EXHIBIT 10.16

EXECUTION COPY

MANAGEMENT AGREEMENT

            THIS MANAGEMENT AGREEMENT (this "Agreement") is made as of October
5, 2000, by and among Roma Restaurant Holdings Inc., a Delaware corporation (the
"Company"), and Frank H. Steed ("Executive"). Certain definitions are set forth
in Section 13 of this Agreement.

            The Company and Executive desire to enter into an agreement (i)
setting forth the terms pursuant to which the Company shall grant to Executive
an option to acquire certain shares of Common; (ii) setting forth the terms and
conditions of Executive's employment with the Company; and (iii) setting forth
the obligation of Executive to refrain from competing with the Company and/or
its Subsidiaries under certain circumstances as provided herein.

        The parties hereto agree as follows:

STOCK AND OPTION PROVISIONS

1.    Stock Option.

        (a)   Grant of Option. Pursuant to the Plan, the Company hereby grants
to Executive a nonqualified stock option (the "Option") to purchase 23.53 shares
(the "Option Shares") of Common, at a price per share of $12,500.00 (the
"Exercise Price"). If the Company at any time subdivides (by any stock split,
stock dividend, recapitalization or otherwise) the Common into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced and the number of Option Shares shall be
proportionately increased. If the Company at any time combines (by reverse stock
split or otherwise) the Common into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased and the number of Option Shares shall be proportionately decreased.
The Option is not intended to be an "incentive stock option" within the meaning
of Section 422 of the Internal Revenue Code.

        (b)   Executive Bound by Plan. Attached hereto as Annex A is a copy of
the Plan which is incorporated herein by reference and made a part hereof.
Executive hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof. The Plan should be carefully
examined before any decision is made to exercise the Option.

        (c)   Exercisability. Subject to Section 1(f), the Option shall be
exercisable, in whole or in part, to the extent it has become vested, by written
notice to the Company at any time, and from time to time, during the period of
time after the Start Date and prior to the tenth anniversary of the Start Date
or such earlier date upon which the Option expires as specified herein or in the
Plan. The Option is subject to cancellation as provided in the Plan.

        (d)   Vesting of Option. The Option shall vest and become exercisable
with respect to the Option Shares as follows:

                (i) Time Option Shares. The Option shall vest with respect to up
to 11.765 Option Shares (the "Time Option Shares") as follows. The Option shall
vest on each vesting date set forth in the table below, with respect to the
number of Time Option Shares corresponding to such vesting date as set forth in
the table below, provided Executive remains continuously employed by the Company
from the Start Date through such vesting date.

 

Vesting Date

Number of Time
Option Shares Which Vest

The first anniversary of the Start Date

2.353

The last day of each month for the first 48 months after the first anniversary
of the Start Date

0.19608333

provided

, that if Executive remains continuously employed by the Company from the Start
Date through the consummation of a Sale of the Company, upon such consummation
the Option will immediately vest with respect to all of the unvested Time Option
Shares.

                (ii) Time/Performance Option Shares. The Option shall vest with
respect to up to 11.765 Option Shares (the "Performance Option Shares") as
follows. The Option shall vest on the date, if any, on which Sentinel and
Sentinel II, collectively, have actually received an aggregate of at least
$60,000,000 in cash and/or other consideration (any such other consideration to
be valued at its fair market value) in return for (or with respect to) all or
any portion of their equity (common or preferred) interests in the Company,
provided that (a) if Executive does not remain continuously employed by the
Company from the Start Date through such date the Option shall vest only with
respect to a number of Performance Option Shares equal to the number of Time
Option Shares which vested pursuant to clause (i) above prior to the termination
of Executive=s employment with the Company, or (b) if Executive remains
continuously employed by the Company from the Start Date through such date the
Option will vest with respect to all of the Performance Option Shares.

        (e)   Early Expiration Upon Termination of Employment.

                (i) To the extent the Option has vested with respect to any Time
Option Shares prior to or on the date Executive's employment with the Company
terminates (the "Termination Date") for any reason other than termination by the
Company for Cause, the Option may be exercised with respect to such vested Time
Option Shares by Executive within 45 days of the Termination Date (90 days in
the case of the Executive =s death). If Executive elects to exercise the Option
with respect to such vested Time Option Shares within 45 days of the Termination
Date (or 90 days as the case may be), such portion shall be immediately subject
to the Repurchase Option pursuant to the terms and conditions set forth in
Section 2. Any Time Option Shares not vested as of the Termination Date shall
expire. If Executive does not elect to exercise any vested Time Option Shares
within 45 days of the Termination Date (or 90 days as the case may be), such
Time Option Shares shall expire and the Option shall no longer be exercisable
with respect thereto.

                (ii) To the extent the Option has vested with respect to any
Performance Option Shares prior to or on the Termination Date (and the
termination of employment was for any reason other than termination by the
Company for Cause), the Option may be exercised with respect to such vested
Performance Option Shares within 45 days of the Termination Date (90 days in the
case of the Executive=s death). If Executive does not elect to exercise any
vested Performance Option Shares within 45 days of the Termination Date (90 days
in the case of the Executive=s death), such Performance Option Shares shall
expire and the Option shall no longer be exercisable with respect thereto. Any
Performance Option Shares not vested as of the Termination Date, other than
those Performance Option Shares, if any, which may potentially vest pursuant to
Section 1(d)(ii), shall expire; provided that if the Option does not vest with
respect to such Performance Option Shares, if any, on or before the date on
which Sentinel and Sentinel II no longer have any equity interest in the
Company, such portion of the Option shall expire on such date. If any portion of
the Option vests pursuant to Section 1(d)(ii) following the Termination Date,
Executive may exercise the Option with respect to such vested Performance Option
Shares only in conjunction with and on the date of the consummation of the
transaction which triggers such vesting; provided that the Company shall provide
Executive with written notice 15 days prior to such date. If Executive does not
elect to exercise the Option with respect to any Performance Option Shares which
vest in conjunction with and on the date of a Sale of the Company, such
Performance Option Shares shall expire and the Option shall no longer be
exercisable with respect thereto. If Executive elects to exercise any portion of
the Option with respect to the Performance Option Shares following the
Termination Date, such portion shall be immediately subject to the Repurchase
Option pursuant to the terms and conditions set forth in Section 2.

                (iii) Notwithstanding anything contained herein to the contrary,
if Executive's employment is terminated by the Company for Cause, the entire
Option (to the extent not yet exercised but whether vested or unvested) shall be
forfeited and shall expire.

        (f)   Procedure for Exercise. Executive may exercise all or a portion
(to the extent it has vested) of the Option by delivering written notice of
exercise to the Company, together with (i) written acknowledgment that Executive
has read and has been afforded an opportunity to ask questions of management of
the Company regarding all financial and other information provided to Executive
regarding the Company and (ii) payment in full by delivery of a cashier's or
certified check in the amount equal to the sum of (A) the Exercise Price
multiplied by the number of shares of Common to be acquired and (B) the amount,
if any, of any additional federal and state income taxes required to be withheld
by reason of the exercise of the Option. As a condition to the exercise of any
part of the Option, Executive will permit the Company to, and at the request of
Executive the Company shall, deliver to him all financial and other information
regarding the Company and its Subsidiaries which it believes necessary to enable
Executive to make an informed investment decision.

        (g)   Securities Laws Restrictions. Executive represents that when
Executive exercises the Option he will be purchasing Option Shares for
Executive's own account and not on behalf of others. Executive understands and
acknowledges that federal and state securities laws govern and restrict
Executive's right to offer, sell or otherwise dispose of any Option Shares
unless Executive's offer, sale or other disposition thereof is registered under
the Securities Act and state securities laws or, in the opinion of the Company'
counsel, such offer, sale or other disposition is exempt from registration
thereunder. Executive agrees that he will not offer, sell or otherwise dispose
of any Option Shares in any manner which would: (i) require the Company to file
any registration statement (or similar filing under state law) with the
Securities and Exchange Commission or to amend or supplement any such filing or
(ii) violate or cause the Company to violate the Securities Act, the rules and
regulations promulgated thereunder or any other state or federal law. Executive
further understands that the certificates for any Option Shares Executive
purchases will bear the legend set forth in Section 4 hereof or such other
legends as the Company deems necessary or desirable in connection with the
Securities Act or other rules, regulations or laws.

        (h)   Non-Transferability of the Option. The Option is personal to
Executive and is not transferable by Executive. Only Executive or Permitted
Transferees or their respective estates or heirs are entitled to exercise the
Option.

        (i)   Effect of Transfers in Violation of Agreement. The Company will
not be required (i) to transfer on its books any Option Shares which have been
sold or transferred in violation of any of the provisions set forth in this
Agreement, or (ii) to treat as owner of such shares, to accord the right to vote
as such owner or to pay dividends to any transferee to whom such shares have
been transferred in violation of this Agreement.

        (j)   Delivery of Shares. The date on which Executive has delivered to
the Company the items required under Section 1(f) is referred to herein as
Executive's "Exercise Date". Certificates for Option Shares purchased upon
exercise of the Option shall be delivered by the Company to Executive within
five business days after Executive's Exercise Date.

        (k)   Date of Issuance. The Option Shares issuable upon the exercise of
the Option shall be deemed to have been issued to Executive on Executive's
Exercise Date, and Executive shall be deemed for all purposes to have become the
record holder of such Option Shares on Executive's Exercise Date.

        (l)   Fully Paid. The issuance of certificates for Option Shares upon
exercise of the Option shall be made without charge to Executive for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such exercise. Each Option Share issuable upon exercise of the
Option shall, upon payment of the exercise price therefor, be fully paid and
nonassessable and free from all liens and charges with respect to the issuance
thereof.

        (m)   Book Transfer. The Company shall not close its books against the
transfer of any Option Shares issued or issuable upon the exercise of the Option
in any manner which interferes with the timely exercise of the Option.

        (n)   Filings. The Company shall assist and cooperate with Executive to
make any required governmental filings or obtain any governmental approvals
prior to or in connection with any exercise of the Option.

        (o)   Reservation. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common solely for the
purpose of issuance upon the exercise of the Option, such number of shares of
Common as are issuable upon the exercise of the Option. All Option Shares which
are so issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Company shall take
all such actions as may be necessary to assure that all such Option Shares may
be so issued without violation of any applicable law or governmental regulation
or any requirements of any domestic securities exchange or market upon which
shares of Common may be listed (except for official notice of issuance which
shall be immediately delivered by the Company upon each such issuance).

2.     Repurchase Option.

        (a)   Repurchase Option. In the event that Executive is no longer
employed by the Company for any reason, the Executive Securities, whether held
by Executive, or one or more Permitted Transferees, will be subject to
repurchase by the Company and the Investors pursuant to the terms and conditions
set forth in this Section 2 (the "Repurchase Option").

        (b)   Termination for Reasons Other than for Cause. If Executive's
employment with the Company is terminated for any reason other than for Cause,
then within one year after the Termination Date, the Company may elect to
purchase all or some of the Executive Securities, at a price per share equal to
the Fair Market Value thereof (x) as determined on the Termination Date, if the
Repurchase Notice (as defined in Section 2(d) below) has been delivered within
three months after the Termination Date, or (y) as determined as of a date
determined by the Board within 30 days prior to the delivery of the Repurchase
Notice, if the Repurchase Notice is delivered after the third month following
the Termination Date; provided that if Executive terminates his employment and
violates Sections 9, 10 or 11, the repurchase price for each share of Executive
Securities shall be equal to the lesser of its Fair Market Value (as of the date
determined above) or the Original Value thereof.

        (c)   Termination for Cause. If Executive is no longer employed by the
Company as a result of Executive's termination for Cause, then within one year
after the Termination Date, the Company may elect to purchase all or any portion
of the Executive Securities at a price per share equal to the lower of (A) the
Fair Market Value thereof (x) as determined on the Termination Date, if the
Repurchase Notice (as defined in Section 2(d) below) has been delivered within
three months after the Termination Date, or (y) as determined as of a date
determined by the Board within 30 days prior to the delivery of the Repurchase
Notice, if the Repurchase Notice is delivered after the third month following
the Termination Date, and (B) the Original Value thereof.

        (d)   Repurchase Procedures. The Company may elect to exercise the right
to purchase all or any portion of the Executive Securities by delivering written
notice (the "Repurchase Notice") to the holder or holders of such Executive
Securities. The Repurchase Notice will set forth the number of shares of
Executive Securities to be acquired from such holder(s), the aggregate
consideration to be paid for such shares and the time and place for the closing
of the transaction. If any shares of Executive Securities are held by Permitted
Transferees of Executive, the Company shall purchase the shares elected to be
purchased from such holder(s) of shares of Executive Securities pro rata
according to the number of shares of Executive Securities held by such holder(s)
at the time of delivery of such Repurchase Notice (determined as nearly as
practicable to the nearest share).

        (e)   Investors' Rights.

                 (i) If for any reason the Company does not elect to purchase
all of the Executive Securities, prior to the 90th day following the Termination
Date, Sentinel and then in certain circumstances, each Investor will be entitled
to exercise the Repurchase Option, in the manner set forth in Section 2(d), with
respect to the Executive Securities that the Company has not elected to purchase
(the "Available Shares"). As soon as practicable, but in any event within thirty
(30) days after the Company determines that there will be Available Shares, the
Company will deliver written notice (the "Option Notice") to all Investors
setting forth the number of Available Shares and the price for each Available
Share.

                 (ii) Sentinel will be permitted to purchase all or some of the
number (the "Sentinel Portion") of Available Shares equal to the product of (A)
Sentinel's Pro Rata Share and (B) the number of Available Shares, by delivering
written notice to the Company and the other Investors within 30 days after
receipt of the Option Notice from the Company. The quotient determined by
dividing (x) the number of shares of Available Shares elected to be purchased by
Sentinel and (y) the Sentinel Portion, shall be referred to as the "Sentinel
Percentage." If Sentinel elects to purchase any of the Available Shares, each of
the other Investors shall be permitted to purchase all or some of the number of
Available Shares equal to the product of (m) the Sentinel Percentage, (n) such
Investor's Pro Rata Share and (o) the number of Available Shares, by delivering
written notice to the Company within 30 days after receipt of the Option Notice
from the Company.

        (f)   Closing. The closing of the transactions contemplated by this
Section 2 will take place on the date designated by the Company in the
Repurchase Notice, which date will not be more than 90 days after the delivery
of such notice. The Company and/or the Investors, as the case may be, will pay
for the Executive Securities to be purchased pursuant to the Repurchase Option
by delivery of a cashier=s check payable to the holder of Executive Securities.
The Company and/or the Investors, as the case may be, will receive customary
representations and warranties from Executive regarding the sale of the
Executive Securities, including but not limited to the representation that
Executive has good and marketable title to the Executive Securities to be
transferred free and clear of all liens, claims and other encumbrances.

        (g)   Restrictions on Repurchase. Notwithstanding anything to the
contrary contained in this Agreement, all repurchases of Executive Securities by
the Company shall be subject to applicable restrictions contained in the
Delaware General Corporation Law and in the Company's and its Subsidiaries' debt
and equity financing agreements. If any such restrictions prohibit the
repurchase of Executive Securities hereunder which the Company is otherwise
entitled or required to make, the Company may make such repurchases as soon as
it is permitted to do so under such restrictions but in no event more than one
year after such restrictions prevent such repurchase.

        (h)   Termination of Repurchase Right. The right of the Company and the
Investors to repurchase Executive Securities pursuant to this Section 2 shall
terminate upon the first to occur of an Sale of the Company or a Qualified
Public Offering.

3.     Stockholders Agreement. The parties hereto acknowledge that the shares of
Executive Securities are subject to the terms and conditions of the Stockholders
Agreement and such shares shall be deemed to be ACompany Shares@ and Executive
shall be deemed to be a AStockholder@ for all purposes of the Stockholders
Agreement including, without limitation, Section 6 of the Stockholders
Agreement. Furthermore, the Option Shares (to the extent they have vested or may
still potentially vest hereunder) will be deemed to be AStockholder Shares@ for
purposes of all calculations under Section 6 of the Stockholders Agreement,
notwithstanding the proviso to the definition of AStockholder Shares@ contained
in the Stockholders Agreement and notwithstanding that the Option may not yet
have been exercised with respect to such Option Shares.

4.       Restrictions on Transfer.

                (a)  The certificates representing the Executive Securities
shall bear the following legend:

> > "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON ,
> > ____, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
> > (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
> > EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM
> > REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
> > ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE
> > OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN A MANAGEMENT AGREEMENT
> > AMONG ROMA RESTAURANT HOLDINGS, INC. (THE "COMPANY") AND EXECUTIVE DATED AS
> > OF ____________, 2000, AS AMENDED AND MODIFIED FROM TIME TO TIME. A COPY OF
> > SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
> > PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."

                (b)     No holder of Executive Securities may sell, transfer or
dispose of any Executive Securities (except pursuant to an effective
registration statement under the Securities Act) without first delivering to the
Company an opinion of counsel (reasonably acceptable in form and substance to
the Company) that neither registration nor qualification under the Securities
Act and applicable state securities laws is required in connection with such
transfer.

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EMPLOYMENT PROVISIONS

5.    Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the Start Date and ending as provided
in Section 8 hereof (the "Employment Period").

6.     Position and Duties.

        (a)   During the Employment Period, Executive shall serve as the Chief
Executive Officer of the Company and shall have the normal duties,
responsibilities and authority of the Chief Executive Officer, subject to the
power of the Board to expand or limit such duties, responsibilities and
authority and to override actions of the Chief Executive Officer. Executive
shall also serve as a director on the Board during the Employment Period.
Executive agrees to resign from the Board upon the termination of the Employment
Period.

        (b)   Executive shall report to the Board, and Executive shall devote
his best efforts and substantially all of his business time and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity) to the business and affairs of the Company and its
Subsidiaries. Executive shall perform his duties and responsibilities to the
best of his abilities in a diligent, trustworthy, businesslike and efficient
manner.

7.       Base Salary; Benefits and Bonuses.

        (a)   During the Employment Period, Executive's base salary shall be
$300,000 per annum or such higher rate as the Board may designate in its sole
discretion based on an annual review (the "Base Salary"), which salary shall be
payable in regular installments in accordance with the Company's general payroll
practices and shall be subject to customary withholding. In addition, during the
Employment Period, Executive shall be entitled to participate in all of the
Company's employee benefit programs for which senior executive employees of the
Company and its Subsidiaries are generally eligible; provided that Executive
shall be entitled to a car allowance of $10,160 per year and three weeks paid
vacation.

        (b)   The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.

        (c)   In addition to the Base Salary, the Board shall award a bonus to
Executive following the end of each fiscal year equal to up to 50% of
Executive's Base Salary based upon performance, determined at the discretion of
the Board. In any given fiscal year if the Company were to just meet the
performance goals contained in the Company=s management plan, the bonus awarded
under this Section 7(c) will be no less than 25% of Executive=s Base Salary.

        (d)   The Company shall pay Executive a bonus of $100,000 (in addition
to any other bonus Executive may be entitled to hereunder) on the one year
anniversary of the Start Date; provided that if Executive=s employment with the
Company terminates prior to such one year anniversary the amount of such bonus
shall be prorated based on the number of days in such one year period elapsed
after the Start Date until the date of such termination.

8.     Term; Termination.

        (a)   The Employment Period shall end on the fifth annual anniversary of
the Start Date; provided that (i) the Employment Period shall terminate prior to
such date upon Executive's death or Disability; (ii) the Employment Period may
be terminated by the Company at any time prior to such date for Cause or without
Cause; and (iii) the Employment Period may be terminated by Executive at any
time for any reason (a "Voluntary Termination").

        (b)   Upon (1) a Voluntary Termination of the employment relationship by
Executive other than within 10 days of a Good Reason Event, or (2) termination
of Executive's employment relationship by the Company for Cause, all future
compensation or bonuses to which Executive would otherwise be entitled and all
future benefits for which Executive would otherwise be eligible shall cease and
terminate as of the date of such termination; provided, however, that any
salary, bonus, incentive payment, deferred compensation or other compensation or
benefit which has been earned by or accrued for the benefit of Executive prior
to the date of termination shall not be forfeited and shall be paid to Executive
promptly.

        (c)   Upon a termination of Executive's employment other than (i)  a
termination by the Company for Cause, (ii)  a Voluntary Termination of the
employment relationship by Executive other than within 10 days of a Good Reason
Event, or (iii) on the fifth anniversary of the Start Date, Executive shall be
entitled (so long as he executes a form of the release attached hereto as
Exhibit A), in consideration of Executive's continuing obligations hereunder
after such termination (including, without limitation, Executive's
non-competition obligations), to receive his Base Salary, payable bi-weekly, and
fringe benefits, as if Executive's employment (which shall cease on the date of
such termination) had continued for the twelve (12) months following
termination; provided, that Executive shall be required to use his reasonable
best efforts to obtain, as expeditiously as possible, employment with a salary
comparable to the Base Salary. In such event, Executive's right to receive the
amounts and benefits set forth in this Section 8(c) shall terminate.
Notwithstanding the foregoing, if Executive obtains employment in accordance
with this Section 8(c) and the salary to be paid to Executive is less than the
Base Salary, the Company shall pay to Executive an amount equal to such
deficiency, payable bi-weekly, for the remainder of the severance period.

MISCELLANEOUS PROVISIONS

9.        Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while employed by the Company and its
Subsidiaries (including those obtained while employed by the Company prior to
the date of this Agreement) concerning the business or affairs of the Company or
any of its Subsidiaries ("Confidential Information") are the property of the
Company or such Subsidiary. Therefore, Executive agrees that he shall not
disclose to any unauthorized person or use for his own purposes any Confidential
Information without the prior written consent of the Board, unless and to the
extent that (i) such information was otherwise available to Executive from a
source other than the Company or (ii) the aforementioned matters become
generally known to and available for use by the public other than as a result of
Executive's acts or omissions. Executive shall deliver to the Company at the
termination of the Employment Period, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which he may then possess or have
under his control.

10.         Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company and its Subsidiaries ("Work Product") belong to the Company or such
Subsidiary. Executive shall promptly disclose such Work Product to the Board and
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).

11.         Non-Compete, Non-Solicitation.

        (a)   In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company prior to the date of this Agreement he has become familiar, and
during his continued employment with the Company he shall become familiar, with
the Company's trade secrets and with other Confidential Information concerning
the Company and its Subsidiaries and that his services have been and shall be of
special, unique and extraordinary value to the Company and its Subsidiaries.
Therefore, Executive agrees that, during the period commencing on the Start Date
and ending on the eighteenth month anniversary of the termination of the
Employment Period (the "Noncompete Period"), he shall not directly or indirectly
own any interest in, manage, control, participate in, consult with, or render
services for, any Person that is in the casual dining restaurant business in the
United States for which ribs account for at least 20% of such Person=s sales.
Nothing herein shall prohibit Executive from being a passive owner of not more
than 5% of the outstanding stock of any class of a corporation which is publicly
traded, so long as Executive has no active participation in the business of such
corporation.

        (b)   During the Noncompete Period, Executive shall not directly, or
indirectly through another entity, (i) induce or attempt to induce any executive
employee, district manager, store manager or assistant store manager of the
Company or any Subsidiary (collectively, the "Restricted Employees") to leave
the employ of the Company or such Subsidiary, or in any way interfere with the
relationship between the Company or any Subsidiary and any Restricted Employee,
(ii) hire any person who was a Restricted Employee at any time during the 6
months prior to the termination of the Employment Period, or (iii) induce or
attempt to induce any supplier, licensee, licensor, franchisee or other material
business relation of the Company or any Subsidiary to cease doing business with
the Company or such Subsidiary, or in any way interfere with the relationship
between any such supplier, licensee, licensor or material business relation and
the Company or any Subsidiary (including, without limitation, making any
negative statements or communications about the Company or its Subsidiaries).

12.       Enforcement. If, at the time of enforcement of Sections 9, 10 or 11 of
this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area. Because
Executive's services are unique and because Executive has access to Confidential
Information and Work Product, the parties hereto agree that money damages would
not be an adequate remedy for any breach of this Agreement. Therefore, in the
event a breach or threatened breach of this Agreement, the Company or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other
security). In addition, in the event of an alleged breach or violation by
Executive of Section 11, the Noncompete Period shall be tolled until such breach
or violation has been duly cured. Executive agrees that the restrictions
contained in Section 11 are reasonable.

13.       Definitions. All references to a fiscal year refer to the Company=s
fiscal year.

        "Affiliate" means, with respect to any Person, any other Person
controlling, controlled by, or under common control with such Person. For
purposes of this Agreement, the term "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with" as used with
respect to any Person) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person whether through ownership of voting securities, by contract or otherwise.

      "Board" means the board of directors of the Company.

      "Cause" means (i) a material breach of this Agreement by Executive that is
not cured or remedied and continues for five (5) business days after the Board
has given written notice to Executive specifying the manner in which Executive
has materially breached this Agreement, (ii) gross negligence (which is not
cured within 5 days after written notice from the Board) or willful misconduct
by Executive in the performance of his duties as an executive of the Company,
(iii) Executive's commission of a felony involving dishonesty, disloyalty or
fraud with respect to the Company or moral turpitude, or (iv) Executive=s
continued failure to obey lawful written directions of the Board which written
directions are not materially inconsistent with Executive=s duties and
responsibilities hereunder.

      "Change of Ownership" is any event pursuant to which Sentinel and Sentinel
II together with their Affiliates collectively cease to own at least 50% of the
aggregate number of shares of Common which Sentinel and Sentinel II owns as of
the date hereof (subject to adjustments for stock splits, combinations,
dividends and other similar transactions).

      "Common" means the Company's Common Stock, par value $.01 per share.

      "Disability" means Executive's inability, due to illness, accident,
injury, physical or mental incapacity or other disability, to carry out
effectively his duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 60 consecutive days as determined by an independent physician.

      "Executive Securities" means (i) the Option Shares which are issued and
outstanding from time to time, (ii) any other shares of Common otherwise issued
to, acquired by or held by Executive, and (iii) shares of the Company's capital
stock issued with respect to the securities specified in clauses (i) or (ii)
above by way of a stock split, stock dividend or other recapitalization;
provided that Executive Securities shall continue to be Executive Securities in
the hands of any holder other than Executive (except for the Company and the
Investors and except for transferees in a Public Sale), and except as otherwise
provided herein, each such other holder of Executive Securities shall succeed to
all rights and obligations attributable to Executive as a holder of Executive
Securities hereunder.

      "Fair Market Value" of each share of Executive Securities, as the case may
be, means the market value as determined in good faith mutually by the Board and
Executive; provided that if the parties cannot agree within 30 days, the Fair
Market Value will be decided by a mutually acceptable independent investment
bank, whose determination will be final and binding.

      "Good Reason Event" means:

> (a)   Notwithstanding the exercise of the power granted to the Company and the
> Board by Section 6(a) hereof, the assignment to Executive of any duties
> inconsistent in any material respect with Executive's position (including
> status, offices, titles and reporting requirements), authority, duties or
> responsibilities initially assigned to Executive and as contemplated by
> Section 6 of this Agreement, or any other action that results in a diminution
> in such position, authority, duties or responsibilities, excluding for this
> purpose an isolated, insubstantial and inadvertent action not taken in bad
> faith that is remedied within 10 days after receipt of written notice thereof
> from Executive to the Company; or
> 
> (b)   Any failure by the Company to comply with any of the provisions of this
> Agreement, other than an isolated, insubstantial and inadvertent failure not
> occurring in bad faith that is remedied within 10 days after receipt of
> written notice thereof from Executive to the Company.

      "Investor Shares" means (i) any Common acquired by the Investors, and (ii)
any equity securities of the Company issued or issuable directly or indirectly
with respect to the securities referred to in clause (i) above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization; provided that
Investor Shares shall not include (a) shares of Common issued pursuant to the
conversion or exercise of any options, warrants or other convertible securities
or (b) any equity securities of the Company issued or issuable with respect to
the securities referred to in clause (a) above in connection with a combination
or split of shares, recapitalization, merger, consolidation or other
reorganization.

>       "Investors" means the parties listed on Schedule 1 attached hereto,
> provided that if a party who is an employee of the Company as of the date
> hereof or becomes an employee of the Company at any time after the date hereof
> ceases to be an employee of the Company hereafter or thereafter, such party
> shall be deemed to have been removed from the Schedule and shall no longer be
> deemed an Investor for purposes of this Agreement.

        "Original Value" means with respect to each share of Executive
Securities, the purchase price paid for such share (as proportionally adjusted
for all stock splits, stock dividends and other recapitalizations subsequent to
the date hereof).

        "Permitted Transferee" has the meaning set forth in the Stockholders
Agreement.

        "Person" means any natural person, corporation, partnership, limited
liability company, trust, unincorporated organization or other entity.

        "Plan" means the Company=s 1998 Stock Option Plan.

        "Pro Rata Share" means, with respect to each Investor, the quotient
determined by dividing (i) the total number of Investor Shares held by such
Investor, by (ii) the total number of Investor Shares held by all Investors.

        "Public Sale" means any sale pursuant to a registered public offering
under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.

        "Qualified Public Offering" has the meaning set forth in the
Stockholders Agreement.

        "Sale of the Company" means the first to occur of any transaction (i)
following which there has been a Change of Ownership, or (ii) involving the sale
of substantially all of the Company's operating assets determined on a
consolidated basis.

        "Securities Act" means the Securities Act of 1933, as amended from time
to time.

        "Sentinel" means Sentinel Capital Partners, L.P., a Delaware limited
partnership.

        "Sentinel II" means Sentinel Capital Partners II, L.P., a Delaware
limited partnership.

        "Start Date" means the date as mutually agreed to by the Company and
Executive, which shall not be more than 15 days from the date hereof, on which
Executive commences his employment with the Company.

        "Stockholders Agreement" means that certain Stockholders Agreement dated
as of July 1, 1998, by and among the Company and the Company's stockholders.

        "Subsidiary" means any corporation, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by the Company or
(ii) if a partnership, association or other business entity, a majority of the
partnership or other similar ownership interests thereof is at the time owned or
controlled, directly or indirectly, by the Company. For purposes hereof, the
Company shall be deemed to have a majority ownership interest in a partnership,
association or other business entity if the Company, directly or indirectly, is
allocated a majority of partnership, association, or other business entity gains
or losses, or is or controls the managing director or general partner (or Person
having like authority) of such partnership, association or other business
entity.

        "Termination Date" has the meaning set forth in Section 1(e).

14.     Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the Investors at the addresses indicated in the
Company's records and to the other recipients at the address indicated below:

If to Executive:                      Frank H. Steed
                                               41 Masland Circle
                                               Dallas, TX 75230

with a copy to (which            Akin, Gump, Strauss, Hauer & Feld, LLP
shall not constitute                 300 Covent Street, #1500
notice to Executive):              San Antonio, TX 78205

If to the Company:
                                                c/o Sentinel Capital Partners,
L.P.
                                                777 Third Avenue, 32nd Floor
                                                New York, New York 10022
                                                Attention:      David S. Lobel
                                                                     John F.
McCormack
                                                                     Eric
D. Bommer

with a copy to (which              Kirkland & Ellis
shall not constitute                   Citicorp Center
notice to the Company:            153 East 53rd Street
                                                  New York, New York 10022
                                                  Attention: Frederick  Tanne,
Esquire

                                                     - and-

                                                  David Short
                                                  Romacorp, Inc.
                                                  9304 Forest Lane, Suite 200
                                                  Dallas, TX 75243

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.

15.   General Provisions.

        (a)   Transfers in Violation of Agreement. Any transfer or attempted
transfer of any Executive Securities in violation of any provision of this
Agreement shall be void, and the Company shall not record such transfer on its
books or treat any purported transferee of such Executive Securities as the
owner of such stock for any purpose.

        (b)   Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

        (c)   Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.

        (d)   Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

        (e)   Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the Investors and their respective successors and
assigns (including subsequent holders of Executive Securities); provided that
the rights and obligations of Executive under this Agreement shall not be
assignable except in connection with a permitted transfer of Executive
Securities hereunder.

        (f)   Choice of Law. The corporate law of the State of Delaware shall
govern all questions concerning the relative rights of the Company, Executive
and the Investors. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of Texas, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Texas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas.

        (g)   Remedies. Each of the parties to this Agreement (including the
Investors) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable attorney's
fees) caused by any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and acknowledge
that money damages would not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction (without posting any
bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement .

        (h)   Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Executive. The provisions of Section 2 may be amended and waived only with the
prior written consent of the Investors.

        (i)   Third-Party Beneficiaries. The parties hereto acknowledge and
agree that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investors and
their successors and assigns .

* * * * *

      IN WITNESS WHEREOF,

the parties hereto have executed this Agreement on the date first written above.

ROMA RESTAURANT HOLDINGS INC.

 

By: /s/Richard A. Peabody                 
Its:  President                                                  

 

/s/Frank H. Steed                                 

Frank H. Steed                                                

--------------------------------------------------------------------------------

 

 

Schedule 1

 

Sentinel Capital Partners, L.P.
Sentinel Capital Partners II, L.P.
Omega Partners, L.P.
The Provident Bank
Travelers Casualty and Surety Company
The Travelers Insurance Company
The Travelers Life and Annuity Company
The Phoenix Insurance Company
NPC Restaurant Holdings, Inc.