THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Luby's, Inc. (LUB)

12/13/2005 Proxy Information

Harris J. Pappas and Christopher J. Pappas are brothers.

On July 23, 2002, the Company entered into an Indemnification Agreement with each member of the Board of Directors under which the Company obligated itself to indemnify each director to the fullest extent permitted by applicable law so that he or she will continue to serve the Company free from undue concern regarding liabilities. The Company has also entered into an Indemnification Agreement with each person becoming a member of the Board of Directors since July 23, 2002. The Board of Directors has determined that uncertainties relating to liability insurance and indemnification have made it advisable to provide directors with assurance that liability protection will be available in the future.

The Company obtains certain services from entities owned and controlled by Christopher J. Pappas, President and Chief Executive Officer of the Company, and Harris J. Pappas, Chief Operating Officer of the Company, pursuant to the terms of an Affiliate Services Agreement dated August 28, 2001, and then amended and restated as of July 23, 2002. The types of services periodically provided to the Company by these entities are the supply of goods and other services necessary for the operation of the Company. When the Affiliate Services Agreement was amended, a Master Sales Agreement with such entities was entered into on July 23, 2002, to more properly reflect the current relationship between the Company and those entities regarding the provisions of services and goods. Both the Amended and Restated Affiliate Services Agreement and Master Sales Agreement expire on December 31, 2005. On December 6, 2005, the Board of Directors voted to approve the renewal of the Master Sales Agreement, with substantially similar terms as the expiring agreement.

During the 2005 fiscal year, the entities owned or controlled by Messrs. Pappas (the "Pappas Entities") provided goods to the Company under the Master Sales Agreement in the amount of approximately $176,000. During the 2004 fiscal year, the Pappas Entities provided goods to the Company under the Master Sales Agreement in the amount of approximately $113,000. No services were provided in fiscal 2004 under the Affiliate Services Agreement. From September 1, 2005, through November 30, 2005, the Company incurred costs in the amount of approximately $2,000 from the Pappas Entities under either the Master Sales Agreement or the Affiliate Services Agreement.

Consistent with past practices, the Finance and Audit Committee of the Board of Directors reviewed on a quarterly basis all applicable amounts related to either the Master Sales Agreement or the Affiliate Services Agreement. That committee is composed entirely of nonemployee directors.

The Company anticipates that payments to such entities under the Master Sales Agreement during the current fiscal year will not exceed $500,000. Such payments will be primarily for goods purchased pursuant to the terms of the Master Sales Agreement. In the opinion of the Finance and Audit Committee, the fees paid by the Company for such goods and/or services are primarily at or below the level which the Company would pay for comparable goods and/or services (if available) from a party unaffiliated with the Company.

The Company leases real property from the Pappas Entities under a separate agreement, dated September 28, 2001 and amended as of May 20, 2003, for use as the Company's service center. The amount paid by the Company under this lease agreement was approximately $88,000 in fiscal 2005, and $82,000 in fiscal 2004. From September 1, 2005, through November 30, 2005, the Company incurred lease costs for the service center in the amount of $14,000. The Company has contracted to pay $6,800 per month in rent pursuant to said lease agreement to the Pappas Entities during the current fiscal year. The Company is obligated to pay all related repairs and maintenance, insurance, and pro-rata portion of utilities under said lease. The current term of this lease is month-to-month.

The Company previously leased a location from an unrelated third party. That location is used to house increased equipment inventories due to prior store closures. The Company considered it more prudent to lease this location rather than to pursue purchasing a storage facility, as its strategy is to focus its capital expenditures on its operating restaurants. In a separate transaction, the third-party property owner sold the location to the Pappas Entities during the fourth quarter of fiscal 2003, with the Pappas Entities becoming the Company's landlord for that location effective August 1, 2003. The storage site complements the Company's Houston service center with approximately 27,000 square feet of warehouse space. The amount paid by the Company under this lease arrangement was approximately $72,000 in fiscal 2005. From September 1, 2005, through November 30, 2005, the Company incurred lease costs for the storage site of approximately $11,000. The Company has contracted to pay $5,559 per month in rent pursuant to said lease agreement to the Pappas Entities during the current fiscal year. The Company is obligated to pay all related repairs and maintenance, insurance, and pro-rata portion of utilities under said lease. The current term of this lease is month-to-month.

Late in the third quarter of fiscal 2004, Messrs. Pappas became partners in a limited partnership which purchased a retail strip center in Houston, Texas. Messrs. Pappas own a 50% limited partnership and a 50% general partnership interest. One of the Company’s restaurants has rented approximately 7% of the space in that center since July of 1969. No changes were made to the Company’s lease terms as a result of the transfer of ownership of the center to the new partnership. The amount paid by the Company pursuant to the terms of this lease was $56,000 in fiscal 2004, and $167,000 in fiscal 2005, and $41,000 from September 1, 2005, to November 30, 2005. No amendments shall be made to this lease without the approval of the Finance and Audit Committee.

The Company entered into a purchase agreement (the "Purchase Agreement") with Messrs. Pappas on March 9, 2001. Pursuant to the terms of the Purchase Agreement, Messrs. Pappas became obligated to purchase convertible subordinated promissory notes (the "Pappas Notes") from the Company in the aggregate amount of $10 million upon satisfaction of certain conditions specified in the Purchase Agreement. Messrs. Pappas each purchased two convertible subordinated promissory notes dated June 29, 2001, from the Company in the face amounts of $1.5 million and $3.5 million each (the “Original Notes”), resulting in the receipt of $10 million in proceeds by the Company. The Original Notes were unsecured, and the rights of Messrs. Pappas to receive payments under the Pappas Notes were subordinated to the rights of the Company's senior secured creditors. As previously reported in the Company’s Current Report on Form 8-K filed May 23, 2003 and in the Company’s periodic filings, the Company’s default under the terms of its senior indebtedness which occurred in January of 2003 triggered a default under cross-default provisions in the Original Notes. In connection with the refinancing of the Company’s senior indebtedness and with the negotiation of new employment contracts with Messrs. Pappas (to replace the contracts which expired in March of 2004), a committee of independent directors of the Company, which was advised by independent advisors, negotiated an amendment of the Original Notes. These negotiations resulted in the curing of all defaults under the Original Notes and the issuance of two new notes, each in the face amount of $5 million to each of Christopher and Harris Pappas (the “Amended Notes”). Messrs. Pappas surrendered the Original Notes to the Company in connection with the issuance of the Amended Notes.

The Amended Notes accrued interest at an annual rate of prime plus 5% for as long as the senior debt equaled or exceeded $60 million. When the senior debt was reduced below $60 million, interest was at prime plus 4.00%. In either case, the rate could not exceed 12.00% or the maximum legal rate. The Amended Notes were unsecured and subordinated to the rights of the holders of the Company’s senior indebtedness. The Original Notes were convertible into the Company’s common stock at $5.00 per share for 2.0 million shares. The terms of the Amended Notes provided that, at the earlier of June 7, 2005, a default under the senior debt, or a “change in control,” as that term is defined in the Amended Notes, the conversion price would lower from $5.00 to $3.10 per share.

On August 31, 2005, Messrs. Pappas each voluntarily converted all of the convertible senior subordinated notes they held into common stock of the Company. Each of them converted $5.0 million principal amount of convertible senior subordinated notes at a conversion price of $3.10 per share into 1,612,903 shares of common stock of the Company. The shares issued pursuant to the conversion were treasury shares that had previously been reserved for such a conversion.

The Company’s treasury shares have also been reserved for two other purposes - the issuance of shares to Messrs. Pappas upon exercise of the options granted to them on March 9, 2001, and for shares issuable under the Company’s Nonemployee Director Phantom Stock Option Plan. In accordance with an agreement between Messrs. Pappas and the Company dated June 7, 2004, Christopher and Harris Pappas have agreed to limit their exercise of stock options to a number that will ensure the “net treasury shares available” are not exceeded.

Pursuant to the terms of that agreement, the Company indicated that it will use reasonable efforts to list on the New York Stock Exchange additional shares which would permit full exercise of those options.

12/17/2004 Proxy Information

The Company obtains certain services from entities owned and controlled by Christopher J. Pappas, President and Chief Executive Officer of the Company, and Harris J. Pappas, Chief Operating Officer of the Company, pursuant to the terms of an Affiliate Services Agreement dated August 28, 2001, and then amended and restated as of July 23, 2002. The types of services periodically provided to the Company by these entities are the supply of goods and other services necessary for the operation of the Company. When the Affiliate Services Agreement was amended, a Master Sales Agreement with such entities was entered into on July 23, 2002, to more properly reflect the current relationship between the Company and those entities regarding the provisions of services and goods.

During the 2004 fiscal year, the entities owned or controlled by Harris and Christopher Pappas (the “Pappas Entities”) provided goods to the Company under the Master Sales Agreement in the amount of approximately $113,000. Conversely, no services were provided in fiscal 2003 relative to the Affiliate Services Agreement. Subsequent to August 25, 2004, and through November 30, 2004, the Company incurred costs in the amount of approximately $47,000 from the Pappas Entities under either the Master Sales Agreement or the Affiliate Services Agreement.

Consistent with past practices, the Finance and Audit Committee of the Board reviewed on a quarterly basis all applicable amounts related to either the Master Sales Agreement or the Affiliate Services Agreement. That Committee is composed entirely of nonemployee directors.

The Company anticipates payments to such entities under the Affiliate Services Agreement and the Master Sales Agreement during the current fiscal year will not exceed $500,000. Such payments will be primarily for goods purchased pursuant to the terms of the Master Sales Agreement. In the opinion of the Finance and Audit Committee, the fees paid by the Company for such goods and/or services are primarily at or below the level which the Company would pay for comparable goods and/or services (if available) from a party unaffiliated with the Company.

The Company is obligated under a separate agreement dated September 28, 2001, for the lease of real property for the Company’s service center from the Pappas Entities. This lease agreement was amended on May 20, 2003, to expand the space leased by the Company. The proposal to amend the lease was reviewed by the Company’s Internal Audit Department, evaluated by the Finance and Audit Committee of the Board, and evaluated and approved by the Board with Messrs. Pappas and Markantonis abstaining from such vote. The amount paid by the Company under this lease agreement was approximately $82,000 in fiscal 2004. Subsequent to August 25, 2004, and through November 30, 2004, the Company incurred lease costs for the service center in the amount of $20,400. The Company has contracted to pay $6,800 per month in rent pursuant to said lease agreement to such entities during the current fiscal year. The Company is obligated to pay all related repairs and maintenance, insurance, and pro-rata portion of utilities under said lease.

The Company previously leased a location from an unrelated third party. That location is used to house increased equipment inventories due to store closures under the current business plan. The Company considered it more prudent to lease this location rather than to pursue purchasing a storage facility, as its strategy is to focus its capital expenditures on its operating restaurants. In a separate transaction, the third-party property owner sold the location to the Pappas Entities during the fourth quarter of fiscal 2003, with the Pappas Entities becoming the Company’s landlord for that location effective August 1, 2003. The storage site complements the Houston Service Center with approximately 27,000 square feet of warehouse space. The amount paid by the Company under this lease arrangement was approximately $69,000 in fiscal 2004. Subsequent to August 25, 2004, and through November 30, 2004, the Company incurred lease costs for the storage site of approximately $17,000. The Company has contracted to pay $5,559 per month in rent pursuant to said lease agreement to the Pappas Entities during the current fiscal year. The Company is obligated to pay all related repairs and maintenance, insurance, and pro-rata portion of utilities under said lease.

Late in the third quarter of fiscal 2004, Christopher J. Pappas and Harris J. Pappas became partners in a limited partnership which purchased a retail strip center in Houston, Texas. Messrs. Pappas own a 50% partnership interest. One of the Company’s restaurants has rented approximately 7% of the space in that center since July of 1969. No changes were made to the Company’s lease terms as a result of the transfer of ownership of the center to the new partnership. The amount paid by the Company pursuant to the terms of this lease since the Pappas’s inclusion as partners was $56,000 in fiscal 2004. Management is under instruction that no amendments can be made to this lease without the approval of the Finance and Audit Committee.

The Company entered into a purchase agreement (the “Purchase Agreement”) with Christopher J. Pappas and Harris J. Pappas on March 9, 2001. Pursuant to the terms of the Purchase Agreement, Messrs. Pappas became obligated to purchase convertible subordinated promissory notes (the “Pappas Notes”) from the Company in the aggregate amount of $10 million upon satisfaction of certain conditions specified in the Purchase Agreement. Messrs. Pappas each purchased two convertible subordinated promissory notes dated June 29, 2001, from the Company in the face amounts of $1.5 million and $3.5 million each (the “Original Notes”), resulting in the receipt of $10 million in proceeds by the Company. The Original Notes were unsecured, and the rights of Messrs. Pappas to receive payments under the Pappas Notes were subordinated to the rights of the Company’s senior secured creditors. As previously reported in the Company’s Current Report on Form 8-K filed May 23, 2003 and in the Company’s periodic filings, the Company’s default under the terms of its senior indebtedness which occurred in January of 2003 triggered a default under cross-default provisions in the Original Notes. In connection with the refinancing of the Company’s senior indebtedness and with the negotiation of new employment contracts with Messrs. Pappas (to replace the contracts which expired in March of 2004), a committee of independent directors of the Company, which was advised by independent advisors, negotiated an amendment of the Original Notes. These negotiations resulted in the curing of all defaults under the Original Notes and the issuance of two new notes, each in the face amount of $5 million to each of Christopher and Harris Pappas (the “Amended Notes”). Messrs. Pappas surrendered the Original Notes to the Company in connection with the issuance of the Amended Notes.

The Amended Notes accrue interest at an annual rate of prime plus 5.00% for as long as the senior debt equals or exceeds $60 million. When the senior debt is reduced below $60 million, interest will be prime plus 4.00%. In either case, the rate cannot exceed 12.00% or the maximum legal rate. The Amended Notes remain unsecured and remain subordinated to the rights of the holders of the Company’s senior indebtedness. The Original Notes were convertible into the Company’s common stock at $5.00 per share for 2.0 million shares. The terms of the Amended Notes provides that, at the earlier of June 7, 2005, a default under the senior debt, or a “change in control” as that term is defined in the Amended Notes, the conversion price will lower from $5.00 to $3.10 per share. In addition, the Company agreed to certain limits on the amount of indebtedness that can incur while the Amended Notes are outstanding.

The Company has agreed to reserve shares held in treasury for issuance to the holders of the Amended Notes upon conversion of the debt. The Company’s treasury shares have also been reserved for two other purposes — the issuance of shares to Messrs. Pappas upon exercise of the options granted to them on March 9, 2001, and for shares issuable under the Company’s Nonemployee Director Phantom Stock Option Plan. In accordance with an agreement between Messrs. Pappas and the Company dated June 7, 2004, Christopher and Harris Pappas have agreed to limit their exercise of stock options to a number that will ensure the “net treasury shares available” are not exceeded. Pursuant to the terms of that agreement, the Company indicated that it will use reasonable efforts to list on the New York Stock Exchange additional shares which would permit full exercise of those options.

On July 23, 2002, the Company entered into an Indemnification Agreement with each member of the Board of Directors under which the Company obligated itself to indemnify each director to the fullest extent permitted by applicable law so that he or she will continue to serve the Company free from undue concern regarding liabilities. The Company has also entered into an Indemnification Agreement with each person becoming a member of the Board of Directors since July 23, 2002. The Board of Directors has determined that uncertainties relating to liability insurance and indemnification have made it advisable to provide directors with assurance that liability protection will be available in the future.

Frank Markantonis is an attorney whose principal client is Pappas Restaurants, Inc., an entity controlled by COO Harris J. Pappas and CEO Christopher J. Pappas.

Mr. Woliver was Senior Vice President-Operations of Luby's Inc. from 1995 to 1997 and Vice President-Operations from 1984 to 1995.

1/22/2004 Proxy Information

Frank Markantonis is an attorney whose principal client is Pappas Restaurants, Inc., an entity controlled by COO Harris J. Pappas and CEO Christopher J. Pappas.

Jim W. Woliver is a retired former officer of Luby's, Inc. and presently a director of Luby's, Inc. He was Senior Vice President-Operations from 1995 to 1997 and Vice President-Operations from 1984 to 1995.