CONSULTANT AGREEMENT

This Consultant Agreement (“Agreement”) is made by and between LUBY’S, INC., a
Delaware corporation, and its subsidiaries, with an address at 13111 Northwest
Freeway, Suite 600, Houston, Texas 77040 (collectively, the “Company”) and
ERNEST PEKMEZARIS (the “Consultant”), and is effective beginning on the
Separation Date as set forth below.

This Agreement represents the agreement mutually reached in connection with the
matters outlined herein. Therefore, for and in good consideration of the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties, both the Company and the Consultant hereby agree as follows:

1. Resignation of Employment from the Company. The Consultant hereby submits and
the Company hereby accepts the Consultant’s voluntary resignation as Senior Vice
President and Chief Financial Officer and as an officer, agent, and employee of
the Company effective April 20, 2007 (the “Separation Date”). Accordingly,
effective as of the Separation Date the Consultant’s employment with the Company
will be permanently and irrevocably terminated. The Consultant’s participation
in any benefit plans will end in accordance with the terms of such plans. The
Consultant will be paid all wages or compensation actually owed as of the
Separation Date, and the Company will pay the Consultant for any reasonable
unreimbursed business expenses, which remain outstanding as of the Separation
Date. Unless Consultant is terminated for Cause (as defined below), all unvested
stock option and restricted stock grants previously made shall continue to vest
during the term of this agreement; and in the event of termination of this
agreement, any unvested stock options or restricted stock grants shall vest
immediately and/or become unrestricted.

2. Consulting Relationship. For the period beginning on the Separation Date and
ending April 20, 2009, unless otherwise terminated pursuant to the terms of this
Agreement (the “Consulting Period”) the Consultant’s relationship with the
Company will be solely that of an independent contractor and not as an employee
of the Company (the “Consulting Relationship”) for the consideration provided
for in this Agreement and upon the following terms and conditions:

(a) Consulting Services. During the Consulting Period, the Consultant agrees to
furnish to the Company advisory and consulting services related to Finance and
Accounting matters and other related consulting services as based upon the
direction of the Chief Executive Officer and the Chairman of the Board of
Directors of the Company (the “Consulting Services”). The Consultant will
perform all Consulting Services in a timely, good, and professional manner. The
Consultant agrees to provide the Company with Consulting Services requested by
the Company from time to time in an amount not more than 60 hours of actual
services per month (the “Maximum Requirement”). Provided the Consultant does not
violate the provisions of this Agreement, the Consultant may hold employment
and/or provide other consulting services to persons or parties other than the
Company. Both the Company and the Consultant acknowledge and agree that at all
times subsequent to the Separation Date that the relationship between the
parties shall be solely that of an independent contractor and nothing in this
Agreement or otherwise shall constitute the Consultant as an employee, agent, or
officer of the Company.

(b) Consulting Fees. The Company will pay the Consultant a gross consulting fee
of $12,500 each month (the “Consulting Fee”) during the Consulting Period in
connection with the Consultant’s performance of Consulting Services. The Company
agrees to pay all reasonable and actual expenses incurred by the Consultant in
the sole and direct performance of Consulting Services, including but not
limited to, travel expenses. The Company shall also provide the Consultant with
office space in connection with the performance of Consulting Services,
provided, however, all such expenses must be reasonably necessary, actual and
approved in advance by the Company. The Consultant acknowledges that he has no
other claims for compensation, bonus, or other incentive payments.

(c) Termination of Consulting Relationship. Notwithstanding any agreement to the
contrary, unless extended by written agreement of the parties, the Consulting
Period and all obligations of the Company pursuant to this Paragraph 2,
including, without limitation, the obligation to pay the Consulting Fee, shall
automatically terminate (1) April 20, 2009 or (2) an event giving rise for a
termination for Cause of the Consulting Relationship. A termination for “Cause”
of the Consulting Relationship shall include: (i) a willful and material failure
or refusal by the Consultant to timely, properly and professionally perform
Consulting Services pursuant to this Agreement; (ii) a breach or violation by
the Consultant of any of the terms, covenants, or provisions of this Agreement;
or (iii) any unlawful misconduct by the Consultant, including, without
limitation, the commission of an act of fraud or embezzlement against the
Company or the commission of a crime involving moral turpitude.
 

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3. Enforcement and Representations. Each party acknowledges that the
restrictions and agreements contained in this Agreement are necessary for the
protection of the other party and that any breach of any of the provisions of
this Agreement by a party will cause the other party irreparable damages for
which the other party could not be adequately or reasonably compensated for in
monetary damages. Accordingly, each party consents to the issuance of an
injunction in favor of the other party, where a party has acted upon reasonable
information concerning the potential breach, to enjoin the breach of any
covenant of the other party contained in this Agreement by any court of
competent jurisdiction. Nothing contained in this Paragraph shall be in
limitation of any other rights or remedies that a party may have at law or in
equity should the other party breach the terms of this Agreement. The Consultant
also represents and warrants to the Company, as of the date hereof, that the
execution, delivery and performance by the Consultant of the terms and
provisions of this Agreement do not require the consent of any spouse or other
person which has not already been obtained and that this Agreement constitutes a
legal, valid and binding obligation of the Consultant and is enforceable against
the Consultant in accordance with its terms.

4. Governing Law, Venue, and Severability. The Company and the Consultant agree
that Texas law shall govern the construction, interpretation, and enforcement of
this Agreement, and the parties agree that venue for any action brought to
enforce this Agreement shall be a court of competent jurisdiction in the County
of Harris, State of Texas. If any provision, or portion thereof, of this
Agreement shall for any reason be held to be invalid or unenforceable or to be
contrary to public policy or any law, then the remainder of this Agreement shall
be affected thereby. If at any time the Consultant claims that any portion of
this Agreement is unenforceable or invalid, the Consultant must immediately
tender back all consideration paid to the Consultant pursuant to this Agreement,
and provide written notice of the basis for the Consultant’s claim.

5. Compliance with Securities Laws. The Consultant agrees to comply with any
applicable federal and state securities laws including, without limitation,
compliance with any applicable reporting requirements under Section 16 of the
Securities Exchange Act of 1934, as amended, for a period of six (6) months
after the Separation Date. The Consultant should consult with an attorney of his
choice after the Separation Date to determine any continuing obligations he may
have with respect to the federal and state securities laws including applicable
insider trading regulations and Section 16 reporting obligations.

6. Entire Agreement. The Company and the Consultant agree that no promises or
representations were or are made which do not appear written in this Agreement;
that this Agreement, contains the voluntary and entire agreement between the
parties and supersedes any and all previous verbal or written promises,
representations, agreements, negotiations and discussions between the parties;
that this is a final and binding settlement agreement; that neither of the
parties are relying on any representation or promise that does not appear in
this Agreement; that this Agreement is the result of negotiations between the
parties after the opportunity to consult with counsel of each of the parties own
respective choosing; and that this Agreement cannot be terminated or changed
except by a writing signed by a duly authorized representative of the Company
and the Consultant.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the Separation Date.
 
 
COMPANY: 
 
By:
/s/Gasper Mir III  
Gasper Mir, III
 
Chariman of the Board
 
 Luby's, Inc.

 
 
CONSULTANT:
 
By:
/s/Ernest Pekmezaris  
Ernest Pekmezaris
 
 
 
 

 

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