopted by a majority of the number of directors constituting the whole Board, may designate other committees, each committee to consist of two or more directors and to have and exercise such powers and authority as may be provided in such resolution. Each such committee shall keep regular minutes of its proceedings and make reports to the Board of Directors when and as required by the Board. Section 11. Compensation of Directors. By resolution of the Board of Directors, the directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors or of any committee of the Board of Directors and may be paid a fixed sum for attendance at each such meeting, or may be paid stated salaries as directors, or both; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Section 12. Action Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee designated by the Board of Directors, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 13. Meetings by Conference Call, Etc. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. Section 14. Reliance Upon Books. Directors and members of any committee designated by the Board of Directors shall, in the performance of their duties, be fully protected in relying in good faith upon the books of accounts or reports made to the Corporation by any of its officers, or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any such committee, or in relying in good faith upon other records of the Corporation. ARTICLE IV NOTICES Section 1. Form of Notice. Whenever under the provisions of the Certificate of Incorporation, these Bylaws or by statute, notice is required to be given to any director or stockholder, and no provision is made as to how such notice shall be given, it shall not be construed to mean personal notice, but any such notice may be given in writing and personally delivered or sent by mail, postage prepaid, addressed to such director or stockholder at such address as appears on the books of the Corporation, and any such notice required or permitted to be given by mail shall be deemed to be given at the time when the same be thus deposited in the United States mail as aforesaid; such notice may also be given by some form of electronic transmission, in which case it shall be so addressed as to be received by such director or stockholder at the address of such director or stockholder as it appears on the books of the Corporation or at a regular place of such director's or stockholder's business, in which case such notice shall be deemed to be given at the time when the recipient of such transmission acknowledges its receipt. Section 2. Waiver. Whenever any notice is required to be given to any director or stockholder of the Corporation under the provisions of the statutes, the Certificate of Incorporation or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated in such notice, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the attendance is for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. ARTICLE V OFFICERS Section 1. In General. The officers of the Corporation shall be elected by the Board of Directors and shall be a President, one or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors may also elect additional officers, including but not limited to a Chairman of the Board, a Vice Chairman of the Board, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers, and a Controller. Two or more offices may be held by the same person, except that the office of President and Secretary shall not be held by the same person. Section 2. Election and Removal. The Board of Directors shall elect officers at its first meeting after each annual meeting of the stockholders. The salaries of all officers shall be fixed by the Board of Directors from time to time. Each officer shall hold office until his successor is elected and qualified. Any officer may be removed, for or without cause, at any time by vote of the Board of Directors. Election or appointment of an officer or agent of the Corporation shall not of itself create contract rights. Section 3. Chairman. The Chairman of the Board of Directors, if there be a Chairman, shall preside at all meetings of the stockholders and the Board of Directors. In the absence or disability of the Chairman of the Board, the President shall preside at meetings of the stockholders and the Board of Directors. The Chairman of the Board may be designated by the Board of Directors as the Chief Executive Officer of the Corporation, in which event he shall have the general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chairman of the Board may sign certificates for shares, deeds, mortgages, bonds, contracts and other instruments on behalf of the Corporation, except as otherwise required by law or where the signing thereof is expressly delegated by the Board of Directors or these Bylaws to some other officer or agent. Section 4. President. The President may be designated by the Board of Directors as the Chief Executive Officer of the Corporation, in which event he shall have the general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. If the President is not so designated as the Chief Executive Officer, he shall be the Chief Operating Officer of the Corporation. The President may sign certificates for shares, deeds, mortgages, bonds, contracts and other instruments on behalf of the Corporation, except as otherwise required by law or where the signing thereof is expressly delegated by the Board of Directors or these Bylaws to some other officer or agent. The President shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board, except as otherwise expressly provided in these Bylaws. Section 5. Vice Presidents. If there be an Executive Vice President, he shall, in the absence or disability of the President, perform the duties and exercise the powers of the President. If the President is designated as the Chief Executive Officer of the Corporation pursuant to these Bylaws, the Executive Vice President shall be the Chief Operating Officer of the Corporation. In the absence or disability of the President and the Executive Vice President, the Senior Vice Presidents in the order of their seniority shall perform the duties and exercise the powers of the President. All Vice Presidents of the Corporation shall generally assist the President and the Chairman of the Board and shall perform such other duties as the President or the Chairman of the Board or the Board of Directors may prescribe. Section 6. Secretary. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for the Executive Committee and any other committees of the Board when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the President. He shall keep in safe custody the seal of the Corporation. Section 7. Assistant Secretaries. Any Assistant Secretary shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as may be prescribed by the Board of Directors or the President. Section 8. Treasurer. The Treasurer shall have the custody of all corporate funds and securities, and shall keep full and accurate accounts of receipts and disbursements of the Corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and directors, at the regular meetings of the Board or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation, and shall perform such other duties as may be prescribed by the Board of Directors or the President. Section 9. Assistant Treasurers. Any Assistant Treasurer shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as may be prescribed by the Board of Directors or the President. ARTICLE VI CERTIFICATES REPRESENTING SHARES Section 1. Form of Certificates. The Corporation shall deliver certificates representing all shares to which stockholders are entitled. Certificates representing shares of the Corporation shall be in such form as shall be determined by the Board of Directors and shall be numbered consecutively and entered in the books of the Corporation as they are issued. Each certificate shall state on the face thereof the holder's name, the number, class of shares, and the par value of the shares or a statement that the shares are without par value. They shall be signed by the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and may be sealed with the seal of the Corporation or a facsimile thereof if the Corporation shall then have a seal. If any certificate is countersigned by a transfer agent or registered by a registrar, either of which is other than the Corporation or an employee of the Corporation, the signatures of the Corporation's officers may be facsimiles. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed on such certificate, shall cease to be such officer, transfer agent or registrar, whether because of death, resignation or otherwise, before such certificate has been delivered by the Corporation or its agents, such certificate may nevertheless be issued and delivered with the same effect as if he were such officer, transfer agent or registrar at the date of issue. Section 2. Lost Certificates. The Board of Directors may direct that a new certificate be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing the issue of a new certificate, the Board of Directors, in its discretion and as a condition precedent to the issuance thereof, may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such form, in such sum, and with such surety or sureties as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 3. Transfer of Shares. Shares of stock of the Corporation shall be transferrable in the manner prescribed by law and in these Bylaws. Shares of stock shall be transferable only on the books of the Corporation by the holder thereof in person or by his duly authorized attorney and, upon surrender to the Corporation or to the transfer agent of the Corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation or the transfer agent of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 4. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the outstanding shares of the Corporation may be declared by the Board of Directors at any regular or special meeting, subject to the provisions of law and of the Certificate of Incorporation. Dividends may be declared and paid in cash, in property, or in shares of the Corporation, provided that all such declarations and payments of dividends shall be in strict compliance with all applicable laws and the Certificate of Incorporation. The Board of Directors may fix in advance a record date for the purposes of determining stockholders entitled to receive payment of any dividend, such record date to be not more than 60 days prior to the payment date of such dividend, or the Board of Directors may close the stock ledger for such purpose for a period of not more than 60 days prior to the payment date of such dividend. If the stock transfer books are not closed and no record date is fixed by the Board of Directors, the date upon which the Board of Directors adopts the resolution declaring such dividend shall be the record date. Section 2. Fiscal Year. The fiscal year of the Corporation shall be the twelve-month period ending August 31 of each year unless otherwise fixed by resolution of the Board of Directors. Section 3. Seal. The Corporation shall have a seal and said seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. Any officer of the Corporation shall have authority to affix the seal to any document requiring it. Section 4. Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contracts or execute and deliver any instruments in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 5. Loans. No loans shall be contracted on behalf of the Corporation, and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. ARTICLE VIII Section 1. Power to Indemnify in Actions, Suits or Proceedings Other Than Those by or in the Right of the Corporation. Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer, of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 3. Authorization of Indemnification. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. To the extent, however, that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case. Section 4. Good Faith Defined. For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to him by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used in this Section 4 of this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provision of this Section 4 of this Article VIII shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Section 5. Indemnification by a Court. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 of this Article VIII shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application. Section 6. Expenses Payable in Advance. Expenses incurred by a director or officer in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of any undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Section 7. Nonexclusivity of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by or granted pursuant to his Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any Bylaw, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or Section 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the General Corporation Law of the State of Delaware, or otherwise. Section 8. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VIII. Section 9. Certain Definitions. For purposes of this Article VIII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors and officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such indemnification relates to his acts while serving in any of the foregoing capacities, of such constituent corporation, as he would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article VIII, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director or officer of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article VIII. Section 10. Survival of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 11. Limitation on Indemnification. Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 of this Article VIII), the Corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation. Section 12. Indemnification of Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation. ARTICLE IX AMENDMENTS Section 1. Amendments. These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board of Directors at any regular meeting or at any special meeting called for that purpose. Section 2. When Bylaws Silent. It is expressly recognized that when the Bylaws are silent as to the manner of performing any corporate function, the provisions of Delaware law shall control. Section 3. Entire Board of Directors. As used in this Article IX and in these Bylaws generally, the term "entire Board of Directors" means the total number of directors which the Corporation would have if there were no vacancies. EX-10 3 INCENTIVE BONUS/DEF COMP/AMDT TO SERP/PHANTOM STK Exhibit 10(g) LUBY'S CAFETERIAS, INC. INCENTIVE BONUS PLAN FOR FISCAL 1998 1. Purpose. The Incentive Bonus Plan for Fiscal 1998 (the "Plan") of Luby's Cafeterias, Inc. (the "Company') is intended to provide (i) additional incentives for Participants to improve their job performance, (ii) encouragement for outstanding employees to become officers, and to help retain and attract highly talented executives. 2. Participants. Participants include the Executive Vice President, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents, and Assistant Secretary. 3. Cash Bonus Pool. The Company shall establish a Cash Bonus Pool based upon the sum of target award percentages multiplied by each Participant's salary. The target award percentages have been set for each level of Participants by the Compensation Committee. 4. Performance Goals. At the recommendation of the Chief Executive Officer, the Compensation Committee of the Board of Directors has approved certain Strategic Objectives and a threshold earnings goal for the Company for fiscal 1998. If the threshold earnings goal is met or exceeded, the Compensation Committee will then evaluate the performance of the Company in achieving the Strategic Objectives and determine what portion of the Cash Bonus Pool will be approved for awards. 5. Job Performance Evaluations. At the end of each fiscal year, the management of the Company shall review the job performance of each Participant during the fiscal year and shall evaluate his or her performance based upon the achievement of goals and objectives established during the course of the year. In addition, each Participant will be evaluated on the basis of general job performance criteria. Such criteria shall include all aspects of job performance, such as attitude, responsiveness, resourcefulness, initiative, and ability to communicate effectively with others. 6. Cash Bonuses. Upon completion of the Job Performance Evaluations of all Participants at the end of the fiscal year, the management of the Company shall allocate the approved Cash Bonus Pool among the Participants based upon the performance evaluations. The Company's evaluation of each Participant's job performance and the Company's determination of the amount to be awarded to each Participant out of the Cash Bonus Pool shall be final and conclusive and shall be binding upon all Participants in the Plan. The amount awarded to each Participant out of the Cash Bonus Pool shall be in addition to his or her base salary and other benefits. 7. Withholding Tax. The Company shall have the right to deduct from all payments made under the Plan any taxes required by law to be withheld with respect to such payments. 8. Interpretation of the Plan. Any disagreement or dispute with respect to the interpretation or application of the Plan shall be resolved by the Executive Committee of the Board of Directors of the Company. The decision of the Executive Committee with respect to any such matter shall be final and conclusive and shall be binding upon all participants in the Plan. 9. Amendment and Discontinuance of the Plan. The Plan may be discontinued or amended by the Board of Directors of the Company at any time. No participant shall be entitled to receive a bonus under the Plan until such time as the bonus has been awarded in accordance with the Plan. Exhibit 10(o) AMENDMENT TO LUBY'S CAFETERIAS, INC. NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN On March 19, 1998, the Board of Directors of Luby's Cafeterias, Inc. duly adopted the following resolution: RESOLVED: That the Luby's Cafeterias, Inc. Nonemployee Director Deferred Compensation Plan is hereby amended by adding thereto a new Section 12 reading as follows: 12.Transfers At any time during the period from April 1, 1998 through May 31, 1998, any Nonemployee Director may deliver to the Company a written notification that he or she elects to transfer to the Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan (the "Phantom Stock Plan") the entire balance of his or her deferred compensation account established under this Plan. In the event of such notification to the Company, the entire balance of the account of the notifying Nonemployee Director under this Plan as of the date of receipt by the Company of said notification shall be transferred to and credited to the account of such Nonemployee Director under the Phantom Stock Plan. Exhibit 10(u) AMENDMENT TO SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP) OF LUBY'S CAFETERIAS, INC. On January 9, 1998, the Board of Directors of Luby's Cafeterias, Inc. duly adopted the following resolution: RESOLVED: That Section 1.9 of the Supplemental Executive Retirement Plan (SERP) of Luby's Cafeterias, Inc. is hereby amended, effective as of January 1, 1998, to read as follows: 1.9 "Compensation" means only the regular annual base salary payable to a Participant during the Plan Year, as well as all bonuses paid to the Participant during the Plan Year (whether discretionary, formula or contractual). No other forms of remuneration shall be included as Compensation. Exhibit 10(aa) LUBY'S CAFETERIAS, INC. NONEMPLOYEE DIRECTOR PHANTOM STOCK PLAN 1. Purpose and Effectiveness. The purpose of the Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan (the "Plan") is to provide for the payment to Nonemployee Directors of Luby's Cafeterias, Inc. (the "Company") of all or a portion of their director retainer fees in the form of shares of phantom stock ("Phantom Shares") in order to align further the interests of the directors with those of the shareholders of the Company and thereby to promote the long-term growth and performance of the Company. The Plan shall be effective on April 1, 1998 (the "Effective Date"). 2. Participants. Participants shall be directors of the Company who are not employed by the Company or a subsidiary of the Company or any other business entity in which the Company, directly or indirectly, owns 50% or more of the capital or profit interest (the "Nonemployee Directors"). A Nonemployee Director may become a participant by electing to defer all or a portion of his or her director retainer fees ("Retainer Fees") as provided in the Plan. 3. Deferral of Retainer Fees. By written notice to the Treasurer of the Company, a Nonemployee Director may elect to defer all or a portion of his or her Retainer Fees. Such notice must be received by the Treasurer, or postmarked, not later than (i) March 31, 1998, for the period April 1 through December 31, 1998 ("first Plan year") and (ii) December 31 preceding the beginning of any subsequent calendar year. Deferral elections made under the Plan with respect to the first Plan year or any subsequent calendar year will be final and, upon commencement of such year, cannot be amended or revoked in respect of Retainer Fees for director services rendered during such year. 4. Participants' Accounts. Retainer Fees deferred by a Participant pursuant to the Plan shall be credited to a Phantom Share account ("Account") maintained on the books of the Company for such Participant. Deferred Retainer Fees shall be credited to a Participant's Account on the date such Retainer Fees would otherwise have been paid. 5. Phantom Shares. Dollar amounts to be credited to an Account shall be credited in the form of Phantom Shares. The number of Phantom Shares credited shall be determined in each instance by dividing the dollar credit by an amount equal to the closing price of a share of the Company's common stock ("Common Stock") as reported by the composite tape of the New York Stock Exchange (or other reporting system selected by the Board of Directors of the Company) on the relevant date; or, if no sale of Common Stock is reported for such date, the next following day for which there is a reported sale. Phantom Shares shall be credited in whole shares and in fractional shares to the nearest thousandth of a share. 6. Dividend Equivalents. On each date when a cash dividend is paid by the Company on the Common Stock, the Account of each Participant shall be credited with a dollar amount equal to such dividend on one share of Common Stock multiplied by the number of Phantom Shares in the Account at the close of business on the dividend record date, which credit shall be converted into additional Phantom Shares in the manner described in Section 5 hereof. 7. Adjustments. In the event the outstanding shares of Common Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or another corporation, through reorganization, merger, consolidation, liquidation, recapitalization, stock split-up, combination of shares, or dividend payable in Common Stock, appropriate adjustment in the number and kind of Phantom Shares credited to the Account of each Participant shall be made so as to provide, as nearly as practicable, an equivalent interest in the Account. No such adjustment shall be made in any Account after the Termination Date applicable to that Account. 8. Termination of Directorship. When a Nonemployee Director ceases to be a director of the Company on account of resignation, retirement, death, disability, removal, or any other circumstance, his or her last day of service shall constitute the "Termination Date" for purposes of the Plan. No credits of Phantom Shares shall be made to the Account of a Participant after his or her Termination Date. 9. Designation of Beneficiary. A Participant may designate a beneficiary ("Beneficiary") to whom the Participant's benefits under the Plan shall be distributed in the event of death of the Participant prior to settlement of his or her Account. If there is no designated Beneficiary, or no designated Beneficiary surviving at a Participant's death, his or her benefits under the Plan shall be distributed to his or her estate. A Participant's Beneficiary designation must be in writing on a form prescribed by the Company and must be delivered to the Company prior to the Termination Date. 10. Payment of Accounts. When a Participant ceases to be a director of the Company, the Phantom Shares in his or her Account shall be converted on his or her Termination Date into an equivalent number of shares of Common Stock (with any fractional share being rounded up to a whole share). As soon as practicable after the Termination Date, the Company shall issue and deliver to such Participant, or his or her Beneficiary, a certificate for the number of shares of Common Stock determined in accordance with this Section 10. 11. Total Shares. The number of shares of Common Stock which may be issued in satisfaction of Phantom Shares pursuant to the Plan shall not exceed 100,000 shares, unless increased by the Board of Directors in an amendment to the Plan. 12. Listing and Registration. The Company, in its discretion, may postpone the issuance and delivery of shares of Common Stock until completion of such stock exchange listing, or registration, or other qualification of such shares, under any federal or state law, rule, or regulation, as the Company may consider appropriate. The Company may require the recipient of such shares to make such representations and to furnish such information as the Company may consider appropriate in connection with the issuance of such shares in compliance with applicable law. 13. Payment of Taxes. It shall be a condition to the Company's obligation to issue shares of Common Stock pursuant to the Plan that each Participant or his or her Beneficiary shall pay, or make provision satisfactory to the Company for payment of, any federal or state taxes which the Company may be obligated to withhold or collect with respect to the issuance of such shares. 14. Shareholder Rights. No Participant shall have any rights as an owner or holder of Common Stock by virtue of his or her Account or by virtue of his or her ownership of phantom shares. No such rights shall exist or be deemed to be created until such time as the Phantom Shares in the Account are converted into shares of Common Stock pursuant to Section 10 hereof. 15. No Right to Continued Service. Nothing contained in the Plan shall be deemed to confer upon any Nonemployee Director the right to continue to serve as a director of the Company or the right to be renominated or reelected as such. 16. Assignment. No right or interest of any Participant or his or her Beneficiary (or any person claiming through or under either of them) in such Participant's Account or any distribution or benefit under the Plan shall be assignable or transferrable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance, or other legal process or in any manner liable for or subject to the debts or liabilities of such Participant. 17. Unfunded Plan. The Plan and the rights of Participants to receive benefits under the Plan shall be unfunded and shall not create or be construed to create a trust or other fiduciary obligation of the Company. All rights of Participants to receive benefits under the Plan shall constitute unsecured claims against the general assets of the Company. 18. Tax Consequences. The Plan is intended to be treated as an unfunded deferred compensation plan under the Internal Revenue Code so that amounts by which Participants elect to have their compensation reduced pursuant to the Plan shall not be included in their gross income until such time as the amounts credited to their Accounts are distributed to them or their Beneficiaries in the form of shares of Common Stock. 19. Successors and Heirs. The Plan and all properly executed elections and designations made by any Participant shall be binding upon the Company and each Participant, and upon any successor in interest or assignee of the Company, and upon the Beneficiary, heirs and legal representatives of each Participant. 20. Administration and Interpretation. The Plan shall be administered by the Board of Directors of the Company. The decision of the Board of Directors on any matter concerning the administration or interpretation of the Plan shall be final, conclusive and binding upon all Participants and their Beneficiaries, heirs and legal representatives. The Board of Directors shall have no liability for any action taken in good faith with respect to the Plan. 21. Expenses. All costs and expenses incurred in the operation and administration of the Plan shall be borne by the Company. 22. Amendment or Termination of the Plan. The Plan may be amended, from time to time, or terminated, at any time, by the Board of Directors; provided, however, that no amendment or termination shall adversely affect the Account of any Participant without his or her consent. 23. Term of the Plan. The Plan shall continue in effect from the Effective Date until terminated by the Board of Directors or until the maximum number of shares of Common Stock issuable under the Plan have been issued. 24. Governing Law. The Plan shall be governed by, construed under, and enforced in accordance with the laws of Delaware and, where applicable, the laws of the United States. 25. Transfers. At any time during the period from the Effective Date through May 31, 1998, a Nonemployee Director who has previously elected to defer director's fees pursuant to the Luby's Cafeterias, Inc. Nonemployee Director Deferred Compensation Plan (the "1995 Plan") may deliver to the Company a written notification that such Nonemployee Director elects to transfer to this Plan the entire balance of his or her deferred compensation account established under the 1995 Plan, to be credited to his or her Account under this Plan in the form of Phantom Shares. In the event of such notification to the Company, the Account of the notifying Nonemployee Director under this Plan shall be credited with the transferred amount as of the date of receipt by the Company of said notification, which credit shall be in the form of Phantom Shares determined in accordance with the provisions of Section 5 hereof. EX-11 4 COMPUTATION OF EARNINGS PER SHARE Exhibit 11 COMPUTATION OF PER SHARE EARNINGS The following is a computation of the weighted average number of shares outstanding which is used in the computation of per share earnings for Luby's Cafeterias, Inc. for the three and six months ended February 28, 1998 and 1997. Three months ended February 28, 1998: 23,270,675 x shares outstanding for 90 days 2,094,360,750 Divided by number of days in the period 90 _____________ 23,270,675 Six months ended February 28, 1998: 23,266,374 x shares outstanding for 18 days 418,794,732 23,266,921 x shares outstanding for 17 days 395,537,657 23,268,328 x shares outstanding for 9 days 209,414,952 23,270,675 x shares outstanding for 137 days 3,188,082,475 _____________ 4,211,829,816 Divided by number of days in the period 181 _____________ 23,269,778 Three months ended February 28, 1997: 23,329,990 x shares outstanding for 31 days 723,229,690 23,404,092 x shares outstanding for 31 days 725,526,852 23,409,028 x shares outstanding for 28 days 655,452,784 _____________ 2,104,209,326 Divided by number of days in the period 90 _____________ 23,380,104 Six months ended February 28, 1997: 23,892,819 x shares outstanding for 30 days 716,784,570 23,666,720 x shares outstanding for 31 days 733,668,320 23,281,927 x shares outstanding for 30 days 698,457,810 23,329,990 x shares outstanding for 31 days 723,229,690 23,404,092 x shares outstanding for 31 days 725,526,852 23,409,028 x shares outstanding for 28 days 655,452,784 _____________ 4,253,120,026 Divided by number of days in the period 181 _____________ 23,497,901 EX-27 5 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS AUG-31-1998 FEB-28-1998 3,730 0 683 0 5,939 16,140 500,023 165,640 368,765 39,397 0 0 0 8,769 213,953 368,765 247,876 247,876 139,458 139,458 75,874 0 2,525 20,416 7,268 13,148 0 0 0 13,148 0.57 0.57 Other stockholders' equity amount is less cost of treasury stock of $92,907.
EX-99 6 CORP GOVERNANCE GUIDELINES Exhibit 99 Luby's Cafeterias, Inc. Corporate Governance Guidelines Adopted March 19, 1998 ROLE AND RESPONSIBILITIES OF BOARD 1. Ethical Business Environment The Board believes that the long-term success of Luby's is dependent on the maintenance of an ethical business environment that focuses on adherence to both the letter and spirit of the law and regulations and the highest standards of corporate citizenship. 2. Oversight The Board acknowledges that Luby's has many different stakeholders. However, the paramount duty of Luby's Board and management is to the shareholders; the interests of other stakeholders are relevant as a derivative of the duty to shareholders. The Board is the ultimate decision making body except for those matters reserved by law to the shareholders. The management team approved by the Board is charged by the Board with the day-to-day management of Luby's affairs. The Board monitors corporate performance against business plans on a regular basis to evaluate whether the business is being properly managed. 3. Senior Management The Board selects and regularly evaluates the CEO. The appointment and regular evaluation of a Chief Operating Officer, if any, will be made by the Board in conjunction with the CEO. The Board determines the CEO's compensation and reviews and approves the compensation of senior management. It periodically reviews succession planning and management development with the CEO. 4. Strategy The Board ensures that a strategic planning process is in place, is used, and produces sound choices. It reviews and approves major corporate strategies and monitors the implementation of current strategic initiatives to assess whether they are on schedule, on budget, and producing effective results. 5. Material Transactions The Board reviews and approves material transactions not in the ordinary course of business including significant capital allocations and expenditures. 6. Internal Controls, Reporting, and Compliance The Board satisfies itself as to the adequacy of internal controls, risk management, financial reporting, and compliance with laws and regulations. 7. Corporate Governance The Board nominates directors to serve on the Board and ensures that the structure and practices of the Board provide for sound corporate governance. COMPOSITION OF THE BOARD 8. Independent Director An "Independent Director" is a person who is not a current and, generally, not a former member of management and has no relationship or activity that could affect or appear to affect his or her ability to exercise independent judgment as a director. The Governance Committee reviews the circumstances in each case and determines when a Board member or candidate is not independent. The Board will seek to maintain a substantial majority of independent directors. Various regulatory agencies have adopted differing concepts of independence (e.g. SEC, NYSE, IRS). These external definitions are not part of these Guidelines and should be consulted only for the specific purposes for which they were intended. 9. Number of Directors Luby's Bylaws provide for the Board to fix the number of directors at not less than nine or more than fifteen. The Board currently has nine members. The Board may adjust this upward to accommodate an outstanding potential candidate or during periods of transition when new directors may overlap with retiring directors. 10. Membership Criteria The Governance Committee is responsible for recommending to the Board the appropriate skills and characteristics for prospective Board candidates in the context of the current Board makeup and the perceived needs of Luby's at that point in time. This assessment should include issues of general business experience, specialized knowledge, functional skills, other Board and time commitments, personal characteristics, age, independence, and diversity. 11. Screening, Selection, and Invitation to Serve Luby's Bylaws provide that director candidates standing for election by the shareholders shall be nominated by the Board or by a shareholder as provided in the Bylaws. Vacancies in the Board shall be filled by selection of the current directors. The Governance Committee is responsible for screening potential candidates with input from all Board members. The COB will coordinate the extension of an invitation to Board membership. 12. Directors Who Change Principal Job Responsibility Directors should as a matter of course tender their resignation from the Board upon retirement, a change of employer, or other significant change in their professional roles and responsibilities. The Board, through its Governance Committee, should then consider whether it is in the best interest of Luby's to accept this resignation or to ask the director to continue to serve. 13. Retirement Age and Term Limits A director shall not be eligible to stand for election or reelection to the Board after reaching the age of 70 years. Except for incumbent directors as of March 19, 1998, a director will offer his or her resignation from the Board upon reaching the age of 70 years effective at the next annual meeting of shareholders. The Board does not believe that there should be term limits for directors. Rather, the Board believes that the Governance Committee should consider each Director's contribution to the Board every three years, prior to his of her nomination for reelection. 14. Selection of CEO and COB There is no policy as to whether the offices of the CEO and COB should be separate and, if separate, whether the COB should be an independent director. The Board remains free to make these choices in any way it deems best at the time. 15. Lead Director If the offices of the CEO and COB are not separate or if the COB is not considered by the Board to be an independent director, the independent directors will elect one of their number to serve as Lead Director. The Lead Director will chair meetings of independent directors, will facilitate communications between other members of the Board and the CEO and COB, and will assume other duties which the independent directors as a whole may designate from time to time. Directors are always free to communicate directly with the CEO and COB. 16. Limitations on Tenure as Independent COB or Lead Director An Independent COB or Lead Director serves at the pleasure of the Board. It is the sense of the Board that a director's service as Independent COB or Lead Director should generally not extend beyond the annual meeting of shareholders after three consecutive years of service. FUNCTIONING OF THE BOARD 17. Board Meetings Article III of Luby's Bylaws spells out required procedures for calling and conducting meetings of the Board in order to conduct corporate business. The Board sets the number and schedule of Regular Board meetings for the entire year at the annual meeting of the Board in January. Currently the Board has five Regular Meetings each year. The President, Secretary or a majority of directors may call Special Meetings of the Board as necessary. 18. Board Agendas The CEO in conjunction with the COB or Lead Director will establish and publish an agenda for each meeting of the Board. Board members may suggest items for inclusion on the agenda and, subject to the authority of the COB and the will of the majority, may raise for discussion at any Board meeting subjects not on the agenda. 19. Board Materials Distributed in Advance Information and data that are important to the Board's understanding of the business of the meeting and presentations on special subjects should, when practical, be distributed at least one week in advance of the meeting to permit directors to prepare for the meeting. This will conserve Board meeting time and allow discussion to focus on questions and analysis of these materials. Management will try to keep materials as brief as possible while still providing the desired information. Lengthy reports or documents, when practical, should be accompanied by executive summaries. Directors are encouraged to comment on the adequacy and effectiveness of materials provided. 20. Attendance of Nondirectors at Board Meetings The CEO may invite members of senior management who are not Board members to regularly participate in portions of the Board meeting. Further, the Board encourages the participation at Board meetings of managers who can provide additional insight into items being discussed or who have future potential in the Company and who should be given exposure to the Board. Portions of all Board meetings will be reserved for private deliberation among Board members. 21. Meetings of Independent Directors Independent directors will, from time to time, meet privately at the request of the COB (or Lead Director) or upon the Board's own motion. These meetings may include a discussion with the CEO. FUNCTIONING OF COMMITTEES OF THE BOARD 22. Board Committees The current standing committees of the Board are: Executive, Audit, Compensation, and Governance. From time to time the Board may create a new or disband an existing Committee depending on particular interests of the Board, issues facing the Company, or legal requirements. 23. Committee Charters Each Committee should, with leadership from its Chair, develop and maintain a charter describing its duties and responsibilities. Charters developed or amended will be reviewed by the Governance Committee and approved by the full Board. 24. Assignment and Rotation of Committee Membership The Governance Committee in consultation with the COB or Lead Director, the CEO, and individual Board members, will assign Board members and chairs to various Committees, subject to Board approval. Assignments should comply with various applicable regulations (e.g. SEC, NYSE, IRS) and with the desires of individual members insofar as possible. Consideration should be given to rotating committee membership and chairs from time to time generally on a three to five year schedule. 25. Scheduling of Committee Meetings and Committee Agendas The Chair of each Committee, in consultation with its members, the COB, and management, determines the frequency, length, and agenda of each meeting of the Committee. 26. Committee Reports to the Board The Chair of each Committee will report to the full Board as soon as practical following a Committee meeting all matters discussed, decisions reached, and recommendations made for Board approval. The Chair will have an opportunity to comment on Committee activities at each Board meeting. Minutes of all Committee meetings will be distributed to all Board members. MISCELLANEOUS 27. Board Access to Management Board members have complete access to Luby's management. Board members should use judgment to insure that this contact is not distracting to business operations or that it could be perceived as infringing on the responsibilities of the CEO. Correspondence from a Board member to a member of management should be copied to the CEO and COB. 28. Communications with the Public and Various Constituencies The CEO is responsible for establishing effective communications with Luby's various constituencies, i.e. press, shareholders, potential investors, customers, communities, suppliers, creditors, and corporate partners. Management speaks for Luby's, and Board members should communicate with these constituencies only with the consent and generally at the request of management. 29. Assessing Board Performance Approximately annually, the COB will survey Board members on their perceptions of the performance and effectiveness of the Board and solicit suggestions for improving its performance. The objective is to increase the effectiveness of the Board and not to target individual Board members. The results of this survey will be reported by the COB to the full Board. 30. Board Compensation Luby's policy is to compensate nonmanagement directors competitively relative to companies of comparable size. The Governance Committee will annually recommend to the full Board for its consideration director compensation for the next year. 31. Stock Ownership Guidelines for Directors The Board believes that each Luby's director should accumulate a meaningful investment in Luby's stock and has established guidelines for share ownership. Currently, directors are expected to accumulate, over time, common shares with a market value of at least $100,000. Luby's has established a tax deferred Nonemployee Director Phantom Stock Plan. Beginning in 1999 and until the ownership guidelines are met, the nonemployee director will receive at least $10,000 of the annual retainer in phantom stock units to be redeemed for a like number of common shares when he or she ceases for any reason to be a director. Once ownership guidelines have been met, the director will not be obligated to acquire additional phantom stock units or common shares. 32. Review of Guidelines The Governance Committee is responsible for periodic review of these Guidelines, as well as consideration of other corporate governance issues that may, from time to time, merit consideration of the entire Board. 33. Intent These Guidelines are intended to be a statement of general principles to guide the Board in formulating corporate policy. The Guidelines are not rules or bylaws. They may be amended from time to time by the Board. In addition, the Board may on occasion depart from the Guidelines when circumstances indicate that a departure is in the best interest of the Company and its shareholders. -----END PRIVACY-ENHANCED MESSAGE-----