Market Overview

Luby's Urges Shareholders to Support Company's Board Nominees


Company Continues to Execute on Strategic Plan to Drive
Profitability and Improve Shareholder Value

Luby's Nominees are Experienced, Highly-Qualified and Deeply
Aligned with ALL Shareholders – And are Essential to Executing the
Company's Strategy

Bandera's Actions – And Their Nominees' Records – Call into
Question Their Credibility and Commitment

Vote on the WHITE Proxy Card Today to Protect Your Investment in

Luby's, Inc. (NYSE:LUB) ("Luby's" or the "Company") today announced
that it has mailed a letter to shareholders in connection with the
Company's upcoming Annual Meeting of Shareholders ("Annual Meeting") to
be held on January 25, 2019. The full text of the letter follows.

January 10, 2019

Dear Fellow Shareholders,

As we approach the Luby's Annual Meeting of Shareholders on January 25,
2019, you have the opportunity to choose the directors who will chart
the path forward for your Company. Given this important decision, we
would like to make four simple points:

  • Luby's is already making substantial progress on its aggressive
    turnaround plan to generate consistent and sustainable same-store
    sales growth and improved store profitability – all with the goal of
    increasing shareholder value.
  • Luby's experienced and highly-qualified nominees are aligned with all
    shareholders and are best-positioned to continue overseeing the
    Company's turnaround.
  • The four nominees hand-picked by New York-based activist hedge fund
    Bandera Partners LLC ("Bandera") do not have the right experience to
    serve on the Board of Luby's – and their records are highly concerning.
  • Bandera's actions and decisions during their campaign to replace
    directors on the Luby's Board call into question their credibility.

Our strategy includes four key elements:

1. Raise Awareness of Our Brands – Our goal is to
capitalize on what people love about the Luby's brands – great tasting
food and service – while focusing on how to innovate and grow in ways
that connect with today's consumer. For example, we partnered with
third-party delivery services such as Uber Eats to make our brands
available at home and at the office. We also opened four new Fuddruckers
franchise restaurants in fiscal 2018 and introduced more packaged frozen
Luby's favorites into over 250 stores of Texas grocery retailer H-E-B.
Both Luby's and Fuddruckers are implementing highly targeted digital
marketing efforts and value propositions and employing our mobile
ordering tools while growing our loyal e-club base.

2. Strengthen Our Core Operations – We believe operations
starts with our people. We named a new Chief Operating Officer, Todd
Coutee, and we are focused on having the right leaders and the right
talent in place in order to help grow sales, improve profitability and
address cost pressures through better management oversight. Notably, we
generated a 1.5% increase in same-store sales at Luby's Cafeterias in
fiscal 2018 and grew sales at Luby's Culinary Services by 42.26% in that
same period.

3. Optimize the Business for the Future – We are
continuously assessing the value potential of all our locations as well
as how best to allocate our capital for long-term success. In fiscal
2018 we closed 21 underperforming Company-owned restaurants, and have
closed an additional six restaurants since the end of that fiscal year.
We also refinanced our debt in December and engaged in an asset sale
program of up to $45 million, the proceeds of which we are using to help
pay down our debt.

4. Maintain Strong Corporate Governance – Our Board
includes a strong independent Chairman. We recently announced the
addition of Twila Day to our slate of director nominees for the 2019
Annual Meeting, further increasing the number of independent directors
on the Board. In addition, CEO Chris Pappas has reduced his annual
salary to only $1 and has committed to keeping it at this amount until
the Company's turnaround efforts bear fruit for Luby's shareholders.

The best path to unlocking the value of the Luby's enterprise is to
execute against the Board's forward-looking turnaround plan, improve
results and enhance the stock price.

The current Board's mix of industry and management experience is
essential to Luby's ability to execute on its strategy. Directors
Christopher J. Pappas, Harris J. Pappas, Frank Markantonis and Gasper
Mir, III are critical members of the Board

It is still entirely unclear what Bandera's "plan" is for Luby's.
Considering that none of their nominees possess restaurant operating
experience – and given that you can't turn around
a restaurant company on a spreadsheet
– we believe, if elected,
they would push for short-term actions that would do shareholders a
grave disservice over the medium- and long-term. This risk to
shareholders is heightened by their decision to target four Luby's
directors who are clearly essential to the Company – the CEO, the
Independent Chairman, the two largest shareholders and our trusted legal

The interests of Luby's Directors Chris Pappas, Harris Pappas, Frank
Markantonis and Gasper Mir, III are acutely aligned with all
shareholders. Luby's management and Board have more "skin
in the game
" than anyone,
given their combined beneficial
ownership of approximately 38% of the Company.

Real hands-on restaurant experience matters immensely for Luby's
right now.
Chris and Harris Pappas have previously steered the
Company through difficult periods in 2000 and 2008 – leading the Company
as it streamlined operations, reduced store count and debt, and improved
financial results and the stock price.

Furthermore, Chris and Harris Pappas have co-founded and operated
more than 90 restaurants during their careers
, including the
Pappadeaux Seafood Kitchen, Pappasitos Cantina, and Pappas Bros.
Steakhouse brands.

Frank Markantonis also has extensive restaurant industry experience. He
has practiced as an attorney for more than four decades in all areas of
legal practice affecting the operations of restaurants and hospitality

Gasper Mir, III is the Independent Chairman of the Luby's Board and a
finance and accounting expert
with 46 years of experience from his
distinguished tenure at the accounting firms KPMG LLP and MFR.

Bandera's nominees do not have the right experience and their track
records raise numerous questions about their qualifications to serve on
the Luby's Board

Bandera candidate Jeff Gramm has limited restaurant industry
experience and a questionable record of shareholder value creation.
Tandy Leather Factory has seen approximately negative
76.13% total shareholder return
(TSR) since Jeff Gramm joined
the board. Mr. Gramm himself has written: "…I've learned that
I'm much better suited to finding good investment ideas than managing
activist interventions or serving on corporate boards

Further, Mr. Gramm is wildly exaggerating his track record. For example,
he claims to have "led" an equity recap of Denny's in 2004 while working
at Mellon HBV Alternative Strategies LLC.2 We find it hard to
believe that Mr. Gramm "led" anything in his first year out of
business school. In Mr. Gramm's own words: "Earlier that same year, I
had written my first activist letter, to Denny''s ironic how
confident it was relative to how little I really knew at the time.

The perplexing, inconsistent and at times flippant way in which Mr.
Gramm has conducted this campaign calls into doubt whether he is serious
about turning around Luby's and whether the "plans" Bandera's
representatives would advocate for are truly in the best interests of
the Company and its shareholders.

Bandera candidate Savneet Singh has ZERO
restaurant industry experience and a full plate of other engagements.

Mr. Singh owns no Luby's stock to the Company's knowledge and seems to
be highly occupied with other executive and board roles – including
recently being named interim CEO at PAR Technology (NYSE:PAR) and
already serving on three public company boards – which according to both
Institutional Shareholder Services and Glass, Lewis & Co. guidelines
would make him "overboarded" if he were to become a director at Luby's.
We believe Mr. Singh has no capacity to truly represent Luby's
shareholders – especially in a turnaround situation that requires a
great deal of time, experience and attention.

Furthermore, Mr. Singh currently serves on the board of two public
companies – LottoGopher Holdings Inc. (CSE:LOTO) (OTCQB:LTTGF) (FSE:
2LG) and Blockchain Power Trust (TSXV:BPWR) – that have defaulted on
their financial reporting requirements and had serious financial
oversight issues during his tenure. Both of these disastrous situations
occurred just in the last year.

Bandera failed to disclose Mr. Singh's
directorship at LottoGopher in its proxy materials
, which
raises numerous questions: why did Bandera try to hide this from Mr.
Singh's biography, how involved and culpable was he in this scandal, how
could he possibly have time for Luby's in light of his board membership
at a company in such financial distress, and how could Luby's
shareholders trust Mr. Singh after the oversight failures witnessed in
his previous directorships?

Senator William Philip Gramm has ZERO
restaurant industry experience and ZERO
public company board experience.
At 76 years old, Senator Gramm
would be ineligible to stand for election under Company policy.
Additionally, he does not own any Luby's stock to the Company's

Stacy Hock has NO restaurant industry
experience, NO public company board
experience, and NO management or
operational leadership experience.
Ms. Hock owns no Luby's stock to
the Company's knowledge, and has no relevant expertise or skillsets to
help Luby's maximize its potential. Other than her close connections to
the Gramm family, it is difficult to ascertain what qualifications Ms.
Hock possesses that would justify her election to the Board.

Bandera's record in prior activist situations and concerning pattern
of engagement in this one calls into question its credibility

Bandera's track record speaks for itself. In 2017, Bandera formed
a group with other activists to wage a proxy fight against Fiesta
Restaurant Group Inc. (NASDAQ:FRGI). Fiesta's shareholders
overwhelmingly voted to re-elect all three Fiesta directors with vote
margins between 89% and 97% (excluding the dissident group's shares)
instead of the nominees proposed by Bandera and its group.

A pattern of confusing and concerning behavior. After Bandera
went public with its formal nomination notice, the Board requested to
interview two of Bandera's director candidates, which Bandera refused.
Bandera insisted that "a settlement agreement [be] in place" first
before any interviews be permitted. After Bandera's refusal to let the
Board interview its candidates, the Board reiterated in another letter
that it would stand by its offer to interview the two Bandera candidates
if Bandera were willing to reconsider its position. Bandera never even
bothered to respond to the letter and instead proceeded with the filing
of its proxy materials.

Moreover, Bandera flip-flopped on its slate numerous times. At first,
they proposed in a settlement term sheet three candidates: Jeff
Gramm, his father, and Timothy Brog, a business associate of Jeff
Gramm's. Only three days later, Bandera submitted a nomination notice
for six candidates, seeking control of the Luby's Board. Two
weeks afterwards, Bandera issued a press release, in which it mentioned
only five candidates – Timothy Brog was suddenly no longer included. And
finally Bandera's proxy materials included only four candidates –
quietly withdrawing another candidate (Brian K. Wright, a restaurant
operator, whom Luby's sought to interview). All of this back-and-forth
occurred within a time period of only one month.



The Board of Directors of Luby's, Inc.



If you have any questions or require any assistance with respect to
voting your shares, please contact the Company's proxy solicitor, Morrow

509 Madison Avenue, Suite 1206
New York, NY 10022

Toll Free: (800) 662-5200
Direct: (203) 658-9400

About Luby's

Luby's, Inc. (NYSE:LUB) operates 142 restaurants nationally: 82 Luby's
Cafeterias and 59 Fuddruckers. The Company is also the franchisor for
104 Fuddruckers franchise locations across the United States (including
Puerto Rico), Canada, Mexico, Panama, and Colombia. Luby's Culinary
Contract Services provides food service management to 30 sites
consisting of healthcare, higher education, sport stadiums, and
corporate dining locations.

Forward-Looking Statements

This letter may contain statements that are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements contained in this letter, other than statements
of historical fact, are "forward-looking statements" for purposes of
these provisions, including the statements regarding scheduled openings
of units, scheduled closures of units, sales of assets, expected
proceeds from the sale of assets, expected levels of capital
expenditures, effects of food commodity costs, anticipated financial
results in future periods and expectations of industry conditions.
Luby's cautions readers that various factors could cause its actual
financial and operational results 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, as well as oral statements made from time to
time by representatives of Luby's. The following factors, as well as any
other cautionary language included in this letter, provide examples of
risks, uncertainties and events that may cause Luby's actual results to
differ materially from the expectations Luby's describes in such
forward-looking statements: general business and economic conditions;
the impact of competition; our operating initiatives; fluctuations in
the costs of commodities, including beef, poultry, seafood, dairy,
cheese and produce; increases in utility costs, including the costs of
natural gas and other energy supplies; changes in the availability and
cost of labor; the seasonality of Luby's business; changes in
governmental regulations, including changes in minimum wages; the
effects of inflation; the availability of credit; unfavorable publicity
relating to operations, including publicity concerning food quality,
illness or other health concerns or labor relations; the continued
service of key management personnel; and other risks and uncertainties
disclosed in Luby's annual reports on Form 10-K and quarterly reports on
Form 10-Q. We undertake no obligation to update publicly or otherwise
revise any forward-looking statements, whether as a result of new
information, future events or other factors that affect the subject of
these statements, except where we are expressly required to do so by law.

1 Jeff Gramm. Dear Chairman: Boardroom Battles and
the Rise of Shareholder Activism
, Harper Business, 2016.

2 Bandera Partners Presentation to Institutional Shareholder
Services (ISS), page 5, January 7, 2019.

3 Jeff Gramm. Dear Chairman: Boardroom Battles and
the Rise of Shareholder Activism
, Harper Business, 2016.

View Comments and Join the Discussion!
Lightning Fast
Market News Service
$199 Free 14 Day Trial