sec document
UNITED STATES
SECURTIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|X| Soliciting Material Under Rule 14a-12
LUBY'S, INC.
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(Name of Registrant as Specified in Its Charter)
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD.
PARCHE, LLC
RCG ENTERPRISE, LTD
RCG STARBOARD ADVISORS, LLC
RAMIUS CAPITAL GROUP, L.L.C.
C4S & CO., L.L.C.
PETER A. COHEN
MORGAN B. STARK
JEFFREY M. SOLOMON
THOMAS W. STRAUSS
STEPHEN FARRAR
WILLIAM J. FOX
BRION G. GRUBE
MATTHEW Q. PANNEK
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(Name of Persons(s) Filing Consent Statement, if Other Than the Registrant)
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PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN
THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
Starboard Value and Opportunity Master Fund Ltd. ("Starboard"), an
affiliate of Ramius Capital Group, L.L.C. ("Ramius Capital"), together with the
other participants named herein, intends to make a preliminary filing with the
Securities and Exchange Commission ("SEC") of a proxy statement and an
accompanying proxy card to be used to solicit votes for the election of its
nominees at the 2008 annual meeting of shareholders of Luby's, Inc., a Delaware
corporation (the "Company").
Item 1: On November 5, 2007, RCG Starboard Advisors, LLC, a subsidiary
of Ramius Capital and affiliate of Starboard, issued the following press
release:
FOR IMMEDIATE RELEASE
RAMIUS CAPITAL SENDS OPEN LETTER TO SHAREHOLDERS OF LUBY'S
BELIEVES BOARD CONTINUES TO FAVOR MANAGEMENT OVER SHAREHOLDERS
RAMIUS' INDEPENDENT NOMINEES ARE COMMITTED TO CREATING A STRONGER AND MORE
EFFECTIVELY GOVERNED COMPANY
NEW YORK - NOVEMBER 5, 2007 - RCG Starboard Advisors, LLC, a subsidiary of
Ramius Capital Group, L.L.C. and affiliate of Starboard Value and Opportunity
Master Fund Ltd. (collectively, "Ramius"), today issued a letter to all
shareholders of Luby's, Inc. ("Luby's" or the "Company") (NYSE: LUB) in which
Ramius urged all shareholders to vote for its four independent director nominees
at the upcoming 2008 Annual Meeting of Shareholders, which has been scheduled
for January 15, 2008.
In the letter, Ramius questioned whether the Company's current Board of
Directors has been acting in the best interest of all shareholders. These doubts
are highlighted by its recent decision to increase the exemption under the
poison pill granted to Chris and Harris Pappas allowing them to further increase
their effective control of the Company without paying shareholders a control
premium. Additionally, in five out of the past six shareholder votes, the Board
has chosen to follow management's recommendation, thereby ignoring the
affirmative vote of shareholders on the proposal to declassify the Board.
Ramius Partner Jeffrey C. Smith stated, "While we are pleased that Chris and
Harris Pappas have renewed their commitments to run Luby's through August 2009
and share their belief that Luby's shares represent an attractive value, we are
concerned that the current Board is putting the interests of the Pappas brothers
ahead of those of the other shareholders. Luby's is a public company that should
be run for the benefit of all shareholders and, unfortunately, we believe the
current Board is instead representing the best interests of management."
"Our four independent nominees are highly qualified and possess unique
restaurant industry and financial experience. If elected, our independent
nominees will work diligently with the Board and management to maximize value
for all shareholders."
Ramius also announced that it intends to file its preliminary proxy materials
regarding the upcoming election with the Securities and Exchange Commission
shortly.
The full text of the letter follows:
[RCG STARBOARD ADVISORS LETTERHEAD]
November 5, 2007
Dear Fellow Luby's Shareholder:
RCG Starboard Advisors, LLC, a subsidiary of Ramius Capital Group, L.L.C.,
through its affiliates, including Starboard Value and Opportunity Master Fund
Ltd., is the largest independent investor in Luby's, Inc. ("Luby's" or the
"Company"). We are concerned that the current Board of Directors of the Company
(the "Board") is not representing the best interests of ALL Luby's shareholders.
As a result, we have nominated four independent and highly qualified individuals
for election to Luby's ten-member Board at the January 15, 2008 Annual Meeting.
This election contest is about ensuring that the Board is comprised of
members who will represent the BEST INTERESTS OF ALL SHAREHOLDERS.
LUBY'S IS A PUBLIC COMPANY--THE BOARD HAS AN OBLIGATION TO REPRESENT THE
BEST INTERESTS OF ALL SHAREHOLDERS.
Please do not get confused--this election contest is not about day-to-day
operations of the business.
o We are pleased to see that Chris and Harris Pappas extended their
employment commitments through at least 2009.
o We share the Pappas' belief in Luby's future growth prospects and we agree
that Luby's shares represent an attractive value and a good investment
opportunity.
WE ARE CONCERNED, HOWEVER, THAT THE CURRENT BOARD IS NOT ACTING IN THE BEST
INTEREST OF ALL LUBY'S SHAREHOLDERS. THE BOARD APPEARS TO BE PUTTING THE BEST
INTERESTS OF THE PAPPAS BROTHERS AHEAD OF THOSE OF THE OTHER SHAREHOLDERS.
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o Chris and Harris Pappas already had a preferential exemption from the
Luby's "poison pill" allowing them to own up to 28% of the Company instead
of the 15% allowed for each other shareholder.
o The Board unilaterally increased the ownership threshold recently for the
Pappas brothers by an additional 5% to 33%.
o The primary purpose of a "poison pill" is to require a potential acquirer
to negotiate an appropriate control premium with a company's board before
allowing such an acquirer to gain control.
o Shareholders receive no conceivable benefit from the Board allowing the
Pappas brothers to further increase their effective control of the Company
without paying shareholders a control premium.
To us, this Board action demonstrates the Pappas' unchecked control over the
Company and the need for truly independent directors.
WE QUESTION WHETHER THE CURRENT BOARD UNDERSTANDS THAT IT REPRESENTS THE
SHAREHOLDERS AND NOT SENIOR MANAGEMENT.
For six out of the past seven years, Luby's proxy has included a non-binding
shareholder proposal to declassify the Board. Each year, management recommended
against the proposal. For five out of those six years the shareholders voted in
favor of declassifying the Board. In each instance, the BOARD CHOSE TO IGNORE
THE SHAREHOLDERS' CHOICE and followed management's recommendation instead.
SHAREHOLDER PROPOSAL TO DECLASSIFY THE BOARD
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Year of Management
Meeting For Against Recommendation Vote Result Board Action
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2001 8,810,394 6,079,591 Against For Against
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2003 9,120,320 5,951,719 Against For Against
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2004 6,763,369 5,207,909 Against For Against
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2005 7,905,841 5,582,255 Against For Against
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2006 7,896,596 5,421,817 Against For Against
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2007 7,422,649 9,324,726 Against Against Against
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THE BOARD OF DIRECTORS HAS A FIDUCIARY RESPONSIBILITY TO
REPRESENT THE BEST INTERESTS OF ALL SHAREHOLDERS.
WE BELIEVE THE CURRENT BOARD HAS PROVEN IT REPRESENTS THE
BEST INTERESTS OF MANAGEMENT.
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WE ARE ASKING YOU TO SUPPORT OUR TRULY INDEPENDENT NOMINEES WHO, AS A MINORITY
OF THE BOARD, WOULD WORK WITH THE OTHER DIRECTORS TOWARDS A STRONGER AND MORE
EFFECTIVELY GOVERNED COMPANY AND TO ENSURE THAT THE BEST INTERESTS OF ALL
SHAREHOLDERS ARE REPRESENTED.
OUR INDEPENDENT NOMINEES HAVE EXTENSIVE INDUSTRY EXPERIENCE AND
WILL WORK TO IMPROVE SHAREHOLDER VALUE.
Our nominees, are not only independent, but also have extensive restaurant and
finance experience. If elected, they will work diligently with the other Board
members and management to aid in the execution of the growth strategy while
exploring any and all alternatives to enhance shareholder value.
We believe our nominees, with their industry experience and financial acumen and
their views on building shareholder value, are the right choice to represent our
collective interests as shareholders of Luby's.
If elected, our nominees will represent a minority of the Board. We are not
seeking control of Luby's or to overhaul Luby's strategic focus or plan.
WE ARE ASKING FOR YOUR SUPPORT TO ELECT INDEPENDENT DIRECTORS
WHO WILL REPRESENT YOUR BEST INTERESTS ON THE LUBY'S BOARD
We view Luby's as a good company with a solid record and excellent prospects. We
also believe, however, that it is run by a BOARD WITH CONFLICTS OF INTEREST--A
BOARD THAT ANSWERS TO MANAGEMENT AT THE EXPENSE OF THE SHAREHOLDERS.
We will be providing you with further information and our GOLD proxy card
shortly. We will offer you the opportunity to elect to the Luby's boardroom
truly independent shareholder representatives committed to building the value of
your investment. In the meantime, we urge you not to return any WHITE proxy card
Luby's management sends you.
Thank you for your time and attention.
/s/ Jeffrey C. Smith
Partner, Ramius Capital Group, L.L.C.
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ABOUT RAMIUS CAPITAL GROUP, L.L.C.
Ramius Capital Group is a registered investment advisor that manages assets of
approximately $9.6 billion in a variety of alternative investment strategies.
Ramius Capital Group is headquartered in New York with offices located in
London, Tokyo, Hong Kong, Munich, and Vienna.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Starboard Value and Opportunity Master Fund Ltd., an affiliate of Ramius Capital
Group, L.L.C. ("Ramius Capital"), together with the other participants named
herein, intends to make a preliminary filing with the Securities and Exchange
Commission ("SEC") of a proxy statement and an accompanying GOLD proxy card to
be used to solicit votes for the election of its nominees at the 2008 annual
meeting of shareholders of Luby's, Inc., a Delaware corporation (the "Company").
RAMIUS CAPITAL ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY
STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO
THE PARTICIPANTS' PROXY SOLICITOR, INNISFREE M&A INCORPORATED, AT ITS TOLL-FREE
NUMBER: (877) 800-5185.
The participants in the proxy solicitation are Starboard Value and Opportunity
Master Fund Ltd., a Cayman Islands exempted company ("Starboard"), Parche, LLC,
a Delaware limited liability company ("Parche"), RCG Enterprise, Ltd, a Cayman
Islands exempted company ("RCG Enterprise"), RCG Starboard Advisors, LLC, a
Delaware limited liability company ("RCG Starboard"), Ramius Capital Group,
L.L.C., a Delaware limited liability company ("Ramius Capital"), C4S & Co.,
L.L.C., a Delaware limited liability company ("C4S"), Peter A. Cohen, Morgan B.
Stark, Thomas W. Strauss, Jeffrey M. Solomon, Stephen Farrar, Matthew Q. Pannek,
William J. Fox and Brion G. Grube (the "Participants").
Starboard beneficially owns 1,566,180 Shares and Parche beneficially owns
298,320 Shares. As of the date hereof, RCG Enterprise (as the sole non-managing
member of Parche and owner of all economic interests therein) is deemed to be
the beneficial owner of the 298,320 Shares owned by Parche. As of the date
hereof, RCG Starboard Advisors (as the investment manager of Starboard and the
managing member of Parche) is deemed to be the beneficial owner of the 1,566,180
Shares owned by Starboard and the 298,320 Shares owned by Parche. As of the date
hereof, each of Ramius Capital (as the sole member of RCG Starboard Advisors),
C4S (as the managing member of Ramius Capital) and Mr. Cohen, Mr. Stark, Mr.
Strauss and Mr. Solomon (as the managing members of C4S) is deemed to be the
beneficial owner of the 1,566,180 Shares owned by Starboard and the 298,320
Shares owned by Parche. Mr. Cohen, Mr. Stark, Mr. Strauss and Mr. Solomon share
voting and dispositive power with respect to the Shares owned by Starboard and
Parche by virtue of their shared authority to vote and dispose of such Shares.
Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial ownership of such
Shares except to the extent of their pecuniary interest therein. Each of the
Ramius Nominees, as a member of a "group" for the purposes of Section
13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to
be a beneficial owner of the 1,566,180 Shares owned by Starboard and the 298,320
Shares owned by Parche. Each of the Ramius Nominees disclaims beneficial
ownership of Shares that he does not directly own.
Starboard beneficially owns 1,566,180 shares of Common Stock of the Company.
Parche beneficially owns 298,320 shares of Common Stock of the Company. As the
sole non-managing member of Parche and owner of all economic interests therein,
RCG Enterprise is deemed to beneficially own the 298,320 shares of Common Stock
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of the Company owned by Parche. As the investment manager of Starboard and the
managing member of Parche, RCG Starboard is deemed to beneficially own the
1,566,180 shares of Common Stock of the Company owned by Starboard and the
298,320 shares of Common Stock of the Company owned by Parche. As the sole
member of RCG Starboard, Ramius Capital is deemed to beneficially own the
1,566,180 shares of Common Stock of the Company owned by Starboard and the
298,320 shares of Common Stock of the Company owned by Parche. As the managing
member of Ramius Capital, C4S is deemed to beneficially own the 1,566,180 shares
of Common Stock of the Company owned by Starboard and the 298,320 shares of
Common Stock of the Company owned by Parche.
As the managing members of C4S, each of Mr. Cohen, Mr. Stark, Mr. Strauss and
Mr. Solomon is deemed to beneficially own the 1,566,180 shares of Common Stock
of the Company owned by Starboard and the 298,320 shares of Common Stock of the
Company owned by Parche.
None of Mr. Farrar, Mr. Pannek, Mr. Fox and Mr. Grube directly owns any
shares of Common Stock of the Company. Each of Mr. Farrar, Mr. Pannek, Mr.
Fox and Mr. Grube, by virtue of his status as a director nominee of
Starboard, may be deemed to beneficially own the 1,566,180 shares of Common
Stock of the Company owned by Starboard and the 298,320 shares of Common
Stock of the Company owned by Parche. Each of Mr. Farrar, Mr. Pannek, Mr.
Fox and Mr. Grube disclaims beneficial ownership of such Shares.
# # #
CONTACT:
Media & Shareholders:
Sard Verbinnen & Co.
Dan Gagnier or Renee Soto, 212-687-8080
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