Believes That the Pappases "Have Detrimentally Affected the
Company" and "Have Acted in Their Own Interests and Contrary to the
Best Interests of the Company and its Shareholders"
Report Cites Numerous Current and Potential Conflicts of Interest
Between the Pappases and the Board of Directors
Believes Luby's Corporate Governance is Egregious and Calls For
New and Better Oversight
Supports the Election of Ramius' Independent Director Nominees Who
are Equipped with Restaurant Industry Experience and Unaffiliated with
Either Luby's or Pappas Restaurants
Ramius Urges Shareholders to Vote the GOLD Proxy Card 'FOR'
Stephen Farrar, William J. Fox, Brion Grube, and Matthew Pannek.
NEW YORK--(Business Wire)--Starboard Value and Opportunity Master Fund Ltd., an affiliate of
RCG Starboard Advisors, LLC and Ramius Capital Group, L.L.C.
(collectively, "Ramius"), today announced that Glass Lewis & Co, a
leading independent voting advisory service, has recommended that
shareholders of Luby's Inc. ("Luby's" or the "Company") (NYSE: LUB)
vote on Ramius' GOLD proxy card to elect Stephen Farrar and Brion
Grube to the Board of Directors of Luby's at its 2008 Annual Meeting
of Shareholders, which is scheduled for January 15, 2008.
Ramius Partner Jeffrey C. Smith said: "We are very pleased that
yet another independent proxy advisory service has recommended that
shareholders of Luby's cast their votes in favor of change on Luby's
board of directors. We are particularly gratified that Glass Lewis, in
line with the recommendation recently issued by PROXY Governance Inc.,
another leading advisory service, concluded that our nominees are
highly qualified to serve on the Luby's Board."
Mr. Smith added, "Given the numerous conflicts of interest and
considerable corporate governance concerns, we believe that voting for
all of Ramius' independent nominees - Stephen Farrar, William J. Fox,
Brion Grube and Matthew Pannek - is the best way to ensure that Luby's
will be run for the benefit of all shareholders."
In its analysis, Glass Lewis noted:
"We believe that the Messrs. Christopher and Harris Pappas, as CEO
and COO of the Company respectively, have detrimentally affected the
Company. They have acted in their own interests and contrary to the
best interests of the Company and its shareholders, culminating in the
aforementioned amendment to the Company's poison pill and the Pappas
brothers' disproportionate financial gain, in comparison to
shareholders, from their convertible notes."
"Specifically, Messrs. Christopher and Harris Pappas eventually
converted all of their convertible notes into common stock at a
conversion price of $3.10, thereby realizing a market value of $42.4
million compared to the original $10 million investment."
"We are also concerned that Messrs. Christopher and Harris Pappas
not only serve as executives of the Company, but also serve as CEO and
president, respectively, of Pappas Restaurants, Inc, a privately owned
restaurant company that is engaged in numerous business transactions
with the Company."
"We question the need for the Company, through the leadership of
Messrs. Christopher and Harris Pappas, to engage in business
relationships with Pappas Restaurants, Inc. We view such relationships
as potentially creating conflicts for the Pappas brothers, as they may
be forced to weigh their own interests in relation to shareholder
interests when making board decisions."
"In our view, the Pappas brothers may make decisions in favor of
their privately owned restaurant at the expense of the Company and its
shareholders."
"Moreover, we believe shareholders should be concerned that
Messrs. Christopher and Harris Pappas own an entity operating and
potentially competing in the same industry as the Company."
"Additionally, we are troubled by the numerous ties between Pappas
Restaurants, Inc. and other directors and executives of the Company,
which thereby exacerbate independence concerns at the Company."
"In sum, we find the Company's corporate governance egregious
enough to warrant new and better oversight. Therefore, we believe that
electing directors who are equipped with restaurant industry
experience and unaffiliated with either the Company or the Pappas
entities is essential."
Ramius strongly encourages Luby's shareholders to sign, date, and
return the GOLD proxy card and vote 'FOR' Stephen Farrar, 'FOR'
William Fox, 'FOR' Brion Grube, and 'FOR' Matthew Pannek.
Shareholders who have questions, or need assistance in voting
their shares, should call Ramius' proxy solicitors, Innisfree M&A
Incorporated, Toll-Free at 877-800-5185 or collect at 212-750-5833.
For more information on how to vote, as well as other proxy materials,
please visit www.shareholdersforlubys.com
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
On November 30, 2007, 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, made a definitive
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
DEFINITIVE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION.
THE DEFINITIVE PROXY STATEMENT IS 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 DEFINITIVE 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, William J. Fox, Brion G. Grube, Matthew Q. Pannek, Jeffrey C.
Smith and Gavin Molinelli (the "Participants").
As of January 8, 2008, Starboard beneficially owned 1,778,616
shares of Common Stock of the Company and Parche beneficially owned
338,784 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 338,784
shares of Common Stock of the Company owned by Parche. As the
investment manager of Starboard and the managing member of Parche, RCG
Starboard Advisors is deemed to beneficially own the 1,778,616 shares
of Common Stock of the Company owned by Starboard and the 338,784
shares of Common Stock of the Company owned by Parche. As the sole
member of RCG Starboard Advisors, Ramius Capital is deemed to
beneficially own the 1,778,616 shares of Common Stock of the Company
owned by Starboard and the 338,784 shares of Common Stock of the
Company owned by Parche. As the managing member of Ramius Capital, C4S
is deemed to beneficially own the 1,778,616 shares of Common Stock of
the Company owned by Starboard and the 338,784 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 1,778,616 shares of Common Stock of the Company
owned by Starboard and the 338,784 shares of Common Stock of the
Company owned by Parche. Messrs. Cohen, Stark, Strauss and Solomon
disclaim beneficial ownership of such shares of Common Stock of the
Company except to the extent of their pecuniary interest therein. As
members of a "group" for the purposes of Rule 13d-5(b)(1) of the
Securities Exchange Act of 1934, as amended, Messrs. Farrar, Fox,
Grube, Pannek, Smith and Molinelli are deemed to beneficially own the
1,778,616 shares of Common Stock of the Company owned by Starboard and
the 338,784 shares of Common Stock of the Company owned by Parche.
Messrs. Farrar, Fox, Grube, Pannek, Smith and Molinelli each disclaim
beneficial ownership of shares of Common Stock of the Company that
they do not directly own.
Media & Stockholders:
Sard Verbinnen & Co.
Dan Gagnier or Renee Soto, 212-687-8080
Copyright Business Wire 2008
