8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 20, 2007

Luby's, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-8308	74-1335253
(Commission File Number)	(IRS Employer Identification Number)
13111 Northwest Freeway, Suite 600  Houston, TX 77040
(Address of principal executive offices, including zip code)

 (713) 329-6800

 (Registrant's telephone number, including area code)

   (Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

* Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

* Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

* Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

* Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Consultant Agreement with retiring Chief Financial Officer

On April 20, 2007, the Board of Directors (the "Board") of Luby’s, Inc. (the "Company") approved the terms of a consultant agreement with Ernest Pekmezaris, the Company's Senior Vice President and Chief Financial Officer who has resigned from the Company as described under Item 5.02 below. Under the agreement, Mr. Pekmezaris will furnish to the Company advisory and consulting services related to finance and accounting matters and other related consulting services. The agreement expires on April 20, 2009 and provides that Mr. Pekmezaris will be paid $12,500 per month for his services.

ITEM 5.0DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;    

                             COMPENSATORY  ARRANGEMENTS OF CERTAIN OFFICERS

In accordance with the Company’s Succession Plan that was announced on January 24, 2007, on April 20, 2007, Ernest Pekmezaris resigned as Senior Vice President and Chief Financial Officer and Scott Gray was appointed as the Company's new Senior Vice President and Chief Financial Officer. Mr. Gray has been with the company since 2001 and has served in a number of financial roles including Vice President of Finance, Director of Planning and Director of Internal Audit. Prior to joining Luby’s, Mr. Gray served as Internal Auditor at Pappas Restaurants from 1996 to 2001. Prior to working at Pappas Restaurants, Mr. Gray was an external auditor at Arthur Andersen. As described in Item 1.01 above, Mr. Pekmezaris will remain an advisor to the Company.

Annual Salary of Chief Financial Officer

On April 20, 2007, the Board approved the annual base salary of $200,000 for Mr. Gray.

Grants of Incentive Stock Options and Restricted Stock for new Chief Financial Officer

On April 20, 2007, pursuant to the Luby's Incentive Stock Plan, the Board approved a grant of options to purchase 8,333 shares of the Company's common stock to Mr. Gray. The exercise price of each stock option is $10.20, the closing market price of the Company's common stock on the date of the grant, and the options vest and become exercisable in equal installments on each of the first four anniversaries of the date of grant. Vested options must be exercised within six years of the grant date.

The Board also approved a grant of 920 shares of restricted common stock of the Company to Mr. Gray. The restricted stock fully vests and becomes unrestricted on April 20, 2010. The restricted stock is valued at the closing price of the Company's common stock of $10.20 per share on April 20, 2007. If not vested, the restricted stock will automatically expire and terminate, and will be forfeited to the Company, on the date that Mr. Gray's employment is terminated, except upon retirement on or after Mr. Gray's 65th birthday, death, permanent and total disability, a leave of absence by Mr. Gray or a change of control of the Company, as defined in the award agreement.

Item 9.01  Financial Statements and Exhibits.

Exhibit 10.1 Form of Restricted Stock Award Agreement

Exhibit 10.2 Form of Incentive Stock Option Award Agreement

Exhibit 10.3        Consultant Agreement

Exhibit 99     Press Release of Luby’s, dated April 20, 2007

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 hereunto duly authorized.

LUBY'S, INC.

(Registrant)

Date:	April 23, 2007	By:	/s/Christopher J. Pappas
			Christopher J. Pappas
			President and Chief Executive Officer

EX-10.1

LUBY’S, INC.

INCENTIVE STOCK PLAN

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT, dated as of ____________(the “Award Agreement”), is entered into by and between by LUBY’S, INC. (the "Company") and __________(the "Grantee"), upon the following terms and conditions:

1.Grant. Company hereby grants ________shares of Restricted Stock (the “Restricted Stock”) as of ____________(the “Award Date”) subject to the restrictions set forth in this Award Agreement and subject to all applicable provisions of the Luby’s Incentive Stock Plan (The “Plan”), as it may be amended from time to time, which provisions are incorporated by reference and made a part hereof to the same extent as if set forth in their entirety herein, and to such other terms necessary or appropriate to the grant hereof having been made. Each share of Restricted Stock corresponds to one (1) share of Common Stock, par value $0.32 per share ("Common Stock"), of the Company.

2.Restrictions on Transfer. Except as otherwise provided herein, Restricted Stock granted hereunder shall become unrestricted on the third anniversary of the Award Date. (“Lapse Date”). None of the Restricted Stock may be sold, transferred, pledged, hypothecated or otherwise encumbered or disposed of until the restrictions have lapsed in accordance with this Award Agreement. Except as provided in Section 6, all Restricted Stock to which restrictions have not yet lapsed shall be forfeited to the Company immediately upon Termination of Grantee’s Employment.

3.Rights as Stockholder. Grantee shall have no rights as a stockholder with respect to any Restricted Stock until a stock certificate for the shares is issued in Grantee’s name. Once any such stock certificate is issued in Grantee’s name, Grantee shall be entitled to all rights associated with ownership of the Restricted Stock, except that the Restricted Stock will remain subject to the restrictions set forth herein and if any additional shares of Common Stock become issuable on the basis of such Restricted Stock (e.g., a stock dividend), any such additional shares shall be subject to the same restrictions as the shares of Restricted Stock to which they relate. Each stock certificate evidencing any Restricted Stock shall contain such legends and stock transfer instructions or limitations as may be determined or authorized by the Committee which administers the Plan (the “Committee”) in its sole discretion; and the Company may, in its sole discretion, retain custody of any such certificate throughout the period during which any restrictions are in effect and require, as a condition to issuing any such certificate, that the Grantee tender to the Company a stock power duly executed in blank relating thereto. Any dividends payable on the Restricted Stock shall be paid in cash to Grantee on the day on which the corresponding cash dividends are paid to shareholders of record, or as soon as administratively practicable thereafter, but in no event later than the fifteenth (15^th) day of the third calendar month following the day on which such cash dividends are paid to shareholders of record.

4.Adjustments. In the event of any change in the outstanding Common Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the Committee may adjust proportionally the number of shares of Restricted Stock. In the event of any other change affecting the Common Stock or any distribution (other than normal cash dividends) to holders of Common Stock, such adjustments as may be deemed equitable by the Committee, including adjustments to avoid fractional shares, may be made to give proper effect to such event.

5.Non-Assignability. No benefit payable under, or interest in, this Award Agreement or in the shares of Common Stock to be issued to Grantee hereunder shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge and any such attempted action shall be void and no such benefit or interest shall be, in any manner, liable for, or subject to, Grantee’s or Grantee’s beneficiary’s debts, contracts, liabilities or torts; provided, however, nothing in this Section shall prevent transfer (i) by will, (ii) by applicable laws of descent and distribution or (iii) to an alternate payee to the extent that a Qualified Domestic Relations Order so provides, as further described in the Plan.

6.Continuous Employment. If Grantee’s employment with the Company or an Affiliate of the Company is terminated for any reason, except as provided below, Grantee’s Restricted Stock shall automatically expire and terminate, and shall be forfeited to the Company, on the date of Termination of Grantee’s Employment. Notwithstanding anything herein to the contrary, the Lapse Date of the Restricted Stock may be accelerated (by notice in writing) by the Company in its sole discretion at any time. “Termination of Grantee’s Employment” shall mean the last date that Grantee is either an employee of the Company or an Affiliate or engaged as a consultant or director of the Company or an Affiliate.

  (a)Retirement. If Grantee terminates Grantee’s employment with the Company or an Affiliate of the Company by retirement on or after Grantee's 65th birthday, then the Lapse Date of the Restricted Stock granted under this Award Agreement shall be accelerated as of the day preceding Grantee’s retirement, subject to Grantee’s execution of a general release and waiver in a form provided by the Company.

(b)Death. If Grantee’s employment with the Company or an Affiliate of the Company terminates due to Grantee’s death, then the Lapse Date of the Restricted Stock granted under this Award Agreement will become unrestricted as of the day preceding Grantee’s death.

(c)Permanent and Total Disability. If Grantee’s employment with the Company or an Affiliate of the Company or an Affiliate of the Company terminates due to Grantee’s Permanent and Total Disability, and Grantee has been employed by Company for at least 3 years, then the Lapse Date of the Restricted Stock granted under this Award Agreement will be accelerated, as of the date preceding the termination of Grantee’s employment, subject to execution by Grantee of a general release and waiver in a form provided by the Company.

“Permanent and Total Disability” shall have the meaning ascribed to such term under Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (together with the regulations and other official guidance promulgated thereunder, the “Code”), and with such permanent and total disability being certified prior to termination of Grantee’s employment by (i) the Social Security Administration, (ii) such other body having the relevant decision-making power applicable to the Company (such as an insurance carrier), or (iii) an independent medical advisor appointed by the Company in its sole discretion, as applicable.

(d)Leave of Absence. Lapse Date may be suspended by the Company in its sole discretion during a leave of absence by Grantee as provided from time to time according to Company policies and practices.

(e)Change of Control. All Restricted Stock shall become immediately unrestricted upon a Change of Control, as defined in the Plan. If, on the date of termination of Grantee's employment with the Company or an affiliate of the Company, Grantee is entitled to rights or benefits under a written Change of Control Agreement with the Company containing provisions relating to Restricted Stock which are more favorable to Grantee than those contained in this Award Agreement, the provisions of such Change of Control Agreement shall prevail.

7.Disputes. If the employment of Grantee shall terminate prior to the Lapse Date of the Restricted Stock, and there exists a dispute between Grantee and the Company as to the satisfaction of the conditions of this Award Agreement, the Restricted Stock shall remain subject to the restrictions contained herein until the resolution of such dispute, regardless of any intervening expiration of the restrictions, except that any dividends that may be payable to the holders of record of shares of Common Stock as of a date during the period from termination of Grantee's employment to the resolution of such dispute (the "Suspension Period") shall:

(1) to the extent to which such dividends would have been payable to Grantee on the shares of Restricted Stock, be held by the Company as part of its general funds, and shall be paid to or for the account of Grantee only upon, and in the event of, a resolution of such dispute in a manner favorable to Grantee, and then only with respect to such of the shares as to which such resolution shall be so favorable, and

(2) be canceled upon, and in the event of, a resolution of such dispute in a manner unfavorable to Grantee, and then only with respect to such of the shares as to which such resolution shall be so unfavorable.

8.Form and Timing of Payment. Restricted Stock shall be paid by the Company in shares of Common Stock (on a one-to-one basis) on, or as soon as practicable after, the Lapse Date of the Restricted Stock has passed (which, for purposes of this Section, includes the date of any acceleration as referenced in Section 6), but in any event, within the period ending on the later to occur of the date that is 2 ¹/2 months from the end of (i) Grantee’s tax year that includes the Lapse Date of the Restricted Stock, or (ii) the Company’s tax year that includes the applicable Lapse Date of the Restricted Stock (which payment schedule is intended to comply with the “short-term deferral” exemption from the application of Section 409A of the Code). Shares of Common Stock issued that become unrestricted shall be deemed to be issued in consideration of past services actually rendered by Grantee to the Company or an Affiliate or for its benefit for which Grantee has not previously been compensated or for future services to be rendered, as the case may be, which the Company deems to have a value at least equal to the aggregate par value thereof.

9.Tax Withholding. All payments or grants made pursuant to this Award Agreement shall be subject to withholding of all applicable taxes, based on the minimum statutory withholding rates for federal, state and local tax purposes, including any employment taxes resulting from the lapsing of the restrictions (the “Tax Obligations”). In the event that Company requests Grantee to do so, Grantee hereby agrees that Grantee will satisfy the Tax Obligations resulting from the lapsing of the restrictions by authorizing, and Grantee hereby authorizes, the Company to withhold from the shares of Common Stock otherwise deliverable to Grantee as a result of the lapsing of the restrictions in accordance herewith, a number of shares having a fair market value less than or equal to the Tax Obligations. Any shares of Common Stock withheld by the Company hereunder shall not be deemed to have been issued by the Company for any purpose under the Plan and shall remain available for issuance thereunder.

The number of shares of Common Stock tendered by Grantee pursuant to this Section shall be determined by the Company and be valued at the fair market value of the Common Stock on the date the Tax Obligations arise. To the extent that the number of shares tendered by Grantee pursuant to this Section is insufficient to satisfy the Tax Obligations, Grantee hereby authorizes the Company to deduct from Grantee’s compensation the additional amount necessary to fully satisfy the Tax Obligations. If the Company chooses not to deduct such amount from Grantee’s compensation, Grantee agrees to pay the Company, in cash or by check, the additional amount necessary to fully satisfy the Tax Obligations. Grantee agrees to take any further actions and execute any additional documents as may be necessary to effectuate the provisions of this Section. No certificates representing the shares of Common Stock shall be delivered to Grantee unless and until Grantee has satisfied Grantee’s obligations with respect to the full amount of all federal, state and local tax withholding or other employment taxes applicable to Grantee resulting from the payment of the Restricted Stock earned.

10.Section 83(b) Election. Under Section 83 of the Code, the difference between the purchase price paid by the Grantee for the Restricted Stock, if any, and their fair market value on the Lapse Date of the Restricted Stock, will be reportable as ordinary income at that time. Grantee may elect to be taxed on the Award Date with respect to Restricted Stock rather than when such restrictions lapse by filing an election under Section 83(b) of the Code in a form similar to that set forth in Exhibit A hereto with the Internal Revenue Service within 30 days after the Award Date. Failure to make this filing within the 30-day period will result in the recognition of ordinary income by Grantee (in the event the Fair Market Value of the shares increases after the Award Date) as the forfeiture restrictions lapse.

GRANTEE ACKNOWLEDGES THAT IT IS HIS OR HER SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b), EVEN IF GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON GRANTEE’S BEHALF. GRANTEE IS RELYING SOLELY ON HIS OR HER OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY 83(b) ELECTION.

11.Award Agreement Subject to Plan. This Award Agreement is sub-ject to the Plan. The terms and provisions of the Plan (including any subsequent amend-ments thereto) are hereby incorporated herein by reference thereto. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. All defini-tions of words and terms contained in the Plan shall be applicable to this Award Agreement.

12.No Retention Rights. Nothing herein contained shall confer on the Grantee any right with respect to continuation of employment, or interfere with the right of the Company or its Affiliates to terminate at any time the service of the Grantee. Any questions as to whether and when there has been a termination of Grantee's employment, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

13.Applicable Law. The validity, construction, interpretation and enforceability of this Award Agreement shall be determined and governed by the laws of the State of Texas without regard to any conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of this Award Agreement to the substantive law of another jurisdiction, and any litigation arising out of this Award Agreement shall be brought in Harris County, Texas.

 14.Severability. The provisions of this Award Agreement are severable and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions, and any partially unenforceable provision to the extent enforceable in any jurisdiction, shall nevertheless be binding and enforceable.

 15.Waiver. The waiver by the Company of a breach of any provision of this Award Agreement by Grantee shall not operate or be construed as a waiver of any subsequent breach by Grantee.

 16.Binding Effect. The provisions of this Award Agreement shall be binding upon the parties hereto, their successors and assigns, including, without limitation, the Company, its successors or assigns, the estate of the Grantee and the executors, administrators or trustees of such estate and any receiver, trustee in bankruptcy or representative of the creditors of the Grantee.

17.Entire Agreement; Amendment. This Award Agreement and any other agreements and instruments contemplated by this Award Agreement contain the entire agreement of the parties, and this Award Agreement may be amended only in writing signed by both parties.

IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed in duplicate and its corporate seal to be hereunto affixed by its proper corporate officers thereunto duly authorized.

ATTEST:

__________________________________________

Peter Tropoli, Senior V.P andGeneral Counseland Chief Executive Officer

LUBY'S, INC.

By______________________________________________

Christopher J. Pappas, President and Chief Executive Officer

ACCEPTED:

__________________________________________

Grantee

EX-10.2

LUBY’S, INC.

INCENTIVE STOCK OPTION

GRANTED UNDER LUBY’S INCENTIVE STOCK PLAN

Name of Employee: _________________________________

Date of Grant: _____________________________________

Number of Option Shares: ____________________________

Option Price per Share: ______________________________

THIS OPTION is granted on the above date (the "Date of Grant") by Luby's, Inc. (the "Company") to the person named above (the "Employee"), upon the following terms and conditions:

1.Grant of Option. The Company grants to the Employee an option to purchase, on the terms and conditions stated herein, the number of shares specified above (the "Option Shares") of the Company's Common Stock, par value $0.32 per share (“Common Stock”) at the Option Price specified above.

2.Type of Option. This Option is granted under the Luby’s Incentive Stock Plan (the "Plan") and shall be subject to all applicable provisions of the Plan, as it may be amended from time to time. This Option is an "incentive stock option" as defined in Section 422 of the Internal Revenue Code and is intended to conform to the requirements of Section 422 of the Internal Revenue Code and to the provisions of the Plan. The terms "parent corporation" and "subsidiary corporation" have the meanings given to them by Section 424 of the Internal Revenue Code. All section references to the Internal Revenue Code are intended to include any future amendments or substitutions therefor in the Code.

3.Continuous Employment. This Option may be exercised by the Employee only if, at all times from the Date of Grant to the date of such exercise, the Employee was an employee of the Company or a parent or subsidiary of the Company or another corporation referred to in Section 422 of the Internal Revenue Code, unless such continuous employment is terminated by such employer, or by retirement, or by disability, or is otherwise terminated with the written consent of the employer. If such continuous employment is so terminated, this Option may be exercised, to the extent the Option was exercisable on the date of termination of employment, within one year after such termination of employment, but in no event later than the termination date of this Option. Termination of employment shall mean the last date that Grantee is either an employee of the Company or an Affiliate or engaged as a consultant or director of the Company or an Affiliate. Retirement means retirement on or after the Employee's 65th birthday. Disability means a disability which qualifies the Employee for benefits under a long-term disability program maintained by the Company or a subsidiary of the Company.

4.Death of Employee. If the Employee dies at a time when any portion of this Option is exercisable by him, this Option may be exercised as to such portion within one year after the date of death, by the person or persons to whom his rights under this Option shall have passed by will or by the laws of descent and distribution, but in no event later than the termination date of this Option.

5.Period of Option and Right to Exercise. The term of this Option is six years from the Date of Grant. The termination date of this Option is the day preceding the sixth anniversary of the Date of Grant. This Option may not, in any event, be exercised prior to the first anniversary of the Date of Grant or subsequent to the expiration date of this Option. Subject to the provisions of paragraphs 3 and 4 above, this Option shall become exercisable as to one-fourth of the total number of Option Shares on each succeeding anniversary of the Date of Grant. Once the right to purchase shares has accrued, such shares may thereafter be purchased at any time, or in part from time to time, until the expiration date of this Option, subject to the provisions of paragraphs 3 and 4 above and paragraph 6 below. In no case may this Option be exercised for a fraction of a share.

6.Payment for Shares. Payment for shares purchased upon exercise of this Option shall be made in full at the time of exercise of the Option. No loan shall be made or guaranteed by the Company for the purpose of financing the purchase of any optioned shares. Payment of the Option Price shall be made in cash or may be made by delivering Common Stock of the Company having a fair market value at least equal to the Option Price, or a combination of Common Stock and cash. Such fair market value shall be determined by the closing price of the Common Stock on the New York Stock Exchange on the date on which this Option is exercised or, if no sale of the Common Stock shall have been made on the Exchange on that day, then on the next following day for which there is a reported sale.

7.Method of Exercise. This Option may be exercised only by written notice given to the Company, in form satisfactory to the Company, specifying the number of Option Shares which the holder of the Option elects to purchase, the number of Option Shares which the holder is paying for in cash and the number of Option Shares which the holder is paying for in shares of Common Stock. Such written notice and any subsequent exercise is subject to Company approval, as well as all policies and procedures in place at Company, including but not limited to Stock Trading Policies and Blackout Restrictions. Such written notice shall be accompanied by a check payable to the order of the Company for the cash portion of the purchase price and, if applicable, by the delivery of certificates representing shares of Common Stock duly endorsed and otherwise in proper form for transfer to the Company of such number of shares of Common Stock as are required to equal the fair market value of the Option Shares being paid for in stock. Upon each exercise of this Option, the Company, as promptly as practicable, will mail or deliver to the person exercising this Option a certificate or certificates representing the shares then purchased. The Company, in its discretion, may postpone the issuance and delivery of shares upon any exercise of this Option until completion of such stock exchange listing, or registration or other qualification, of such shares under any Federal or state law, rule or regulation as the Company may consider appropriate. The Company may require any person exercising this Option to make such representations and furnish such information as the Company may consider appropriate in connection with the issuance of the shares in compliance with applicable law.

8.Limitations on Transfer and Exercise. This Option is not transferable by the Employee other than by will or by the laws of descent and distribution, and this Option is exercisable during the lifetime of the Employee, only by him.

9.Adjustments. In the event of any change in the outstanding Common Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event, the committee which administers the plan (the “Committee”) may adjust proportionally the number of Option Shares and the Option Price. In the event of any other change affecting the Common Stock or any distribution (other than normal cash dividends) to holders of Common Stock, such adjustments as may be deemed equitable by the Committee, including adjustments to avoid fractional shares, may be made to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Committee shall be authorized to issue and substitute a new stock option for this Option.

10.Consideration for Grant. Although this Option may be exercised only if employment is continuous as provided in Section 3 hereof, it is understood that such employment shall, subject to the terms of any employment contract, be at the pleasure of the employer and at such compensation as the employer shall reasonably determine from time to time. Nothing in the Plan or in this Option shall confer on the Employee any right to continue in the employment of the Company or any of its affiliates or to interfere in any way with the right of the Company or its affiliates to terminate his or her employment at any time.

11.Amendment, Modification, Suspension, or Discontinuance of the Plan. The Board of Directors of the Company (the “Board”) may amend, modify, suspend, or terminate the plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law. Subject to changes in the law or other legal requirements that would permit otherwise, the Plan may not be amended without the consent of the holders of a majority of the shares of Common Stock then outstanding (i) to increase the aggregate number of shares of Common Stock that may be issued under the Plan (except for adjustments pursuant to the Plan), (ii) to decreased the Option Price, (iii) to materially modify the requirements as to eligibility for participation in the Plan, (iv) to withdraw administration of the Plan from the Committee, or (v) to extend the period during which awards may be granted under the Plan.

12.Change of Control. Should a “change in control” of the Company occur of a nature that would be required to be reported in response to Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934 as that requirement exists on the Date of Grant, then, upon the occurrence of, and on the date of said change in control, notwithstanding anything elsewhere herein contained, this Option shall become exercisable in full.

13.Change in Control Agreement. If, on the date of termination of Employee’s employment with the Company or an affiliate of the Company, Employee is entitled to rights or benefits under a written Change of Control Agreement with the Company containing provisions relating to stock options which are more favorable to Employee than those contained in this Option, the provisions of such Change of Control Agreement shall prevail.

14.Administration and Interpretation. The Plan shall be administered by the Committee, which shall have full and exclusive power to interpret the Plan, to grant waivers of restrictions, and to adopt such rules, regulations, and guidelines for carrying out the Plan as it may deem necessary or proper. All questions of interpretation and administration with respect to the Plan and this Option shall be determined by the Committee, and its determination shall be final and conclusive.

15.Notices. Any notice hereunder by the holder of this Option shall be given to the Company in writing and such notice and any payment hereunder shall be deemed duly given or made only upon receipt thereof at the Company's principal office in San Antonio, Texas, or at such other place as the Company may designate by written notice to the holder of this Option. Any notice or other communication hereunder to the holder of this Option shall be in writing and shall be deemed duly given if mailed or delivered to the holder at such address as he may have on file with the Company.

16.Shareholder Rights. The holder of this Option shall have no rights as a shareholder with respect to any Option Shares until the holder of this Option or his nominee becomes a shareholder of record with respect to such shares.

17.Withholding. The holder of this Option may be required to pay any taxes which must be withheld prior to receipt of any Option Shares hereunder

IN WITNESS WHEREOF, the Company has caused this Option to be executed in duplicate and its corporate seal to be hereunto affixed by its proper corporate officers thereunto duly authorized.

ATTEST:.

_______________________

Secretary

LUBY'S, INC.

_______________________

Christopher J. Pappas, President and Chief Executive Officer

ACCEPTED:

_______________________

Employee

EX-10.3

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.
 

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

EX-99

Luby’s Names Scott Gray Chief Financial Officer

HOUSTON, TX - April 20, 2007- Luby's, Inc. (NYSE: LUB)today announced that Scott Gray, 38, has been named Chief Financial Officer of Luby’s, Inc., effective April 20, 2007.

In accordance with the Company’s “Succession Plan” that was announced on January 24, 2007, Mr. Gray replaces Mr. Pekmezaris, who has held the position of Chief Financial Officer since 2001. Mr. Pekmezaris will remain an advisor to the Company.

“Scott has been a valued member of our team since we arrived in 2001, and we are confident in his experience and leadership based on a solid record of delivering results. Our succession plan has been successful in creating continuity for the organization and shareholders during this transition,” said Chris Pappas, President and CEO. “Ernie’s was instrumental in restoring our financial stability. Going forward, Ernie will serve as a valued advisor to the Company.”

Mr. Gray has been with the company since 2001 and has served in a number of financial roles including Vice President of Finance, Director of Planning and Director of Internal Audit. Prior to joining Luby’s, Mr. Gray served as Internal Auditor at Pappas Restaurants from 1996 to 2001. Prior to working at Pappas Restaurants, Mr. Gray was an external auditor at Arthur Andersen.

Mr. Gray is a Certified Public Accountant with a degree in Accounting from Lamar University.

About Luby’s

Luby’s operates 127 restaurants in Austin, Dallas, Houston, San Antonio, the Rio Grande Valley and other locations throughout Texas and other states.  Luby’s provides its customers with quality home-style food, value pricing, and outstanding customer service.