Document:

Exhibit
      10.5

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      U.S. SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR FOREIGN
      JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED
      PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE OR APPLICABLE
      FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL
      SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER U.S.
      FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS IS NOT
      REQUIRED.

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

       

    

    2007
      STOCK INCENTIVE PLAN

    NOTICE
      OF STOCK OPTION GRANT

     

    Pacific
      Restaurant Holdings, Inc. (the
      “Company”) hereby grants you the following Option to purchase shares of its
      common stock (“Shares”). The terms and conditions of this Option are set forth
      in the Stock Option Agreement and the Pacific
      Restaurant Holdings, Inc. 2007 Stock
      Incentive Plan (the “Plan”), both of which are attached to and made a part of
      this document.

     

    
      	
              Date
                of Grant:

            	
              [Date
                of Grant]

            
	 	 
	
              Name
                of Optionee:

            	
              [Name
                of Optionee]

            
	 	 
	
              Number
                of Option Shares:

            	
              [Number
                of Shares]

            
	 	 
	
              Exercise
                Price per Share:

            	
              $[Exercise
                Price]
                (The Exercise Price per Share of an Option shall not be less than
                one
                hundred percent (100%) of the Fair Market Value of a Share on the
                date of
                grant. If Optionee is a Ten-Percent Stockholder, the Exercise Price
                per
                Share of an ISO must be at least one hundred ten percent (110%) of
                Fair
                Market Value.)

            
	 	 
	
              Vesting
                Start Date:

            	
              [Vesting
                Start Date]

            
	 	 
	
              Type
                of Option:

            	
              [Type
                of Grant: NSO/ISO]

            
	 	 
	
              Vesting
                Schedule:

            	
              Subject
                to the terms and conditions set forth in Section 2 of the Stock Option
                Agreement, the Option vests with respect to the first 25% of the
                Shares
                when the Optionee completes 12 months of continuous Service after the
                Vesting Start Date, and with respect to an additional 1/48th of the
                Shares
                when the Optionee completes each full month of continuous Service
                thereafter.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    By
      signing this document, you acknowledge receipt of a copy of the Plan, and agree
      that (a) you have carefully read, fully understand and agree to all of the
      terms
      and conditions described in the attached Stock Option Agreement, the Plan
      document and “Notice of Exercise and Common Stock Purchase Agreement” (the
“Exercise Notice”); (b) you hereby make the purchaser’s investment
      representations contained in the Exercise Notice with respect to the grant
      of
      this Option; (c) you understand and agree that the Stock Option Agreement,
      including its cover sheet and attachments, constitutes the entire understanding
      between you and the Company regarding this Option, and that any prior
      agreements, commitments or negotiations concerning this Option are replaced
      and
      superseded; and (d) you have been given an opportunity to consult your own
      legal
      and tax counsel with respect to all matters relating to this Option prior to
      signing this cover sheet and that you have either consulted such counsel or
      voluntarily declined to consult such counsel.

     

    
      	
              [NAME
                OF OPTIONEE]

            	 	 	
              PACIFIC
                RESTAURANT HOLDINGS, INC.

            
	 	 	 	 
	 	 	 	 
	
            	 	 	By:
	 

              

            	 	 	
              
                

              

              Its: 

               

              
                

              

              
              

            

    

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

      NOTICE
        OF
        STOCK OPTION GRANT

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

      PACIFIC
        RESTAURANT HOLDINGS, INC. 

    

     

    2007
      STOCK INCENTIVE PLAN

     

    STOCK
      OPTION AGREEMENT

     

    SECTION 1. KIND
      OF OPTION.

     

    This
      Option is intended to be either an incentive stock option intended to meet
      the
      requirements of section 422 of the Internal Revenue Code (an “ISO”) or a
      non-statutory option (an “NSO”), which is not intended to meet the requirements
      of an ISO, as indicated in the Notice of Stock Option Grant. Even if this Option
      is designated as an ISO, it shall be deemed to be an NSO to the extent required
      by the $100,000 annual limitation under Section 422(d) of the
      Code.

     

    SECTION 2. VESTING.

     

    Subject
      to the terms and conditions of the Plan and this Stock Option Agreement (the
      “Agreement”), your Option will be exercisable with respect to the Shares that
      have become vested in accordance with the schedule set forth in the Notice
      of
      Stock Option Grant. If your Option is granted in consideration of your Service
      as an Employee or a Consultant, after your Service as an Employee or a
      Consultant terminates for any reason, vesting of your Shares subject to such
      Option immediately stops and such Option expires immediately as to the number
      of
      Shares that are not vested as of the date your Service as an Employee or a
      Consultant terminates. If your Option is granted in consideration of your
      Service as an Outside Director, after your Service as an Outside Director
      terminates for any reason, vesting of your Shares subject to such Option
      immediately stops and such Option expires immediately as to the number of Shares
      that are not vested as of the date your Service as an Outside Director
      terminates.

     

    SECTION 3. TERM.

     

    Your
      Option will expire in any event at the close of business at Company headquarters
      on ten (10) years after the Date of Grant; provided, however, that if your
      Option is an ISO it will expire five (5) years after the Date of Grant if you
      are a Ten-Percent Stockholder of the Company (the “Expiration Date”). Also, your
      Option will expire earlier if your Service terminates, as described
      below.

     

    SECTION 4. REGULAR
      TERMINATION.

     

    
      	 	
              (a)

            	
              If
                your Service terminates for any reason except death or Disability,
                the
                vested portion of your Option will expire at the close of business
                at
                Company headquarters on the date three (3) months after your termination
                of Service. During that three (3) month period, you may exercise
                the
                portion of your Option that was vested on your termination date.
                Notwithstanding the foregoing, the Option may not be exercised after
                the
                Expiration Date determined under Section 3
                above.

            

    

    
      
         

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        STOCK
          OPTION AGREEMENT

      

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              If
                your Option is an ISO and you exercise it more than three months
                after
                termination of your Service as an Employee for any reason other than
                death
                or Disability expected to result in death or to last for a continuous
                period of at least twelve (12) months, your Option will cease to
                be
                eligible for ISO tax treatment.

            

    

     

    
      	 	
              (c)

            	
              Your
                Option will cease to be eligible for ISO tax treatment if you exercise
                it
                more than three months after the 90th day of a bona fide leave of
                absence
                approved by the Company, unless you return to employment immediately
                upon
                termination of such leave or your right to reemployment after your
                leave
                was guaranteed by statute or
                contract.

            

    

     

    SECTION 5. DEATH.

     

    If
      you
      die while in Service with the Company, the vested portion of your Option will
      expire at the close of business at Company headquarters on the date twelve
      (12)
      months after the date of your death. During that twelve (12) month period,
      your
      estate, legatees or heirs may exercise that portion of your Option that was
      vested on the date of your death. Notwithstanding the foregoing, the Option
      may
      not be exercised after the Expiration Date determined under Section 3
      above.

     

    SECTION 6. DISABILITY.

     

    
      	 	
              (a)

            	
              If
                your Service terminates because of a Disability, the vested portion
                of
                your Option will expire at the close of business at Company headquarters
                on the date twelve (12) months after your termination date. During
                that
                twelve (12) month period, you may exercise that portion of your Option
                that was vested on the date of your Disability. “Disability” means that
                you are unable to engage in any substantial gainful activity by reason
                of
                any medically determinable physical or mental impairment. Notwithstanding
                the foregoing, the Option may not be exercised after the Expiration
                Date
                determined under Section 3
                above.

            

    

     

    
      	 	
              (b)

            	
              If
                your Option is an ISO and your Disability is not expected to result
                in
                death or to last for a continuous period of at least twelve (12)
                months,
                your Option will be eligible for ISO tax treatment only if it is
                exercised
                within three (3) months following the termination of your Service
                as an
                Employee.

            

    

     

    SECTION 7. EXERCISING
      YOUR OPTION.

     

    To
      exercise your Option, you must execute the Notice of Exercise and Common Stock
      Purchase Agreement (the “Exercise Notice”), attached as Exhibit A.
      You
      must submit this form, together with full payment, to the Company. Your exercise
      will be effective when it is received by the Company. If someone else wants
      to
      exercise your Option after your death, that person must prove to the Company’s
      satisfaction that he or she is entitled to do so.

    
      
        

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        STOCK
          OPTION AGREEMENT

      

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    SECTION 8. PAYMENT
      FORMS.

     

    When
      you
      exercise your Option, you must include payment of the Exercise Price for the
      Shares you are purchasing in cash or cash equivalents. Alternatively, you may
      pay all or part of the Exercise Price by surrendering, or attesting to ownership
      of, Shares already owned by you, unless such action would cause the Company
      to
      recognize any (or additional) compensation expense with respect to the Option
      for financial reporting purposes. Such Shares shall be surrendered to the
      Company in good form for transfer and shall be valued at their Fair Market
      Value
      on the date of Option exercise. To the extent that a public market for the
      Shares exists and to the extent permitted by applicable law, in each case as
      determined by the Company, you also may exercise your Option by delivery (on
      a
      form prescribed by the Company) of an irrevocable direction to a securities
      broker to sell Shares and to deliver all or part of the sale proceeds to the
      Company in payment of the aggregate Exercise Price and, if requested, applicable
      withholding taxes. The Company will provide the forms necessary to make such
      a
      cashless exercise. The Board may permit such other payment forms as it deems
      appropriate, subject to applicable laws, regulations and rules.

     

    SECTION 9. TAX
      WITHHOLDING AND REPORTING.

     

    
      	 	
              (a)

            	
              You
                will not be allowed to exercise this Option unless you pay, or make
                acceptable arrangements to pay, any taxes required to be withheld
                as a
                result of the Option exercise or the sale of Shares acquired upon
                exercise
                of this Option. You hereby authorize withholding from payroll or
                any other
                payment due you from the Company or your employer to satisfy any
                such
                withholding tax obligation. 

            

    

     

    
      	 	
              (b)

            	
              If
                you sell or otherwise dispose of any of the Shares acquired pursuant
                to an
                ISO on or before the later of (i) two years after the grant date, or
                (ii) one year after the exercise date, you shall immediately notify
                the Company in writing of such
                disposition.

            

    

     

    SECTION 10. RIGHT
      OF FIRST REFUSAL.

     

    In
      the
      event that you propose to sell, pledge or otherwise transfer to a third party
      any Shares acquired under this Agreement, or any interest in such Shares, the
      Company shall have a “Right of First Refusal” with respect to such Shares in
      accordance with the provisions of the Exercise Notice.

     

    SECTION 11. RESALE
      RESTRICTIONS/MARKET STAND-OFF.

     

    In
      connection with any underwritten public offering by the Company of its equity
      securities pursuant to an effective registration statement filed under the
      U.S.
      Securities Act of 1933, as amended, including the Company’s initial public
      offering, you may be prohibited from engaging in any transaction with respect
      to
      any of the Company’s common stock without the prior written consent of the
      Company or its underwriters in accordance with the provisions of the Exercise
      Notice.

    
      
        

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        STOCK
          OPTION AGREEMENT

      

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    SECTION 12. TRANSFER
      OF OPTION.

     

    Prior
      to
      your death, only you may exercise this Option. This Option and the rights and
      privileges conferred hereby cannot be sold, pledged or otherwise transferred
      (whether by operation of law or otherwise) and shall not be subject to sale
      under execution, attachment, levy or similar process. For instance, you may
      not
      sell this Option or use it as security for a loan. If you attempt to do any
      of
      these things, this Option will immediately become invalid. You may, however,
      dispose of this Option in your will. Regardless of any marital property
      settlement agreement, the Company is not obligated to honor an Exercise Notice
      from your spouse or former spouse, nor is the Company obligated to recognize
      such individual’s interest in your Option in any other way. Notwithstanding the
      foregoing, however, to the extent permitted by the Board in its sole discretion,
      an NSO may be transferred by you to a revocable trust or to one or more family
      members or to a trust established for your benefit and/or one or more of your
      family members to the extent permitted by the Plan.

     

    SECTION 13. RETENTION
      RIGHTS.

     

    This
      Agreement does not give you the right to be retained by the Company in any
      capacity. The Company reserves the right to terminate your Service at any time
      and for any reason without thereby incurring any liability to you.

     

    SECTION 14. STOCKHOLDER
      RIGHTS.

     

    Neither
      you nor your estate or heirs have any rights as a stockholder of the Company
      until a certificate for the Shares acquired upon exercise of this Option has
      been issued. No adjustments are made for dividends or other rights if the
      applicable record date occurs before your stock certificate is issued, except
      as
      described in the Plan.

     

    SECTION 15. ADJUSTMENTS.

     

    In
      the
      event of a stock split, a stock dividend or a similar change in the Company’s
      Stock, the number of Shares covered by this Option and the Exercise Price per
      share may be adjusted pursuant to the Plan. Your Option shall be subject to
      the
      terms of the agreement of merger, liquidation or reorganization in the event
      the
      Company is subject to such corporate activity as set forth in the
      Plan.

     

    SECTION 16. LEGENDS.

     

    All
      certificates representing the Shares issued upon exercise of this Option shall,
      where applicable, have endorsed thereon the following legends:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED
      UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
      ANY
      STATE OR FOREIGN JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED
      AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE
      OR
      APPLICABLE FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION
      OF
      COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
      U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS IS NOT
      REQUIRED.

    
      

      PACIFIC
        RESTAURANT HOLDINGS, INC.

      STOCK
        OPTION AGREEMENT

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
      ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS
      OF
      A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF. SUCH
      AGREEMENT PROVIDES FOR CERTAIN TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF FIRST
      REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SECURITIES. THE SECRETARY OF THE
      COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER
      HEREOF WITHOUT CHARGE.

     

    If
      the Option is an ISO, then the following legend should be
      included:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED UPON EXERCISE OF AN INCENTIVE
      STOCK OPTION, AND THE COMPANY MUST BE NOTIFIED IF THE SHARES SHALL BE
      TRANSFERRED BEFORE THE LATER OF THE TWO (2) YEAR ANNIVERSARY OF THE DATE OF
      GRANT OF THE OPTION OR THE ONE (1) YEAR ANNIVERSARY OF THE DATE ON WHICH THE
      OPTION WAS EXERCISED. THE REGISTERED HOLDER MAY RECOGNIZE ORDINARY INCOME IF
      THE
      SHARES ARE TRANSFERRED BEFORE SUCH DATE.

     

    SECTION 17. TAX
      DISCLAIMER.

     

    You
      agree
      that you are responsible for consulting your own tax advisor as to the tax
      consequences associated with your Option. The tax rules governing options are
      complex, change frequently and depend on the individual taxpayer’s situation.
      For your information, a memorandum that briefly summarizes current U.S. federal
      income tax law relating to certain aspects of stock options is attached hereto
      as Exhibit B. Please note that this memorandum does not purport to be complete.
      Although the Company will make available to you general tax information about
      stock options, you agree that the Company shall not be held liable or
      responsible for making such information available to you and any tax or
      financial consequences that you may incur in connection with your
      Option.

     

    In
      addition, as noted in Exhibit B, options granted at a discount from fair market
      value may be considered “deferred compensation” subject to adverse tax
      consequences under new Section 409A of the Internal Revenue Code, which is
      generally effective January 1, 2005. The Board has made a good faith
      determination that the exercise price per share of the Option is not less than
      the fair market value of the Shares underlying your Option on the Date of Grant.
      It is possible, however, that the Internal Revenue Service could later challenge
      that determination and assert that the
      fair
      market value of the Shares underlying your Option was greater on the Date of
      Grant than the exercise price determined by the Board,
      which could result in immediate income tax upon the vesting of your Option
      (whether or not exercised) and a 20% tax penalty, as well as the loss of
      incentive stock option status (if applicable). The Company gives no assurance
      that such adverse tax consequences will not occur and specifically assumes
      no
      responsibility therefor. By accepting this Option, you acknowledge that any
      tax
      liability or other adverse tax consequences to you resulting from the grant
      of
      the Option will be the responsibility of, and will be borne entirely by,
      you.  YOU ARE THEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE
      ACCEPTING THE GRANT OF THIS OPTION.

    
       

      PACIFIC
        RESTAURANT HOLDINGS, INC.

      STOCK
        OPTION AGREEMENT

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    SECTION 18. THE
      PLAN AND OTHER AGREEMENTS.

     

    The
      text
      of the Plan is incorporated in this Agreement by reference. Certain capitalized
      terms used in this Agreement are defined in the Plan. The Notice of Stock Option
      Grant, this Agreement, including its attachments, and the Plan constitute the
      entire understanding between you and the Company regarding this Option. Any
      prior agreements, commitments or negotiations concerning this Option are
      superseded.

     

    SECTION 19. MISCELLANEOUS
      PROVISIONS

     

    
      	 	
              (a)

            	
              You
                understand and acknowledge that (i) the Plan is entirely
                discretionary, (ii) the Company and your employer have reserved the
                right to amend, suspend or terminate the Plan at any time, (iii) the
                grant of an option does not in any way create any contractual or
                other
                right to receive additional grants of options (or benefits in lieu
                of
                options) at any time or in any amount and (iv) all determinations
                with respect to any additional grants, including (without limitation)
                the
                times when options will be granted, the number of Shares offered,
                the
                Exercise Price and the vesting schedule, will be at the sole discretion
                of
                the Company.

            

    

     

    
      	 	
              (b)

            	
              The
                value of this Option shall be an extraordinary item of compensation
                outside the scope of your employment contract, if any, and shall
                not be
                considered a part of your normal or expected compensation for purposes
                of
                calculating severance, resignation, redundancy or end-of-service
                payments,
                bonuses, long-service awards, pension or retirement benefits or similar
                payments.

            

    

     

    
      	 	
              (c)

            	
              You
                understand and acknowledge that participation in the Plan ceases
                upon
                termination of your Service for any reason, except as may explicitly
                be
                provided otherwise in the Plan or this
                Agreement.

            

    

     

    
      	 	
              (d)

            	
              You
                hereby authorize and direct your employer to disclose to the Company
                or
                any Subsidiary any information regarding your employment, the nature
                and
                amount of the your compensation and the fact and conditions of your
                participation in the Plan, as your employer deems necessary or appropriate
                to facilitate the administration of the
                Plan.

            

    

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

      STOCK
        OPTION AGREEMENT

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              You
                consent to the collection, use and transfer of personal data as described
                in this Subsection. You understand and acknowledge that the Company,
                your
                employer and the Company’s other Subsidiaries hold certain personal
                information regarding you for the purpose of managing and administering
                the Plan, including (without limitation) your name, home address,
                telephone number, date of birth, social insurance number, salary,
                nationality, job title, any Shares or directorships held in the Company
                and details of all options or any other entitlements to Shares awarded,
                canceled, exercised, vested, unvested or outstanding in the your
                favor
                (the “Data”). You further understand and acknowledge that the Company
                and/or its Subsidiaries will transfer Data among themselves as necessary
                for the purpose of implementation, administration and management
                of your
                participation in the Plan and that the Company and/or any Subsidiary
                may
                each further transfer Data to any third party assisting the Company
                in the
                implementation, administration and management of the Plan. You understand
                and acknowledge that the recipients of Data may be located in the
                United
                States or elsewhere. You authorize such recipients to receive, possess,
                use, retain and transfer Data, in electronic or other form, for the
                purpose of administering your participation in the Plan, including
                a
                transfer to any broker or other third party with whom you elect to
                deposit
                Shares acquired under the Plan of such Data as may be required for
                the
                administration of the Plan and/or the subsequent holding of Shares
                on your
                behalf. You may, at any time, view the Data, require any necessary
                modifications of Data or withdraw the consents set forth in this
                Subsection by contacting the Human Resources Department of the Company
                in
                writing.

            

    

     

    SECTION 20. APPLICABLE
      LAW.

     

    This
      Agreement will be interpreted and enforced under the laws of the State of
      California (without regard to their choice of law provisions).

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

      STOCK
        OPTION AGREEMENT

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

         

      

    

    EXHIBIT A

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

    

     

    2007
      STOCK INCENTIVE PLAN

     

    NOTICE
      OF EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

     

    THIS
      AGREEMENT is dated as of ___________, ____, between Pacific
      Restaurant Holdings, Inc.
      (the
“Company”), and [Name
      of Optionee]
      (“Purchaser”).

     

    WITNESSETH:

     

    WHEREAS,
      the Company granted Purchaser a stock option on __________ (the “Date of Grant”)
      pursuant to a stock option agreement (the “Option Agreement”) under which
      Purchaser has the right to purchase up to [Number
      of Shares]
      shares
      of the Company’s common stock (the “Option Shares”); and

     

    WHEREAS,
      the Option is exercisable with respect to certain of the Option Shares as of
      the
      date hereof; and

     

    WHEREAS,
      pursuant to the Option Agreement, Purchaser desires to purchase shares of the
      Company as herein described, on the terms and conditions set forth in this
      Agreement, the Option Agreement and the Pacific
      Restaurant Holdings, Inc.
      2007
      Stock Incentive Plan (the “Plan”). Certain capitalized terms used in this
      Agreement are defined in the Plan.

     

    NOW,
      THEREFORE, it is agreed between the parties as follows:

     

    SECTION 1. PURCHASE
      OF SHARES.

     

    
      	 	
              (a)

            	
              Pursuant
                to the terms of the Option Agreement, Purchaser hereby agrees to
                purchase
                from the Company and the Company agrees to sell and issue to Purchaser
                _________
                shares of the Company’s common stock (the “Common Stock”) for the Exercise
                Price per share specified in the Notice of Stock Option Grant payable
                by
                personal check, cashier’s check, money order or otherwise as permitted by
                the Option Agreement. Payment shall be delivered at the Closing,
                as such
                term is defined below.

            

    

     

    
      	 	
              (b)

            	
              The
                closing (the “Closing”) under this Agreement shall occur at the offices of
                the Company as of the date hereof, or such other time and place as
                may be
                designated by the Company (the “Closing
                Date”).

            

    

     

    SECTION 2. ADJUSTMENT
      OF SHARES.

     

    Subject
      to the provisions of the Certificate of Incorporation of the Company, if
      (a) there is any stock dividend or liquidating dividend of cash and/or
      property, stock split or other change in the character or amount of any of
      the
      outstanding securities of the Company, or (b) there is any consolidation,
      merger or sale of all or substantially all of the assets of the Company, then,
      in such event, any and all new, substituted or additional securities or other
      cash or property to which Purchaser is entitled by reason of Purchaser’s
      ownership of the shares shall be immediately subject to the Right of First
      Refusal, as defined below, with the same force and effect as the shares subject
      to the Right of First Refusal. Appropriate adjustments shall be made to the
      number and/or class of shares subject to the Right of First Refusal to reflect
      the exchange or distribution of such securities. In the event of a merger or
      consolidation of the Company with or into another entity or any other corporate
      reorganization, the Right of First Refusal may be exercised by the Company’s
      successor.

    
      

      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    SECTION 3. THE
      COMPANY’S RIGHT OF FIRST REFUSAL.

     

    Before
      any shares of Common Stock registered in the name of Purchaser may be sold
      or
      transferred, such shares shall first be offered to the Company as follows (the
      “Right of First Refusal”):

     

    
      	 	
              (a)

            	
              Purchaser
                shall promptly deliver a notice (“Notice”) to the Company stating
                (i) Purchaser’s bona fide intention to sell or transfer such shares,
                (ii) the number of such shares to be sold or transferred, and the
                basic terms and conditions of such sale or transfer, (iii) the price
                for which Purchaser proposes to sell or transfer such shares,
                (iv) the name of the proposed purchaser or transferee, and
                (v) proof satisfactory to the Company that the proposed sale or
                transfer will not violate any applicable U.S. federal, state or foreign
                securities laws. The Notice shall be signed by both Purchaser and
                the
                proposed purchaser or transferee and must constitute a binding commitment
                subject to the Company’s Right of First Refusal as set forth
                herein.

            

    

     

    
      	 	
              (b)

            	
              Within
                thirty (30) days after receipt of the Notice, the Company may elect
                to
                purchase all or any portion of the shares to which the Notice refers,
                at
                the price per share specified in the Notice. If the Company elects
                not to
                purchase all or any portion of the shares, the Company may assign
                its
                right to purchase all or any portion of the shares. The assignees
                may
                elect within thirty (30) days after receipt by the Company of the
                Notice
                to purchase all or any portion of the shares to which the Notice
                refers,
                at the price per share specified in the Notice. An election to purchase
                shall be made by written notice to Purchaser. Payment for shares
                purchased
                pursuant to this Section 3 shall be made within thirty (30) days
                after receipt of the Notice by the Company and, at the option of
                the
                Company, may be made by cancellation of all or a portion of outstanding
                indebtedness, if any, or in cash or
                both.

            

    

     

    
      	 	
              (c)

            	
              If
                all or any portion of the shares to which the Notice refers are not
                elected to be purchased, as provided in subparagraph 3(b), Purchaser
                may sell those shares to any person named in the Notice at the price
                specified in the Notice, provided that such sale or transfer is
                consummated within sixty (60) days of the date of said Notice to
                the
                Company, and provided, further, that any such sale is made in compliance
                with applicable U.S. federal, state and foreign securities laws and
                not in
                violation of any other contractual restrictions to which Purchaser
                is
                bound. The third-party purchaser shall be bound by, and shall acquire
                the
                shares of stock subject to, the provisions of this Agreement, including
                the Company’s Right of First
                Refusal.

            

    

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (d)

            	
              Any
                proposed transfer on terms and conditions different from those set
                forth
                in the Notice, as well as any subsequent proposed transfer shall
                again be
                subject to the Company’s Right of First Refusal and shall require
                compliance with the procedures described in this
                Section 3.

            

    

     

    
      	 	
              (e)

            	
              Purchaser
                agrees to cooperate affirmatively with the Company, to the extent
                reasonably requested by the Company, to enforce rights and obligations
                pursuant to this Agreement.

            

    

     

    
      	 	
              (f)

            	
              Notwithstanding
                the above, neither the Company nor any assignee of the Company under
                this
                Section 3 shall have any right under this Section 3 at any time
                subsequent to the closing of a public offering of the common stock
                of the
                Company pursuant to a registration statement declared effective under
                the
                U.S. Securities Act of 1933, as amended (the “Securities
                Act”).

            

    

     

    
      	 	
              (g)

            	
              This
                Section 3 shall not apply to (i) a transfer by will or intestate
                succession, or (ii) a transfer to one or more members of Purchaser’s
                Immediate Family (defined below) or to a trust established by Purchaser
                for the benefit of Purchaser and/or one or more members of Purchaser’s
                Immediate Family, provided that the transferee agrees in writing
                on a form
                prescribed by the Company to be bound by all of the provisions of
                this
                Agreement to the same extent as they apply to Purchaser. The transferee
                shall execute a copy of the attached Annex
                I
                and file the same with the Secretary of the Company. For purposes
                of this
                Agreement, Immediate Family means any child, stepchild, grandchild,
                parent, stepparent, grandparent, spouse, sibling, mother-in-law,
                father-in-law, son-in-law, daughter-in-law, brother-in-law or
                sister-in-law, and shall include adoptive
                relationships.

            

    

     

    SECTION 4. PURCHASER’S
      RIGHTS AFTER EXERCISE OF RIGHT OF FIRST REFUSAL.

     

    If
      the
      Company makes available, at the time and place and in the amount and form
      provided in this Agreement, the consideration for the Common Stock to be
      repurchased in accordance with the provisions of Section 3 of this
      Agreement, then from and after such time the person from whom such shares are
      to
      be repurchased shall no longer have any rights as a holder of such shares (other
      than the right to receive payment of such consideration in accordance with
      this
      Agreement). Such shares shall be deemed to have been repurchased in accordance
      with the applicable provisions hereof, whether or not the certificate(s)
      therefor have been delivered as required by this Agreement.

    
       

      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    SECTION 5. LEGEND
      OF SHARES.

     

    All
      certificates representing the Common Stock purchased under this Agreement shall,
      where applicable, have endorsed thereon the following legends and any other
      legends required by applicable securities laws:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED
      UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
      ANY
      STATE OR FOREIGN JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED
      AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE
      OR
      APPLICABLE FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION
      OF
      COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
      U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS IS NOT
      REQUIRED.

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
      ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS
      OF
      A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF. SUCH
      AGREEMENT PROVIDES FOR CERTAIN TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF FIRST
      REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SECURITIES. THE SECRETARY OF THE
      COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER
      HEREOF WITHOUT CHARGE.

     

    If
      the Option is an ISO, then the following legend should be
      included:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED UPON EXERCISE OF AN INCENTIVE
      STOCK OPTION, AND THE COMPANY MUST BE NOTIFIED IF THE SHARES SHALL BE
      TRANSFERRED BEFORE THE LATER OF THE TWO (2) YEAR ANNIVERSARY OF THE DATE OF
      GRANT OF THE OPTION OR THE ONE (1) YEAR ANNIVERSARY OF THE DATE ON WHICH THE
      OPTION WAS EXERCISED. THE REGISTERED HOLDER MAY RECOGNIZE ORDINARY INCOME IF
      THE
      SHARES ARE TRANSFERRED BEFORE SUCH DATE.

     

    SECTION 6. PURCHASER’S
      INVESTMENT REPRESENTATIONS.

     

    
      	 	
              (a)

            	
              This
                Agreement is made with Purchaser in reliance upon Purchaser’s
                representation to the Company, which by Purchaser’s acceptance hereof
                Purchaser confirms, that the Common Stock which Purchaser will receive
                will be acquired with Purchaser’s own funds for investment for an
                indefinite period for Purchaser’s own account, not as a nominee or agent,
                and not with a view to the sale or distribution of any part thereof,
                and
                that Purchaser has no present intention of selling, granting participation
                in, or otherwise distributing the same, but subject, nevertheless,
                to any
                requirement of law that the disposition of Purchaser’s property shall at
                all times be within Purchaser’s control. By executing this Agreement,
                Purchaser further represents that Purchaser does not have any contract,
                understanding or agreement with any person to sell, transfer, or
                grant
                participation to such person or to any third person, with respect
                to any
                of the Common Stock.

            

    

    
      

      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              Purchaser
                understands that the Common Stock will not be registered or qualified
                under applicable U.S. federal, state or foreign securities laws on
                the
                ground that the sale provided for in this Agreement is exempt from
                registration or qualification under applicable U.S. federal, state
                or
                foreign securities laws and that the Company’s reliance on such exemption
                is predicated on Purchaser’s representations set forth
                herein.

            

    

     

    
      	 	
              (c)

            	
              Purchaser
                agrees that in no event shall Purchaser make a disposition of any
                of the
                Common Stock (including a disposition under Section 3 of this
                Agreement), unless and until
                (i) Purchaser
                shall have notified the Company of the proposed disposition and shall
                have
                furnished the Company with a statement of the circumstances surrounding
                the proposed disposition and
                (ii) Purchaser
                shall have furnished the Company with an opinion of counsel satisfactory
                to the Company to the effect that
                (A) such
                disposition will not require registration or qualification of such
                Common
                Stock under applicable U.S. federal, state or foreign securities
                laws
                or
                (B) appropriate
                action necessary for compliance with the applicable U.S. federal,
                state or
                foreign securities laws has been taken or
                (iii) the
                Company shall have waived, expressly and in writing, its rights under
                clauses (i) and (ii) of this
                Section.

            

    

     

    
      	 	
              (d)

            	
              With
                respect to a transaction occurring prior to such date as the Plan
                and
                Common Stock thereunder are covered by a valid Form S-8 or similar
                U.S.
                federal registration statement, this Subsection shall apply unless
                the
                transaction is covered by the exemption in California Corporations
                Code
                section 25102(o) or a similar broad-based exemption. In connection
                with the investment representations made herein, Purchaser represents
                that
                Purchaser is able to fend for himself or herself in the transactions
                contemplated by this Agreement, has such knowledge and experience
                in
                financial and business matters as to be capable of evaluating the
                merits
                and risks of Purchaser’s investment, has the ability to bear the economic
                risks of Purchaser’s investment and has been furnished with and has had
                access to such information as would be made available in the form
                of a
                registration statement together with such additional information
                as is
                necessary to verify the accuracy of the information supplied and
                to have
                all questions answered by the
                Company.

            

    

     

    
      	 	
              (e)

            	
              Purchaser
                understands that if the Company does not register with the U.S. Securities
                and Exchange Commission pursuant to section 12 of the U.S. Securities
                Exchange Act of 1934, as amended, or if a registration statement
                covering
                the Common Stock (or a filing pursuant to the exemption from registration
                under Regulation A of the Securities Act) under the Securities Act
                is not
                in effect when Purchaser desires to sell the Common Stock, Purchaser
                may
                be required to hold the Common Stock for an indeterminate period.
                Purchaser also acknowledges that Purchaser understands that any sale
                of
                the Common Stock which might be made by Purchaser in reliance upon
                Rule
                144 under the Securities Act may be made only in limited amounts
                in
                accordance with the terms and conditions of that
                Rule.

            

    

    
       

      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

    

     

    SECTION 7. NO
      DUTY TO TRANSFER IN VIOLATION OF THIS AGREEMENT.

     

    The
      Company shall not be required (a) to transfer on its books any shares of
      Common Stock of the Company which shall have been sold or transferred in
      violation of any of the provisions set forth in this Agreement or (b) to
      treat as owner of such shares or to accord the right to vote as such owner
      or to
      pay dividends to any transferee to whom such shares shall have been so
      transferred.

     

    SECTION 8. RIGHTS
      OF PURCHASER.

     

    
      	 	
              (a)

            	
              Except
                as otherwise provided herein, Purchaser shall, during the term of
                this
                Agreement, exercise all rights and privileges of a stockholder of
                the
                Company with respect to the Common
                Stock.

            

    

     

    
      	 	
              (b)

            	
              Nothing
                in this Agreement shall be construed as a right by Purchaser to be
                retained by the Company, or a parent or subsidiary of the Company
                in any
                capacity. The Company reserves the right to terminate Purchaser’s Service
                at any time and for any reason without thereby incurring any liability
                to
                Purchaser.

            

    

     

    SECTION 9. RESALE
      RESTRICTIONS/MARKET STAND-OFF.

     

    Purchaser
      hereby agrees that in connection with any underwritten public offering by the
      Company of its equity securities pursuant to an effective registration statement
      filed under the Securities Act, including the Company’s initial public offering,
      Purchaser shall not, directly or indirectly, engage in any transaction
      prohibited by the underwriter, or sell, make any short sale of, contract to
      sell, transfer the economic risk of ownership in, loan, hypothecate, pledge,
      grant any option for the purchase of, or otherwise dispose or transfer for
      value
      or agree to engage in any of the foregoing transactions with respect to any
      Common Stock without the prior written consent of the Company or its
      underwriters, for such period of time after the effective date of such
      registration statement as may be requested by the Company or such underwriters.
      Such period of time shall not exceed one hundred eighty (180) days and may
      be
      required by the underwriter as a market condition of the offering; provided,
      however, that if either (a) during the last seventeen (17) days of such one
      hundred eighty (180) day period, the Company issues an earnings release or
      material news or a material event relating to the Company occurs or (b) prior
      to
      the expiration of such one hundred eighty (180) day period, the Company
      announces that it will release earnings results during the sixteen (16) day
      period beginning on the last day of the one hundred eighty (180) day period,
      then the restrictions imposed during such one hundred eighty (180) day period
      shall continue to apply until the expiration of the eighteen (18) day period
      beginning on the issuance of the earnings release or the occurrence of the
      material news or material event; provided, further, that in the event the
      Company or the underwriter requests that the one hundred eighty (180) day period
      be extended or modified pursuant to then-applicable law, rules, regulations
      or
      trading policies, the restrictions imposed during the one hundred eighty (180)
      day period shall continue to apply to the extent requested by the Company or
      the
      underwriter to comply with such law, rules, regulations or trading policies.
      Purchaser hereby agrees to execute and deliver such other agreements as may
      be
      reasonably requested by the Company or the underwriter which are consistent
      with
      the foregoing or which are necessary to give further effect thereto. To enforce
      the provisions of this Section, the Company may impose stop-transfer
      instructions with respect to the Common Stock until the end of the applicable
      stand-off period.

    
      

      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    SECTION 10. OTHER
      NECESSARY ACTIONS.

     

    The
      parties agree to execute such further instruments and to take such further
      action as may reasonably be necessary to carry out the intent of this
      Agreement.

     

    SECTION 11. NOTICE.

     

    Any
      notice required or permitted under this Agreement shall be given in writing
      and
      shall be deemed effectively given upon the earliest of personal delivery,
      receipt or the third full day following deposit in the United States Post Office
      with postage and fees prepaid, addressed to the other party hereto at the
      address last known or at such other address as such party may designate by
      ten
      (10) days’ advance written notice to the other party hereto.

     

    SECTION 12. SUCCESSORS
      AND ASSIGNS.

     

    This
      Agreement shall inure to the benefit of the successors and assigns of the
      Company and, subject to the restrictions on transfer herein set forth, be
      binding upon Purchaser and Purchaser’s heirs, executors, administrators,
      successors and assigns. The failure of the Company in any instance to exercise
      the Right of First Refusal described herein shall not constitute a waiver of
      any
      other Right of First Refusal that may subsequently arise under the provisions
      of
      this Agreement. No waiver of any breach or condition of this Agreement shall
      be
      deemed to be a waiver of any other or subsequent breach or condition, whether
      of
      a like or different nature.

     

    SECTION 13. APPLICABLE
      LAW.

     

    This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of California, as such laws are applied to contracts entered into
      and
      performed in such state.

     

    SECTION 14. NO
      STATE QUALIFICATION.

     

    THE
      SALE
      OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
      WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE
      ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
      CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE
      SALE
      OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105
      OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
      ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
      SALE IS SO EXEMPT.

    
      

      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

     

    SECTION 15. NO
      ORAL MODIFICATION.

     

    No
      modification of this Agreement shall be valid unless made in writing and signed
      by the parties hereto.

     

    SECTION 16. ENTIRE
      AGREEMENT.

     

    This
      Agreement, the Option Agreement and the Plan constitute the entire complete
      and
      final agreement between the parties hereto with regard to the subject matter
      hereof.

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the day and
      year
      first above written.

     

    
      	
              PACIFIC
                RESTAURANT HOLDINGS, INC.

            	 	 	
              [NAME
                OF OPTIONEE]
                (PURCHASER)

            
	 	 	 	 
	 	 	 	 
	By	 	 	
            
	
              
                

              

               

              Its

              
                

              

            	 	 	
              

              Signature

            

    

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC. 

      EXHIBIT
        A
        TO STOCK OPTION AGREEMENT

      NOTICE
        OF
        EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

    

     

    ANNEX
      I

     

    ACKNOWLEDGMENT
      OF AND AGREEMENT TO BE BOUND

    BY
      THE NOTICE OF EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    OF

    PACIFIC
      RESTAURANT HOLDINGS, INC.

     

    The
      undersigned, as transferee of shares of Pacific
      Restaurant Holdings, Inc. hereby
      acknowledges that he or she has read and reviewed the terms of the Notice of
      Exercise and Common Stock Purchase Agreement of
      Pacific
      Restaurant Holdings, Inc. and
      hereby agrees to be bound by the terms and conditions thereof, as if the
      undersigned had executed said Agreement as an original party
      thereto.

     

    Dated:
      ____________________, ____.

     

    
      	 	 	 	 
	
            	 	 	
              

              (Signature
                of Transferee)

            
	
            	 	 	
            
	 	 	 	
              

              (Printed
                Name of Transferee)

            

    

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

      ANNEX I

      TO
        NOTICE
        OF EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

    

    EXHIBIT B

     

    U.S.
      FEDERAL TAX INFORMATION

     

    (Current
      as of October 2007)

     

    The
      following memorandum briefly summarizes current U.S. federal income tax law.
      The
      discussion is intended to be used solely for general information purposes and
      does not make specific representations to any participant. A taxpayer’s
      particular situation may be such that some variation of the basic rules is
      applicable to him or her. In addition, the U.S. federal income tax laws and
      regulations are revised frequently and may change again in the future. Each
      participant is urged to consult a tax advisor, both with respect to U.S. federal
      income tax consequences as well as any foreign, state or local tax consequences,
      before exercising any option or before disposing of any shares of stock acquired
      under the Plan.

     

    Initial
      Grant of Options

     

    The
      grant
      of an option, whether a nonqualified or nonstatutory stock option (“NSO”) or an
      incentive stock option (“ISO”), is not a taxable event for the optionee, and the
      Company obtains no deduction for the grant of the option. Note, however, that
      under new Section 409A of the Internal Revenue Code, which is generally
      effective January 1, 2005, options granted at a discount from fair market value
      may be considered “deferred compensation” subject to adverse tax consequences,
      including immediate income tax upon the vesting of the option (whether or not
      exercised) and a 20% tax penalty.

     

    Nonqualified
      or Nonstatutory Stock Options

     

    The
      exercise of an NSO is a taxable event to the optionee. The amount by which
      the
      fair market value of the shares on the date of exercise exceeds the exercise
      price (the “spread”) will be taxed to the optionee as ordinary income. The
      spread will also be considered “wages” for purposes of FICA taxes. The Company
      will be entitled to a deduction in the same amount as the ordinary income
      recognized by the optionee from the exercise of the option that is reported
      to
      the IRS by the optionee or the Company. In general, the optionee’s tax basis in
      the shares acquired by exercising an NSO is equal to the fair market value
      of
      such shares on the date of exercise. Upon a subsequent sale of any such shares
      in a taxable transaction, the optionee will realize capital gain or loss
      (long-term or short-term, depending on whether the shares were held for the
      required holding period before the sale) in an amount equal to the difference
      between his or her basis in the shares and the sale price.

    

      Internal
        Revenue Service regulations generally provide that, for the purpose of avoiding
        federal tax penalties, a taxpayer may rely only on formal written advice
        meeting
        specific requirements. The tax discussion in this document does not meet
        those
        requirements. Accordingly, the tax discussion was not intended or written
        to be
        used, and it cannot be used, for the purpose of avoiding federal tax penalties
        that may be imposed on you. Further, the tax discussion in this document
        could
        be considered to support the promotion or marketing of the transaction or
        matter
        discussed herein. You and any other person reading the tax discussion should
        seek advice based on his, her or its particular circumstances from an
        independent tax advisor.

    

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    The
      capital gains holding periods are complex. If shares are held for more than
      one
      year, the maximum tax rate on the gain has been reduced from twenty percent
      (20%) to fifteen percent (15%) for gain recognized on or after May 6, 2003,
      and before January 1, 2011. Because the rules are complex and can vary in
      individual circumstances, each participant should consider consulting his or
      her
      own tax advisor.

     

    If
      an
      optionee exercises an NSO and pays the exercise price with previously acquired
      shares of stock, special rules apply. The transaction is treated as a tax-free
      exchange of the old shares for the same number of new shares, except as
      described below with respect to shares acquired pursuant to ISOs. The optionee’s
      basis in the new shares is the same as his or her basis in the old shares,
      and
      the capital gains holding period runs without interruption from the date when
      the old shares were acquired. The value of any new shares received by the
      optionee in excess of the number of old shares surrendered minus any cash the
      optionee pays for the new shares will be taxed as ordinary income. The
      optionee’s basis in the additional shares is equal to the fair market value of
      such shares on the date the shares were transferred, and the capital gain
      holding period commences on the same date. The effect of these rules is to
      defer
      recognition of any gain in the old shares when those shares are used to buy
      new
      shares. Stated differently, these rules allow an optionee to finance the
      exercise of an NSO by using shares of stock that he or she already owns, without
      paying current tax on any unrealized appreciation in those old
      shares.

     

    Incentive
      Stock Options

     

    The
      holder of an ISO will not be subject to U.S. federal income tax upon the
      exercise of the ISO, and the Company will not be entitled to a tax deduction
      by
      reason of such exercise, provided that the holder is employed by the Company
      on
      the exercise date (or the holder’s employment terminated within the three (3)
      months preceding the exercise date). Exceptions to this exercise timing
      requirement apply in the event the optionee dies or becomes disabled. A
      subsequent sale of the shares received upon the exercise of an ISO will result
      in the realization of long-term capital gain or loss in the amount of the
      difference between the amount realized on the sale and the exercise price for
      such shares, provided that the sale occurs more than one (1) year after the
      exercise of the ISO and
      more
      than two (2) years after the grant of the ISO. In general, if a sale or
      disposition of the shares occurs prior to satisfaction of the foregoing holding
      periods (referred to as a “disqualifying disposition”), the optionee will
      recognize ordinary income and the Company will be entitled to a corresponding
      deduction, generally equal to the amount of ordinary income recognized by the
      optionee from the disqualifying disposition that is reported to the IRS by
      the
      optionee or the Company.

     

    Favorable
      tax treatment is accorded to an optionee only to the extent that the value
      of
      the shares (determined at the time of grant) covered by an ISO first exercisable
      in any single calendar year does not exceed one hundred thousand dollars
      ($100,000). If ISOs for shares whose aggregate value exceeds one hundred
      thousand dollars ($100,000) become exercisable in the same calendar year, the
      excess will be treated as NSOs.

     

    A
      special
      rule applies if an optionee pays all or part of the exercise price of an ISO
      by
      surrendering shares of stock that he or she previously acquired by exercising
      any other ISO. If the optionee has not held the old shares for the full duration
      of the applicable holding periods, then the surrender of such shares to fund
      the
      exercise of the new ISO will be treated as a disqualifying disposition of the
      old shares. As described above, the result of a disqualifying disposition is
      the
      loss of favorable tax treatment with respect to the acquisition of the old
      shares pursuant to the previously exercised ISO.

    

      PASSPORT
        RESTAURANTS, INC.

      EXHIBIT
        B
        TO STOCK OPTION AGREEMENT

      U.S.
        FEDERAL TAX INFORMATION

    

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    Where
      the
      applicable holding period requirements have been met, the use of previously
      acquired shares of stock to pay all or a portion of the exercise price of an
      ISO
      may offer significant tax advantages. In particular, a deferral of the
      recognition of any appreciation in the surrendered shares is available in the
      same manner as discussed above with respect to NSOs.

     

    Alternative
      Minimum Tax

     

    Alternative
      minimum tax is paid when such tax exceeds a taxpayer’s regular U.S. federal
      income tax. Alternative minimum tax is calculated based on alternative minimum
      taxable income, which is taxable income for U.S. federal income tax purposes,
      modified by certain adjustments and increased by tax preference
      items.

     

    The
      “spread” under an ISO—that is, the difference between (a) the fair market
      value of the shares of stock at exercise and (b) the exercise price—is
      classified as alternative minimum taxable income for the year of exercise.
      Alternative minimum taxable income may be subject to the alternative minimum
      tax. However, if the shares of stock purchased upon the exercise of an ISO
      are
      sold in the same taxable year in which they are acquired, then the amount
      includible in the taxpayer’s alternative minimum taxable income will in no event
      exceed the amount realized upon such sale less the option exercise price paid
      for those shares.

     

    In
      general, when a taxpayer sells stock acquired through the exercise of an ISO,
      only the difference between the fair market value of the shares on the date
      of
      exercise and the date of sale is used in computing any alternative minimum
      tax
      for the year of the sale. The portion of a taxpayer’s alternative minimum tax
      attributable to certain items of tax preference (including the spread upon
      the
      exercise of an ISO) can be credited against the taxpayer’s regular liability in
      later years subject to certain limitations.

     

    Withholding
      Taxes

     

    Exercise
      of an NSO produces taxable income which is subject to withholding. The Company
      will not deliver shares to the optionee unless the optionee has agreed to
      satisfactory arrangements for meeting all applicable U.S. federal, state and
      local withholding tax requirements.

     

    U.S.
      federal tax law does not require unrecognized gain on exercise of an ISO to
      be
      treated as “wages” for the purposes of FICA taxes.

     

    THIS
      TAX SUMMARY IS GENERAL IN NATURE AND SHOULD NOT BE RELIED UPON BY ANY PERSON
      IN
      DECIDING WHETHER OR WHEN TO EXERCISE AN OPTION. EACH PERSON SHOULD CONSULT
      HIS
      OR HER OWN TAX ADVISOR REGARDING THESE MATTERS.

    

      PASSPORT
        RESTAURANTS, INC.

      EXHIBIT
        B
        TO STOCK OPTION AGREEMENT

      U.S.
        FEDERAL TAX INFORMATION

    

    
      
        
        

      

      
        B-3Exhibit
      10.6

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      U.S. SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR FOREIGN
      JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED
      PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE AND APPLICABLE
      FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL
      SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER U.S.
      FEDERAL AND STATE AND APPLICABLE FOREIGN SECURITIES LAWS IS NOT
      REQUIRED.

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

       

    

    2007
      STOCK INCENTIVE PLAN

    NOTICE
      OF RESTRICTED STOCK AWARD

     

    Pacific
      Restaurant Holdings, Inc. (the “Company”) hereby grants you an award (“Award”)
      of restricted shares (“Shares”) of the Company’s common stock (“Stock”) on the
      following terms. The terms and conditions of this Award are set forth in the
      Restricted Share Agreement and the Pacific Restaurant Holdings, Inc. 2007 Stock
      Incentive Plan (the “Plan”), both of which are attached to and made a part of
      this document.

     

    
      	
              Date
                of Grant:

            	 	 
	 	 	 
	
              Name
                of Recipient:

            	 	 
	 	 	 
	
              Number
                of Restricted Shares:

            	 	 
	 	 	 
	
              Fair
                Market Value per Share:

            	 	
              $_______
                per share

            
	 	 	 
	
              Total
                Fair Market Value of Award:

            	 	
              $________

            
	 	 	 
	
              Vesting
                Start Date:

            	 	
              ______________
                ____, 20____

            
	 	 	 
	
              Vesting
                Schedule:

            	 	
              [The
                Shares subject to this Award vest with respect to the first 25% of
                the
                Shares subject to this Award when Recipient completes one year of
                continuous Service after the Vesting Start Date, and with respect
                to an
                additional 25% of the Shares subject to this Award when Recipient
                completes each full year of continuous Service thereafter.]

            

    

    

      PACIFIC
        RESTAURANT HOLDINGS, INC.

      NOTICE
        OF
        RESTRICTED STOCK AWARD

    

    
      
        
        

      

      
        -1-

        
          

        

      

       

    

    By
      signing this document, you acknowledge receipt of a copy of the Plan, and agree
      that (a) you have carefully read, fully understand and agree to all of the
      terms
      and conditions described in the attached Restricted Share Agreement and the
      Plan; (b) you hereby make the Recipient’s investment representations contained
      in the Restricted Share Agreement with respect to the grant of this Award;
      (c)
      you understand and agree that the Restricted Share Agreement, including its
      cover sheet and attachments, constitutes the entire understanding between you
      and the Company regarding this Award, and that any prior agreements, commitments
      or negotiations concerning this Award are replaced and superseded; and (d)
      you
      have been given an opportunity to consult your own legal and tax counsel with
      respect to all matters relating to this Award prior to signing this cover sheet
      and that you have either consulted such counsel or voluntarily declined to
      consult such counsel.

     

    
      	 	 	 
	
              [______________________________]

            	
              PACIFIC
                RESTAURANT HOLDINGS, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
               

              Its:

            	
              

            
	 	
            	
              

            

    

    
      

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        NOTICE
          OF
          RESTRICTED STOCK AWARD

      

      
        
          
          

        

        
          -2-

          
            

          

        

         

      

    

     

    
      PACIFIC
        RESTAURANT HOLDINGS, INC.

    

     

    2007
      STOCK INCENTIVE PLAN

    RESTRICTED
      SHARE AGREEMENT

    

      THIS
        AGREEMENT is dated as of _______________, ____, between Pacific Restaurant
        Holdings, Inc. (the “Company”), and ______________ (“Recipient”).

       

      
        	SECTION
                1.	
                PAYMENT
                  FOR SHARES.

              

      

       

      The
        Company hereby transfers to Recipient the aggregate number of Shares
set
        forth
        in the Notice of Restricted Stock Award in consideration of services rendered
        by
        Recipient having a value at least equal to the aggregate Fair Market Value
        of
        such Shares. 

       

      
        	SECTION
                2.	
                GOVERNING
                  PLAN.

              

      

       

      The
        Shares are granted pursuant and subject in all respects to the applicable
        provisions of the Pacific Restaurant Holdings, Inc. 2007 Stock Incentive
        Plan
        (the “Plan”), which is incorporated herein by reference. Terms not otherwise
        defined in this Agreement have meanings ascribed to them in the
        Plan.

       

      
        	SECTION
                3.	
                VESTING

              

      

       

      The
        Shares will vest in accordance with the schedule set forth in the Notice
        of
        Restricted Stock Award. 

       

      No
        additional Shares vest after Recipient’s Service as an Employee has terminated
        for any reason.

       

      
        	SECTION
                4.	
                TAX
                  CONSEQUENCES

              

      

       

      
        	 	
                (a)

              	
                No
                  stock certificates will be released to Recipient unless Recipient
                  has made
                  arrangements acceptable to the Company to pay any withholding taxes
                  that
                  may be due as a result of this award or the vesting of the Shares.
                  With
                  the Company’s consent, these arrangements may include (a) withholding
                  shares of Stock that otherwise would be delivered to Recipient
                  when they
                  vest or (b) surrendering shares that Recipient previously acquired.
                  If
                  Recipient fails to make arrangements acceptable to the Company
                  to pay any
                  such withholding taxes, the Company, in its sole discretion, may
                  withhold
                  shares of Common Stock that otherwise would be distributed to Recipient
                  when they vest (or upon such other date on which withholding obligations
                  arise) to satisfy the withholding obligation, but not in excess
                  of the
                  amount of shares necessary to satisfy the minimum withholding amount.
                  The
                  fair market value of the shares surrendered, determined as of the
                  date
                  when taxes otherwise would have been withheld in cash, will be
                  applied as
                  credit against the withholding taxes. Recipient also authorizes
                  the
                  Company, or Recipient’s actual employer, to satisfy all withholding
                  obligations of the Company or Recipient’s actual employer from Recipient’s
                  wages or other cash compensation payable to Recipient by the Company
                  or
                  Recipient’s actual employer.

              

      

      

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        RESTRICTED
          SHARE AGREEMENT

         

      

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (b)

              	
                In
                  connection with the receipt of the Shares pursuant to this Agreement,
                  Recipient may consider making an election under Section 83(b) of the
                  Internal Revenue Code (the “83(b) Election”), a form of which can be found
                  on page D-3 of Exhibit D.
                  The
                  83(b) Election must be filed within thirty (30) days after the
                  date of
                  grant of the Shares. RECIPIENT
                  SHOULD CONSULT A TAX AND/OR FINANCIAL ADVISOR BEFORE MAKING AN
                  83(b)
                  ELECTION.

              

      

       

      
        	SECTION
                5.	
                FORFEITURE

              

      

       

      Upon
        the
        date Recipient’s Service as an Employee of the Company terminates for any
        reason, all Shares of Stock received by Recipient pursuant to this Agreement
        that have not vested under the terms of the Agreement, together with any
        shares
        of Stock issued as a dividend or other distribution on, in exchange for or
        upon
        the conversion of such unvested Stock (collectively, the “Subject Shares”), will
        be forfeited to the extent that they have not vested before such date and
        do not
        vest as a result of termination. This means that the Restricted Shares will
        immediately revert to the Company with
        no
        further action required by the Company.
        Recipient will
        receive no
        payment for Restricted Shares that are forfeited. The Company determines
        when
        Recipient’s Service terminates for this purpose. 

       

      
        	SECTION
                6.	
                ESCROW
                  OF SHARES.

              

      

       

      
        	 	
                (a)

              	
                To
                  ensure that Recipient’s unvested Shares are delivered to the Company in
                  the event of a forfeiture described in Section 5, Recipient agrees
                  promptly following the execution of this Agreement, to deliver
                  to and
                  deposit with the escrow agent (the “Escrow Agent”) named in the Joint
                  Escrow Instructions attached as Exhibit A,
                  the certificate(s) evidencing the unvested Shares and an Assignment
                  Separate from Certificate executed by Recipient (with date and
                  number of
                  shares in blank) in the form attached as Exhibit B.
                  The certificate(s) evidencing the unvested Shares and the Assignment
                  Separate from Certificate shall be delivered to the Escrow Agent
                  and held
                  under the Joint Escrow Instructions, which shall be delivered to
                  the
                  Escrow Agent promptly following the execution of this
                  Agreement.

              

      

       

      
        	 	
                (b)

              	
                Promptly
                  following the date when the Shares have vested in full, the Company
                  shall
                  direct the Escrow Agent to deliver to Recipient a certificate or
                  certificates representing the Shares. 

              

      

       

      
        	SECTION
                7.	
                ADJUSTMENT
                  OF SHARES.

              

      

       

      Subject
        to the provisions of the Certificate of Incorporation of the Company,
        if
        (a) there is any stock dividend or liquidating dividend of cash and/or
        property, stock split or other change in the character or amount of any of
        the
        outstanding securities of the Company, or
        (b) there
        is any consolidation, merger or sale of all or substantially all of the assets
        of the Company,
        then, in
        such event, any and all new, substituted or additional securities or other
        property to which Recipient is entitled by reason of Recipient’s ownership of
        the Shares shall be immediately subject to the forfeiture provisions of Section
        5 with the same force and effect as the Shares subject to the forfeiture
        provisions of Section 5. Appropriate adjustments shall be made to the number
        and/or class of shares subject to the forfeiture provisions of Section 5
        to
        reflect the exchange or distribution of such securities. In the event of
        a
        merger or consolidation of the Company with or into another entity or any
        other
        corporate reorganization, the forfeiture provisions of Section 5 may be enforced
        by the Company’s successor.

      
        

          PACIFIC
            RESTAURANT HOLDINGS, INC.

          RESTRICTED
            SHARE AGREEMENT

           

        

        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

          

        

      

       

      
        	SECTION
                8.	
                TRANSFER
                  BY RECIPIENT TO CERTAIN
                  PEOPLE.

              

      

       

      
        	 	
                (a)

              	
                Notwithstanding
                  anything herein to the contrary, Recipient may not transfer, assign,
                  encumber or otherwise dispose of any Subject Shares without the
                  Company’s
                  written consent, except that Recipient may transfer Subject Shares
                  to one
                  or more members of Recipient’s Immediate Family (as defined below), or to
                  a trust established by Recipient for the benefit of Recipient and/or
                  one
                  or more members of Recipient’s Immediate Family, provided that the
                  transferee agrees in writing on a form prescribed by the Company
                  to be
                  bound by all of the provisions of this Agreement to the same extent
                  as
                  they apply to Recipient. The transferee shall execute a copy of
                  Exhibit C
                  and file the same with the Secretary of the
                  Company.

              

      

       

      
        	 	
                (b)

              	
                For
                  purposes of this Agreement, Immediate Family means any child, stepchild,
                  grandchild, parent, stepparent, grandparent, spouse, sibling,
                  mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law
                  or sister-in-law, and shall include adoptive
                  relationships.

              

      

       

      
        	SECTION
                9.	
                LEGEND
                  OF SHARES.

              

      

       

      All
        certificates representing the Common Stock awarded under this Agreement shall,
        where applicable, have endorsed thereon the following legends and any other
        legends required by applicable securities laws:

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED
        UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
        OF ANY
        STATE OR FOREIGN JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED
        AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE
        AND
        APPLICABLE FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION
        OF
        COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
        U.S. FEDERAL AND STATE AND APPLICABLE FOREIGN SECURITIES LAWS IS NOT
        REQUIRED.

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
        ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS
        OF
        A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF. SUCH
        AGREEMENT PROVIDES FOR CERTAIN TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF
        FIRST
        REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SECURITIES AND CERTAIN FORFEITURE
        RESTRICTIONS. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH
        A
        COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.

      
        

          PACIFIC
            RESTAURANT HOLDINGS, INC.

          RESTRICTED
            SHARE AGREEMENT

           

        

        
          
            
            

          

          
            -3-

            
              

            

          

          
            
            

          

        

      

       

      
        	SECTION
                10.	
                RECIPIENT’S
                  INVESTMENT
                  REPRESENTATIONS.

              

      

       

      
        	 	
                (a)

              	
                This
                  Agreement is made with Recipient in reliance upon Recipient’s
                  representation to the Company, which by Recipient’s acceptance hereof
                  Recipient confirms, that the Common Stock which Recipient will
                  receive
                  will be acquired for investment for an indefinite
                  period for Recipient’s own account, not as a nominee or agent, and not
                  with a view to the sale or distribution of any part thereof, and
                  that
                  Recipient has no present intention of selling, granting participation
                  in,
                  or otherwise distributing the same, but subject, nevertheless,
                  to any
                  requirement of law that the disposition of Recipient’s property shall at
                  all times
                  be within Recipient’s
                  control. By executing this Agreement, Recipient further represents
                  that
                  Recipient does not have any contract, understanding or agreement
                  with any
                  person to sell, transfer, or grant participation to such person
                  or to any
                  third person, with respect to any of the Common
                  Stock.

              

      

       

      
        	 	
                (b)

              	
                Recipient
                  understands that the Common Stock will not be registered or qualified
                  under applicable U.S. federal, state or foreign securities laws
                  on the
                  ground that the sale provided for in this Agreement is exempt from
                  registration or qualification under applicable U.S. federal, state
                  or
                  foreign securities laws and that the Company’s
                  reliance on such exemption is predicated on Recipient’s representations
                  set forth herein.

              

      

       

      
        	 	
                (c)

              	
                Recipient
                  agrees that in no event shall Recipient make a disposition of any
                  of the
                  Common Stock (including a disposition under Section 8 of this
                  Agreement), unless and until
                  (i) Recipient
                  shall have notified the Company of the proposed disposition and
                  shall have
                  furnished the Company with a statement of the circumstances surrounding
                  the proposed disposition and
                  (ii) Recipient
                  shall have furnished the Company with an opinion of counsel satisfactory
                  to the Company to the effect that
                  (A) such
                  disposition will not require registration or qualification of such
                  Common
                  Stock under applicable U.S. federal, state or foreign securities
                  laws
                  or
                  (B) appropriate
                  action necessary for compliance with the U.S. federal, state or
                  foreign
                  securities laws has been taken or
                  (iii) the
                  Company shall have waived, expressly and in writing, its rights
                  under
                  clauses (i) and (ii) of this
                  Section.

              

      

       

      
        	 	
                (d)

              	
                With
                  respect to a transaction occurring prior to such date as the Plan
                  and
                  Common Stock thereunder are covered by a valid Form S-8 or similar
                  U.S.
                  federal registration statement, this Subsection shall apply unless the
                  transaction is covered by the exemption in California Corporations
                  Code
                  section 25102(o) or a similar broad-based exemption. In connection
                  with the investment representations made herein, Recipient represents
                  that
                  Recipient is able to fend for himself or herself in the transactions
                  contemplated by this Agreement, has such knowledge and experience
                  in
                  financial and business matters as to be capable of evaluating the
                  merits
                  and risks of Recipient’s investment, has the ability to bear the economic
                  risks of Recipient’s investment and has been furnished with and has had
                  access to such information as would be made available in the form
                  of a
                  registration statement together with such additional information
                  as is
                  necessary to verify the accuracy of the information supplied and
                  to have
                  all questions answered by the
                  Company.

              

      

      
        

          PACIFIC
            RESTAURANT HOLDINGS, INC.

          RESTRICTED
            SHARE AGREEMENT

           

        

        
          
            
            

          

          
            -4-

            
              

            

          

          
            
            

          

        

      

       

      
        	 	
                (e)

              	
                Recipient
                  understands that if the Company does not register with the Securities
                  and
                  Exchange Commission pursuant to section 12 of the U.S. Securities
                  Exchange Act of 1934, as amended, or if a registration statement
                  covering
                  the Common Stock (or a filing pursuant to the exemption from registration
                  under Regulation A of the Securities Act) under the Securities
                  Act is not
                  in effect when Recipient desires to sell the Common Stock, Recipient
                  may
                  be required to hold the Common Stock for an indeterminate period.
                  Recipient also acknowledges that Recipient understands that any
                  sale of
                  the Common Stock which might be made by Recipient in reliance upon
                  Rule
                  144 under the Securities Act may be made only in limited amounts
                  in
                  accordance with the terms and conditions of that
                  Rule.

              

      

       

      
        	SECTION
                11.	
                NO
                  DUTY TO TRANSFER IN VIOLATION OF THIS
                  AGREEMENT.

              

      

       

      The
        Company shall not be required (a) to transfer on its books any shares of
        Common Stock of the Company which shall have been sold or transferred in
        violation of any of the provisions set forth in this Agreement or (b) to
        treat as owner of such shares or to accord the right to vote as such owner
        or to
        pay dividends to any transferee to whom such shares shall have been so
        transferred.

       

      
        	SECTION
                12.	
                RIGHTS
                  OF RECIPIENT.

              

      

       

      
        	 	
                (a)

              	
                Except
                  as otherwise provided herein, Recipient shall, during the term
                  of this
                  Agreement, exercise all rights and privileges of a stockholder
                  of the
                  Company with respect to the Common
                  Stock.

              

      

       

      
        	 	
                (b)

              	
                Nothing
                  in this Agreement shall be construed as a right by Recipient to
                  be
                  retained by the Company, or a parent or subsidiary of the Company
                  in any
                  capacity. The Company reserves the right to terminate Recipient’s Service
                  at any time and for any reason without thereby incurring any liability
                  to
                  Recipient.

              

      

       

      
        	SECTION
                13.	
                RESALE
                  RESTRICTIONS/MARKET
                  STAND-OFF.

              

      

       

      Recipient
        hereby agrees that in connection with any underwritten public offering by
        the
        Company of its equity securities pursuant to an effective registration statement
        filed under the Securities Act, including the Company’s initial public offering,
        Recipient shall not, directly or indirectly, engage in any transaction
        prohibited by the underwriter, or sell, make any short sale of, contract
        to
        sell, transfer the economic risk of ownership in, loan, hypothecate, pledge,
        grant any Award for the purchase of, or otherwise dispose or transfer for
        value
        or agree to engage in any of the foregoing transactions with respect to any
        Common Stock without the prior written consent of the Company or its
        underwriters, for such period of time after the effective date of such
        registration statement as may be requested by the Company or such underwriters.
        Such period of time shall not exceed one hundred eighty (180) days; provided,
        however, that if either (a) during the last seventeen (17) days of such one
        hundred eighty (180) day period, the Company issues an earnings release or
        material news or a material event relating to the Company occurs or (b) prior
        to
        the expiration of such one hundred eighty (180) day period, the Company
        announces that it will release earnings results during the sixteen (16) day
        period beginning on the last day of the one hundred eighty (180) day period,
        then the restrictions imposed during such one hundred eighty (180) day period
        shall continue to apply until the expiration of the eighteen (18) day period
        beginning on the issuance of the earnings release or the occurrence of the
        material news or material event; and provided, further, that in the event
        the
        Company or the underwriter requests that the one hundred eighty (180) day
        period
        be extended or modified pursuant to then-applicable law, rules, regulations
        or
        trading policies, the restrictions imposed during the one hundred eighty
        (180)
        day period shall continue to apply to the extent requested by the Company
        or the
        underwriter to comply with such law, rules, regulations or trading policies.
        Recipient hereby agrees to execute and deliver such other agreements as may
        be
        reasonably requested by the Company or the underwriter which are consistent
        with
        the foregoing or which are necessary to give further effect thereto. To enforce
        the provisions of this Section, the Company may impose stop-transfer
        instructions with respect to the Common Stock until the end of the applicable
        stand-off period.

      
        

          PACIFIC
            RESTAURANT HOLDINGS, INC.

          RESTRICTED
            SHARE AGREEMENT

           

        

        
          
            
            

          

          
            -5-

            
              

            

          

          
            
            

          

        

      

       

      
        	SECTION
                14.	
                OTHER
                  NECESSARY ACTIONS.

              

      

       

      The
        parties agree to execute such further instruments and to take such further
        action as may reasonably be necessary to carry out the intent of this
        Agreement.

       

      
        	SECTION
                15.	
                NOTICE.

              

      

       

      Any
        notice required or permitted under this Agreement shall be given in writing
        and
        shall be deemed effectively given upon the earliest of personal delivery,
        receipt or the third full day following deposit in the United States Post
        Office
        with postage and fees prepaid, addressed to the other party hereto at the
        address last known or at such other address as such party may designate by
        ten
        (10) days’ advance written notice to the other party hereto.

       

      
        	SECTION
                16.	
                SUCCESSORS
                  AND ASSIGNS.

              

      

       

      This
        Agreement shall inure to the benefit of the successors and assigns of the
        Company and, subject to the restrictions on transfer herein set forth, be
        binding upon Recipient and Recipient’s heirs, executors, administrators,
        successors and assigns. The failure of the Company in any instance to exercise
        the Right of First Refusal described herein shall not constitute a waiver
        of any
        other Right of First Refusal that may subsequently arise under the provisions
        of
        this Agreement. No waiver of any breach or condition of this Agreement shall
        be
        deemed to be a waiver of any other or subsequent breach or condition, whether
        of
        a like or different nature.

      
        

          PACIFIC
            RESTAURANT HOLDINGS, INC.

          RESTRICTED
            SHARE AGREEMENT

           

        

        
          
            
            

          

          
            -6-

            
              

            

          

          
            
            

          

        

      

       

      
        	SECTION
                17.	
                APPLICABLE
                  LAW.

              

      

       

      This
        Agreement shall be governed by, and construed in accordance with, the laws
        of
        the State of California, as such laws are applied to contracts entered into
        and
        performed in such state.

       

      
        	SECTION
                18.	
                NO
                  STATE QUALIFICATION.

              

      

       

      THE
        SALE
        OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
        WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE
        ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
        CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE
        SALE
        OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105
        OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
        ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS
        THE
        SALE IS SO EXEMPT.

       

      
        	SECTION
                19.	
                NO
                  ORAL MODIFICATION.

              

      

       

      No
        modification of this Agreement shall be valid unless made in writing and
        signed
        by the parties hereto.

       

      
        	SECTION
                20.	
                ENTIRE
                  AGREEMENT.

              

      

       

      This
        Agreement and the Plan constitute the entire complete and final agreement
        between the parties hereto with regard to the subject matter
        hereof.

       

      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the day and
        year
        first above written.

       

      
        	 	 	 
	
                PACIFIC
                  RESTAURANT HOLDINGS, INC.

              	
                [______________________________]

              
	 
 	 
 	 
 
	
                By:
                  

              	      	
              
	
                
                  

                

                Its:
                  

                
                  
                    

                  

                

              	
                

                Signature

              

      

       

      
        
          PACIFIC
            RESTAURANT HOLDINGS, INC.

          RESTRICTED
            SHARE AGREEMENT

           

        

        
          
            
            

          

          
            -7-

            
              

            

          

          
            
            

          

        

      

       

      EXHIBIT A

       

      
        JOINT
          ESCROW INSTRUCTIONS
_________, ____

       

      To
        Secretary of

      Pacific
        Restaurant Holdings, Inc.

      804
        Pier
        View Way, Suite 208

      Oceanside,
        California 92054

      

      Dear
        Sir
        or Madam:

       

      As
        Escrow
        Agent for Pacific Restaurant Holdings, Inc. (the “Company”), and [Name
        of Recipient]
        (the
“Recipient”), you are authorized and directed to hold the Assignment Separate
        from Certificate form(s) executed by Recipient and the certificate(s) of
        stock
        representing Recipient’s unvested shares transferred in accordance with the
        terms of the restricted share agreement (the “Agreement”) entered into between
        the Company and Recipient, in accordance with the following
        instructions:

       

      1. In
        the
        event of a forfeiture
        described in Section 5 of the Agreement,
        Recipient and the Company hereby irrevocably authorize and direct you to
        effect
        the contemplated forfeiture, and to promptly deliver the stock
        certificates.

       

      2. Promptly
        following a forfeiture describe in Section 5 of the Agreement, you are directed
        (a) to date the Assignment Separate from Certificate form(s) necessary for
        the transfer in question, (b) to fill in the number of shares being
        transferred, and (c) to deliver the form(s), together with the certificate
        or certificates evidencing the shares to be transferred, to the Company.
        

       

      3. Recipient
        irrevocably authorizes the Company to deposit with you any certificates
        evidencing shares to be held by you under this letter and any additions and
        substitutions to the shares as defined in the Agreement. Recipient irrevocably
        appoints you as his or her attorney-in-fact and agent for the term of this
        escrow to execute, with respect to the shares of stock, all documents necessary
        or appropriate to make such securities negotiable and to complete any
        transaction contemplated by these Joint Escrow Instructions. Subject to the
        provisions of this Section 3, Recipient shall exercise all rights and
        privileges, including but not limited to, the right to vote and to receive
        dividends (if any), of a stockholder of the Company while the shares are
        held by
        you.

       

      4. In
        accordance with the terms of Section 6(b) of the Agreement, you may deliver
        to Recipient a certificate or certificates representing shares that are no
        longer subject to the forfeiture restrictions described in Section 5 of the
        Agreement.

       

      5. This
        escrow shall terminate upon the release of all shares held under the terms
        and
        provisions hereof.

      

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        EXHIBIT A
          TO
          RESTRICTED SHARE AGREEMENT

        JOINT
          ESCROW INSTRUCTIONS

      

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      6. If
        at the
        time of termination of this escrow you should have in your possession any
        documents, securities or other property belonging to Recipient, you shall
        deliver them to Recipient and shall be discharged from all further obligations
        under these Joint Escrow Instructions.

       

      7. Your
        duties under these Joint Escrow Instructions may be altered, amended, modified
        or revoked only by a writing signed by all of the parties.

       

      8. You
        shall
        be obligated to perform the duties described in these Joint Escrow Instructions
        and shall be protected in relying or refraining from acting on any instrument
        reasonably believed by you to be genuine and to have been signed or presented
        by
        the proper party or parties. You shall not be personally liable for any act
        or
        omission as Escrow Agent or as attorney-in-fact of Recipient while acting
        in
        good faith and in the exercise of your own good judgment, and any act or
        omission by you pursuant to the advice of your own attorneys shall be conclusive
        evidence of such good faith.

       

      9. You
        are
        expressly authorized to disregard any and all warnings given by any of the
        parties hereto or by any other person or corporation, excepting only orders
        or
        process of courts of law, and are expressly authorized to comply with and
        obey
        orders, judgments or decrees of any court. In case you obey or comply with
        any
        such order, judgment or decree of any court, you shall not be liable to any
        of
        the parties under these Joint Escrow Instructions or to any other person,
        firm
        or corporation by reason of such compliance, notwithstanding any such order,
        judgment or decree being subsequently reversed, modified, annulled, set aside,
        vacated or found to have been entered without jurisdiction.

       

      10. You
        shall
        not be liable in any respect on account of the identity, authority or rights
        of
        the parties executing or delivering or purporting to execute or deliver the
        Agreement or any documents or papers deposited or called for under these
        Joint
        Escrow Instructions.

       

      11. You
        shall
        not be liable for the outlawing of any rights under any statute of limitations
        with respect to these Joint Escrow Instructions or any documents deposited
        with
        you.

       

      12. You
        shall
        be entitled to employ such legal counsel and other experts as you may deem
        necessary properly to advise you in connection with your obligations under
        these
        Joint Escrow Instructions and may rely upon the advice of such
        counsel.

       

      13. Your
        responsibilities as Escrow Agent under these Joint Escrow Instructions shall
        terminate if you shall cease to be employed by the Company or if you shall
        resign by written notice to each party. In the event of any such termination,
        the Company shall appoint any officer of the Company as successor Escrow
        Agent.

       

      14. If
        you
        reasonably require other or further instruments in connection with these
        Joint
        Escrow Instructions or obligations under these Joint Escrow Instructions,
        the
        parties shall furnish such instruments.

      
        

          PACIFIC
            RESTAURANT HOLDINGS, INC.

          EXHIBIT A
            TO
            RESTRICTED SHARE AGREEMENT

          JOINT
            ESCROW INSTRUCTIONS

        

         

        
          
            
            

          

          
            A-2

            
              

            

          

          
            
            

          

        

      

       

      15. It
        is
        understood and agreed that should any dispute arise with respect to the delivery
        and/or ownership or right of possession of the securities held by you under
        these Joint Escrow Instructions, you are authorized and directed to retain
        in
        your possession without liability to anyone all or any part of the securities
        until the dispute is settled either by mutual written agreement of the parties
        or by a final order, decree or judgment of a court of competent jurisdiction
        after the time for appeal has expired and no appeal has been perfected. You
        are
        under no duty whatsoever to institute or defend against any such
        proceedings.

       

      16. Any
        notice required or permitted under these Joint Escrow Instructions shall
        be
        given in writing and will be deemed effectively given upon personal delivery
        or
        upon deposit in the United States Post Office, by registered or certified
        mail
        with postage and fees prepaid, addressed to each of the other
        parties.

       

      17. By
        signing these Joint Escrow Instructions, you become a party only for the
        purpose
        of these Joint Escrow Instructions; you do not become a party to the
        Agreement.

       

      18. This
        instrument shall be governed by and construed in accordance with the laws
        of the
        State of California.

       

      19. This
        instrument shall be binding upon and inure to the benefit of the parties
        hereto
        and their respective successors and permitted assigns.

      
        	 	 	 
	 	
                Very
                  truly yours,

                

                Pacific
                  Restaurant Holdings, Inc.

              
	 
 	 
 	 
 
	
              	By  	
              
	 	
                 

                Its

              	
                

              
	
              	
              	
                

              

      

      

        	ESCROW
                AGENT:	 	 	[___________________________________]
	 	 	 	 
	 	 	 	 
	
              	 	 	
              
	
                
Signature	 	 	
                
                  
Signature

              

      

      
        

          PACIFIC
            RESTAURANT HOLDINGS, INC.

          EXHIBIT A
            TO
            RESTRICTED SHARE AGREEMENT

          JOINT
            ESCROW INSTRUCTIONS

        

         

        
          
            
            

          

          
            A-3

            
              

            

          

          
            
            

          

        

      

      EXHIBIT B

       

      ASSIGNMENT
        SEPARATE FROM CERTIFICATE

       

      FOR
        VALUE
        RECEIVED, [Name
        of Recipient]
        sells,
        assigns and transfers to Pacific Restaurant Holdings, Inc. (the “Company”) or
        its assignee [print
        the number of shares]
        ([#
        of shares])
        shares
        of the Common Stock of the Company (the “Shares”), standing in his or her name
        on the books of the Company represented by Certificate No. ___________ and
        irrevocably constitutes and appoints [Name/Title
        of Escrow Agent]
        as
        Attorney to transfer the Shares on the books of the Company with full power
        of
        substitution in the premises.

       

      Dated:
        ____________________, ____.

       

      
        	 	 	 
	 	
                [NAME
                  OF RECIPIENT]

              
	
              	 	
              
	
              	 	 
	
              	
              	
              
	 	
                

                (Signature)

              

      

       

      Spousal
        Consent (if applicable)

       

      ___________________
        (Recipient’s spouse) indicates by the execution of this Assignment his or her
        consent to be bound by the terms herein as to his or her interests, whether
        as
        community property or otherwise, if any, in the Shares.

      
        	 	 	 
	 	 	
                Printed
                  Name

              
	 	 	 
	
              	
              	
              
	 	
                

                Signature

              

      

       

      INSTRUCTIONS:
         PLEASE
        DO NOT FILL IN ANY BLANKS OTHER THAN
        THE SIGNATURE LINE. THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY
        TO
        ENFORCE THE FORFEITURE RESTRICTIONS SET FORTH IN THE RESTRICTED SHARE AGREEMENT
        WITHOUT REQUIRING ADDITIONAL SIGNATURES.

      

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        EXHIBIT B
          TO STOCK AWARD AGREEMENT

        ASSIGNMENT
          SEPARATE FROM CERTIFICATE

         

        
          
            
            

          

          
            B-1

            
              

            

          

          
            
            

          

        

      

      EXHIBIT C

       

      ACKNOWLEDGMENT
        OF AND AGREEMENT TO BE BOUND

      BY
        THE RESTRICTED SHARE AGREEMENT OF

      PACIFIC
        RESTAURANT HOLDINGS, INC.

       

      The
        undersigned, as transferee of shares of Pacific Restaurant Holdings, Inc.
        hereby
        acknowledges that he or she has read and reviewed the terms of the Restricted
        Share Agreement of Pacific Restaurant Holdings, Inc. and hereby agrees to
        be
        bound by the terms and conditions thereof, as if the undersigned had executed
        said Agreement as an original party thereto.

       

      Dated:
        ____________________, ____.

       

      
        	 	 	
                

                (Signature
                  of Transferee)

              
	 
 	 
 	 
 
	
              	      	
                

                (Printed
                  Name of Transferee)

              

      

      

        PACIFIC
          RESTAURANT HOLDINGS, INC.

        EXHIBIT C
          TO RESTRICTED SHARE AGREEMENT

        ACKNOWLEDGMENT
          OF AND AGREEMENT TO BE BOUND BY THE RESTRICTED STOCK AGREEMENT

         

        
          
            
            

          

          
            C-1

            
              

            

          

          
            
            

          

           

        

      

      EXHIBIT D

       

      STEP-BY-STEP
        INSTRUCTIONS TO

      MAKE
        A SECTION 83(b) ELECTION

       

      WORD
        OF CAUTION: IF YOU CHOOSE TO FILE A SECTION 83(b) ELECTION, YOU MUST FILE
        YOUR SECTION 83(b) ELECTION FORM WITH THE IRS NO LATER THAN 30 DAYS
        FOLLOWING THE DATE OF GRANT OF THE RESTRICTED STOCK. THE 30-DAY DEADLINE
        IS
        ABSOLUTE AND CANNOT BE WAIVED UNDER ANY CIRCUMSTANCES. ALSO, ONCE FILED,
        YOUR
        SECTION 83(b) ELECTION FORM MAY NOT BE REVOKED, EXCEPT WITH THE CONSENT OF
        THE IRS (WHICH CONSENT IS GENERALLY DENIED).

       

      THESE
        INSTRUCTIONS ARE DISTRIBUTED MERELY FOR CONVENIENCE IN THE EVENT YOU CHOOSE
        TO
        FILE AN 83(b) ELECTION. THEY SHOULD NOT BE RELIED UPON BY ANY PERSON IN DECIDING
        WHETHER OR WHEN TO EXERCISE AN AWARD OR TO MAKE AN 83(b) ELECTION. EACH PERSON
        SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THESE
        MATTERS.

       

      
        	
                Step
                  1.

              	
                Complete
                  and execute the 83(b) Form found on page D-4 of this Exhibit D
                  (the “83(b) Form”). Do not fill in the blank in paragraph 6, which relates
                  to the fair market value of the property at the time of transfer.
                  Submit
                  the 83(b) Form to the Company and ask that the Company insert the
                  per
                  share fair market value of the shares in paragraph 6 of the 83(b)
                  Form.

              

      

       

      
        	
                Step
                  2.

              	
                Make
                  four copies of the executed and completed 83(b)
                  Form.

              

      

       

      
        	
                Step
                  3.

              	
                Mail
                  (a) the cover letter on page D-3 and (b) the original executed
                  83(b) Form
                  on page D-4 to the Internal Revenue Service Center where you file
                  your
                  U.S. federal income tax return.

              

      

       

      
        	 	
                The
                  tax, if any, arising out of your election does not have to be paid
                  until
                  you file your tax return for the taxable year in which you received
                  your
                  Award shares (except to the extent that withholding taxes or estimated
                  taxes are payable). The forms must be filed no later than 30 days
                  following the date of grant of the restricted stock. The
                  30-day deadline is absolute and cannot be waived under any
                  circumstances.
                  The filing is deemed to be made on the date that the forms are
                  mailed from
                  the post office, i.e., the postmark date. Mail the forms by registered
                  or
                  certified mail, return receipt requested, so that you have proof
                  that you
                  filed the forms within the 30-day period. If you miss the deadline,
                  you
                  will be taxed on your Award shares as they vest based on the value
                  of the
                  shares at that time. You should seek local tax advice on whether
                  you must
                  make a separate filing with your state of residence in order to
                  make a
                  similar election for purposes of your state income
                  tax.

              

      

       

      
        	
                Step
                  4.

              	
                Mail
                  or submit a copy of the filing with the Company on the same day
                  that you
                  file the 83(b) Form, and make sure that you retain copies of the
                  forms for
                  your records and for filing with your tax returns (see Step
                  5).

              

      

       

      
        	
                Step
                  5.

              	
                File
                  copies of the forms with your U.S. federal tax (and state tax,
                  if
                  appropriate) returns for the taxable year in which you received
                  your Award
                  shares.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      [Name
        of Recipient]

      [Recipient’s
        Address]

       

      [Date]

       

      VIA
        CERTIFIED MAIL

      

      Return
        Receipt Requested

      Receipt
        [enter
        receipt # here]

      

      Internal
        Revenue Service Center

      [Appropriate
        IRS center address]

       

      Re:
        Election Under Section 83(b) of the Internal Revenue
        Code

       

      Ladies
        and Gentlemen:

       

      Enclosed
        please find an executed form of election under Section 83(b) of the
        Internal Revenue Code of 1986 relating to the issuance of __________
        shares
        of Pacific Restaurant Holdings, Inc. Common Stock.

       

      Also
        enclosed is a copy of the 83(b) election and a stamped, self-addressed envelope.
        Please acknowledge receipt of these materials by stamping the enclosed copy
        of
        the 83(b) election with the date of receipt and returning it to me.

       

      Thank
        you
        for your attention to this matter.

      
        	 	 	 
	 	
                Very
                  truly yours,

                

                

                [Name
                  of Recipient]

              

      

      
        
           

        

      

      Enclosures

       

      cc:
        Pacific Restaurant Holdings, Inc. w/ encs.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SECTION 83(b)
        ELECTION

       

      This
        statement is being made under Section 83(b) of the Internal Revenue Code of
        1986, pursuant to Treasury Regulation section 1.83-2.

       

      1.
        The
        taxpayer who performed the services is:

       

      Name
        of
        Recipient: _____________

       

      Recipient’s
        Address: _____________

       

      Recipient’s
        Social Security Number: _____________

       

      2.
        The
        property with respect to which the election is being made is
        _____________ shares of common stock of Pacific Restaurant Holdings, Inc.,
        a Delaware corporation (the “Company”).

       

      3.
        The
        property was transferred on _______________, 200__. (Date of
        Exercise)

       

      4.
        The
        taxable year in which the election is being made is the calendar year
        200__.

       

      5.
        The
        property is subject to forfeiture restrictions pursuant to which the property
        will automatically be forfeited to the issuer upon the date the taxpayer’s
        employment with the issuer is terminated for any reason. The forfeiture
        restrictions lapse in a series of installments over a two-year
        period.

       

      6.
        The
        Fair Market Value of the property at the time of transfer (determined without
        regard to any restriction other than a restriction which by its terms will
        never
        lapse) is $_______ per share.

       

      7.
        The
        amount paid for such property is $____________.

       

      8.
        A copy
        of this statement was furnished to the Company for whom the taxpayer rendered
        the service underlying the transfer of property.

       

      9.
        This
        statement is executed as of ___________________, 200__.

       

      
        	 	 	 	 
	
              	 	 	 
	
                
                  

                

                Spouse
                  (if any)

              	 	 	
                
                  

                

                [Name
                  of Recipient]:
                  Taxpayer

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