BRINKER INTERNATIONAL INC, S-8, 1994-11-16

BRINKER INTERNATIONAL INC
S-8, 1994-11-16
EATING PLACES

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As Filed With The Securities And Exchange Commission on November 16, 1994

Registration No.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

BRINKER INTERNATIONAL, INC.
(Exact name of issuer as specified in its charter)

Delaware 75-1914582
(State of incorporation) (I.R.S. employer identification no.)
6820 LBJ Freeway
Dallas, Texas 75240
(Address of principal executive office) (Zip Code)

Amended and Restated
On The Border Cafes, Inc. Stock Option Plan
(Full title of the plan)

Debra L. Smithart Bruce H. Hallett
Executive Vice President Crouch & Hallett, L.L.P.
Brinker International, Inc. 717 N. Harwood Street
6820 LBJ Freeway Suite 1400
Dallas, Texas 75240 Dallas, Texas 75201
(214) 980-9917 (214) 953-0053

(Names, addresses and telephone numbers, including area codes,
of agents for service)

APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALES PURSUANT TO THE PLANS:
Sales to the optionees of securities proposed to be registered hereunder will
occur from time to time after the effective date of this Registration
Statement.

<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Aggregate Amount of
to be Registered Registered Price Per Share Offering Price Registration Fee (1)
<S> <C> <C> <C> <C>

Common Stock,
$0.10 par value 123,742 Shs. $ 21.57 $ 2,669,115 $ 920.38

(1) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457,
based on the average of the high and low prices of the registrant's common stock on November 11,
1994 as reported on the New York Stock Exchange.
</TABLE>
</PAGE>

Item 3. Incorporation of Documents by Reference.

The documents listed (i) through (iii) below are hereby incorporated by
reference into this Registration Statement. All documents subsequently filed
by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934 (the "1934 Act") prior to filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.

(i) The Company's latest annual report filed pursuant to Section 13 or
15(d) of the 1934 Act or the latest prospectus filed pursuant to Rule 424(b)
or (c) under the Securities Act of 1933 (the "1933 Act"), which contains,
either directly or by incorporation by reference, audited financial statements
for the Company's latest fiscal year for which such statements have been
filed.

(ii) All other reports filed pursuant to Section 13(a) and 15(d) of the
1934 Act since the end of the fiscal year covered by the annual reports or the
prospectus referred to in (i) above.

(iii) The description of the Company's Common Stock which is contained
in a registration statement on Form 8-A filed under the 1934 Act, including
any amendment or report filed for the purpose of updating such description.

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Officers and Directors.

Section 145 of the General Corporation Law of the State of Delaware
provides generally and in pertinent part that a Delaware corporation may
indemnify its directors and officers against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by them in
connection with any suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) if, in connection with the matters in issue, they acted in
good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interests of the corporation, and, in connection with any
criminal suit or proceeding, if in connection with the matters in issue, they
had no reasonable cause to believe their conduct was unlawful. Section 145
further provides that in connection with the defense or settlement of any
action by or in the right of the corporation, a Delaware corporation may
indemnify its directors and officers against expenses actually and reasonably
incurred by them if, in connection with the matters in issue, they acted in
good faith, in a manner they reasonably believed to be in, or not opposed to,
the best interests of the corporation, except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 permits a Delaware corporation to grant its directors and officers
additional rights of indemnification through bylaw provisions and otherwise
and to purchase indemnity insurance on behalf of its directors and officers.

Article Ninth of the registrant's Certificate of Incorporation provides
that no director shall be liable to the registrant or its stockholders for
monetary damages for breach of fiduciary duty, provided that the liability of
a director is not limited (i) for any breach of the director's duty of loyalty
to the registrant or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or (iv) any
transaction from which such director derived an improper personal benefit.

Article VI, Section 2 of the registrant's bylaws provides, in general,
that the registrant shall indemnify its directors and officers under the
circumstances defined in Section 145. The Company has obtained an insurance
policy insuring the directors and officers of the Company against certain
liabilities, if any, that arise in connection with the performance of their
duties on behalf of the Company and its subsidiaries.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

4(a) Amended and Restated On The Border Cafes, Inc. Stock Option Plan
(filed herewith).

4(b) Forms of Incentive Stock Option Agreement and Nonqualified Stock
Option Agreement under the Amended and Restated On The Border
Cafes, Inc. Stock Option Plan (filed herewith).

5 Opinion of Crouch & Hallett, L.L.P. (filed herewith).

23(a) Consent of KPMG Peat Marwick, L.L.P. (filed herewith)

23(b) Consent of Crouch & Hallett, L.L.P. (included as part of
Exhibit 5).

Item 9. Undertakings.

(1) The undersigned registrant hereby undertakes:

(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
and

(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall
be deemed to be the initial bona fide offering thereof; and

(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.

(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securitiesat thattime shallbe deemedto bethe initialbona fideoffering thereof.

(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the certificate of incorporation or
bylaws of the registrant or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
</PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas and the State of Texas, on
the 16th day of November, 1994.

BRINKER INTERNATIONAL, INC.

By: Debra L. Smithart
Debra L. Smithart, Executive Vice
President and Chief Financial
Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on November 16, 1994.

Name Title

Norman E. Brinker Chairman of the Board, Chief
Norman E. Brinker Executive Officer and Director
(Principal Executive Officer)

Debra L. Smithart Executive Vice President - Chief
Debra L. Smithart Financial Officer and Director
(Principal Financial and Accounting
Officer)

Ronald A. McDougall Director
Ronald A. McDougall

Creed L. Ford, III Director
Creed L. Ford, III

F. Lane Cardwell, Jr. Director
F. Lane Cardwell, Jr.

Roger F. Thomson Director
Roger F. Thomson

Director
Jack W. Evans, Sr.

Director
Rae F. Evans

J.M. Haggar, Jr. Director
J.M. Haggar, Jr.

Ray L. Hunt Director
Ray L. Hunt

Director
J. Ira Harris

Director
Frederick S. Humphries

Director
James E. Oesterreicher

Director
William F. Regas

Director
Roger T. Staubach
</PAGE>

EXHIBIT 4(a)

AMENDED AND RESTATED
ON THE BORDER CAFES, INC.
STOCK OPTION PLAN

INTRODUCTION

On May 18, 1994, the Shareholders of On The Border Cafes, Inc. adopted

the following Amended and Restated Stock Option Plan:

1. PURPOSE. The purpose of the Plan is to provide key employees and

consultants with a proprietary interest in the Company through the granting of

options which will

(a) increase the interest of the key employees and consultants in the
Company's welfare;

(b) furnish an incentive to the key employees and consultants to
continue their services for the Company; and

(c) provide a means through which the Company may attract able persons
to enter its employ and serve as consultants to it.

2. ADMINISTRATION. The Plan will be administered by the Committee.

3. PARTICIPANTS. The Committee shall, from time to time, select the

particular key employees and consultants of the Company and its Subsidiaries

to whom options are to be granted, and who will, upon such grant, become

participants in the Plan. For purposes of the Plan, "key employees" are those

officers and employees whose performance and responsibilities are determined

by the Committee to be influential to the success of the Company. An

Incentive Option may not be granted to a consultant who is not an employee of

the Company or its Subsidiaries.

4. STOCK OWNERSHIP LIMITATION. No Incentive Option may be granted to

an employee who owns more than 10% of the voting power of all classes of stock

of the Company or its Parent or Subsidiaries. This limitation will not apply

if the option price is at least 110% of the fair market value of the stock at

the time the Incentive Option is granted and the Incentive Option is not

exercisable more than five years from the date it is granted.

5. SHARES SUBJECT TO PLAN. The Committee may not grant options under

the Plan for more than 550,000 shares of Common Stock of the Company, but this

number may be adjusted to reflect, if deemed appropriate by the Committee, any

stock dividend, stock split, share combination, recapitalization or the like,

of or by the Company. Shares to be optioned and sold may be made available

from either authorized but unissued Common Stock or Common Stock held by the

Company in its treasury. Shares that by reason of the expiration of an option

or otherwise are no longer subject to purchase pursuant to an option granted

under the Plan may be reoffered under the Plan.

6. LIMITATION OF AMOUNT. The aggregate fair market value (determined

at the time of grant) of the shares of Common Stock which any employee is

first eligible to purchase in any calendar year by exercise of Incentive

Options granted under this Plan and all incentive stock option plans of the

Company or its Parent or Subsidiaries shall not exceed $100,000. For this

purpose, the fair market value (determined at the respective date of grant of

each option) of the stock purchasable by exercise of an Incentive Option (or

an installment thereof) shall be counted against the $100,000 annual

limitation for an employee only for the calendar year such stock is first

purchasable under the terms of the option.

7. ALLOTMENT OF SHARES. The Committee shall determine the number of

shares of Common Stock to be offered from time to time by grant of options to

key employees and consultants of the Company or its Subsidiaries. The grant

of an option to a key employee or consultant shall not be deemed either to

entitle the key employee or consultant to, or to disqualify the key employee

or consultant from, participation in any other grant of options under the

Plan.

8. GRANT OF OPTIONS. The Committee is authorized to grant Incentive

Options and Nonqualified Options under the Plan. The grant of options shall

be evidenced by stock option agreements containing such terms and provisions

as are approved by the Committee, but not inconsistent with the Plan,

including provisions that may be necessary to assure that any option that is

intended to be an Incentive Option will comply with Section 422 of the

Internal Revenue Code. The Company shall execute the stock option agreements

upon instructions from the Committee.

A stock option agreement may provide that the option holder may request

approval from the Committee to exercise an option or a portion thereof by

tendering shares of Common Stock at the fair market value per share on the

date of exercise in lieu of cash payment of the exercise price.

9. OPTION PRICE. The option price of each Incentive Option shall not

be less than 100% of the fair market value per share of the Common Stock on

the date the option is granted. The option price of each Nonqualified Option

shall be determined by the Committee. The Committee shall determine the fair

market value of the Common Stock on the date of grant, and shall set forth the

determination in its minutes, using any reasonable valuation method.

10. OPTION PERIOD. The Option Period will begin on the date the

option is granted, which will be the date the Committee authorizes the option

unless the Committee specifies a later date. No option may terminate later

than ten years from the date the option is granted. The Committee may

provide for the exercise of options in installments and upon such terms,

conditions and restrictions as it may determine. The Committee may provide

for termination of the option in the case of termination of employment or

service as a consultant, or any other reason.

11. RIGHTS IN EVENT OF DEATH. If a participant dies prior to

termination of his right to exercise an option in accordance with the

provisions of his stock option agreement without having totally exercised the

option, the option may be exercised, to the extent of the shares with respect

to which the option could have been exercised by the participant on the date

of the participant's death, by the participant's estate or by the person who

acquired the right to exercise the option by bequest or inheritance or by

reason of the death of the participant, provided the option is exercised prior

to the date of its expiration or one year from the date of the participant's

death, whichever first occurs.

12. PAYMENT. Full payment for shares purchased upon exercising an

option shall be made in cash or by check or by tendering shares of Common

Stock at the fair market value per share at the time of exercise, or on such

other terms as are set forth in the applicable option agreement. No shares

may be issued until full payment of the purchase price therefor has been made,

and a participant will have none of the rights of a stockholder until shares

are issued to him.

13. EXERCISE OF OPTION. Options granted under the Plan may be

exercised during the Option Period, at such times, in such amounts, in

accordance with such terms and subject to such restrictions as are set forth

in the applicable stock option agreements. In no event may an option be

exercised or shares by issued pursuant to an option if any requisite action,

approval or consent of any governmental authority of any kind having

jurisdiction over the exercise of options shall not have been taken or

secured.

14. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of shares of

Common Stock covered by each outstanding option granted under the Plan and the

option price may be adjusted to reflect, as deemed appropriate by the

Committee, any stock dividend, stock split, share combination, exchange of

shares, recapitalization, merger, consolidation, separation, reorganization,

liquidation or the like, of or by the Company.

15. NON-ASSIGNABILITY. Options may not be transferred other than by

will or by the laws of descent and distribution. During a participant's

lifetime, options granted to a participant may be exercised only by the

participant.

16. INTERPRETATION. The Committee shall interpret the Plan and shall

prescribe such rules and regulations in connection with the operation of the

Plan as it determines to be advisable for the administration of the Plan. The

Committee may rescind and amend its rules and regulations.

17. AMENDMENT OR DISCONTINUANCE. The Plan may be amended or

discontinued by the Board without the approval of the stockholders of the

Company, except that any amendment that would (a) materially increase the

benefits accruing to participants under the Plan, (b) materially increase the

number of securities that may be issued under the Plan, or (c) materially

modify the requirements of eligibility for participation in the Plan must be

approved by the stockholders of the Company.

18. EFFECT OF PLAN. Neither the adoption of the Plan nor any action

of the Board or the Committee shall be deemed to give any officer, employee or

consultant any right to be granted an option to purchase Common Stock of the

Company or any other rights except as may be evidenced by the stock option

agreement, or any amendment thereto, duly authorized by the Committee and

executed on behalf of the Company and then only to the extent and on the terms

and conditions expressly set forth therein.

19. TERM. Unless sooner terminated by action of the Board, this Plan

will terminate on March 11, 2002. The Committee may not grant options under

the Plan after that date, but options granted before that date will continue

to be effective in accordance with their terms.

20. DEFINITIONS. For the purpose of this Plan, unless the context

requires otherwise, the following terms shall have the meanings indicated:

(a) "Plan" means this Stock Option Plan as amended from time to time.

(b) "Committee" means the Stock Option Committee of the Board or, in

the absence of a Stock Option Committee, shall mean the entire Board.

(d) "Common Stock" means the Common Stock which the Company is

currently authorized to issue or may in the future by authorized to issue (as

long as the common stock varies from that currently authorized, if at all,

only in amount of par value).

(e) "Subsidiary" means any corporation in an unbroken chain of

corporations beginning with the Company if, at the time of the granting of the

option, each of the corporations other than the last corporation in the

unbroken chain owns stock possessing 50% or more of the total combined voting

power of all classes of stock in one of the other corporations in the chain,

and "Subsidiaries" means more than one of any such corporations.

(f) "Parent" means any corporation in an unbroken chain of

corporations ending with the Company if, at the time of granting of the

option, each of the corporations other than the Company owns stock possessing

50% or more of the total combined voting power of all classes of stock in one

of the other corporations in the chain.

(g) "Option Period" means the period during which an option may be

exercised.

(h) "Incentive Option" means an option granted under the Plan which

meets the requirements of Section 422 of the Internal Revenue Code.

(i) "Nonqualified Option" means an option granted under the Plan which

is not intended to be an Incentive Option.
</PAGE>

EXHIBIT 4(b)

ON THE BORDER CAFES, INC.
INCENTIVE STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the On the Border Cafes, Inc. Stock

Option Plan (the "Plan") for key employees of On the Border Cafes, Inc. (the

"Company") and its subsidiaries, the Company grants to

(the "Option Holder")

an incentive option to purchase from the Company a total of

shares of Common Stock, $.02 par value, of the Company at $ per share

(being at least the fair market value per share of the Common Stock on the

date of this grant), in the amounts, during the periods and upon the terms and

conditions set forth in this Agreement.

2. Time of Exercise. Except only as specifically provided elsewhere

in this Agreement, this option is exercisable in the following cumulative

installments:

First installment. Up to of the total optioned shares at any
time after one year from the date of grant.

Second installment. Up to an additional of the total optioned
shares at any time after two years from the date of grant.

Third installment. Up to an additional of the total optioned
shares at any time after three years from the date of grant.

Fourth installment. Up to an additional of the total optioned
shares at any time after four years from the date of grant.

If an installment covers a fractional share, such installment will be rounded

off to the next highest share, except the final installment, which will be for

the balance of the total optioned shares. In the event of the Option Holder's

termination of employment for whatever cause, the option will be exercisable

only to the extent that the Option Holder could have exercised it on the date

of his termination of employment.

3. Exercise of Option. The exercise of this option shall entitle the

Option Holder to purchase shares of Common Stock of the Company. If requested

by the Option Holder and approved by the Company, the Option Holder may

exercise this option or any portion hereof by tendering shares of Common

Stock, in lieu of cash payment for the option shares being purchased, with the

number of shares tendered to be determined by the fair market value per share

of the Common Stock on the date of exercise, as determined by the Company.

4. Subject to Plan. This option and the grant and exercise thereof

are subject to the terms and conditions of the Plan, which is incorporated

herein by reference and made a part hereof, but the terms of the Plan shall

not be considered an enlargement of any benefits under this Agreement. In

addition, this option is subject to any rules and regulations promulgated

pursuant to the Plan, now or hereafter in effect.

5. Term. This option will terminate at the first of the following:

(a) 5 p.m. on , 19 .

(b) 5 p.m. on the date one year following the date of the Option
Holder's death.

(c) 5 p.m. on the date the Option Holder's employment with the Company
and its subsidiaries terminates for reasons of dishonesty, whether
in the course of his employment or otherwise, or for assisting a
competitor without permission, or for interfering with the
Company's relationship with a customer, or for any similar action
(hereinafter collectively referred to as "disloyalty").

(d) 5 p.m. on the date 30 days following the date the Option Holder's
employment with the Company and its subsidiaries terminates for a
reason other than death or disloyalty.

6. Who May Exercise. During the lifetime of the Option Holder, this

option may be exercised only by the Option Holder. If the Option Holder dies

prior to the termination date specified in Section 5 hereof without having

exercised the option as to all of the shares covered hereby, the option may be

exercised to the extent the Option Holder could have exercised the option on

the date of his death at any time prior to the earlier of the dates specified

in 5(a) and (b) hereof by the Option Holder's estate or a person who acquired

the right to exercise the option by bequest or inheritance or by reason of the

death of the Option Holder, subject to the other terms of this Agreement, the

Plan and applicable laws, rules and regulations.

7. Restrictions on Exercise. This option:

(a) may be exercised only with respect to full shares and no
fractional share of stock shall be issued;

(b) may not be exercised in whole or in part and no cash or
certificates representing shares subject to such option shall be
delivered, if any requisite approval or consent of any government
authority of any kind having jurisdiction over the exercise of
options shall not have been secured; and

(c) may be exercised only if at all times during the period beginning
with the date of the granting of the option and ending on the date
30 days prior to the date of exercise the Option Holder was an
employee of either the Company or a subsidiary of the Company;
provided, if the Option Holder's continuous employment is
terminated by (i) disloyalty, the option will terminate as
provided in Section 5(c) or (ii) death, the option may be
exercised in accordance with Section 6.

8. Manner of Exercise. Subject to such administrative regulations as

the Board of Directors of Company may from time to time adopt, the Option

Holder or beneficiary shall, in order to exercise this option

(a) give written notice to the Company of the exercise price and the
number of shares which he will purchase and furnish an undertaking
to make payment of such exercise price in United States dollars
before issuance of such shares; or

(b) give written notice to the Company of the exercise price and the
number of shares for which he is requesting approval from the
Company to tender other shares of Common Stock in exchange for
option shares.

Any notice shall include an undertaking to furnish or execute such

documents as the Company in its discretion shall deem necessary (i) to

evidence such exercise, in whole or in part, of the option evidenced by this

Agreement, (ii) to determine whether registration is then required under the

Securities Act of 1933, or any other law, as then in effect, and (iii) to

comply with or satisfy the requirements of the Securities Act of 1933, or any

other law, as then in effect.

In addition, if an exercise under paragraph (b) above is requested, the

notice shall include an undertaking to tender to the Company (i) promptly

after receipt of denial by the Company of the paragraph (b) request, full

payment in United States dollars of the option exercise price for the shares

being purchased hereunder or (ii) promptly after receipt of approval by the

Company of exercise of this option or portion hereof by payment of Common

Stock, full payment in Common Stock in exchange for the shares being purchased

hereunder.

The Company shall advise the Option Holder or beneficiary in writing,

within ten business days after the first Board of Directors (or the

administering committee thereof, if any,) meeting following the date of

exercise, whether the Company approves the exchange of Common Stock for option

stock being purchased. The Company must receive full payment in United States

dollars or the appropriate number of shares of Common Stock, whichever

applies, of the option exercise price within five business days after the date

of the Company's notice, unless the Company extends the time of payment.

9. Non-Assignability. This option is not assignable or transferable

by the Option Holder except by will or by the laws of descent and

distribution.

10. Rights of Shareholder. The Option Holder will have no rights as a

shareholder with respect to any shares covered by this option until the

issuance of a certificate or certificates to the Option Holder for the

shares. Except as otherwise provided in Section 11 hereof, no adjustment

shall be made for dividends or other rights for which the record date is prior

to the issuance of such certificate or certificates.

11. Capital Adjustments. The number of shares of Common Stock covered

by this option, and the option price thereof, shall be subject to such

adjustment as the Board of Directors of the Company deems appropriate to

reflect any stock dividend, stock split, share combination, exchange of

shares, recapitalization, merger, consolidation, separation, reorganization,

liquidation or the like, of or by the Company.

12. Acceleration of Exercise Upon Change in Control. Upon the

dissolution or liquidation of the Company, a merger or consolidation in which

the Company is not the surviving corporation (other than a merger into a

subsidiary or parent of the Company, or a merger the primary purpose of which

is reincorporation), a sale or conveyance of all or substantially all of its

assets, or a transaction or series of related transactions in which another

corporation becomes the owner of fifty percent (50%) or more of the total

combined voting power of all classes of stock of the Company, the Option

Holder shall have the right to exercise this option, in whole or in part, at

any time prior to the termination of this option without regard to the extent

that he would have been entitled to do so under Section 2 hereof.

13. Law Governing. This Agreement is intended to be performed in the

State of Texas and shall be construed and enforced in accordance with and

governed by the laws of such State.

14. Date of Grant. The date of grant of this option is ,
19 .

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed

by its duly authorized officer and the Option Holder, to evidence his consent

and approval of all the terms hereof, has duly executed this Agreement, as of

the date specified in Section 14 hereof.

ON THE BORDER CAFES, INC.

, Option Holder
</PAGE>

ON THE BORDER CAFES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the On the Border Cafes, Inc. Stock

Option Plan (the "Plan") for key employees of On the Border Cafes, Inc. (the

"Company") and its subsidiaries, the Company grants to

(the "Option Holder")

a nonqualified option to purchase from the Company a total of

shares of Common Stock, $.02 par value, of the Company at $ per share

(being at least the fair market value per share of the Common Stock on the

date of this grant), in the amounts, during the periods and upon the terms and

conditions set forth in this Agreement. This option is not intended to

constitute an incentive option within the meaning of I.R.C. Section 422.