-----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, Tj53vkQS8a5tw2dmGjMv9eyxBOjJCQ2AqSfUYt34x9/5Hq4Nk+feB/rMO+V8qM0p i7BIPbR2H53gkir6udve5Q== 0000016099-99-000013.txt : 19990715 0000016099-99-000013.hdr.sgml : 19990715 ACCESSION NUMBER: 0000016099-99-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990531 FILED AS OF DATE: 19990714 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: 99663967 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 May 31, 1999 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, 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: 22,420,375 shares outstanding as of May 31, 1999 exclusive of 4,982,692 treasury shares) Part I - FINANCIAL INFORMATION Item 1. Financial Statements LUBY'S, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Nine Months Ended May 31, May 31, 1999 1998 1999 1998 ____ ____ ____ ____ (Amounts in thousands except per share data) Sales $127,084 $131,230 $376,563 $379,106 Costs and expenses: Cost of food 29,720 33,151 91,742 95,897 Payroll and related costs 38,929 38,765 115,382 115,477 Occupancy and other operating expenses 39,110 39,059 116,982 114,933 General and administrative expenses 5,351 6,658 17,105 17,164 ________ ________ ________ ________ 113,110 117,633 341,211 343,471 ________ ________ ________ ________ Income from operations 13,974 13,597 35,352 35,635 Interest expense (1,165) (1,288) (3,611) (3,813) Other income, net 338 342 1,238 1,245 ________ ________ ________ ________ Income before income taxes 13,147 12,651 32,979 33,067 Provision for income taxes 4,371 4,504 11,312 11,772 ________ ________ ________ ________ Net income $ 8,776 $ 8,147 $ 21,667 $ 21,295 ________ ________ ________ ________ Net income per share - basic and assuming dilution $.39 $.35 $.96 $.92 Cash dividends per share $.20 $.20 $.60 $.60 Average number of shares outstanding 22,420 23,271 22,680 23,270 See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued) LUBY'S, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) May 31, August 31, 1999 1998 ______ _________ (Thousands of dollars) ASSETS Current assets: Cash and cash equivalents $ 696 $ 3,760 Trade accounts and other receivables 774 704 Food and supply inventories 3,993 5,072 Prepaid expenses 4,322 4,375 Deferred income taxes 958 1,201 ________ ________ Total current assets 10,743 15,112 Property held for sale 12,647 17,340 Investments and other assets - at cost 9,248 7,992 Property, plant, and equipment - at cost, net 303,166 298,597 ________ ________ $335,804 $339,041 ________ ________ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 13,697 $ 12,482 Dividends payable 4,484 4,654 Accrued expenses and other liabilities 25,508 28,231 Income taxes payable 2,829 2,069 ________ ________ Total current liabilities 46,518 47,436 Long-term debt 74,000 73,000 Deferred income taxes and other credits 14,569 13,191 Shareholders' equity: Common stock 8,769 8,769 Paid-in capital 27,049 27,012 Retained earnings 270,703 262,540 Less cost of treasury stock (105,804) (92,907) ________ ________ Total shareholders' equity 200,717 205,414 ________ ________ $335,804 $339,041 ________ ________ See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued) LUBY'S, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended May 31, 1999 1998 ____ ____ (Thousands of dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 21,667 $ 21,295 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,886 15,802 Increase (decrease) in accrued expenses and other liabilities (2,686) 143 Other, net 5,311 (5,561) ________ ________ Net cash provided by operating activities 39,178 31,679 ________ ________ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposal of property held for sale 5,020 3,568 Purchases of land held for future use (4,563) (948) Purchases of property, plant, and equipment (16,636) (17,498) ________ ________ Net cash used in investing activities (16,179) (14,878) ________ ________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock under stock option plan --- 42 Proceeds from long-term debt 602,500 658,000 Reductions of long-term debt (601,500) (665,000) Purchases of treasury stock (13,389) --- Dividends paid (13,674) (13,961) ________ ________ Net cash used in financing activities $(26,063) $(20,919) ________ ________ Net decrease in cash and cash equivalents (3,064) (4,118) Cash and cash equivalents at beginning of period 3,760 6,430 ________ ________ Cash and cash equivalents at end of period $ 696 $ 2,312 ________ ________ See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued) LUBY'S, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the Nine Months Ended May 31, 1999 and 1998 (UNAUDITED)
Total Common Stock Paid-in Retained Shareholders' Issued Treasury Capital Earnings Equity ______ ________ _______ ________ _____________ (Thousands of dollars) Balance at August 31, 1997 $8,769 $(93,014) $26,945 $276,140 $218,840 Net income for the period --- --- --- 21,295 21,295 Common stock issued under employee benefit plans, net of shares tendered in partial payment and including tax benefits --- 107 54 (65) 96 Cash dividends --- --- --- (13,962) (13,962) ______ ________ _______ ________ ________ Balance at May 31, 1998 $8,769 $(92,907) $26,999 $283,408 $226,269 ______ ________ _______ ________ ________ Balance at August 31, 1998 $8,769 $(92,907) $27,012 $262,540 $205,414 Net income for the period --- --- --- 21,667 21,667 Common stock issued under employee benefit plans, net of shares tendered in partial payment and including tax benefits --- 21 37 --- 58 Cash dividends --- --- --- (13,504) (13,504) Purchases of treasury stock --- (12,918) --- --- (12,918) ______ ________ _______ ________ ________ Balance at May 31, 1999 $8,769 $(105,804) $27,049 $270,703 $200,717 ______ ________ _______ ________ ________ See accompanying notes.
Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued) LUBY'S, INC. NOTES TO FINANCIAL STATEMENTS May 31, 1999 (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, 1998. 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. 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 $3,064,000 from the end of the preceding fiscal year to May 31, 1999. All capital expenditures for fiscal 1999 are being funded from cash flows from operations, cash equivalents, and long-term debt. Capital expenditures for the nine months ended May 31, 1999, were $21,199,000. As of May 31, 1999, the company owned six undeveloped land sites, four land sites on which restaurants are under construction, and several properties held for sale. During the nine months ended May 31, 1999, the company purchased 850,300 shares of its common stock at a cost of $12,918,000, which are being held as treasury stock. These shares were purchased under a 1,000,000 share authorization which expired December 31, 1998. 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 May 31, 1999, the amount outstanding under this line of credit was $74,000,000. 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 May 31, 1999 compared to the quarter ended May 31, 1998 _____________________________________________________________________ Sales decreased $4,146,000, or 3.2%, primarily due to the closing of ten restaurants since May 31, 1998. In addition, sales volumes at restaurants opened over one year declined 1.4% during the quarter. This decline was partially offset by the addition of one new restaurant in fiscal 1999. Cost of food decreased $3,431,000, or 10.3%, primarily due to the savings associated with the consolidation of our purchasing under a prime vendor program and the decline in sales. As a percentage of sales, food costs were lower versus the prior year due to various additional factors including increased drink sales from new self-serve drink counters and other sales mix changes, the impact of a new manager compensation plan which provides more of an incentive to improve margins at all sales volumes, and certain menu price increases. Although sales declined, payroll and related costs increased slightly due to higher hourly wage rates related to tight labor markets for entry-level employees. Occupancy and other operating expenses remain fairly flat as the increase in advertising expenditures, higher food-to-go packaging costs, and higher costs associated with the rollout of a new uniform program for restaurant employees were offset by fewer restaurants and lower depreciation expense associated with store closings and asset impairments. General and administrative expenses decreased $1,307,000, or 19.6%, as the recording of a lump sum severance agreement and professional fees associated with the company's strategic plan were recorded in the prior year. Interest expense decreased $123,000, or 9.5%, due to lower average borrowings under the line of credit agreement and a lower weighted average interest rate during the current period as compared to the same period last year. The provision for income taxes declined $133,000, or 3.0%, as the effective tax rate decreased from 35.6% to 33.2% due to lower estimated state taxes as well as higher than expected tax credits. Nine months ended May 31, 1999 compared to the nine months ended May 31, 1998 _____________________________________________________________________________ Sales decreased $2,543,000, or 0.7%, primarily due to the closing of five restaurants in fiscal 1998 and eight restaurants in fiscal 1999. This decline was partially offset by the addition of one new restaurant in fiscal 1999 and five in fiscal 1998. In addition, sales volumes at restaurants opened over one year increased approximately 1.0%. Cost of food decreased $4,155,000, or 4.3%, primarily due to the savings associated with our conversion to a prime vendor program and the decline in sales. As a percentage of sales, food costs were lower versus the prior year due to various additional factors including increased drink sales from new self-serve drink counters and other sales mix changes, the impact of a new manager compensation plan which provides more of an incentive to improve margins at all sales volumes, and certain menu price increases. Although sales declined, payroll and related costs remained fairly flat due to higher hourly wage rates related to tight labor markets for entry-level employees. Occupancy and other operating expenses increased $2,049,000, or 1.8%, due to an increase in advertising expenditures, higher food-to-go packaging costs, and higher costs associated with the rollout of a new uniform program for all hourly employees. These increases were partially offset by fewer restaurants and lower depreciation expense associated with store closings and asset impairments. General and administrative expenses declined $59,000 or 0.3%. The recording of a lump sum severance agreement and professional fees associated with the company's strategic plan which were recorded in the prior year were offset by higher corporate salaries and benefits associated with the addition of new positions to support the implementation of the company's strategic plan and costs relating to increased recruiting and training efforts for store management in the current year. Interest expense decreased $202,000, or 5.3%, due to lower average borrowings under the line-of-credit agreement and a lower weighted average interest rate during the current period as compared to the same period last year. The provision for income taxes decreased $460,000, or 3.9%. The effective tax rate decreased from 35.6% to 34.3% due to lower estimated state taxes and higher than expected tax credits. The Year 2000 _____________ During 1998 the company, in the ordinary course of business, decided to migrate its information technology from internally developed systems to commercially available products. The decision was made for a variety of business reasons and the new systems are designed to provide the infrastructure to support corporate and restaurant-based systems. The newly implemented systems are Year 2000 compliant. The transition to the new technology was completed in January 1999. The company believes the Year 2000 will not pose significant operational problems for its computer systems. The cost of the Year 2000 project is estimated to be $200,000, primarily for services and costs of updating some existing software. The company has established a committee which initiated communications with various third parties with which it has significant relationships to determine their readiness with respect to the Year 2000 issue. These third parties include food and paper distributors, banks, and other entities. Based on responses received from these third parties, it appears that the Year 2000 issues are being addressed. The company has not been informed of significant Year 2000 issues by third parties with which it has material relationships. The company intends to continue communications and monitor Year 2000 concerns that might develop. The company has obtained assurances that our primary food and paper distributors will have ample stock on hand should any secondary distributors experience unanticipated Year 2000 issues. Based on our findings and discussions with all significant vendors, the company believes the likelihood is remote that its vendors have not fully addressed the Year 2000 issues. However, despite the company's diligent preparation, some of its vendors may fail to perform effectively or may fail to timely or completely deliver products or services. In those circumstances, the company expects to be able to conduct normal business operations and to be able to obtain necessary products from alternative vendors, however, there would be some disruption which would have an adverse effect on the company's consolidated financial position, results of operations, and cash flows. 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 (continued) Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3(a) Certificate of Incorporation of Luby's, Inc., as currently in effect (filed as Exhibit 3(b) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 3(b) Bylaws of Luby's, Inc. as currently in effect (filed as Exhibit 3(c) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 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) Luby's Cafeterias, Inc. Incentive Bonus Plan for Fiscal 1998 adopted January 9, 1998 (filed as Exhibit 10(g) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(d) Performance Unit Plan of Luby's Cafeterias, Inc. approved by the shareholders 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(e) 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(f) 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(g) 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(h) 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(i) 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(j) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted March 19, 1998 (filed as Exhibit 10(o) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(k) 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(l) 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(m) 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(n) 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(o) 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(p) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 9, 1998 (filed as Exhibit 10(u) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(q) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted May 21, 1999. 10(r) 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(s) Amendment dated January 8, 1999, to Employment Agreement between Luby's Cafeterias, Inc. and Barry J.C. Parker (filed as Exhibit 10(r) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 10(t) 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(u) 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(v) Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted March 19, 1998 (filed as Exhibit 10(aa) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(w) Salary Continuation Agreement dated May 14, 1998, between Luby's Cafeterias, Inc. and Sue Elliott (filed as Exhibit 10(cc) to the company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1998, and incorporated herein by reference). 10(x) Salary Continuation Agreement dated June 1, 1998, between Luby's Cafeterias, Inc. and Alan M. Davis (filed as Exhibit 10(dd) to the company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1998, and incorporated herein by reference). 10(y) Luby's Incentive Stock Plan adopted October 16, 1998 (filed as Exhibit 10(cc) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference). 10(z) Incentive Bonus Plan for Fiscal 1999 adopted October 16, 1998 (filed as Exhibit 10(dd) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference). 10(aa) Form of Change in Control Agreement entered into between Luby's, Inc. and Barry J.C. Parker, President and Chief Executive Officer, as of January 8, 1999 (filed as Exhibit 10(z) to the company's Quarterly report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 10(bb) Form of Change in Control Agreement entered into between Luby's, Inc. and each of its Senior Vice Presidents as of January 8, 1999 (filed as Exhibit 10(aa) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 10(cc) Luby's, Inc. Deferred Compensation Plan effective June 1, 1999. 11 Statement re computation of per share earnings. 99(a) Corporate Governance Guidelines of Luby's Cafeterias, Inc. as amended January 7, 1999 (filed as Exhibit 99(a) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). (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, INC. (Registrant) BARRY J.C. PARKER By: _____________________________ Barry J. C. Parker President and Chief Executive Officer LAURA M. BISHOP By: _____________________________ Laura M. Bishop Senior Vice President and Chief Financial Officer Dated: July 14, 1999 EXHIBIT INDEX Number Document Pages 3(a) Certificate of Incorporation of Luby's, Inc., as currently in effect (filed as Exhibit 3(b) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 3(b) Bylaws of Luby's, Inc. as currently in effect (filed as Exhibit 3(c) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 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) Luby's Cafeterias, Inc. Incentive Bonus Plan for Fiscal 1998 adopted January 9, 1998 (filed as Exhibit 10(g) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(d) Performance Unit Plan of Luby's Cafeterias, Inc. approved by the shareholders 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(e) 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(f) 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(g) 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(h) 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(i) 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(j) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted March 19, 1998 (filed as Exhibit 10(o) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(k) 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(l) 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(m) 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(n) 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(o) 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(p) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 9, 1998 (filed as Exhibit 10(u) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(q) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted May 21, 1999. 10(r) 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(s) Amendment dated January 8, 1999, to Employment Agreement between Luby's Cafeterias, Inc. and Barry J.C. Parker (filed as Exhibit 10(r) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 10(t) 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(u) 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(v) Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted March 19, 1998 (filed as Exhibit 10(aa) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 10(w) Salary Continuation Agreement dated May 14, 1998, between Luby's Cafeterias, Inc. and Sue Elliott (filed as Exhibit 10(cc) to the company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1998, and incorporated herein by reference). 10(x) Salary Continuation Agreement dated June 1, 1998, between Luby's Cafeterias, Inc. and Alan M. Davis (filed as Exhibit 10(dd) to the company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1998, and incorporated herein by reference). 10(y) Luby's Incentive Stock Plan adopted October 16, 1998 (filed as Exhibit 10(cc) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference). 10(z) Incentive Bonus Plan for Fiscal 1999 adopted October 16, 1998 (filed as Exhibit 10(dd) to the company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference). 10(aa) Form of Change in Control Agreement entered into between Luby's, Inc. and Barry J.C. Parker, President and Chief Executive Officer, as of January 8, 1999 (filed as Exhibit 10(z) to the company's Quarterly report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 10(bb) Form of Change in Control Agreement entered into between Luby's, Inc. and each of its Senior Vice Presidents as of January 8, 1999 (filed as Exhibit 10(aa) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). 10(cc) Luby's, Inc. Deferred Compensation Plan effective June 1, 1999. 11 Statement re computation of per share earnings. 99(a) Corporate Governance Guidelines of Luby's Cafeterias, Inc. as amended January 7, 1999 (filed as Exhibit 99(a) to the company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference). EX-10 2 AMENDMENT TO SERP PLAN; LUBY'S DEFERRED COMP PLAN Exhibit 10(q) LUBY'S, INC. RESOLUTIONS OF BOARD OF DIRECTORS May 21, 1999 SERP WHEREAS, the Company currently maintains the Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan (the "SERP") for certain of its key executives; and WHEREAS, the Company is establishing a Luby's, Inc. Deferred Compensation Plan (the "Deferred Compensation Plan") for the benefit of all of its highly compensated employees (some of which are covered as Participants under the SERP); and WHEREAS, under the Deferred Compensation Plan eligible highly compensated employees will be electing to defer the receipt of compensation they otherwise would be entitled to receive for services performed for the Company; and WHEREAS, such deferral of compensation would serve to reduce benefits Participants in the SERP would otherwise be entitled to receive; and WHEREAS, the Company desires that SERP benefits payable to highly compensated employees deferring compensation under the Deferred Compensation Plan should not be reduced; NOW, THEREFORE, BE IT RESOLVED: The Board of Directors of the Company authorizes and directs the appropriate officers of the Company to amend the SERP by amending the definition of "Accrued Benefit" contained in Section 1.1 of the SERP by inserting the following sentence at the end thereof: Notwithstanding the preceding provisions of this Section 1.1 to the contrary, the offset described above for the Annualized Value of any Deferred Compensation Agreement shall not include any offset for benefits accrued under the Luby's, Inc. Deferred Compensation Plan established effective June 1, 1999, as it may be amended from time to time. Exhibit 10(cc) LUBY'S, INC. DEFERRED COMPENSATION PLAN Section LUBY'S, INC. DEFERRED COMPENSATION PLAN TABLE OF CONTENTS ARTICLE I -- DEFINITIONS Account 1.1 Affiliate 1.2 Beneficiary 1.3 Board of Directors 1.4 Bonus 1.5 Change of Control 1.6 Code 1.7 Committee 1.8 Company 1.9 Compensation 1.10 Deferred Compensation Ledger 1.11 Disability 1.12 Elective Deferral 1.13 Elective Deferral Agreement 1.14 Employer 1.15 401(k) Plan 1.16 Fund 1.17 Highly Compensated Employee 1.18 Participant 1.19 Plan 1.20 Plan Year 1.21 Retirement 1.22 Trust 1.23 Trustee 1.24 ARTICLE II - ELIGIBILITY ARTICLE III - DEFERRAL Deferral Election 3.1 Deferral Amount 3.2 ARTICLE IV - ACCOUNT Establishing a Participant's Account 4.1 Credit of the Participant's Deferral 4.2 Gauge for Determining Benefits 4.3 ARTICLE V - VESTING ARTICLE VI - DISTRIBUTIONS Death/Beneficiary Designation 6.1 Disability 6.2 Retirement 6.3 Termination Prior to Death, Disability or Retirement 6.4 Hardship Withdrawals 6.5 Payment on Specified Event 6.6 Responsibility for Distributions and Withholding of Taxes 6.7 ARTICLE VII - ADMINISTRATION Committee Appointment 7.1 Committee Organization and Voting 7.2 Powers of the Committee 7.3 Committee Discretion 7.4 Annual Statements 7.5 Reimbursement of Expenses 7.6 ARTICLE VIII - AMENDMENT AND/OR TERMINATION AND CHANGE OF CONTROL Amendment or Termination of the Plan 8.1 No Retroactive Effect on Account 8.2 Effect of Change of Control 8.3 Effect of Termination 8.4 ARTICLE IX - FUNDING Payments Under This Agreement are the Obligation of the Company 9.1 Agreement May Be Funded Through Rabbi Trust 9.2 Participants Must Rely Only on General Credit of the Company 9.3 ARTICLE X - MISCELLANEOUS Limitation of Rights 10.1 Distributions to Incompetents or Minors 10.2 Nonalienation of Benefits 10.3 Reliance Upon Information 10.4 Severability 10.5 Notice 10.6 Gender and Number 10.7 Governing Law 10.8 Effective Date 10.9 LUBY'S, INC. DEFERRED COMPENSATION PLAN WHEREAS, Luby's, Inc. (the "Company") desires to establish a deferred compensation plan for all of its highly compensated employees (as that term is defined in Section 4.14(q) of the Internal Revenue Code) (the "Participants"), all of whom constitute a select group of management or highly compensated employees of the Company for purposes of Title I of the Employee Retirement Income Security Act of 1974 ("ERISA"); NOW, THEREFORE, the Company adopts the Deferred Compensation Plan as set forth in the following Luby's, Inc. Deferred Compensation Plan as follows: ARTICLE I DEFINITIONS 1.1 Account. "Account" means a Participant's Account in the Deferred Compensation Ledger maintained by the Committee which reflects the benefits a Participant is entitled to under this Plan as a result of his deferral of Compensation under the Plan. 1.2 Affiliate. "Affiliate" means any subsidiary corporation of the Company. The term "subsidiary corporation" means any corporation in an unbroken chain of corporations beginning with the Company if, at the time of the action or transaction, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 1.3 Beneficiary. "Beneficiary" means a person or entity designated by the Participant under the terms of this Plan to receive any amounts distributed under the Plan upon the death of the Participant. 1.4 Board of Directors. "Board of Directors" means the Board of Directors of Luby's, Inc., or any committee designated by the Board of Directors to assume its duties or responsibilities with respect to the Plan. 1.5 Bonus. "Bonus" means the annual bonus, if any, paid to certain Participants from year to year at the discretion of the Board of Directors. The term "Bonus" shall not include any regular and recurring monthly bonuses paid to certain Participants. 1.6 Change of Control. "Change of Control" mean the occurrence of any of the events described in subsections (a) through (d) below: (a) Either (A) receipt by the Company of a report on Schedule 13D, or an amendment to such a report, filed with the Securities and Exchange Commission (the "SEC") pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the "1934 Act") disclosing that any person (as such term is used in Section 13(d) of the 1934 Act) ("Person"), is the beneficial owner, directly or indirectly, of twenty percent or more of the combined voting power of the outstanding stock of the Company, or (B) actual knowledge by the Board of Directors of facts on the basis of which any person is required to file such a report on Schedule 13D, or to make an amendment to such a report, with the SEC (or would be required to file such a report or amendment upon the lapse of the applicable period of time specified in Section 13(d) of the 1934 Act) disclosing that such Person is the beneficial owner, directly or indirectly, of twenty percent or more of the combined voting power of the outstanding stock of Luby's, Inc. (b) Purchase by any Person other than the Company or a wholly-owned subsidiary of the Company, of shares pursuant to a tender or exchange offer to acquire any stock of the Company (or securities convertible into stock) for cash, securities or any other consideration provided that, after consummation of the offer, such Person is the beneficial owner (as defined in Rule 13d-e under the 1934 Act), directly or indirectly, of twenty percent or more of the combined voting power of the outstanding stock of the Company (calculated as provided in paragraph (d) of Rule 13d-3 under the 1934 Act in the case of rights to acquire stock). (c) Approval by the shareholders of the Company of a transaction described in any of the following paragraphs: (i) Any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of stock of the Company would be converted into cash, securities or other property, other than a consolidation or merger of the Company in which holders of its stock immediately prior to the consolidation or merger own at least a majority of the combined voting power of the outstanding stock of the surviving corporation immediately after the consolidation or merger (or at least a majority of the combined voting power of the outstanding stock of a corporation which owns directly or indirectly all of the voting stock of the surviving corporation). (ii) Any consolidation or merger in which the Company is the continuing or surviving corporation but in which the shareholders of the Company immediately prior to the consolidation or merger do not hold at least a majority of the combined voting power of the outstanding stock of the continuing or surviving corporation (except where such holders of stock hold at least a majority of the combined voting power of the outstanding stock of the corporation which owns directly or indirectly all of the voting stock of the Company). (iii) Any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company (except such a transfer to a corporation which is wholly owned, directly or indirectly, by the Company), or any complete liquidation of the Company. (iv) Any merger or consolidation of the Company where, after the merger or consolidation, one Person owns 100% of the shares of stock of the Company (except where the holders of the Company voting stock immediately prior to such merger or consolidation own at least a majority of the combined voting power of the outstanding stock of such Person immediately after such merger or consolidation). (d) A change in the majority of the members of the Board of Directors within a 24-month period unless the election or nomination for election by the Company shareholders of each new director was approved by the vote of at least two-thirds of the directors then still in office who were in office at the beginning of the 24-month period. A Change In Control occurs on the date that an event described in subsection (a), (b), or (d) occurs. In the case of a transaction described in subsection (c) which is subject to approval by the shareholders, the Change In Control occurs on the date the transaction is complete. 1.7 Code. "Code" means the Internal Revenue Code of 1986, as amended from time to time. 1.8 Committee. "Committee" means the persons who are from time to time designated by the Board of Directors to serve as the Committee administering the Plan. These persons shall constitute the members of the Committee administering this Plan. 1.9 Company. "Company" means Luby's, Inc., the sponsor of the Plan. 1.10 Compensation. "Compensation" means the same as the definition of compensation used under the 401(k) Plan for purposes of determining actual deferral percentages under the 401(k) Plan; provided, however, that Bonuses shall not be included as Compensation and Compensation shall be determined without regard to the limitations imposed under the 401(k) Plan on maximum recognizable compensation that may be taken into account thereunder. 1.11 Deferred Compensation Ledger. "Deferred Compensation Ledger" means the ledger maintained by the Committee for each Participant which reflects the amount of Compensation and/or Bonus deferred by the Participant under this Plan pursuant to his Elective Deferral Agreement and the amount of earnings credited to his Account. 1.12 Disability. "Disability" means a physical or mental condition that meets the eligibility requirements for the receipt of disability income under the Company's long term disability benefit plan then in effect; provided, however, that should the Company not maintain a long term disability benefit plan, then, Disability shall mean that determined under the federal Social Security Act. 1.13 Elective Deferral. "Elective Deferral" means the amount of Compensation and/or Bonus the Participant elects to defer under the terms of this Plan. 1.14 Elective Deferral Agreement. "Elective Deferral Agreement" means the agreement entered into by the Participant from time to time setting forth his Elective Deferrals under the Plan. 1.15 Employer. "Employer" means the Company or any Affiliate which adopts this Plan. 1.16 401(k) Plan. "401(k) Plan" means the Luby's Savings and Investment Plan, incorporating 401(k) features, as it may be amended from time to time. 1.17 Fund. "Fund" means the investment fund or funds, or portfolio or portfolios selected by the Committee and attached to and incorporated in this Plan, which shall be used to measure the benefits to be provided by this Plan. 1.18 Highly Compensated Employee. "Highly Compensated Employee" means all employees of the Employer constituting highly compensated employees of the Employer as defined in Section 414(q) of the Code as determined under the 401(k) Plan from time to time. Provided, however, with respect to a newly-hired employee of an Employer who would constitute a Highly Compensated Employee of the Employer but for his employment during the preceding Plan Year, such an employee shall be considered a Highly Compensated Employee for purposes of determining his or her eligibility to participate under the Plan. 1.19 Participant. "Participant" means all Highly Compensated Employees of the Employer, all of whom constitute a member of a select group of management or other highly compensated employees of the Employer. 1.20 Plan. "Plan" means Luby's, Inc. Deferred Compensation Plan set forth in this document, as amended from time to time. 1.21 Plan Year. "Plan Year" means the calendar year. 1.22 Retirement. "Retirement" means the retirement of a Participant from the Employer, in accordance with the Employer's then prevailing retirement policies. 1.23 Trust. "Trust" means any grantor's trust established by the Company and the Trustee, if any, pursuant to Revenue Procedure 92-64, which would intend to constitute a model "rabbi trust" for the purpose of establishing a funding vehicle for the payment of benefits under the Plan. 1.24 Trustee. "Trustee" means any trustee that may be appointed by the Company from time to time under the Trust. ARTICLE II ELIGIBILITY All Highly Compensated Employees of any Employer are eligible to participate in this Plan in any Plan Year in which such person is a Highly Compensated Employee. The Committee shall notify all Highly Compensated Employees of their eligibility to participate in the Plan. In order to commence participation in the Plan, such an eligible Participant shall execute an Elective Deferral Agreement (which may or may not provide for Elective Deferrals by the Participant) in a form satisfactory to the Committee, together with any other documents as may be required from time to time by the Committee. ARTICLE III DEFERRAL 3.1 Deferral Election. A Participant may elect within 30 days after notification of being eligible to participate in the Plan, or not less than 30 days prior to the beginning of any future Plan Year by properly completing an Elective Deferral Agreement what, if any, percentage of his Compensation and/or Bonus earned during the ensuing Plan Year is to be deferred under this Plan. Once an election has been made under the Elective Deferral Agreement as to the percentage of Compensation and/or Bonus to be deferred, it becomes irrevocable for that Plan Year. The election to participate in the Plan for a given Plan Year will be effective only upon receipt by the Committee of the Participant's Elective Deferral Agreement on such form and at such time as will be determined by the Committee from time to time. If the Committee fails to receive a Participant's Elective Deferral Agreement prior to the beginning of a Plan Year, that Participant will be deemed to have elected to continue in effect his current election to defer (or not defer) any part of his Compensation and/or Bonus for that Plan Year, as well as subsequent Plan Years, until he has revoked or modified his election. 3.2 Deferral Amount. A Participant may elect to defer a percentage of his Compensation for the ensuing Plan Year under this Plan in such percentage of his Compensation as the Committee may announce prior to the commencement of the Plan Year. Notwithstanding the preceding provision of this Section 3.2, with respect to an eligible Participant who has not met the eligibility conditions to participate in the 401(k) Plan, such a Participant shall be entitled to elect to defer an additional amount or percentage of his or her Compensation as the Committee may announce prior to the commencement of the Plan Year; provided, however, at such point in time that the eligible Participant becomes eligible to participate in the 401(k) Plan, he or she shall only be entitled to elect to defer a percentage of his or her Compensation for the remainder of the Plan Year as is made available to all other Plan Participants. Finally, a Participant may also elect to defer all or a percentage of his or her Bonus, if any, to be paid during the ensuing Plan Year. The amount of any Bonus to be deferred may be any amount or percentage elected by the Participant prior to the commencement of the Plan Year during which the Bonus is to be earned. ARTICLE IV ACCOUNT 4.1 Establishing a Participant's Account. The Committee will establish an Account for each Participant in a special Deferred Compensation Ledger which will be maintained by the Company. The Account will reflect the amount of the Company's obligation to the Participant at any given time. 4.2 Credit of the Participant's Deferral. The Committee will credit the amount of a Participant's deferral to the Participant's Account in the Deferred Compensation Ledger as it would have been paid during the Plan Year but for the deferral which was elected. 4.3 Gauge for Determining Benefits. The Compensation and/or Bonus deferred pursuant to the Elective Deferral Agreement, if any, when allocated to the Account of the Participant, shall be treated as if it were invested in the Fund as of the date of allocation. The amounts entered in the Account shall then begin accruing gains and losses and income at the rate set forth under the Fund as if those amounts were actually invested in the Fund, and shall continue to accrue such gains and losses and income at the rate set forth under the Fund until the valuation date established by the Committee that precedes the date such amounts are distributed from the Account to the Participant pursuant to Article VI of the Plan. ARTICLE V VESTING All deferrals of Compensation and/or Bonus, pursuant to the Elective Deferral Agreement will be 100% vested at all times. The gains, losses and earnings allocated on those deferrals will be 100% vested. ARTICLE VI DISTRIBUTIONS 6.1 Death/Beneficiary Designation. Upon the death of a Participant, the Participant's Beneficiary or Beneficiaries will receive the balance then credited to the Participant's Account in the Deferred Compensation Ledger in the form of a lump sum distribution. The payment will be made or commence to be paid within 90 days after the Participant's death. Each Participant, at the time of entering into his initial Elective Deferral Agreement, must file with the Committee a designation of one or more Beneficiaries to whom distributions otherwise due the Participant will be made in the event of his death prior to the complete distribution of the amount credited to his Account in the Deferred Compensation Ledger. The designation will be effective upon receipt by the Committee of a properly executed form which the Committee has approved for that purpose. The Participant may from time to time revoke or change any designation of Beneficiary by filing another approved Beneficiary designation form with the Committee. If there is no valid designation of Beneficiary on file with the Committee at the time of the Participant's death, or if all of the Beneficiaries designated in the last Beneficiary designation have predeceased the Participant or otherwise ceased to exist, the Beneficiary will be the Participant's spouse, if the spouse survives the Participant, or otherwise the Participant's estate. A Beneficiary must survive the Participant by 60 days in order to be considered to be living on the date of the Participant's death. If any Beneficiary survives the Participant but dies or otherwise ceases to exist before receiving all amounts due the Beneficiary from the Participant's Account, the balance of the amount which would have been paid to that Beneficiary will, unless the Participant's designation provides otherwise, be distributed to the individual deceased Beneficiary's estate or to the Participant's estate in the case of a Beneficiary which is not an individual. Any Beneficiary designation which designates any person or entity other than the Participant's spouse must be consented to in writing in a form acceptable to the Committee in order to be effective. 6.2 Disability. Upon the Disability of the Participant, the Participant shall receive or commence to receive the value of the amounts credited to his Account as soon as administratively practicable following determination of said Participant's Disability, in the form of a lump sum distribution if the balance then credited to the Participant's Account does not exceed $50,000. In the event the balance then credited to the Participant's Account is in excess of $50,000 but less than $200,000, then the amount shall be distributed in the form of five annual installments. If the balance then credited to the Participant's Account exceeds $200,000, then it shall be distributed in ten annual installments. Any such Accounts distributed in installment payments shall continue to accrue earning to the Account as set forth in section 4.3 of the Plan until such Account has been fully distributed. 6.3 Retirement. Upon the Retirement of the Participant, the Participant shall receive or commence to receive the value of the amounts credited to his Account as soon as administratively practicable following said Participant's Retirement, in the manner set forth in Section 6.2 as if the Participant had become Disabled; provided, however, that a Participant may, upon giving at least one year's notice prior to his or her actual Retirement, elect to receive a distribution exceeding $200,000 in five annual installments or, in the alternative, a distribution exceeding $50,000 but less than $200,000 in ten annual installments if said election is provided to the Committee at least one year prior to the Participant's Retirement. 6.4 Termination Prior to Death, Disability or Retirement. Upon the Participant's termination from the employ of the Employer, prior to death, Disability or Retirement, the Participant shall receive the value of the amounts credited his Account as soon as administratively practicable following said Participant's termination in the manner set forth in Section 6.1 as if the Participant had died. 6.5 Hardship Withdrawals. Any Participant may request a hardship withdrawal. No hardship withdrawal can exceed the lesser of the amount credited to the Participant's Account or the amount reasonably needed to satisfy the emergency need taking into account all other resources reasonably available to meet this Participant's emergency need. Whether a hardship exists and the amount reasonably needed to satisfy the emergency need (taking into account the Participant's other means) will be determined by the Committee based upon the evidence presented by the Participant and the rules established in this Section; but shall include but not be limited to unforeseeable emergencies arising from unexpected illness or accident involving the Participant or his dependents, loss of property due to casualty or other extraordinary circumstances such as impending bankruptcy, a long and serious illness of the Participant or his dependents. If a hardship withdrawal is approved by the Committee it will be paid within 10 days of the Committee's determination. The circumstances that will constitute a hardship will depend upon the facts of each case. It is the intent of the Company that this section 6.5 be interpreted in a manner consistent with Internal Revenue Service Revenue Procedure 92-65 as it may be amended or superceded from time to time. 6.6 Payment on Specified Event. The Participant shall have the right to make one election at his or her commencement of participation in the Plan to receive in one lump-sum that portion or those portions of his Account on a specific date specified by the Participant in his Elective Deferral Agreement (or any other agreement provided by the Committee for this purpose) or the balance of his Account, if less, so long as the date specified is at least five (5) years after the date of the election. In addition to the Participant's right to make an election at his or her commencement of participation, the Participant shall also have the right to request a lump sum distribution of all or a portion of his Account on any future date specified by the Participant. However, in the event of such a subsequent distribution, the Participant must either (i) suffer a 10% forfeiture of the amount that would otherwise be distributed or (ii) refrain from future participation in the Plan for a period of at least five years from the date of the distribution. The same forfeiture or hold out requirement shall apply in the event the Participant elects to modify or revoke his or her election made at commencement of participation in the Plan but prior to distribution pursuant to that initial election. Any amounts distributed under his Elective Deferral Agreement pursuant to this Section 6.6 shall immediately reduce the Participant's Account for purposes of any further income accrual and for distributions on or after that date. 6.7 Responsibility for Distributions and Withholding of Taxes. The Committee will furnish information to the Company concerning the amount and form of distribution to any Participant entitled to a distribution so that the Company may make or cause the Trust (if one is established) to make the distribution required. The Committee will also calculate the deductions from the amount of the benefit paid under the Plan for any taxes required to be withheld by federal, state or local government and will cause them to be withheld. ARTICLE VII ADMINISTRATION 7.1 Committee Appointment. The Committee will be comprised of those persons designated from time to time by its Board of Directors. The Board of Directors will have the sole discretion to remove any one or more Committee members and appoint one or more replacement or additional Committee members from time to time. 7.2 Committee Organization and Voting. The Board of Directors will select from among the members of the Committee a chairman who will preside at all of its meetings and who will likewise select a secretary without regard to whether that person is a member of the Committee. The secretary will keep all records, documents and data pertaining to the Committee's supervision and administration of the Plan. A majority of the members of the Committee will constitute a quorum for the transaction of business and the vote of a majority of the members present at any meeting will decide any question brought before the meeting. In addition, the Committee may decide any question by vote, taken without a meeting, of a majority of its members. A member of the Committee who is also a Participant will not vote or act on any matter relating solely to himself. 7.3 Powers of the Committee. The Committee will have the exclusive responsibility for the general administration of the Plan according to the terms and provisions of the Plan and will have all powers necessary to accomplish those purposes, including but not by way of limitation the right, power and authority: (a) to determine the amount or percentage of Compensation that Participants may elect to defer in a given Plan Year; (b) to make rules and regulations for the administration of the Plan; (c) to construe all terms, provisions, conditions and limitations of the Plan; (d) to determine whether a Change of Control has occurred; (e) to correct any defect, supply any omission or reconcile any inconsistency that may appear in the Plan in the manner and to the extent it deems expedient to carry the Plan into effect for the greatest benefit of all parties at interest; (f) to designate the persons eligible to become Participants; (g) to determine all controversies relating to the administration of the Plan, including but not limited to: (1) differences of opinion arising between the Company and a Participant, except when the difference of opinion relates to the entitlement to, or the amount of, or the method or timing of payment of a benefit affected by a Change of Control, in which event it shall be decided by judicial action; and (2) any question it deems advisable to determine in order to promote the uniform administration of the Plan for the benefit of all parties at interest; and (h) to delegate by written notice those clerical and recordation duties of the Committee, as it deems necessary or advisable for the proper and efficient administration of the Plan. 7.4 Committee Discretion. The Committee in exercising any power or authority granted under this Plan or in making any determination under this Plan shall perform or refrain from performing those acts using its sole discretion and judgment. Any decision made by the Committee or any refraining to act or any act taken by the Committee in good faith shall be final and binding on all parties. The Committee's decision shall never be subject to de novo review. 7.5 Annual Statements. The Committee will cause each Participant to receive an annual (or more frequent, as determined by the Committee) statement as soon as administratively practicable after the conclusion of each Plan Year (or other more frequent reporting period, as applicable) containing the amounts deferred through that Plan Year (or other more frequent reporting period, as applicable) and the interest or earnings applicable to the deferred amounts. 7.6 Reimbursement of Expenses. The Committee will serve without compensation for their services but will be reimbursed by the Company for all expenses properly and actually incurred in the performance of their duties under the Plan. ARTICLE VIII AMENDMENT AND/OR TERMINATION AND CHANGE OF CONTROL 8.1 Amendment or Termination of the Plan. The Board of Directors may amend or terminate this Plan at any time by an instrument in writing. 8.2 No Retroactive Effect on Account. No amendment will affect the rights of any Participant to the amounts then standing to his credit in his Account in the Deferred Compensation Ledger, to change the method of calculating the rate of earnings under the Fund already accrued on amounts deferred by him prior to the date of the amendment. However, the Committee shall retain the right at any time to change in any manner the method of calculating the rate of earnings under the Fund on all amounts deferred by a Participant after the date of the amendment if it has been announced to the Participants. 8.3 Effect of Change of Control. In the event a Change of Control of the Company, this Plan shall automatically terminate effective as of the Change of Control. The Accounts of each Participant shall be paid in accordance with the provisions of Section 8.4, as soon as administratively practicable following the Change of Control. 8.4 Effect of Termination. If the Plan is terminated, all amounts deferred by Participants and credited to a Participant's Account remain vested under Article V, and earnings under the Fund will be applied to the Account in accordance with Section 4.3 as if the Participant were entitled to and did die on the date the Plan terminated. Distribution will be made to the Participant in accordance with Section 6.1 as if the Participant had died, as soon as administratively practicable in one lump sum payment to the Participant. ARTICLE IX FUNDING 9.1 Payments Under This Agreement are the Obligation of the Company. The Company will pay the benefits due the Participants under this Plan; however should it fail to do so when a benefit is due, the benefit will be paid by the trustee of the Trust entered by and between the Company and the Trustee, should such a Trust be established. In any event, if the Trust, should such a Trust be established, fails to pay for any reason, the Company remains liable for the payment of all benefits provided by this Plan. 9.2 Agreement May Be Funded Through Rabbi Trust. It is specifically recognized by both the Company and the Participants that the Company may, but is not required to, contribute any amount it finds desirable to a so-called "Rabbi Trust," established to accumulate assets sufficient to fund the obligations of the Company under this Plan. However, under all circumstances, the rights of the Participants to the assets held in the Trust will be no greater than the rights expressed in this agreement. Nothing contained in any trust agreement which creates any funding trust or trusts will constitute a guarantee by the Company that assets of the Company transferred to that trust or those trusts will be sufficient to pay any benefits under this Plan or would place the Participant in a secured position ahead of general creditors should the Company become insolvent or bankrupt. Any trust agreement prepared to fund the Company's obligations under this agreement must specifically set out these principles so it is clear in that trust agreement that the Participants in this Plan are only unsecured general creditors of the Company in relation to their benefits under this Plan. 9.3 Participants Must Rely Only on General Credit of the Company. It is also specifically recognized by both the Company and the Participants that this Plan is only a general corporate commitment and that each Participant must rely upon the general credit of the Company for the fulfillment of its obligations hereunder. Under all circumstances the rights of Participants to any asset held by the Company will be no greater than the rights expressed in this agreement. Nothing contained in this agreement will constitute a guarantee by the Company that the assets of the Company will be sufficient to pay any benefits under this Plan or would place the Participant in a secured position ahead of general creditors of the Company. Though the Company may establish and may fund a Rabbi Trust, as indicated in Section 9.2, to accumulate assets to fulfill its obligations, the Plan and any such trust will not create any lien, claim, encumbrance, right, title or other interest of any kind whatsoever in any Participant in any asset held by the Company, contributed to any such trust or otherwise designated to be used for payment of any of its obligations created in this agreement. No specific assets of the Company have been or will be set aside, or will in any way be transferred to any trust or will be pledged in any way for the performance of the Company's obligations under this Plan which would remove such assets from being subject to the general creditors of the Company. ARTICLE X MISCELLANEOUS 10.1 Limitation of Rights. Nothing in this Plan will be construed: (a) to give any non-employee member of the Board of Directors any right to be designated a Participant in the Plan; (b) to give a Participant any right with respect to the compensation deferred or the interest credited in the Deferred Compensation Ledger, except in accordance with the terms of this Plan; or (c) to give a Participant or any other person claiming through him any interest or right under this Plan other than that of any unsecured general creditor of the Company. 10.2 Distributions to Incompetents or Minors. Should a Participant become incompetent or should a Participant designate a Beneficiary who is a minor or incompetent, the Committee is authorized to pay the funds due to the parent of the minor or to the guardian of the minor or incompetent or directly to the minor or to apply those funds for the benefit of the minor or incompetent in any manner the Committee determines in its sole discretion. 10.3 Nonalienation of Benefits. No right or benefit provided in this Plan will be transferable by the Participant except, upon his death, to a named Beneficiary as provided in this Plan. No right or benefit under this Plan will be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge the same will be void. No right or benefit under this Plan will in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits. If any Participant or any Beneficiary becomes bankrupt or attempts to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under this Plan, that right or benefit will, in the discretion of the Committee, cease. In that event, the Committee may have the Company hold or apply the right or benefit or any part of it to the benefit of the Participant or Beneficiary, his or her spouse, children or other dependents or any of them in any manner and in any proportion the Committee believes to be proper in its sole and absolute discretion, but is not required to do so. 10.4 Reliance Upon Information. The Committee will not be liable for any decision or action taken in good faith in connection with the administration of this Plan. Without limiting the generality of the foregoing, any decision or action taken by the Committee when it relies upon information supplied it by any officer of the Company, the Company's legal counsel, the Company's independent accountants or other advisors in connection with the administration of this Plan will be deemed to have been taken in good faith. 10.5 Severability. If any term, provision, covenant or condition of the Plan is held to be invalid, void or otherwise unenforceable, the rest of the Plan will remain in full force and effect and will in no way be affected, impaired or invalidated. 10.6 Notice. Any notice or filing required or permitted to be given to the Committee or a Participant will be sufficient if in writing and hand delivered or sent by U.S. mail to the principal office of the Company or to the residential mailing address of the Participant. Notice will be deemed to be given as of the date of hand delivery or if delivery is by mail, as of the date shown on the postmark. 10.7 Gender and Number. Words used in this Plan of one gender are to be construed as though they were also used in another gender in all cases where they would so apply and likewise words in the singular or plural are to be construed as though they also included the other in all cases where they would so apply. 10.8 Governing Law. The Plan will be construed, administered and governed in all respects by the laws of the State of Texas. 10.9 Effective Date. This amendment and restatement of the Plan will be operative and effective on June 1, 1999. IN WITNESS WHEREOF, the Company has executed this document on this 20th day of April, 1999, as authorized by the Board of Directors of the Company on the 8th day of January, 1999. LUBY'S, INC. LAURA M. BISHOP By ____________________________ Senior Vice President and Chief Financial Officer Title __________________________________________________ EX-11 3 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS 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, Inc. for the three and nine months ended May 31, 1999 and 1998. Three months ended May 31, 1999: 22,420,375 x shares outstanding for 92 days 2,062,674,500 Divided by number of days in the period 92 _____________ 22,420,375 Nine months ended May 31, 1999: 23,270,675 x shares outstanding for 52 days 1,210,075,100 23,163,097 x shares outstanding for 9 days 208,467,873 22,870,798 x shares outstanding for 30 days 686,123,940 22,626,065 x shares outstanding for 31 days 701,408,015 22,420,375 x shares outstanding for 151 days 3,385,476,625 _____________ 6,191,551,553 Divided by number of days in the period 273 _____________ 22,679,676 Three months ended May 31, 1998: 23,270,675 x shares outstanding for 92 days 2,140,902,100 Divided by number of days in the period 92 _____________ 23,270,675 Nine months ended May 31, 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 229 days 5,328,984,575 _____________ 6,352,731,916 Divided by number of days in the period 273 _____________ 23,270,080 EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS AUG-31-1999 MAY-31-1999 696 0 774 0 3,993 10,743 471,842 168,676 335,804 46,518 0 0 0 8,769 191,948 335,804 376,563 376,563 207,124 207,124 116,982 0 3,611 32,979 11,312 21,667 0 0 0 21,667 0.96 0.96 Other stockholders' equity amount is less cost of treasury stock of $105,804.
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