EMPLOYMENT AGREEMENT

         This  Agreement  is  entered  into  effective  as of  this  1st  day of
February,  1998,  by  and  between  Lone  Star  Steakhouse  &  Saloon,  Inc.,  a
corporation (the "Corporation") and Michael J. Archer ("Employee").

                                    RECITALS
                                    --------

         WHEREAS,  the Employee agrees to serve as Chief Operating Officer - Del
Frisco's/Sullivan's of the Corporation; and

         WHEREAS,  Employee is a  principal  officer of the  Corporation  and an
integral part of its management; and

         WHEREAS,  the  Corporation  desires to engage the services of Employee,
whose  experience,  knowledge  and  abilities  with  respect to the business and
affairs of the Corporation are extremely valuable to the Corporation; and

         WHEREAS, the parties hereto desire to enter into this Agreement setting
forth the terms and conditions of the continued  employment  relationship of the
Corporation and Employee.

         NOW THEREFORE, it is agreed as follows:

                                    ARTICLE I

         1.1 Term of Employment. The Corporation shall initially employ Employee
for a period of three years from the date hereof (the "Initial Term").

         1.2 Extension of Initial Term.  Upon  expiration of the initial term of
this Agreement,  this Agreement shall be extended  automatically  for successive
terms of one year each,  unless  either the  Corporation  or the Employee  gives
contrary  written notice to the other not later than 90 days prior to the annual
anniversary date thereof.

         1.3 Principal Place of Employment.  The Corporation  acknowledges  that
the Employee's  principal  residence is currently located in Chicago,  Illinois.
The Corporation  acknowledges  and agrees that the Employee shall be employed by
the  Corporation  at an office to be  established  by  Employee on behalf of the
Corporation in Chicago, Illinois (the "Chicago Office").

         Employee  may hire a secretary  or  secretarial  services,  such salary
terms and other hems and  conditions  which are  acceptable to the  Corporation,
which such acceptance will not be unreasonably withheld.

         The Corporation shall be responsible to pay or immediately



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reimburse  Employee for any and all costs and expenses  incurred in establishing
and operating the Chicago  Office,  including  without  limitation,  any and all
costs and expenses  arising out of any of the activities and items  contemplated
hereby.

                                   ARTICLE II
                             Duties of the Employee
                             ----------------------

         General Duties.  Employee shall serve as Chief Operating  Officer - Del
Frisco's/Sullivan's  of the Corporation.  In close  coordination and cooperation
with the Corporation, Employee shall continue to have the responsibility for the
development of the Corporation's  upscale steakhouse  restaurant concept with an
average meal check price in excess of $18.00 (the  "Division").  Employee  shall
continue to be  responsible  for marketing and growth of the Division.  Employee
shall  be  responsible  for the  management  and  day-to-day  operations  of the
Division.  He shall do and perform all services,  acts,  or things  necessary or
advisable to manage and conduct the business of the Corporation  consistent with
such position  subject to such policies and  procedures as may be established by
the Board.

         Employee shall: (i) devote his or her entire business time,  attention,
and  energies to the  business of the  Corporation,  and,  (ii)  faithfully  and
competently  perform his duties  hereunder;  and, Employee shall not, during the
term  of this  Agreement,  engage  in any  other  business  activity  except  as
permitted by Article 8.

                                   ARTICLE III
                                  Compensation
                                  ------------

         3.1 Salary.  For Employee's  services  Corporation  as Chief  Operating
Officer - Del Frisco's/Sullivan's, Employee shall be paid a salary at the annual
rate of $220,000 (herein referred to as "Salary")  payable in twenty-four  equal
installments  on the first and fifteenth day of each month.  On the first day of
each  calendar  year  during the term of this  Agreement  with the  Corporation,
Employee  shall be eligible for an increase in Salary  based on  recommendations
made by the Compensation Committee of the Board.

         3.2 Bonus. Employee is eligible to participate in the stock option plan
of the employer and all bonus  compensation plans which may be offered from time
to time.

         3.3 Bonus. Employee shall be eligible to receive a bonus (the "Bonus"),
which Bonus will be equal to sixty percent (60%) of the Employee's  then Salary,
for any annual period  hereunder.  The Bonus shall be paid at the  discretion of
the Corporation. Employee and the Corporation agree to establish mutually and in
good faith within sixty (60) days  following the date of this  Agreement,  goals
and  objectives,  in writing,  for the Employee  for each annual  period of this
Agreement, which such goals and objective shall be

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<PAGE>



described in as measurable and objective  standards and criteria as practicable.
In the event that Employee does not fully achieve the goals and objectives  upon
which the Bonus is based in any annual  period,  Employee  shall  nonetheless be
entitled to receive a proportionate  amount of the full amount of the Bonus that
would  otherwise  have been paid to Employee for such annual  period if Employee
had  fully  achieved  the  goals  and  objective.   The   determination  of  the
proportionate  amount of the Bonus to which  Employee  shall be  entitled  shall
correspond to the level, percentage or degree of Employee's achievement of goals
and objective, and shall not be an "all or nothing" test.

                                   ARTICLE IV
                                Employee Benefits
                                -----------------

         4.1 Use of Automobile.  The Corporation shall provide, at the option of
Employee,  with either the use of an automobile for business and personal use or
a cash  allowance  of $750.  If the car is  furnished  by the  Corporation,  the
Corporation  shall pay all expenses of operating,  maintaining and repairing the
automobile  and shall  procure and maintain  automobile  liability  insurance in
respect thereof, with such coverage insuring each Employee for bodily injury and
property damage.

         4.2 Medical Life and Disability  Insurance  Benefits.  The  Corporation
shall provide Employee with the medical,  dental, life and disability  insurance
benefits in accordance with the established benefit policies of the Corporation.
In addition,  the  Corporation  shall pay or  reimburse  Employee for payment of
those  certain  (i) life  insurance  and (ii)  long  term  disability  insurance
policies of Employee in effect as of the date hereof, which such payments in the
aggregate equal approximately $4,700 annually.

         4.3 Business Expenses. Employee shall be authorized to incur reasonable
expenses for promoting the business of the  Corporation  including  expenses for
entertainment,  travel,  and similar  items.  The  Corporation  shall  reimburse
Employee for all such expenses upon the  presentation by Employee,  from time to
time, of an itemized account of such expenditures.

         4.4 Vacations.  Employee  shall be entitled to an annual paid  vacation
equal to three (3) weeks,  effective  immediately.  The timing of paid vacations
shall be scheduled in a reasonable manner by the Employee.

         4.5 Disability.  Upon  disability (as defined  herein) of the Employee,
the  Employee  shall be entitled to receive an amount equal to 50% of his salary
(in addition to any disability  insurance  benefits received pursuant to Section
4.2 herein), such amount being paid semi-monthly in twelve equal installments.

         4.6 Moving Expenses. If upon joint acceptance by the

                                       3

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Corporation and the Employee,  the Employee shall be relocated,  the Corporation
shall pay all related moving expenses of the Employee.

                                    ARTICLE V
                                   Termination
                                   -----------

         5.1 Death. Employee's employment hereunder shall be terminated upon the
Employee's death.

         5.2 Disability.  The Corporation  may terminate  Employee's  employment
hereunder in the event  Employee is disabled and such  disability  continues for
more than 180 days.  Disability shall be defined as the inability of Employee to
render the services required of him under this Agreement as a result of physical
or mental incapacity.

         5.3 Cause.

         (a) The Corporation may terminate  Employee's  employment hereunder for
Cause. For the purpose of this Agreement, "Cause" shall mean the (i) willful and
intentional  failure by Employee to substantially  perform his duties hereunder,
other than any failure  resulting from Employee's  incapacity due to physical or
mental  incapacity,  or (ii)  commission  by Employee,  in  connection  with his
employment by the Corporation, of an illegal act or any act (though not illegal)
which is not in the ordinary course of the Employee's responsibilities and which
exposes the Corporation to a significant level of undue liability.  For purposes
of  this  paragraph,  no act or  failure  to act on  Employee's  part  shall  be
considered to have met either of the  preceding  tests unless done or omitted to
be done by  Employee  not in good faith  without a  reasonable  belief  that his
action or omission was in the best interest of the Corporation.

         (b) Notwithstanding the foregoing, Employee shall not be deemed to have
been  terminated  for Cause unless and until there shall have been  delivered to
Employee a copy of a resolution,  duly adopted by the majority vote of the Board
of Directors.

         5.4 Compensation  Upon  Termination  for Cause or Upon  Resignation  by
Employee.  If Employee's employment shall be terminated for Cause or if Employee
shall  resign his  position  with the  Corporation,  the  Corporation  shall pay
Employee's  compensation  only through the last day of Employee's  employment by
the  Corporation.  The  Corporation  shall  then have no further  obligation  to
Employee under this Agreement.

         5.5 Involuntary Termination If:

             (i) the  Employee is  terminated  by  Corporation  at any time
             prior to the  termination  of this Agreement for reasons other
             than Cause (as  defined  herein),  (ii) if  Corporation  gives
             notice to the Employee, in accordance with Section

                                       4

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             1.2 herein, that this Agreement will not be renewed;

         Employee  shall be paid,  over the ensuing six (6) month period,  a sum
         equal to the cash compensation paid to him excluding all bonuses of any
         kind by Corporation for the six (6) month period immediately  preceding
         such termination or non-renewal. Such six (6) month period, as the case
         may be,  shall  begin:  (i) on the date of  termination  in the case of
         termination  of Employee's  employment;  and (ii) on the date notice of
         non-renewal  is given in the case of  termination of this Agreement not
         accompanied by simultaneous  termination of Employee's  employment with
         the Corporation.

                                   ARTICLE VI
                  No Obligation to Mitigate Damages; No Effect
                           on Other Contractual Rights
                           ---------------------------

         6.1 No Mitigation.  Employee shall not be required to mitigate  damages
or the amount of any payment  provided for under this Agreement by seeking other
employment or otherwise,  nor shall the amount of any payment provided for under
this Agreement be reduced by any  compensation  earned by Employee as the result
of employment by another employer after Employee's termination or resignation.

         6.2 Other Contractual Rights. The provisions of this Agreement, and any
payment provided for hereunder,  shall not reduce any amount otherwise  payable,
or in any way diminish  Employee's existing rights, or rights which would accrue
solely as a result of passage of time under any  employee  benefit plan or other
contract,  plan or arrangement of which Employee is a beneficiary or in which he
participates.

                                   ARTICLE VII
                          Successors to the Corporation
                          -----------------------------

         7.1 Employee's  Successors and Assigns.  This Agreement  shall inure to
the  benefit  of  and  be   enforceable   by   Employee's   personal  and  legal
representatives,  executors,  administrators,  successors,  heirs, distributees,
devisees  and  legatees.  If  Employee  should die while any  amounts  are still
payable to him hereunder,  all such amounts,  unless otherwise  provided herein,
shall be paid in  accordance  with the  terms of this  Agreement  to  Employee's
devisee,  legatee  or  other  designee  or,  if there  be no such  designee,  to
Employee's estate.

                                  ARTICLE VIII
                            Restrictions on Employee
                            ------------------------

         8.1 Non-Disclosure;  Non-Solicitation. Except in the performance of his
duties  hereunder,  at no time during the Term of  Employment,  and for eighteen
(18) months  after the  termination  hereof,  shall  Employee,  individually  or
jointly with others, for

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the benefit of Employee or any third party, publish, disclose, use, or authorize
anyone else to publish, disclose, or use, any secret or confidential material or
information  relating  to  any  aspect  of the  business  or  operations  of the
Corporation,   including,   without  limitation,   any  secret  or  confidential
information relating to the business,  customers, trade or industrial practices,
trade secrets, technology, recipes or know-how of the Corporation. Except in the
performance  of his  duties  hereunder,  at no time  during  the term or six (6)
months  thereafter,  shall Employee for himself or on behalf of any other person
or entity  contact any  employee of the  Corporation  for the purpose of hiring,
diverting or otherwise soliciting the employee.

         8.2  Non-Competition.  During the Term of  Employment  and for eighteen
(18) months  thereafter if Employee is  terminated,  pursuant to either  Section
5.3, or in the event of any voluntary  termination  or  resignation by Employee,
Employee shall not, individually or jointly with others, directly or indirectly,
whether  for his own  account  or for that of any  other  person or  entity,  be
employed  by,  engage in, own, or hold any  ownership  interest in any person or
entity engaged in a restaurant business the same as or similar to any restaurant
business of the Corporation without the Corporation's written consent.

                                   ARTICLE IX
                                  Miscellaneous
                                  -------------

         9.1  Indemnification.  To the full extent  permitted  by law, the Board
shall authorize the payment of expenses  incurred by or shall satisfy  judgments
or fines  rendered  or  levied  against  Employee  in any  action  brought  by a
third-party  against  Employee  (whether or not the  Corporation  is joined as a
party  defendant)  to impose any  liability  or penalty on Employee  for any act
alleged to have been  committed by Employee  while  employed by the  Corporation
unless Employee was acting with gross negligence or willful misconduct. Payments
authorized  hereunder  shall  include  amounts  paid and  expenses  incurred  in
settling any such action or threatened action.

         9.2 Notices.  Any notices  required or permitted to be given under this
Agreement  shall be sufficient if in writing and sent by mail to his  residence,
in the  case  of  Employee,  or to its  principal  office,  in the  case  of the
Corporation.

         9.3 Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.

         9.4 Amendment.  No amendment or modification of this Agreement shall be
deemed effective unless or until executed in writing by the parties hereto.

         9.5 Validity. This Agreement, having been executed and

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<PAGE>



delivered in the State of Kansas, its validity, interpretation,  performance and
enforcement will be governed by the laws of that state.

         9.6 Section  Headings.  Section and other  headings  contained  in this
Agreement  are for  reference  purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         9.7  Counterpart  Execution.  This  Agreement may be executed in two or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute but one and the same instrument.

         9.8 Legal Fees.  Except in the event of termination for Cause, and only
in  the  event  a  change  of  control  of the  Corporation  has  occurred,  the
Corporation  shall pay all legal fees and expenses which Employee may incur as a
result  of  the  Corporation's   contesting  the  validity,   enforceability  or
Employee's interpretation of, or determination under, this Agreement.

         9.9 Exclusivity.  Specific  arrangements  referred to in this Agreement
are not  intended  to exclude  Employee's  participation  in any other  benefits
available to executive  personnel generally or to preclude other compensation or
benefits as may be authorized by the Board from time to time.

         9.10 Partial Invalidity.  If any provision in this Agreement is held by
a court of competent  jurisdiction to be invalid,  void, or  unenforceable,  the
remaining  provisions  shall  nevertheless  continue in full force without being
impaired or invalidated in any way.

         IN WITNESS  WHEREOF,  the  Corporation  has caused this Agreement to be
executed and its seal affixed hereto by its officers  thereunto duly authorized;
and the Employee has executed this Agreement, as of the day and year first above
written.


"CORPORATION"                                    LONE STAR STEAKHOUSE &
   Attest                                          SALOON, INC.


                                                 By:
--------------------------------                    ----------------------------
Gerald T. Aaron, Secretary                       Jamie B. Coulter, Chairman and
                                                   Chief Executive Officer



Witness                                          "EMPLOYEE"




--------------------------------                    ----------------------------
                                                     Michael J. Archer


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