<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 4, 2001          Commission File No. 0-25858

                              DAVE & BUSTER'S, INC.

             (Exact name of registrant as specified in its charter)

      Missouri                                           43-1532756
(State or other jurisdiction of                       (I.R.S. employer
incorporation or organization)                      identification number)

2481 Manana Drive, Dallas, Texas                           75220
(Address of principal executive offices)                  (Zip Code)

                         Registrant's telephone number,
                     Including area code (214) 357-9588

Securities registered pursuant to Section 12(b) of the Act:

                               Title of Each Class
                               -------------------
                          Common Stock, $0.01 par value

Securities registered pursuant to Section 12(g) of the Act:  None


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X]  No [_]


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulations S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ____

The aggregate market value of the voting stock held by persons other than
directors and officers of registrant (who might be deemed to be affiliates of
registrant) at April 16, 2001 was $92,254,351.

The number of shares of common stock outstanding at April 16, 2001 was
12,953,375 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement dated May 4, 2001, for its annual
meeting of Stockholders on June 14, 2001, are incorporated by reference into

Part III hereof, to the extent indicated herein.


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                                     PART I



Item 1.     BUSINESS

      General

      Dave & Buster's, Inc. (the "Company") operates large format, high-volume
      Restaurant/Entertainment Complexes ("Complexes" or "Stores") under the
      Dave & Buster's name. Each Dave & Buster's Complex offers a full menu of
      high quality food and beverage items combined with an extensive array of
      entertainment attractions such as pocket billiards, shuffleboard,
      state-of-the-art interactive simulators and virtual reality systems, and
      traditional carnival-style games of skill. The Company's large format is
      designed to promote easy access to, and maximize customer crossover
      between, the multiple dining and entertainment areas within each Complex.
      The Company emphasizes high levels of customer service to create casual,
      yet sophisticated, "ideal playing conditions" for adults. As of February
      4, 2001, the Company had 27 stores across the continental United States.
      Additionally, the Company licenses the Dave & Buster's concept
      internationally through area licensing agreements and as of February 4,
      2001, there were two Dave & Buster's operating overseas.

      The Dave & Buster's Concept

      The Company seeks to differentiate itself by providing high quality
      dining, bar service, and entertainment attractions in a comfortable, adult
      atmosphere. The key factors of the Company's market positioning and
      operating strategy are:

      Distinctive Concept. Each Dave & Buster's offers a distinctive combination
      of dining, bar service and entertainment. A full menu and complete bar
      service are available from early lunch until late night in each restaurant
      and throughout almost all of the entertainment areas. The broad array of
      attractions, ranging from table and carnival games to state-of-the-art
      virtual reality games, is continuously reviewed and updated to maintain a
      fresh entertainment environment. The Company also actively seeks to
      enhance the popularity of its traditional games, such as pocket billiards
      and shuffleboard, by providing high quality tables, a clean and
      comfortable environment and a high standard of service.

      A Large, Multiple Attraction Destination. The Complexes range in
      approximate total area from 30,000 square feet to 70,000 square feet. The
      large scale of each operation, together with the numerous food, beverage
      and entertainment options offered, is designed to attract a diverse
      customer base and consolidate multiple-destination customer spending into
      one location. Each Dave & Buster's attracts local customers from a wide
      geographical area (estimated to be a twenty-mile radius) along with
      tourists, conventioneers and business travelers.

      Commitment to Quality. The Company strives to provide its customers with
      good food and an inviting atmosphere. Accordingly, each Dave & Buster's
      offers an extensive menu which features popular, moderately priced food
      and beverage items that are individually prepared with a commitment to
      value and quality. The Company makes a significant investment in each
      Complex, and the Company's facilities are designed with an attention to
      detail. In addition, the customer-participation entertainment attractions
      are tastefully presented in an atmosphere that the Company defines as
      "ideal playing conditions".


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      High Standard of Customer Service. Through intensive personnel training,
      constant monitoring of operations and stringent operational controls, the
      Company strives to maintain a consistently high standard of food,
      beverage, and amusement service throughout each Complex. The Company's
      commitment to customer service is evidenced by the availability of full
      food and beverage service in entertainment areas as well as the restaurant
      and bar areas.

      With respect to entertainment, the Company's commitment to customer
      service is demonstrated by service staff in each of the entertainment
      areas who offer assistance in playing and enjoying the games. The Company
      believes its customer service is enhanced by a strong commitment to
      employee motivation and appreciation programs. The Company also believes
      that high service standards are critical to promoting customer loyalty and
      to generating frequent-visiting patterns and referrals by customers.

      Comfortable Adult Atmosphere. Each Dave & Buster's is primarily adult
      oriented and, while children are welcome, strict guidelines are enforced.
      Customers under twenty-one years of age must be accompanied by a parent or
      guardian (a person 25 years of age or older who agrees to be responsible
      for the conduct and safety of the underage guest) at all times during
      their visit and are not allowed in a Dave & Buster's after 10:00 p.m.
      (11:00 p.m. in the summer months). The Company believes that these
      policies help maintain the type of pleasant, relaxed atmosphere that
      appeals to adult customers. The Company also believes that this atmosphere
      attracts groups of customers such as private parties and business
      organizations.

      Integrated Systems. The Company utilizes centralized information and
      accounting systems that are designed to allow its management to
      efficiently monitor labor, food, and other direct operating expenses, and
      to provide timely access to financial and operating data. Management
      believes that its integrated computer systems permit it, on both an
      overall and per Complex basis, to efficiently operate the
      Restaurant/Entertainment Complexes.

      Attractive Venue for Special Events. Each Dave & Buster's offers Special
      Events Planning for companies and private individuals. The varied menu and
      many amusement opportunities make Dave & Buster's attractive locations for
      groups of between 10 and 2,000. In addition, most Dave & Buster's include
      a Show Room with a stage, audio visual capability and private refreshment
      area. Dave & Buster's has developed innovative packages that combine food,
      beverage and entertainment components and markets these to groups and
      individuals.

      Restaurant/Entertainment Concept and Menu

      Dave & Buster's offers a full menu of high quality food and beverage items
      combined with an extensive array of entertainment attractions such as
      pocket billiards, shuffleboard, state-of-the-art interactive simulators
      and virtual reality systems, and traditional carnival-style games of
      skill. The Company's facilities are designed to promote easy access to,
      and maximize customer crossover between, the multiple dining and
      entertainment areas within each Complex. The Company emphasizes high
      levels of customer service to create casual, yet sophisticated, "ideal
      playing conditions" for adults.

      The Dave & Buster's menu is offered from early lunch until late night and
      features moderately priced food designed to appeal to a wide variety of
      customers. This well-rounded fare includes gourmet pastas, individual
      sized pizzas, burgers, steaks, seafood and chicken. The menu is regularly
      updated to reflect current dining trends and incorporates "house specials"
      such as barbequed ribs, blackened chicken pasta, mesquite-peppered rib eye
      steak, and a Philadelphia cheesesteak sandwich. A wide variety of other
      appetizers, soups, salads, sandwiches and desserts is also available.
      Entree and sandwich prices range from $5.95 to $16.95, with many main menu
      items in the $6.95 to $12.95 price range. In order to promote customer
      flow and complement the


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      entertainment areas, full, sit-down food service is offered not only in
      the restaurant areas, but throughout the entire Complex. In addition,
      throughout the restaurant and entertainment areas each Dave & Buster's
      offers full bar service including over 50 different beers, an extensive
      wine selection, and a variety of non-alcoholic beverages such as its own
      private label, "D&B Old Fashioned Philly Root Beer".

      The entertainment attractions in each Dave & Buster's are geared toward
      customer participation and offer both traditional entertainment and
      "Million Dollar Midway" entertainment.

      Traditional Entertainment. Each Dave & Buster's offers a number of
      traditional entertainment options. These traditional offerings include
      "world class" pocket billiards, "championship-style" shuffleboard tables,
      and the Show Room which is designed for hosting private social parties and
      business gatherings as well as Company sponsored events. Traditional
      entertainment games are rented by the hour.

      Million Dollar Midway Games. The largest area in each Dave & Buster's is
      the Million Dollar Midway which is designed to provide high-energy,
      escapism entertainment through a broad selection of electronic, skill and
      sports-oriented games. The Dave & Buster's Power Card activates all the
      midway games (with the exception of coin action games) and can be
      recharged for additional play. The Power Card enables customers to
      activate games more easily and encourages extended play of games. By
      replacing coin activation, the Power Card has eliminated the technical
      difficulties and maintenance issues associated with coin activated
      equipment. Furthermore, the Power Card feature has increased the Company's
      flexibility in pricing and promoting of games.

      Attractions within the Million Dollar Midway include fantasy/high
      technology and classic midway entertainment. Fantasy/high-technology
      offerings include simulator games such as formula race cars, off-road
      vehicles, fighter jets and motorcycles; Galaxian Theater, a
      multi-participant, enclosed simulation theater where up to six players
      take part in mock battles with alien invaders; Virtuality, an interactive,
      electronic game designed to simulate an actual battlefield environment;
      Virtual World, a fantasy environment attraction; Iwerks Turbo Ride
      Theater, a 16 to 18 seat motion simulation theater; large-screen
      interactive electronic games; and "The 19th Hole", a state-of-the-art golf
      simulator. The Company also contracts for exclusive games designed to
      build customer loyalty and repeat customer visits.

      Classic midway entertainment includes sports-oriented games of skill;
      carnival-style games, which are intended to replicate the atmosphere found
      in many local county fairs; and D&B Downs which is one of several
      multiple-player race games offered in each Dave & Buster's. At the
      Winner's Circle, players can redeem coupons won from selected games of
      skill for a wide variety of prizes, many of which display the Dave &
      Buster's logo. The prizes include stuffed animals, clothing, and small
      electronic and novelty items.

      The Company continually evaluates ways to expand its customer base. As an
      example, in early 2001, the Company will begin offering certain of its
      redemption games via the internet on its website www.daveandbusters.com.
      Customers will be able to play certain redemption games on-line and win
      coupons that are redeemable for prizes either on the internet or a Dave &
      Buster's location.


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      Locations

      At February 4, 2001, the Company operated a total of 27 locations in 13
      states, which included:


<TABLE>
<CAPTION>
                                                              Approximate
                 Location                         State      Square Footage
                 --------                         -----      --------------
<S>                                               <C>        <C>
                 Dallas (I)                         TX           40,000
                 Dallas (II)                        TX           31,000
                 Houston                            TX           53,000
                 Atlanta (I)                        GA           53,000
                 Philadelphia                       PA           70,000
                 Chicago (I)                        IL           50,000
                 Chicago (II)                       IL           55,000
                 Hollywood                          FL           58,000
                 North Bethesda                     MD           58,000
                 Ontario                            CA           59,000
                 Cincinnati                         OH           64,000
                 Denver                             CO           48,000
                 Utica (suburban Detroit)           MI           56,000
                 Irvine                             CA           55,000
                 Rockland County                    NY           48,000
                 Orange                             CA           58,000
                 Columbus                           OH           37,500
                 San Antonio                        TX           52,000
                 Atlanta (II)                       GA           58,000
                 St. Louis                          MO           57,000
                 Austin                             TX           40,000
                 Jacksonville                       FL           40,500
                 Providence                         RI           40,500
                 Milpitas (San Jose)                CA           60,000
                 Westminster (Denver)               CO           40,000
                 Pittsburgh                         PA           60,000
                 San Diego                          CA           48,000
</TABLE>



      Business Development

      The Company continually seeks to identify and evaluate new locations for
      expansion. The Company's goal is to open four Complexes in fiscal years
      2001 and 2002, respectively. The Company will open Complexes in 2001 as
      follows:


<TABLE>
<CAPTION>
                                          Approximate          Development
             Location         State      Square Footage           Status
             --------         -----      --------------           ------
<S>                           <C>        <C>                <C>
             Miami              FL          60,000          Opened March 2001
             Frisco             TX          50,000          Under construction
             Honolulu           HI          40,000          Under construction
             Clevelend          OH          50,000          Under construction
</TABLE>


      Potential locations for openings in fiscal 2002 have been tentatively
      identified and site negotiations are currently in progress.


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      The Company believes that the location of its Complexes is critical to the
      Company's long-term success and devotes significant time and resources to
      analyzing each prospective site. In general, the Company targets
      high-profile sites within metropolitan areas of less than one million
      people for intermediate-size models and at least one million people for
      mega-size models. The Company carefully analyzes demographic information
      (such as average income levels) for each prospective site, the Company
      considers factors such as visibility; accessibility to regional highway
      systems; zoning; regulatory restrictions; and proximity to shopping areas,
      office complexes, tourist attractions and residential areas. The Company
      also carefully studies the restaurant and entertainment competition in
      prospective areas. In addition, the Company must select a site of
      sufficient size to accommodate its prototype facility with ample,
      convenient customer parking.

      The typical cost of opening a mega-size Dave & Buster's ranges from
      approximately $7.5 million to $13.0 million (excluding preopening expenses
      and developer allowances), depending upon the location and condition of
      the premises. For intermediate-size models, the typical cost ranges from
      approximately $6.5 million and $12.5 million (excluding pre-opening
      expenses and developer allowances), depending upon the location and
      condition of the premises. The Company will base the decision of owning or
      leasing a site on the projected unit economics and availability of the
      site for purchase. The Complexes opened in 2000 were all leased
      facilities. Opening a leased facility reduces the Company's capital
      investment in a Complex because the Company does not incur land and site
      improvement costs and may also receive a construction allowance from the
      landlord for improvements. The exterior and interior layout of a Dave &
      Buster's is flexible and can be readily adapted to different types of
      buildings. The Company has opened Complexes in both new and existing
      structures, in both urban and suburban areas.

      International

      In August 1995, the Company entered into a license agreement with a
      subsidiary of Bass Plc ("Bass") to license the "Dave & Buster's" name and
      concept in the United Kingdom. Under this agreement, Bass opened a Complex
      in Birmingham, England in May 1997, a Complex in Bristol, England in July
      1998, and agreed to open a total of seven Complexes in the United Kingdom
      by 2005. Under the license agreement, Bass was required to pay the Company
      a royalty based upon gross revenues, net of value added taxes. In October
      2000, Bass terminated this agreement for internal operating reasons and
      closed the two United Kingdom Dave & Buster's locations.

      In February 1998, the Company entered into a license agreement with the
      TaiMall Development Company ("TaiMall") to license the "Dave & Buster's"
      name and concept in the Pacific Rim. Under this agreement, TaiMall opened
      a Complex in Taipei, Taiwan in December 1999, and has agreed to open seven
      Complexes in the Pacific Rim by the year 2006. Under the license
      agreement, TaiMall is required to pay the Company a 5% royalty based upon
      gross revenues. The license agreement contains strict operating covenants
      to ensure consistency of the menu and entertainment offerings with those
      in the Company-operated Complexes.

      In September 1998, the Company entered into a license agreement with the
      SVAG Development Corporation ("SVAG") to license the "Dave & Buster's"
      name and concept in Germany, Switzerland and Austria. In March 2001, SVAG
      terminated this agreement due to lack of financing.

      In March 1999, the Company entered into a license agreement with Funtime
      Hospitality Corp. ("Funtime") to license the "Dave & Buster's" name and
      concept in Canada. Under this agreement, Funtime opened a Complex in
      Toronto, Ontario in June 2000, and has agreed to open five Complexes by
      the year 2005. The license agreement contains strict operating covenants
      to


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      ensure consistency of the menu and entertainment offerings with those in
      the Company operated Complexes.

      In July 2000, the Company entered into a license agreement with Al-Mal
      Entertainment Enterprises, K.C.S. ("Al-Mal") to license the "Dave &
      Buster's" name and concept in the Middle East. Under this agreement,
      Al-Mal has agreed to open six Complexes by the year 2009. The license
      agreement contains strict operating covenants to ensure consistency of the
      menu and entertainment offerings with those in the Company operated
      Complexes.

      In September 2000, the Company entered into a license agreement with Grupo
      Ildomani S. de R.L. de C.V., limited liability company ("Grupo Ildomani")
      to license the "Dave & Buster's" name and concept in Mexico. Under this
      agreement, Grupo Ildomani has agreed to open five Complexes by the year
      2006. The license agreement contains strict operating covenants to ensure
      consistency of the menu and entertainment offerings with those in the
      Company operated Complexes.

      The Company is considering entering into agreements to license the "Dave &
      Buster's" name and concept in additional foreign countries. The Company
      does not have any current plans to invest its own capital in any foreign
      operations.

      Operations and Management

      The Company's ability to manage a complex operation, that includes both
      high volume restaurants, bars and diverse entertainment attractions, has
      been critical to its overall success. The Company strives to maintain
      quality and consistency in each of its Complexes through careful training
      and supervision of personnel and the establishing and adhering to high
      standards relating to personnel performance, food and beverage
      preparation, entertainment productions and equipment, and facilities
      maintenance. The Company believes that it has been able to attract and
      retain high quality, experienced restaurant and entertainment management
      and personnel through its competitive compensation and bonus programs and
      its policy of promoting from within the Company. Staffing levels vary
      according to the size of the location, but a mega-size Dave & Buster's is
      managed by one general manager, two assistant general managers, seven line
      managers, and one business manager.

      In general, each mega-size Dave & Buster's also employs one purchasing
      agent, one amusement manager, one assistant amusement manager, one kitchen
      manager, two assistant kitchen managers, and one special events sales
      manager. On average, the Company's current general managers possess
      approximately four years of experience with the Company. The general
      manager of each Dave & Buster's reports to a Regional Operations Director
      who reports to the Vice President, Director of Operations.

      All managers, many of whom are promoted from within, must complete an
      eleven-week training program during which they are instructed in areas
      such as food quality and preparation, customer service, alcoholic beverage
      service, entertainment management, and employee relations. The Company has
      also prepared operations manuals relating to food and beverage quality and
      service standards as well as proper operation and playing conditions of
      the Company's entertainment attractions. New sales staff and entertainment
      personnel participate in approximately two weeks of training under the
      close supervision of Company management. Management strives to instill
      enthusiasm and dedication in its employees, regularly solicits employee
      suggestions concerning Company operations and endeavors to be responsive
      to employees' concerns. In addition, the Company has extensive and varied
      programs designed to recognize and reward employees for superior
      performance.


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      Efficient, attentive and friendly service is integral to the Company's
      overall concept. In addition to customer evaluations, the Company uses a
      "secret shopper" quality control program to independently monitor customer
      satisfaction. "Secret shoppers" are independent persons who, on a periodic
      basis, test the Company's food, beverage, and service as customers without
      the knowledge of restaurant management or personnel, and report their
      findings to corporate management.

      Each Complex uses a variety of integrated management information systems.
      These systems include a computerized point-of-sale system which
      facilitates the movement of customer food and beverage orders between the
      customer areas and kitchen operations, controls cash, handles credit card
      authorizations, keeps track of revenues on a per-employee basis for
      incentive awards, and provides management with revenue and inventory data.

      Marketing, Advertising and Promotion

      The Company operates its marketing, advertising, and promotional programs
      through the corporate marketing department with the assistance of an
      external advertising agency, media planning/buying service and a national
      public relations firm.

      The corporate marketing department is also responsible for controlling
      media and production costs. During fiscal 2000, the Company's expenditures
      for advertising and promotions were approximately 3.3% of its revenues.

      In order to expand its customer base, the Company focuses marketing
      efforts in three key areas: (1) advertising and system-wide promotions;
      (2) field marketing and local promotions and (3) corporate and group
      customers (special events).

      Advertising and System-wide Promotions. In fiscal 2000, the Company
      launched its first ever national advertising campaign introducing the
      brand tag-line "Big Time Fun". This campaign included television, radio,
      outdoor, print and direct mail to attract new guests. In addition,
      in-store promotions and point-of-sale materials designed to increase visit
      frequency and guest check average were also implemented.

      Field Marketing and Local Promotions. To capitalize on business building
      opportunities at the local market level, the Company has employed a Field
      Marketing team to work in conjunction with store level management, local
      supplier-partners and local media to develop third party promotions
      designed to meet the specific business objectives of the individual
      locations.

      Corporate and Group Marketing (Special Events). The Company employs a
      dedicated corporate-level Special Events staff to provide support and
      direction for the Complex-based Special Events Managers. The Company
      develops and maintains a database for corporate and group bookings. Each
      Dave & Buster's location has hosted events for many large and
      multi-national, national, and regional businesses. Many of the Company's
      corporate and group customers have hosted repeat events.

      Competition

      The restaurant and entertainment industries are highly competitive. There
      are a great number of food and beverage service operations and
      entertainment businesses that compete directly and indirectly with the
      Company. Many of these entities are larger and have significantly greater


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      financial resources and a greater number of units than does the Company.
      Although there are a few other companies presently utilizing the concept
      of combining entertainment and restaurant operations to the same extent as
      the Company, the Company may encounter increased competition in the
      future, which may have an adverse effect on the profitability of the
      Company. In addition, the legalization of casino gambling in geographic
      areas near any restaurant/entertainment company would create the
      possibility for entertainment alternatives, which could have a material
      adverse effect on the Company's business.

      Employees

      At February 4, 2001, the Company employed approximately 6,600 persons,
      approximately 180 of whom served in administrative or executive
      capacities, approximately 550 of whom served as restaurant and
      entertainment management personnel, and the remainder of whom were hourly
      restaurant and entertainment personnel.

      None of the Company's employees are covered by collective bargaining
      agreements, and the Company has never experienced an organized work
      stoppage, strike or labor dispute. The Company believes its working
      conditions and compensation packages are competitive with those offered by
      its competitors and considers relations with its employees to be very
      good.

      Intellectual Property

      The Company has registered the trademark "Dave & Buster's" with the United
      States Patent and Trademark Office and in various foreign countries. The
      Company has registered and/or applied for certain additional trademarks
      with the United States Patent and Trademark Office and in various foreign
      countries.

      Government Regulations

      The Company is subject to various federal, state and local laws affecting
      its business. Each Dave & Buster's is subject to licensing and regulation
      by a number of governmental authorities, which may include alcoholic
      beverage control, amusement, health and safety and fire agencies in the
      state or municipality in which the Complex is located. Each Dave &
      Buster's is required to obtain a license to sell alcoholic beverages on
      the premises from a state authority and, in certain locations, county and
      municipal authorities. Typically, licenses must be renewed annually and
      may be revoked or suspended for cause at any time. Alcoholic beverage
      control regulations relate to numerous aspects of the daily operations of
      each Dave & Buster's, including minimum age of patrons and employees,
      hours of operation, advertising, wholesale purchasing, inventory control
      and handling, and storage and dispensing of alcoholic beverages. The
      Company has not encountered any material problems relating to alcoholic
      beverage licenses to date. The failure to receive or retain a liquor
      license in a particular location could adversely affect the Company's
      ability to obtain such a license elsewhere.

      The Company is subject to "dram-shop" statutes in the states in which
      Complexes are located. These statutes generally provide a person injured
      by an intoxicated person the right to recover damages from an
      establishment which wrongfully served alcoholic beverages to the
      intoxicated individual. The Company carries liquor liability coverage as
      part of its existing comprehensive general liability insurance which it
      believes is consistent with coverage carried by other entities in the
      restaurant and entertainment industries. Although the Company is covered
      by insurance, a judgment against the Company under a dram-shop statute in
      excess of the Company's liability coverage could have a material adverse
      effect on the Company.


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      As a result of operating certain entertainment games and attractions
      including operations which offer redemption prizes, the Company is subject
      to amusement licensing and regulation by the states and municipalities in
      which it has opened Complexes. Certain entertainment attractions are
      heavily regulated and such regulations vary significantly between
      communities. From time to time, existing Complexes may be required to
      modify certain games, alter the mix of games or terminate the use of
      specific games as a result of the interpretation of regulations by state
      or local officials. The Company has, in the past, had to seek changes in
      state or local regulations to enable it to open a given location. To date,
      the Company has been successful in seeking all such regulatory changes.

      The Company is subject to federal and state environmental regulations, but
      these have not had a material negative effect on the Company's operations.
      More stringent and varied requirements of local and state governmental
      bodies with respect to zoning, land use and environmental factors could
      delay or prevent development of new restaurants in particular locations.
      The Company is subject to the Fair Labor Standards Act which governs such
      matters as minimum wages, overtime and other working conditions, along
      with the American With Disabilities Act and various family leave mandates.
      Although the Company expects increases in payroll expenses as a result of
      federal and state mandated increases in the minimum wage, such increases
      are not expected to be material. However, the Company is uncertain of the
      repercussion, if any, on other expenses as vendors are impacted by higher
      minimum wage standards.

      RISK FACTORS

      The Company hereby cautions stockholders, prospective investors in the
      Company and other readers of this report that the following important
      factors, among others, could affect the Company's stock price or cause the
      Company's actual results of operations to differ materially from those
      expressed in any forward-looking statements, oral or written, made by or
      behalf of the Company:

      Our growth depends upon our ability to open new Complexes

      We currently plan to open four Complexes during each of fiscal years 2001
      and 2002, and four Complexes each fiscal year thereafter. Our ability to
      achieve this expansion goal depends upon our raising sufficient capital,
      locating and obtaining appropriate sites, hiring and training additional
      management personnel, and constructing or acquiring, at reasonable cost,
      the necessary improvements and equipment for these Complexes. In
      particular, the capital resources required to develop each new Complex are
      significant. There is no assurance that we can complete our planned
      expansion or that new Complexes will perform in a manner consistent with
      our most recently opened Restaurant/Entertainment Complexes or make a
      positive contribution to our operating performance.

      We operate a relatively small number of Complexes

      As of February 4, 2001, we operated 27 Restaurant/Entertainment Complexes.
      The combination of the relatively small number of locations and the
      significant investment associated with each new Restaurant/Entertainment
      Complex may cause our operating results to fluctuate significantly. Due to
      this relatively small number of locations, poor results of operations at
      any one Restaurant/Entertainment Complex could materially affect our
      profitability. Historically, new Restaurant/Entertainment Complexes have
      experienced a drop in revenues after their first year of operation, and we
      do not expect that in subsequent years, any increases in comparable
      Complex revenues will be meaningful. Additionally, because of the
      substantial up-front financial requirements to open new Complexes, the
      investment risk related to any one


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      Restaurant/Entertainment Complex is much larger than that associated with
      most other companies' restaurant or entertainment venues.

      Our results of operations are dependent upon consumer discretionary
      spending

      Our results of operations are dependent on discretionary spending by
      consumers, particularly by consumers living in communities in which the
      Restaurant/Entertainment Complexes are located. A significant weakening in
      any of the local economies in which we operate may cause our customers to
      curtail discretionary spending which in turn could materially affect our
      profitability.

      We compete against many larger entities

      The restaurant and entertainment industries are highly competitive. We
      compete against many food and beverage service operations and
      entertainment businesses that are larger and have significantly greater
      financial resources and a greater number of units than us. In addition,
      the legislation of casino gambling in geographic areas near any of our
      Complexes creates the likelihood of an additional entertainment
      alternative, which could have a material adverse effect on our business.

      Our operations are subject to many government regulations

      Various federal, state and local laws and permit and license requirements
      affect our business. Significant numbers of our hourly personnel are paid
      at rates related to the federal minimum wage and, accordingly, legislated
      increases in the minimum wage will increase labor costs at our Complexes.
      Other governmental initiatives such as mandated health insurance, if
      implemented, could adversely affect us and the restaurant industry in
      general.

      Our results of operations fluctuate in accordance with Complex
      openings and seasonality

      As a result of the substantial revenues associated with each new
      Restaurant/Entertainment Complex, the timing of new Complex openings will
      result in significant fluctuations in quarterly results. We also expect
      seasonality to be a factor in our results of operations due to lower third
      quarter revenues in the fall season, and higher fourth quarter revenues
      associated with the year-end holidays.

      Our results of operations are dependent upon the efforts of our
      senior management

      Our future success will depend largely on the efforts and abilities of our
      existing senior management, particularly David O. "Dave" Corriveau and
      James W. "Buster" Corley, the Co-Chief Executive Officers and founders of
      our business.

      Our common stock price may experience volatility

      The market price of our Common Stock has fluctuated substantially due to a
      variety of factors, including our quarterly operating results of the
      Company or the results of other restaurant or entertainment companies,
      changes in general economic conditions or the financial markets and other
      factors. In addition, in recent years the stock market has experienced
      extreme price and volume fluctuations. This volatility has had a
      significant effect on the market prices of securities issued by many
      companies for reasons unrelated to the operating performance of these
      companies.


                                       11

<PAGE>   12

I
tem 2. PROPERTIES

      As of February 4, 2001 the Company operated a total of 27 Complexes
      located in 13 states. The Company is currently utilizing all available
      land at its owned locations. The Company's real estate leases are with
      unrelated third parties except where noted.


<TABLE>
<CAPTION>
                                                    Owned or          Lease Expiration       Lease Expiration
           Location                   State     Leased Property             Date             Date with Options
           --------                   -----     ---------------             ----             -----------------
<S>                                   <C>       <C>                   <C>                    <C>
           Dallas (I)                  TX            Owned                   ---                    ---
           Dallas (II)                 TX            Leased             December 2002          December 2007
           Houston                     TX            Owned                   ---                    ---
           Atlanta (I)                 GA            Owned                   ---                    ---
           Philadelphia                PA            Leased             January 2015*          January 2024
           Chicago (I)                 IL            Owned                   ---                    ---
           Chicago (II)                IL            Leased             January 2016           January 2026
           Hollywood                   FL           Leased**             April 2016             April 2031
           North Bethesda              MD            Leased             January 2018           January 2033
           Ontario                     CA            Leased             January 2018           January 2028
           Cincinnati                  OH            Leased             January 2018           January 2038
           Denver                      CO            Leased             December 2017          December 2032
           Utica                       MI            Leased               June 2018              June 2033
           Irvine                      CA            Leased               July 2018              July 2028
           Rockland County             NY            Leased             January 2019           January 2034
           Orange                      CA            Leased             January 2019           January 2029
           Columbus                    OH            Owned                   ---                    ---
           San Antonio                 TX            Leased            September 2018         September 2028
           Atlanta (II)                GA            Leased              March 2019             March 2034
           St. Louis                   MO            Leased               June 2019              June 2034
           Austin                      TX            Leased             December 2019          December 2034
           Jacksonville                FL            Owned                   ---                    ---
           Providence                  RI            Leased             December 2019          December 2034
           Milpitas                    CA            Leased             January 2001           January 2031
           Westminster                 CO            Leased             January 2001           January 2031
           Pittsburgh                  PA            Leased               June 2020              June 2055
           San Diego                   CA            Leased             November 2020           April 2055
</TABLE>


      *     The Company also leases additional parking facilities which expires
            January 2014.

      **    The Company owns the building and leases the real property.

      The Company has also signed 20-year leases for Complexes due to open in
      fiscal 2001 in each of Miami, Florida; Frisco, Texas; Honolulu, Hawaii and
      Cleveland, Ohio. A twenty-year lease has also been signed for Phoenix,
      Arizona, which is scheduled to open in the year 2003. Third-party leases
      typically provide for a minimum base rent, additional rent based on a
      percentage of revenues and payment of certain operating expenses.


                                       12

<PAGE>   13

Item 3. LEGAL PROCEEDINGS.

      The Company is a defendant in litigation arising in the ordinary course of
      its business, including claims resulting from "slip and fall" accidents,
      claims under federal and state laws governing access to public
      accommodations, and employment-related claims. To date, none of such
      litigation, some of which is covered by insurance, has had a material
      effect on the Company.


Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      None.



                                     PART II



Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The Company's Common Stock traded on the Nasdaq National Market under the
      symbol DANB from June 26, 1995 until June 3, 1999. The following table
      summarizes the high and low sale prices per share of Common Stock for the
      applicable periods indicated, as reported on the Nasdaq National Market.
      Since June 4, 1999, the Company's Common Stock is traded on the New York
      Stock Exchange ("NYSE") under the symbol DAB. The following table
      summarizes the high and low sales prices per share of Common Stock for the
      applicable periods indicated, as reported by the NYSE.


<TABLE>
<S>                                            <C>         <C>
               Fiscal Year 1998

               First Quarter                   $27.75      $21.13
               Second Quarter                   26.50       21.38
               Third Quarter                    22.63       10.50
               Fourth Quarter                   24.38       17.13


               Fiscal Year 1999

               First Quarter                    23.25       18.06
               Second Quarter                   29.38       20.50
               Third Quarter                    26.88        8.75
               Fourth Quarter                   10.69        5.06


               Fiscal Year 2000

               First Quarter                    10.50        6.25
               Second Quarter                    7.50        6.00
               Third Quarter                     8.88        6.06
               Fourth Quarter                   12.25        7.56
</TABLE>



      At April 16, 2001, there were 2,124 holders of record.


                                       13

<PAGE>   14
      The Company has never paid cash dividends on its Common Stock and does not
      currently intend to do so as profits are reinvested into the Company to
      fund future expansion of its restaurant business. Payment of dividends in
      the future will depend upon the Company's growth, profitability, financial
      condition and other factors which the Board of Directors may deem
      relevant.


                                       14

<PAGE>   15

Item 6. SELECTED FINANCIAL DATA.

The following table sets forth selected consolidated financial data for the
Company. This data should be read in conjunction with the Consolidated Financial
Statements of the Company and the Notes thereto included in Item 8 hereof and

Management's Discussion and Analysis of Financial Condition and Results of
Operations included in Item 7 hereof.


<TABLE>
<CAPTION>
Fiscal Year                                           2000             1999            1998            1997            1996
                                                            (in thousands, except per share amounts and store data)
<S>                                                <C>              <C>              <C>            <C>              <C>
Income Statement Data

Food and beverage revenues                         $ 168,085        $ 121,390        $ 89,378       $  64,703        $ 48,568
Amusements and other revenues                        164,218          125,744          92,906          63,801          40,207
---------------------------------------------------------------------------------------------------------------------------------
            Total revenues                           332,303          247,134         182,284         128,504          88,775

Cost of revenues                                      61,547           45,720          35,582          24,795          18,003
Operating payroll and benefits                       101,143           76,242          52,206          36,227          25,483
Other store operating expenses                        90,581           65,292          45,862          32,787          20,582
General and administrative expenses                   20,019           14,988          10,579           8,489           5,734
Depreciation and amortization expense                 25,716           19,884          12,163           8,470           5,647
Preopening costs                                       5,331            6,053           4,539           3,246           2,605
---------------------------------------------------------------------------------------------------------------------------------
            Total costs and expenses                 304,337          228,179         160,931         114,014          78,054

Operating income                                      27,966           18,955          21,353          14,490          10,721
Interest income (expense), net                        (8,712)          (3,339)            194            (179)            (38)
---------------------------------------------------------------------------------------------------------------------------------
Income before provision for income taxes
     and cumulative effect of a change in an
     accounting principle                             19,254           15,616          21,547          14,311          10,683
Provision for income taxes                             7,009            5,724           7,969           5,414           4,343
---------------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of a
     change in an accounting principle                12,245            9,892          13,578           8,897           6,340
Cumulative effect of a change in an
     accounting principle, net of income
     tax benefit of $2,928                                --            4,687              --              --              --
---------------------------------------------------------------------------------------------------------------------------------
            Net income                             $  12,245        $   5,205        $ 13,578       $   8,897        $  6,340

Net income per share - basic
     Before cumulative effect of a change in
          an accounting principle                  $     .95        $     .76        $   1.04       $     .77        $    .58

     Cumulative effect of a change in an
          accounting principle                            --              .36              --              --              --
---------------------------------------------------------------------------------------------------------------------------------
                                                   $     .95        $     .40        $   1.04       $     .77        $    .58

Net income per share - diluted
     Before cumulative effect of a change in
          an accounting principle                  $     .94        $     .75        $   1.03       $     .76        $    .58

     Cumulative effect of a change in an
          accounting principle                            --              .36              --              --              --
---------------------------------------------------------------------------------------------------------------------------------
                                                   $     .94        $     .39        $   1.03       $     .76        $    .58
</TABLE>



                                       15

<PAGE>   16

<TABLE>
<CAPTION>
Fiscal Year                                           2000             1999            1998            1997            1996
                                                            (in thousands, except per share amounts and store data)
<S>                                                <C>              <C>              <C>            <C>              <C>
Weighted average shares outstanding
     Basic                                            12,953           13,054          13,053          11,532          10,901
     Diluted                                          12,986           13,214          13,246          11,711          10,969



Balance Sheet Data

Working capital                                    $   5,126        $   8,957        $  8,220       $  26,408        $  1,077
Total assets                                         303,875          268,184         216,592         158,989          99,436
Long-term obligations                                103,860           91,000          42,500          12,000          14,250
Stockholders' equity                                 162,387          149,899         145,502         133,356          75,366


Number of Complexes Open at End of Period

Company operated                                          27               23              17              12               9
</TABLE>





Item 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS)


      FISCAL  2000 COMPARED TO FISCAL 1999

      Total revenues increased to $332,303 for fiscal 2000 from $247,134 for
      fiscal 1999, an increase of $85,169 or 34%. New stores opened in fiscal
      2000 and in fiscal 1999 accounted for 91% of the increase. Revenues at
      comparable stores increased 3.6% for fiscal 2000. Increases in revenues
      were also attributable to a 2% overall price increase and a higher average
      guest check. Total revenues for fiscal 2000 from licensing agreements were
      $966.

      Cost of revenues increased to $61,547 for fiscal 2000 from $45,720 for
      fiscal 1999, an increase of $15,827 or 35%. The increase was principally
      attributable to the 34% increase in revenues. As a percentage of revenues,
      cost of revenues were the same for fiscal 2000 and fiscal 1999 at 18.5%.

      Operating payroll and benefits increased to $101,143 for fiscal 2000 from
      $76,242 for fiscal 1999, an increase of $24,901 or 33%. As a percentage of
      revenue, operating payroll and benefits decreased to 30.4% in fiscal 2000
      from 30.9% in fiscal 1999 due to higher variable labor costs offset by
      lower fixed labor costs and taxes and benefits.

      Other store operating expenses increased to $90,581 for fiscal 2000 from
      $65,292 for fiscal 1999, an increase of $25,289 or 39%. As a percentage of
      revenues, other store operating expenses were 27.3% of revenues in fiscal
      2000 as compared to 26.4% of revenues in fiscal 1999. Other store
      operating expenses were higher due to higher marketing costs associated
      with the Company's 2000 marketing campaign.

      General and administrative expenses increased to $20,019 for fiscal 2000
      from $14,988 for fiscal 1999, an increase of $5,031 or 34%. The increase
      over the prior comparable period resulted from increased administrative
      payroll and related costs for new personnel, and additional costs
      associated with the Company's future growth plans. As a percentage of
      revenues, general and administrative expenses decreased to 6.0% in fiscal
      year 2000 from 6.1% in fiscal year 1999.


                                       16

<PAGE>   17
      Depreciation and amortization expense increased to $25,716 for fiscal 2000
      from $19,884 for fiscal 1999, an increase of $5,832 or 29%. As a
      percentage of revenues, depreciation and amortization decreased to 7.7%
      from 8.0% for the comparable prior period. The increase was attributable
      to new stores opened in fiscal 2000 and in fiscal 1999.

      Preopening costs decreased to $5,331 for fiscal 2000 from $6,053 for
      fiscal 1999, a decrease of $722 or 12%. As a percentage of revenues,
      preopening costs were 1.6% for fiscal 2000 as compared to 2.4% for fiscal
      1999. This decrease was due to the fewer number of new stores opened in
      2000 compared to 1999.

      Interest expense - net increased to $8,712 for fiscal 2000 from $3,339 for
      fiscal 1999. The increase was due to a higher average debt balance and
      higher interest rates in 2000 versus 1999.

      The effective tax rate for fiscal year 2000 was 36.4% as compared to 36.7%
      for fiscal year 1999, and was the result of a lower effective state tax
      rate.

      FISCAL 1999 COMPARED TO FISCAL 1998

      Total revenues increased to $247,134 for fiscal 1999 from $182,284 for
      fiscal 1998, an increase of $64,850 or 36%. New stores opened in fiscal
      1999 and in fiscal 1998 accounted for 109% of the increase. Revenues at
      comparable stores decreased 2.5% for fiscal 1999. Increases in revenues
      were also attributable to a higher average guest check. Total revenues for
      fiscal 1999 from licensing agreements were $573.

      Cost of revenues increased to $45,720 for fiscal 1999 from $35,582 for
      fiscal 1998, an increase of $10,138 or 29%. The increase was principally
      attributable to the 36% increase in revenues. As a percentage of revenues,
      cost of revenues decreased to 18.5% in fiscal 1999 from 19.5% in fiscal
      1998 due to lower food, beverage and amusement costs.

      Operating payroll and benefits increased to $76,242 for fiscal 1999 from
      $52,206 for fiscal 1998, an increase of $24,036 or 46%. As a percentage of
      revenue, operating payroll and benefits increased to 30.9% in fiscal 1999
      from 28.6% in fiscal 1998 due to higher variable and fixed labor costs and
      higher taxes and benefits.

      Other store operating expenses increased to $65,292 for fiscal 1999 from
      $45,862 for fiscal 1998, an increase of $19,430 or 42%. As a percentage of
      revenues, other store operating expenses were 26.4% of revenues in fiscal
      1999 as compared to 25.2% of revenues in fiscal 1998. Other store
      operating expenses were higher due to reduced utilities and fixed costs at
      the stores offset by higher occupancy costs associated with new stores
      opened in fiscal 1999 and in fiscal 1998.

      General and administrative expenses increased to $14,988 for fiscal 1999
      from $10,579 for fiscal 1998, an increase of $4,409 or 42%. The increase
      over the prior comparable period resulted from increased administrative
      payroll and related costs for new personnel, and additional costs
      associated with the Company's future growth plans. As a percentage of
      revenues, general and administrative expenses increased to 6.1% in fiscal
      year 1999 from 5.8% in fiscal year 1998.

      Depreciation and amortization expense increased to $19,884 for fiscal 1999
      from $12,163 for fiscal 1998, an increase of $7,721 or 64%. As a
      percentage of revenues, depreciation and amortization increased to 8.0%
      from 6.7% for the comparable prior period. The increase was attributable
      to new stores opened in fiscal 1999 and in fiscal 1998.


                                       17

<PAGE>   18
      Preopening costs increased to $6,053 for fiscal 1999 from $4,539 for
      fiscal 1998, an increase of $1,514 or 33%. As a percentage of revenues,
      preopening costs were 2.4% for fiscal 1999 as compared to 2.5% for fiscal
      1998.

      The Company adopted Statement of Position 98-5 ("SOP 98-5"), "Reporting on
      the Costs of Start-Up Activities", in the first quarter of 1999. This new
      accounting standard requires the Company to expense all start-up and
      preopening costs as they are incurred. The Company previously deferred
      such costs and amortized them over the twelve-month period following the
      opening of each store. The cumulative effect of this accounting change,
      net of income tax benefit of $2,928, was $4,687.

      Interest expense - net for fiscal 1999 was $3,339 versus an interest
      income - net of $194 for fiscal 1998. The increase was primarily due to
      higher average debt in 1999 versus 1998.

      The effective tax rate for fiscal year 1999 was 36.7% as compared to 37.0%
      for fiscal year 1998, and was the result of a lower effective state tax
      rate.

      LIQUIDITY AND CAPITAL RESOURCES

      Cash flows from operations increased to $36,678 for fiscal 2000 from
      $24,940 for fiscal 1999. The increase was attributable to an increase in
      profitability and the timing of operational receipts and payments.

      The Company secured a new $110,000 senior secured revolving credit and
      term loan facility. This facility replaced the existing $100,000 secured
      revolving line of credit. The facility includes a five-year revolver and
      five-year and seven-year term debt. Borrowing under the facility bears
      interest at a floating rate based on LIBOR or, at the Company's option,
      the bank's prime rate plus, in each case, a margin based upon financial
      performance (9.7% at February 4, 2001) and is secured by all assets of the
      Company. The new facility has certain financial covenants including a
      minimum consolidated tangible net worth level, a maximum leverage ratio,
      minimum fixed charge coverage and maximum level of capital expenditures.
      At February 4, 2001, $1,300 was available under this facility.

      The Company entered into an agreement that expired in 1999, to fix its
      variable-rate debt to fixed-rate debt on notional amounts aggregating
      $45,000. In 1999, the Company terminated the agreement resulting in a $40
      gain.

      The Company's plan is to open four Complexes in fiscal 2001 and 2002,
      respectively. The Company estimates that its capital expenditures will be
      approximately $44,000 and $48,000 for 2001 and 2002, respectively. The
      Company intends to finance this development with cash flow from
      operations.

      QUARTERLY FLUCTUATIONS, SEASONALITY AND INFLATION

      As a result of the substantial revenues associated with each new Complex,
      the timing of new Complex openings will result in significant fluctuations
      in quarterly results. The Company expects seasonality to be a factor in
      the operation or results of its business in the future due to expected
      lower third quarter revenues due to the fall season, and expects higher
      fourth quarter revenues associated with the year-end holidays. The effects
      of supplier price increases have not been material. The Company believes
      low inflation rates in its market areas have contributed to stable food
      and labor costs in recent years. However, there is no assurance that low
      inflation rates will continue or that the Federal minimum wage rate will
      not increase.


                                       18

<PAGE>   19
      MARKET RISK

      The Company's market risk exposure relates to changes in the general level
      of interest rates. The Company's earnings are affected by changes in
      interest rates due to the impact those changes have on its interest
      expense from variable-rate debt. If interest rates increased 10% from the
      floating rates as of February 4, 2001, interest expense for the year ended
      February 3, 2002 would increase by approximately $1,004. This amount is
      determined by considering the impact of hypothetical rates on the
      Company's variable-rate debt as of February 4, 2001, adjusted for known
      cash commitments during 2001.

      "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
      REFORM ACT OF 1995

      Certain statements in this Annual Report are not based on historical facts
      but are "forward-looking statements" that are based on numerous
      assumptions made as of the date of this report. Forward looking statements
      are generally identified by the words "believes", "expects", "intends",
      "anticipates", "scheduled", and similar expressions. Such forward-looking
      statements involve known and unknown risks, uncertainties, and other
      factors which may cause the actual results, performance, or achievements
      of Dave & Buster's, Inc. to be materially different from any future
      results, performance, or achievements expressed or implied by such
      forward-looking statements. Such factors include, among others, the
      following: general economic and business conditions; competition;
      availability; locations and terms of sites for Complex development;
      quality of management; changes in, or the failure to comply with,
      government regulations; and other risks indicated in this filing.


I
tem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company's market risk exposure relates to changes in the general level
      of interest rates. The Company's earnings are affected by changes in
      interest rates due to the impact those changes have on its interest
      expense from variable-rate debt. If interest rates increased 10% from the
      floating rates as of February 4, 2001, interest expense for the year
      ended February 3, 2002 would increase by approximately $1,004. This amount
      is determined by considering the impact of hypothetical rates on the
      Company's variable-rate debt as of February 4, 2001, adjusted for known
      cash commitments during 2001.


Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      See Item 14(a) (1).


Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

      None.


                                       19

<PAGE>   20

                                    PART III


Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      A brief description of each executive officer of the Company is provided
      below. All officers serve at the discretion of the Board of Directors,
      except as provided below. The information set under the caption "Directors
      and Executive Officers" in the Company's Proxy statement dated April 21,
      2000, for the annual meeting of stockholders on June 5, 2000 is
      incorporated herein by reference.

      Mr. David O. Corriveau, 49, a co-founder of the Dave & Buster's concept in
      1982, has served as Co-Chief Executive Officer and President since June
      1995, and as a director of the Company since May 1995 and as Co-Chairman
      of the Board since February 1996. Mr. Corriveau served as President and
      Chief Executive Officer of D&B Holding (a predecessor of the Company) from
      1989 through June 1995. From 1982 to 1989, Messrs. Corriveau and Corley
      operated the Company's business.

      Mr. James W. Corley, 50, a co-founder of the Dave & Buster's concept in
      1982, has served as Co-Chief Executive Officer and Chief Operating Officer
      since June 1995, and as a director of the Company since May 1995 and as
      Co-Chairman of the Board since February 1996. Mr. Corley served as
      Executive Vice President and Chief Operating Officer of D&B Holding from
      1989 through June 1995. From 1982 to 1989, Messrs. Corley and Corriveau
      operated the Company's business.

      Mr. Barry N. Carter, 53, has served as Vice President of Purchasing since
      November 2000 and as Vice President of Store Support since June 1995. He
      served as Vice President and Director of Store Support of D&B Holding from
      November 1994 to June 1995. From 1982 to November 1994, he served in
      operating positions of increasing responsibilities for the Company and its
      predecessors.

      Ms. Barbara G. Core, 42, has served as Vice President of Information
      Technology since September 2000 and Assistant Vice President of
      Information Technology since November 1999. She served as Senior Director
      of I.T. from February 1999 to November 1999 and from April 1998 to
      February 1999 as PeopleSoft Implementation Team Director. From November
      1997 to February 1999 she served as Director of I.T. From January 1990 to
      November 1997 she served in operations positions of increasing
      responsibilities for the Company and its predecessors.

      Ms. Nancy J. Duricic, 46, has served as Vice President of Human Resources
      since December 1997. From June 1989 to June 1997, she served in human
      resources positions of increasing responsibilities in other companies,
      most recently as Vice President of Human Resources for Eljer Industries,
      Inc.

      Mr. Cory J. Haynes, 40, has served as Vice President of International
      Operations since March, 2000 and Vice President of Beverage Operations
      since May 1998. He served as Vice President, Assistant Director of
      Operations from September 1996 to May 1998, and from January 1996 to
      September 1996, as Corporate Director of Management and Development. From
      1982 to January 1996, he served in operating positions of increasing
      responsibilities for the Company and its predecessors.

      Mr. Jeffrey A. Jahnke, 46, has served as Controller, Vice President
      of Accounting for the Company since January 2000.  From May 1998 to
      December 1999 he was a consultant primarily in the hospitality
      business.  Mr. Jahnke was with ClubCorp International, Inc. from
      1983 to 1998 in various financial positions of increasing
      responsibilities, his most recent position being Vice President of
      Accounting.


                                       20

<PAGE>   21
      Mr. Charles Michel, 47, has served as Secretary since January 2001 and as
      Vice President and Chief Financial Officer since February 1996. He served
      as Chief Financial Officer of the Company since June 1995 and as Chief
      Financial Officer of D&B Holding from November 1994 to June 1995.

      Mr. Reginald M. Moultrie, 45, has served as Vice President of
      Amusements since January 1999, as Vice President of Games and
      Merchandising from April 1998 to January 1999, and as Director of
      Amusements from February 1997 to April 1998.  Mr. Moultrie served as
      Vice President of Sales for Skeeball, Inc. from 1993 to 1997.

      Mr. Stuart A. Myers, 40, has served as Vice President of Marketing
      since January 2000.  From September 1996 to December 1999 he served
      as Vice President of Marketing for Whataburger, Inc.  Mr. Myers
      served as Senior Vice President/Restaurant Group Account Director at
      Levenson & Hill Advertising from July 1993 to September 1996.

      Mr. R. Lee Pitts, 36, has served as Vice President of Training and
      New Store Openings since September 2000 and as Assistant Vice
      President and Director of Training from March 1998.  From 1991 to
      March 1998 Mr. Pitts served in operating positions of increasing
      responsibility for the Company and its predecessors.

      Mr. J. Michael Plunkett, 50, has served as Vice President of Kitchen
      Operations since November 2000, as Vice President of Information Systems
      from November 1996 to November 2000, as Vice President, Director of
      Training from June 1995 until November 1996 and as Vice President and
      Director of Training of D&B Holding from November 1994 to June 1995. From
      1982 to November 1994, he served in operating positions of increasing
      responsibilities for the Company and its predecessors.

      Mr. Craig C. Rawls, 32, has served as Treasurer since September
      1998.  From 1995 to September 1998 he served in finance positions of
      increasing responsibilities for the Company and its predecessors.

      Mr. Sterling R. Smith, 48, has served as Vice President of Operations
      since June 1995 and as Vice President and Director of Operations of D&B
      Holding from November 1994 to June 1995. From 1983 to November 1994, Mr.
      Smith served in operating positions of increasing responsibility for the
      Company and its predecessors.

      Mr. Bryan L. Spain, 53, has served as Vice President of Real Estate
      since March 1997.  From 1993 until joining Dave & Buster's, Mr.
      Spain managed the Real Estate Acquisition and Development Program
      for Incredible Universe and Computer City Divisions of Tandy
      Corporation.  In addition, from 1991 to 1993, Mr. Spain served as
      Director, Real Estate Financing for Tandy Corporation.


                                       21

<PAGE>   22

Item 11. COMPENSATION INFORMATION

       The information set under the caption "Election of Directors" in the
       Company's Proxy Statement dated May 4, 2001, for the annual meeting of
       stockholders on June 14, 2001 is incorporated herein by reference.


Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

       The information set under the caption "Beneficial Ownership of Common
       Stock" in the Company's Proxy Statement dated May 4, 2001, for the annual
       meeting of stockholders on June 14, 2001 is incorporated herein by
       reference.


Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

       The information set under caption "Election of Directors - Certain
       Transactions" in the Company's Proxy Statement dated May 4, 2001, for the
       annual meeting of stockholders on June 14, 2001 is incorporated herein by
       reference.


                                       22

<PAGE>   23

                                     PART IV



Item 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS OF FORM 8-K.

      (a)   (1) Financial Statements



<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                                                                                <C>
          Consolidated Balance Sheets -
            February 4, 2001 and January 30, 2000                                       F-1

          Consolidated Statements of Income -
            Fiscal years ended February 4, 2001, January 30, 2000,
            and January 31, 1999                                                         F-2

          Consolidated Statements of Stockholders' Equity - Fiscal years ended
            February 4, 2001, January 30, 2000, and January 31, 1999                     F-3

          Consolidated Statements of Cash Flows - Fiscal years ended February 4,
            2001, January 30, 2000, and January 31, 1999                                 F-4

          Notes to Consolidated Financial Statements                                  F-5 - F-11

          Report of Independent Auditors                                                 F-12
</TABLE>


          All schedules are omitted as the required information is inapplicable
          or the information is presented in the financial statements or related
          notes.

      (a)   (3) Exhibits.

            Reference is made to the Exhibit Index preceding the exhibits
            attached hereto on page 26 for a list of all exhibits filed as a
            part of this Report.

      (b)   Reports of Form 8-K.

            The Company was not required to file a current report on Form 8-K
            during the fourteen weeks ended February 4, 2001.


                                       23

<PAGE>   24

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                         Dave & Buster's, Inc.
                                         a Missouri corporation

                                         By:    /s/ Charles Michel
                                                ------------------------------
                                                Charles Michel,
                                                Vice President, Chief
                                                Financial Officer and
                                                Secretary

Dated: April 23, 2001


                                       24

<PAGE>   25
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons of the registrant and in the
capacities indicated on April 23, 2001.


<TABLE>
<CAPTION>
         Name                                              Title
         ----                                              -----
<S>                                             <C>
/s/David O. Corriveau                           Co-Chairman of the Board,
-----------------------                         Co-Chief Executive Officer, President,
David O. Corriveau                              and Director
                                                (Principal Executive Officer)


/s/James W. Corley                              Co-Chairman of the Board,
-----------------------                         Co-Chief Executive Officer, Chief
James W. Corley                                 Operating Officer and Director


/s/Charles Michel                               Vice President,Chief Financial
-----------------------                         Officer and Secretary
Charles Michel                                  (Principal Financial and Accounting
                                                Officer)


------------------------                        Director
Allen J. Bernstein

/s/Peter A. Edison                              Director
-----------------------
Peter A. Edison

/s/Bruce H. Hallett                             Director
-----------------------
Bruce H. Hallett

/s/Walter S. Henrion                            Director
-----------------------
Walter S. Henrion


-----------------------                         Director
Mark A. Levy


-----------------------                         Director
Christopher C. Maguire
</TABLE>



                                       25

<PAGE>   26
CONSOLIDATED BALANCE SHEETS
DAVE & BUSTER'S, INC.


<TABLE>
<CAPTION>
                                                                                     February 4,     January 30,
in thousands, except share and per share amounts                                         2001           2000
<S>                                                                                  <C>            <C>
Assets
Current assets:
     Cash and cash equivalents                                                         $  3,179       $  3,091
     Inventories                                                                         21,758         16,243
     Prepaid expenses                                                                     3,663          2,104
     Other current assets                                                                 1,787          5,582
-----------------------------------------------------------------------------------------------------------------------------
          Total current assets                                                           30,387         27,020
Property and equipment, net (note 2)                                                    260,467        232,216
Goodwill, net of accumulated amortization of $2,263 and $1,883                            7,445          7,826
Other assets                                                                              5,576          1,122
-----------------------------------------------------------------------------------------------------------------------------
Total assets                                                                           $303,875       $268,184


Liabilities and Stockholders' Equity
Current liabilities:
     Current installments of long-term debt (note 4)                                   $  4,124       $     --
     Accounts payable                                                                     9,291         11,868
     Accrued liabilities (note 3)                                                         7,050          4,858
     Income taxes payable (note 5)                                                        3,567             --
     Deferred income taxes (note 5)                                                       1,229          1,337
-----------------------------------------------------------------------------------------------------------------------------
          Total current liabilities                                                      25,261         18,063
Deferred income taxes (note 5)                                                            7,667          6,377
Other liabilities                                                                         4,700          2,845
Long-term debt, less current installments (note 4)                                      103,860         91,000
Commitments and contingencies (notes 4, 6 and 11) 
Stockholders' equity (note 7):
     Preferred stock, 10,000,000 authorized; none issued                                     --             --
     Common stock, $0.01 par value, 50,000,000 authorized;
          12,953,375 shares issued and outstanding as of
          February 4, 2001 and January 30, 2000, respectively                               131            131
     Paid in capital (note 9)                                                           115,659        115,659
     Restricted stock awards                                                                243             --
     Retained earnings                                                                   48,200         35,955
-----------------------------------------------------------------------------------------------------------------------------
                                                                                        164,233        151,745
     Less:  treasury stock, at cost (175,000 shares)                                      1,846          1,846
-----------------------------------------------------------------------------------------------------------------------------
          Total stockholders' equity                                                    162,387        149,899
-----------------------------------------------------------------------------------------------------------------------------
          Total liabilities and stockholders' equity                                   $303,875       $268,184
</TABLE>




See accompanying notes to consolidated financial statements.


                                       F-1

<PAGE>   27
CONSOLIDATED STATEMENTS OF INCOME
DAVE & BUSTER'S, INC.


<TABLE>
<CAPTION>
in thousands, except per share amounts                                     Fiscal Year 2000          1999               1998
<S>                                                                        <C>                    <C>                 <C>
Food and beverage revenues                                                    $ 168,085           $ 121,390           $ 89,378
Amusement and other revenues                                                    164,218             125,744             92,906
---------------------------------------------------------------------------------------------------------------------------------
     Total revenues                                                             332,303             247,134            182,284


Cost of revenues                                                                 61,547              45,720             35,582
Operating payroll and benefits                                                  101,143              76,242             52,206
Other store operating expenses                                                   90,581              65,292             45,862
General and administrative expenses                                              20,019              14,988             10,579
Depreciation and amortization expense                                            25,716              19,884             12,163
Preopening costs                                                                  5,331               6,053              4,539
---------------------------------------------------------------------------------------------------------------------------------
     Total costs and expenses                                                   304,337             228,179            160,931


Operating income                                                                 27,966              18,955             21,353
Interest income (expense), net                                                   (8,712)             (3,339)               194
---------------------------------------------------------------------------------------------------------------------------------

Income before provision for income taxes
     and cumulative effect of a change in an
     accounting principle                                                        19,254              15,616             21,547
Provision for income taxes (note 5)                                               7,009               5,724              7,969
---------------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of a
     change in an accounting principle                                           12,245               9,892             13,578

Cumulative effect of a change in an accounting
     principle, net of income tax benefit of $2,928                                  --               4,687                 --
---------------------------------------------------------------------------------------------------------------------------------
Net income                                                                    $  12,245           $   5,205           $ 13,578

Net income per share - basic
     Before cumulative effect of a change in an accounting principle          $     .95           $     .76           $   1.04
     Cumulative effect of a change in an accounting principle                        --                 .36                 --
---------------------------------------------------------------------------------------------------------------------------------
                                                                              $     .95           $     .40           $   1.04
Net income per share - diluted
     Before cumulative effect of a change in an accounting principle          $     .94           $     .75           $   1.03
     Cumulative effect of a change in an accounting principle                        --                 .36                 --
---------------------------------------------------------------------------------------------------------------------------------
                                                                              $     .94           $     .39           $   1.03

Weighted average shares outstanding
     Basic                                                                       12,953              13,054             13,053
     Diluted                                                                     12,986              13,214             13,246
</TABLE>



See accompanying notes to consolidated financial statements.


                                       F-2

<PAGE>   28
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
DAVE & BUSTER'S, INC.


<TABLE>
<CAPTION>
                                      Common Stock
                                      ------------            Paid in      Restricted   Retained      Treasury
in thousands                        Shares       Amount       Capital     Stock Awards   Earnings       Stock           Total
------------                        ------       ------       -------     ------------   --------       -----           -----
<S>                                <C>           <C>        <C>           <C>           <C>           <C>            <C>
Balance, February 1, 1998           13,019        $130       $ 116,054        $ --       $17,172       $    --        $ 133,356

Proceeds from exercising
     stock options                      50           1             603          --            --            --              604
Tax benefit related to stock
     option exercises                   --          --             208          --            --            --              208
Spin-off and related
     transactions (note 9)              --          --          (2,244)         --            --            --           (2,244)
Net income                              --          --              --          --        13,578            --           13,578
---------------------------------------------------------------------------------------------------------------------------------
Balance, January 31, 1999           13,069        $131       $ 114,621        $ --       $30,750            --        $ 145,502

Proceeds from exercising
     stock options                      59          --             786          --            --            --              786
Tax benefit related to stock
     option exercises                   --          --             252          --            --            --              252
Purchase of treasury stock            (175)         --              --          --            --        (1,846)          (1,846)
Net income                              --          --              --          --         5,205            --            5,205
---------------------------------------------------------------------------------------------------------------------------------
Balance, January 30, 2000           12,953        $131       $ 115,659        $ --       $35,955       $(1,846)       $ 149,899

Amortization of restricted
     stock awards                       --          --              --         243            --            --              243
Net income                              --          --              --          --        12,245            --           12,245
---------------------------------------------------------------------------------------------------------------------------------
Balance, February 4, 2001           12,953        $131       $ 115,659        $243       $48,200       $(1,846)       $ 162,387
</TABLE>



See accompanying notes to consolidated financial statements.


                                       F-3

<PAGE>   29
CONSOLIDATED STATEMENTS OF CASH FLOWS
DAVE & BUSTER'S, INC.



<TABLE>
<CAPTION>
in thousands                                                 Fiscal Year          2000               1999               1998
<S>                                                                            <C>                 <C>                <C>
Cash flows from operating activities
     Net income                                                                $  12,245           $  5,205           $ 13,578
     Adjustments to reconcile net income to net cash
          provided by operating activities:
               Cumulative effect of change in an accounting principle                 --              4,687                 --
               Depreciation and amortization                                      25,716             19,884             16,702
               Provision for deferred income taxes                                 1,182                986              4,159
               Restricted stock awards                                               243                 --                 --
               Changes in assets and liabilities
                    Inventories                                                   (5,515)            (5,432)            (4,589)
                    Prepaid expenses                                              (1,559)              (361)              (509)
                    Preopening costs                                                  --                 --             (8,493)
                    Other assets                                                    (671)              (666)            (3,401)
                    Accounts payable                                              (2,577)            (1,827)             9,620
                    Accrued liabilities                                            2,192              1,073                530
                    Income taxes payable                                           3,567                 --                 --
                    Other liabilities                                              1,855              1,391                649
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                         36,678             24,940             28,246
Cash flows from investing activities:
     Capital expenditures                                                        (53,574)           (73,798)           (75,621)
     Proceeds from sale of short-term investments                                     --                 --              8,507
----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                            (53,574)           (73,798)           (67,114)
----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
     Purchase of treasury stock                                                       --             (1,846)                --
     Spin-off and related transactions                                                --                 --             (2,244)
     Borrowings under long-term debt                                             131,292             50,000             33,500
     Repayments of long-term debt                                               (114,308)            (1,500)            (3,000)
     Proceeds from issuance of common stock, net                                      --                786                812
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                         16,984             47,440             29,068
----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                                      88             (1,418)            (9,800)
Beginning cash and cash equivalents                                                3,091              4,509             14,309
----------------------------------------------------------------------------------------------------------------------------------
Ending cash and cash equivalents                                               $   3,179           $  3,091           $  4,509
Supplemental disclosures of cash flow information:
     Cash paid for income taxes                                                $   1,941           $  4,188           $  5,674
     Cash paid for interest, net of amounts capitalized                        $   8,363           $  3,455           $    263
</TABLE>



See accompanying notes to consolidated financial statements.


                                      F-4

<PAGE>   30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DAVE & BUSTER'S, INC.

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION - The consolidated financial statements include the
accounts of Dave & Buster's, Inc. and all wholly-owned subsidiaries (the
"Company"). All material intercompany accounts and transactions have been
eliminated in consolidation. The Company's one industry segment is the ownership
and operation of restaurant/entertainment complexes (a "Complex" or "Store")
under the name "Dave & Buster's," which are principally located in the United
States.

USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

FISCAL YEAR - The Company's fiscal year ends on the Sunday after the Saturday
closest to January 31. References to 2000, 1999, and 1998 are to the 53 weeks
ended February 4, 2001 and to the 52 weeks ended January 30, 2000 and January
31, 1999.

INVENTORIES - Inventories, which consist of food, beverage and merchandise are
reported at the lower of cost or market determined on a first-in, first-out
method. Static supplies inventory is capitalized at each store opening date and
reviewed periodically for valuation.

PREOPENING COSTS - The Company adopted Statement of Position 98-5 ("SOP 98-5"),
"Reporting on the Costs of Start-Up Activities," in the first quarter of fiscal
1999. This new accounting standard requires the Company to expense all start-up
and preopening costs as they are incurred. The Company previously deferred such
costs and amortized them over the twelve-month period following the opening of
each store. The cumulative effect of this accounting change, net of income tax
benefit of $2,928, was $4,687.

PROPERTY AND EQUIPMENT - Expenditures for new facilities and those which
substantially increase the useful lives of the property, including interest
during construction, are capitalized. Interest capitalized in 2000, 1999, and
1998 was $1,555, $1,623, and $1,375, respectively. Equipment purchases are
capitalized at cost. Property and equipment lives are estimated as follows:
buildings, 40 years; leasehold and building improvements, shorter of 20 years or
lease life; furniture, fixtures and equipment, 5 to 10 years; games, 5 years.

GOODWILL - Goodwill of $9,708 is being amortized over 30 years. Whenever there
is an indication of impairment, the Company evaluates the recoverability of
goodwill using future undiscounted cash flows.

DEPRECIATION AND AMORTIZATION - Property and equipment, excluding most games,
are depreciated on the straight-line method over the estimated useful life of
the assets. Games are generally depreciated on the 150%-double-declining-balance
method over the estimated useful lives of the assets. Intangible assets are
amortized on the straight-line method over estimated useful lives as follows:
trademarks over statutory lives; lease rights over remaining lease terms.

INTEREST RATE SWAP AGREEMENTS - The Company enters into interest rate swap
agreements to effectively convert a portion of its variable-rate borrowings into
fixed-rate obligations. The interest rate differential to be received or paid is
recognized over the lives of the agreements as an adjustment to interest
expense.

INCOME TAXES - The Company uses the liability method which recognizes the amount
of current and deferred taxes payable or refundable at the date of the financial
statements as a result of all events that have been recognized in the financial
statements and as measured by the provisions of enacted tax laws.


                                      F-5

<PAGE>   31
STOCK OPTION PLAN - The Company has elected to follow Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and
related Interpretations in accounting for its employee stock options because the
alternative fair value accounting provided for under SFAS No. 123, "Accounting
for Stock-Based Compensation", requires use of option valuation models that were
not developed for use in valuing employee stock options. Under APB 25, because
the exercise price of the Company's employee stock options equals the market
price of the underlying stock on the date of grant, no compensation expense is
recognized.

REVENUE RECOGNITION - Foreign license revenues are deferred until the Company
fulfills its obligations under license agreements, which is upon the opening of
the Complex. The license agreements provide for continuing royalty fees based on
percentage of gross revenues and are recognized when assured. Food, beverage and
amusement revenues are recorded at point of sale.

TREASURY STOCK - During fiscal 1999, the Company's Board of Directors approved a
plan to repurchase up to 1,000 shares of the Company's common stock. Pursuant to
the plan, the Company repurchased 175 shares of its common stock for
approximately $1,846.

NOTE 2:     PROPERTY AND EQUIPMENT


<TABLE>
<CAPTION>
                                                 2000                1999
<S>                                          <C>                 <C>
Land ..............................          $  11,308           $  11,308
Buildings .........................             56,023              55,067
Leasehold and building improvements            110,559              81,077
Games .............................             69,970              54,472
Furniture, fixtures, and equipment              72,723              56,597
Construction in progress ..........             17,914              27,250
------------------------------------------------------------------------------
     Total cost ...................            338,497             285,771
Accumulated depreciation ..........            (78,030)            (53,555)
------------------------------------------------------------------------------
                                             $ 260,467           $ 232,216
</TABLE>



NOTE 3:     ACCRUED LIABILITIES

Accrued liabilities consist of the following:


<TABLE>
<CAPTION>
                                                   2000                  1999
<S>                                              <C>                   <C>
Payroll ............................             $1,873                $  436
Sales and use tax ..................              1,618                 2,063
Real estate tax ....................              1,873                 1,744
Other ..............................              1,686                   615
-------------------------------------------------------------------------------
                                                 $7,050                $4,858
</TABLE>



                                      F-6

<PAGE>   32
NOTE 4: LONG-TERM DEBT

In 2000, the Company secured a new $110,000 senior secured revolving credit and
term loan facility. This facility replaced the existing $100,000 secured
revolving line of credit. The facility includes a five-year revolver and
five-year and seven-year term debt. Borrowing under the facility bears interest
at a floating rate based on LIBOR or, at the Company's option, the bank's prime
rate plus, in each case, a margin based upon financial performance (9.7% at
February 4, 2001) and is secured by all assets of the Company. The new facility
has certain financial covenants including a minimum consolidated tangible net
worth level, a maximum leverage ratio, minimum fixed charge coverage and maximum
level of capital expenditures. At February 4, 2001, $1,300 was available under
this facility. The fair value of the Company's long-term debt approximates its
carrying value.

The Company entered into an agreement that expired in 1999, to fix its
variable-rate debt to fixed-rate debt on notional amounts aggregating $45,000.
In 1999, the Company terminated the agreement resulting in a $40 gain.

NOTE 5:     INCOME TAXES


<TABLE>
<CAPTION>
                                                 2000            1999            1998
<S>                                            <C>             <C>             <C>
Current expense
     Federal ........................          $5,077          $4,242          $3,188
     State and local ................             750             496             622
Deferred tax expense ................           1,182             986           4,159
------------------------------------------------------------------------------------------
     Total provision for income taxes          $7,009          $5,724          $7,969
                                                                                
</TABLE>


Significant components of the deferred tax liabilities and assets in the
consolidated balance sheets are as follows:


<TABLE>
<CAPTION>
                                                 2000              1999               1998
<S>                                          <C>                <C>               <C>
Accelerated depreciation ..........          $  9,474           $ 7,475           $  6,215
Preopening costs ..................                --                --              2,928
Prepaid expenses ..................               129               130                131
Capitalized interest costs ........             1,281             1,346              1,022
-----------------------------------------------------------------------------------------------
     Total deferred tax liabilities            10,884             8,951             10,296


Worker's compensation .............               304               330                183
Leasing transactions ..............             1,500               791                394
Other .............................               184               116                 63
-----------------------------------------------------------------------------------------------
     Total deferred tax assets ....             1,988             1,237                640
-----------------------------------------------------------------------------------------------
Net deferred tax liability ........          $ (8,896)          $(7,714)          $ (9,656)
</TABLE>


Reconciliation of federal statutory rates to effective income tax rates:


<TABLE>
<CAPTION>
                                                 2000              1999              1998
<S>                                              <C>               <C>               <C>
Federal corporate statutory rate ....            35.0%             35.0%             35.0%
State and local income taxes, net
     of federal income tax benefit ..             2.2%              2.1%              1.9%
Goodwill amortization and other
     nondeductible expenses .........             2.1%              2.2%              1.5%
Tax credits .........................            (2.0)%            (1.9)%            (1.4)%
Effect of change in deferred tax rate            (1.9)%            (2.4)%            (1.5)%
Other ...............................             1.0%              1.7%              1.5%
-----------------------------------------------------------------------------------------------
Effective tax rate ..................            36.4%             36.7%             37.0%
</TABLE>



                                      F-7

<PAGE>   33
NOTE 6: LEASES

The Company leases certain properties and equipment under operating leases. Some
of the leases include options for renewal or extension on various terms. All
leases require the Company to pay property taxes, insurance and maintenance of
the leased assets. Some leases have provisions for additional percentage rentals
based on revenues; however, payments of percentage rent were minimal during the
three-year period ended February 4, 2001. For 2000, 1999, and 1998, rent expense
for operating leases was $14,295, $11,119, and $8,267, respectively. At February
4, 2001, future minimum lease payments required under operating leases are
$15,431, 2001; $15,328, 2002; $14,395, 2003; $14,155, 2004; $14,479, 2005; and
$206,722, thereafter.

NOTE 7: COMMON STOCK

In 1995, the Company adopted the Dave & Buster's, Inc. 1995 Stock Option Plan
(the "Plan") covering 675 shares of common stock. In 1997 and 1998, the Company
increased the shares of common stock covered by the Plan to 1,350 and 2,350,
respectively. The Plan provides that incentive stock options may be granted at
option prices not less than fair market value at date of grant (110% in the case
of an incentive stock option granted to any person who owns more than 10% of the
total combined voting power of all classes of stock of the Company).
Non-qualified stock options may not be granted for less than 85% of the fair
market value of the common stock at the time of grant and are primarily
exercisable 20% per year after one year from the date of the grant.

In 1996, the Company adopted a stock option plan for outside directors (the
"Directors Plan"). A total of 150 shares of common stock are subject to the
Directors Plan. The options granted under the Directors Plan vest ratably over a
three-year period.

In 2000, the Company amended and restated the Dave & Buster's, Inc. 1995 Stock
Incentive Plan to allow the Company to grant restricted stock awards. These
restricted stock awards will fully vest at the end of the vesting period or the
attainment of one or more performance targets established by the Company.
Recipients are not required to provide consideration to the Company other than
render service and have the right to vote the shares and to receive dividends.
The Company issued 267 shares of restricted stock at a market value of $6.75
which vest at the earlier of attaining certain performance targets or seven
years. The total market value of the restricted shares, as determined at the
date of issuance, is treated as unearned compensation and is charged to expense
over the vesting period. Year to date, the charge to expense for the unearned
compensation was $243.

Pro forma information regarding net income and earnings per common share is
required by SFAS 123, and has been determined as if the Company had accounted
for its employee stock options under the fair value method. The fair value for
these options was estimated at the date of grant using a Black-Scholes option
pricing model with the following weighted-average assumptions for 2000, 1999,
and 1998, respectively: risk-free interest rates of 6.30%, 5.39%, and 5.36%;
dividend yields of 0.0%; volatility factors of the expected market price of the
Company's common stock of .740, .494, and .386; and a weighted-average life of
the option of 2.7, 4.4, and 4.8 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.


                                      F-8

<PAGE>   34
For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. Because SFAS 123
requires, compensation expense to be recognized over the vesting period, the
impact on pro forma net income and pro forma earnings per common share as
reported below may not be representative of pro forma compensation expense in
future years. The Company's pro forma information follows:


<TABLE>
<CAPTION>
                                                             2000                1999               1998
<S>                                                      <C>                 <C>                <C>
      Net income, as reported .................          $   12,245          $    5,205         $   13,578
      Pro forma net income ....................          $   10,018          $    3,627         $   12,699
      Basic net income per share, as reported .          $      .95          $      .40         $     1.04
      Pro forma basic net income per share ....          $      .77          $      .28         $      .97
      Diluted net income per share, as reported          $      .94          $      .39         $     1.03
      Pro forma diluted net income per share ..          $      .77          $      .27         $      .96
</TABLE>


A summary of the Company's stock option activity, and related information is as
follows:


<TABLE>
<CAPTION>
                                                                 2000                        1999                        1998
                                                            Weighted-Average           Weighted-Average            Weighted-Average
                                                   Options   Exercise Price   Options    Exercise Price   Options   Exercise Price
<S>                                                <C>       <C>              <C>        <C>              <C>       <C>
      Outstanding - beginning of year               1,166        $17.24        1,145        $16.82          949        $14.88
      Granted                                         674        $ 7.49          734        $18.10          395        $20.89
      Exercised                                        --            --          (59)       $12.88          (50)       $11.88
      Forfeited                                      (408)       $12.77         (154)       $20.09         (149)       $16.92
      Outstanding - end of year                     1,932        $14.78        1,666        $17.24        1,145        $16.82
      Exercisable - end of year                       642        $17.37          516        $14.87          332        $13.59
      Weighted-average fair value of options
           granted during the year                               $ 3.96                     $ 8.36                     $ 8.56
</TABLE>


As of February 4, 2001, exercise prices for 1,052 options and 880 options ranged
from $6.25 to $15.50 and $18.38 to $27.56, respectively. The weighted-average
remaining contractual life of the options is 7.7 years.

Under a Shareholder Protection Rights Plan adopted by the Company, each share of
outstanding common stock includes a right which entitles the holder to purchase
one one-hundredth of a share of Series A Junior Participating Preferred Stock
for seventy five dollars. Rights attach to all new shares of commons stock
whether newly issued or issued from treasury stock and become exercisable only
under certain conditions involving actual or potential acquisitions of the
Company's common stock. Depending on the circumstances, all holders except the
acquiring person may be entitled to 1) acquire such number of share of Company
common stock as have a market value at the time of twice the exercise price of
each right, or 2) exchange a right for one share of Company common stock or one
one-hundredth of a share of the Series A Junior Participating Preferred Stock,
or 3) receive shares of the acquiring company's common stock having a market
value equal to twice the exercise price of each right. The rights remain in
existence until ten years after the Distribution, unless they are redeemed (at
one cent per right).


                                      F-9

<PAGE>   35
NOTE 8: EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:


<TABLE>
<CAPTION>
                                                                 2000             1999             1998
<S>                                                             <C>              <C>              <C>
Numerator-Net Income                                            $12,245          $ 5,205          $13,578
---------------------------------------------------------------------------------------------------------------
Denominator:
     Denominator for basic net income per share -
     Weighted average shares                                     12,953           13,054           13,053
Effect of dilutive securities - employee stock options               33              160              193
---------------------------------------------------------------------------------------------------------------
Denominator for diluted earnings per share - adjusted
weighted average shares                                          12,986           13,214           13,246

Basic net income per share                                      $   .95          $   .40          $  1.04

Diluted net income per share                                    $   .94          $   .39          $  1.03
</TABLE>



Options to purchase 1,346, 925 and 404 shares of common stock for 2000, 1999,
and 1998, respectively, were not included in the computation of diluted net
income per share because the options would have been antidilutive.

NOTE 9: RELATED PARTY ACTIVITY

In April 1998, a limited liability litigation corporation owned by the creditors
of Edison Brothers filed a lawsuit against the Company and related parties,
seeking recovery in connection with the spin-off and certain related
transactions. In August 1998, the Company settled the litigation with the
limited liability corporation. In full and final settlement of all claims, the
Company paid $2,244 and charged such amount to paid in capital because all
alleged claims were associated with the spin-off transactions.

During 2000, the Company was party to a consulting agreement with Sandell
Investments ("Sandell"), a partnership whose controlling partner is a director
of the Company. Sandell advises the Company with respect to expansion and site
selection, market analysis, improvement and enhancement of the Dave & Buster's
concept and other similar and related activities. Annual fees of $125 were paid
to Sandell in 2000, 1999, and 1998, the maximum fee provided for under the
agreement.

The Company was a party to a sale/leaseback transaction with Cypress Equities,
Inc. for its San Diego, California location whereby the Company received $8,000
in exchange for committing to lease payments of approximately $6,300 over 20
years with options for renewal. A director of the Company is the managing member
of Cypress Equities, Inc. Payments to Cypress Equities, Inc. in 2000 were $167.


                                      F-10

<PAGE>   36
NOTE 10: EMPLOYEE BENEFIT PLAN

The Company sponsors a plan to provide retirement benefits under the provision
of Section 401(k) of the Internal Revenue Code (the 401(k) Plan) for all
employees who have completed a specified term of service. Company contributions
may range from 0% to 100% of employee contributions, up to a maximum of 6% of
eligible employee compensation, as defined. Employees may elect to contribute up
to 20% of their eligible compensation on a pretax basis. Benefits under the
401(k) Plan are limited to the assets of the 401(k) Plan.

NOTE 11: CONTINGENCIES

The Company is subject to certain legal proceedings and claims that arise in the
ordinary course of its business. In the opinion of management, the amount of
ultimate liability with respect to all actions will not materially affect the
consolidated results of operations or financial condition of the Company.

NOTE 12: QUARTERLY FINANCIAL INFORMATION (UNAUDITED)


<TABLE>
<CAPTION>
Fiscal 2000                                        First          Second         Third          Fourth
<S>                                                <C>            <C>            <C>            <C>
Total revenues.................................    $77,849        $77,566        $79,244        $97,644
Income before provision for income taxes.......      4,565          3,397          2,368          8,924
Net income.....................................      2,890          2,150          1,499          5,706
Basic net income per share.....................    $   .22        $   .17        $   .12        $   .44
Basic weighted average shares outstanding......     12,953         12,953         12,953         12,953
Diluted net income per share...................    $   .22        $   .17        $   .12        $   .44
Diluted weighted average shares outstanding....     12,960         12,954         12,974         13,077
</TABLE>




<TABLE>
<CAPTION>
Fiscal 1999                                          First           Second          Third         Fourth
<S>                                                 <C>              <C>            <C>            <C>
Total revenues.................................     $ 59,700         $57,617        $58,988        $70,829
Income before provision for income taxes       
     and cumulative effect of a change in an
     accounting principle......................        6,052           3,124            361          6,079
Income before cumulative effect of a
     change in an accounting principle.........        3,813           1,990            229          3,860
Net income (loss)..............................         (874)          1,990            229          3,860
Basic net income per share.....................
     Income before accounting change...........     $    .29         $   .15        $   .02        $   .30
     Net income (loss).........................         (.07)            .15            .02            .30
Basic weighted average shares outstanding......       13,072          13,111         13,076         12,956
Diluted net income per share 
     Income before accounting change...........     $    .29         $   .15        $   .02        $   .30
     Net income (loss).........................         (.07)            .15            .02            .30
Diluted weighted average shares outstanding....       13,276          13,461         13,163         12,957
</TABLE>



                                      F-11

<PAGE>   37

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


THE BOARD OF DIRECTORS AND STOCKHOLDERS
DAVE & BUSTER'S, INC.


We have audited the accompanying consolidated balance sheets of Dave & Buster's,
Inc. as of February 4, 2001 and January 30, 2000, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended February 4, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Dave & Buster's,
Inc. at February 4, 2001 and January 30, 2000 and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended February 4, 2001, in conformity with accounting principles generally
accepted in the United States.

                                                             Ernst & Young LLP

Dallas, Texas
March 28, 2001



                                      F-12

<PAGE>   38

 
                              INDEX TO EXHIBITS



<TABLE>
<CAPTION>
Exhibit
-------
<S>       <C>
3.1       Restated Articles of Incorporation of the Company. (1)

3.2       Bylaws of the Company. (1)

10.1      Revolving Credit and Term Loan Agreement, dated June 30, 2000, among
          the Company and its subsidiaries, Fleet National Bank (as agent) and
          the financial institutions named therein. (2)

10.7      Rights Agreement between the Company and Rights Agent, dated June 16,
          1995. (1)

10.8      1995 Stock Option Plan (As Amended and Restated April 26, 2000). (3)

10.9      Stock Option Plan for Outside Directors. (5)

10.11     Employment and Executive Retention Agreements for Co-Chief Executive
          Officers, dated June 16, 1995. (4)

10.12     Form of Indemnity Agreements with Executive Officers and Directors.
          (6)

21.1      Subsidiaries of the Company. (4)

23        Independent Auditors' Consent. (4)

99        Proxy Statement, dated May 4, 2001. (7)
</TABLE>




                                       26

<PAGE>   39
-----------------------

(1)       Filed as an Exhibit to the registrant's Form 10-Q for the 13-week
          period ended April 30, 1995 and incorporated herein by reference.

(2)       Filed as an Exhibit to the registrant's Form 10-Q for the 13-week
          period ended July 30, 2000 and incorporated herein by reference.

(3)       Filed as an Exhibit to the registrant's Proxy Statement dated April
          28, 2000 and incorporated herein by reference.

(4)       Filed herewith.

(5)       Filed as an Exhibit to the registrant's Form 10-K for the 52 week
          period ended February 1, 1997 and incorporated herein by reference.

(6)       Filed as an Exhibit to the registrant's Form 10 filed April 11, 1995
          and incorporated herein by reference.

(7)       To be filed with the Commission on or before June 4, 2001.



                                       27





<PAGE>   1
                                                                   Exhibit 10.11


                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (herein the "Agreement") is made as of the 3rd
day of April, 2000, by and between DAVE & BUSTER'S, INC. (the "Corporation") and
James W. Corley (the "Employee").

                                    RECITALS

      A. The Corporation has offered continued employment to Employee for what
it believes to be a reasonable compensation package in light of the required
duties, responsibilities and restrictions. Employee has accepted such offer of
continued employment subject to the terms set forth herein.

      B. The Corporation and Employee desire to set forth in writing the terms
and conditions of their agreements and understandings with respect to the
continued employment of Employee by the Corporation.

                                  AGREEMENT

      NOW, THEREFORE, for and in consideration of the mutual premises and the
covenants and promises contained herein, as well as good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Corporation and Employee hereby agree as follows:

      1. Employment. The Corporation hereby employs, engages and hires Employee,
and Employee hereby accepts such employment and agrees to such hiring and
engagement, upon the terms and conditions hereinafter set forth.


      2. Duties. Employee shall be employed as Co-Chief Executive Officer and
Chief Operating Officer of the Corporation for the entire term of his employment
as set forth in this Agreement and shall faithfully and to the best of his
abilities perform the following duties:

            2.1 Employee shall have supervisory and oversight responsibility for
the Corporation. He shall have active management of the business and affairs of
the Corporation. He shall see that all orders and resolutions of the Board of
Directors of the Corporation (herein "Board of Directors") are carried into
effect.

            2.2 Employee shall, when authorized by the Board of Directors, when
required by law or when the ordinary conduct of the Corporation's business
requires, execute, in the name of the Corporation, such contracts, documents,
papers or instruments on behalf of the Corporation to further its operations and
business interests.

            2.3 Employee shall perform such other duties and responsibilities as
may be prescribed from time to time by the Board of Directors. Such other
executive duties or


                                        1

<PAGE>   2
responsibilities shall be consistent with the duties of the office of Co-Chief
Executive Officer and Chief Operating Officer.

Employee shall devote substantially all of his time and attention to the
Corporation's business and affairs to carry out such responsibilities and shall
not engage in any active management role or own, directly or indirectly, more
than a ten percent (10%) interest in any other business activity except as
authorized by the Board of Directors.

      3. Term. The initial term of the employment of Employee by the Corporation
pursuant to this Agreement shall begin on the date hereof and shall continue for
an initial period of one year, unless sooner terminated as hereinafter provided.
Unless terminated as hereinafter provided, the term of this Agreement shall be
continually renewed after the initial term on a rolling one year basis such that
at any point in time there shall always be a period of one year remaining on the
term of this Agreement.

      4. Compensation.

            4.1 Pre-termination. The Corporation shall pay Employee a salary
(payable in accordance with the Corporation's usual payment practices, but not
less frequently than monthly) for his services under this Agreement beginning at
an annual rate from the date hereof of Four Hundred Thousand Dollars
($400,000.00). Employee's annual salary may not be decreased but may be adjusted
upward at any time by the Board of Directors of the Corporation. Compensation to
Employee hereunder shall be prorated for any partial employment period. Employee
shall also participate in the executive incentive bonus plan and in any other
bonus arrangement mutually agreed between Employee and Corporation.

            4.2 Post-termination. Upon each of the first ten (10) anniversary
dates of the termination of this Agreement, Corporation shall pay to Employee,
or Employee's estate in the event of Employee's death, the sum of One Hundred
Thousand Dollars ($100,000.00). In exchange therefor, Employee, on behalf of
himself and his heirs, grants to Corporation the right to use the personal
identity of Employee in connection with the Corporation's marketing concept for
such ten year period. The provisions of this Paragraph 4.2 shall be treated as
if deleted from this Agreement if Employee's employment is terminated for Cause
pursuant to Paragraph 7.3.

      5. Benefits. In addition to the compensation provided in Paragraph 4,
Corporation shall provide Employee with the benefits described herein. The
amounts provided are a minimum and shall not be reduced during the term hereof,
but may be increased by the Board of Directors or the Compensation Committee
appointed by the Board of Directors.

            5.1 Automobile. During the term of this Agreement, the Corporation
shall provide an automobile allowance to Employee of Fifteen Thousand Dollars
($15,000.00) per fiscal year (with a pro rated amount for any partial fiscal
year).


                                        2

<PAGE>   3
            5.2 Vacations, Holidays, Etc. During the term of this Agreement,
Employee shall be entitled to six (6) weeks vacation per calendar year. Unused
vacation periods may not be carried over to subsequent years.

            5.3 Health Insurance and Death Benefits. Employee shall be provided
group medical and life insurance comparable to the standard medical and life
insurance coverage afforded other senior executive officers of the Corporation.
The Corporation shall also provide Employee with an allowance of Seven Thousand
Five Hundred Dollars ($7,500.00) per fiscal year (with a pro rata amount for any
partial fiscal year) for his use in purchasing additional insurance coverage for
medical, dental, hospitalization and death benefits or in payment of any
uninsured expenses or deductible payments not covered by the medical insurance
provided hereunder.

            5.4 Disability Insurance. Employee shall be provided group
disability insurance comparable to the standard disability insurance coverage
afforded other senior executive officers of the Corporation. The Corporation
shall also provide Employee with an allowance of Four Thousand Five Hundred
Dollars ($4,500.00) per fiscal year (with a pro rated amount for any partial
fiscal year) to purchase disability insurance.

            5.5 Reimbursement of Expenses. Upon submission of appropriate
receipts and other documents, the Corporation shall reimburse Employee for the
reasonable business expenses (other than automobile expenses) incurred by
Employee in fulfilling his duties hereunder.

            5.6 Other Benefits. The Corporation shall provide to Employee such
benefits, other than those benefits expressly provided for in this Agreement,
which are generally made available to other senior executive officers of the
Corporation.

      6. Non-Compete Agreement.

            6.1 Covenant. Employee agrees not to engage in or become an employee
of or consultant or adviser of or have any direct or indirect interest in any
other person, firm, corporation or other entity engaged in, any business
activities directly competitive with the business of the Corporation or any of
its subsidiaries or licensees during the term of his employment by the
Corporation and for a period of six (6) months thereafter. The period of time
under which the Employee is to be bound by this covenant is hereinafter referred
to as the "Non-Compete Period". This restriction shall be applicable with
respect to each and every county and metropolitan area in the United States and
each country in which a licensee is located. Nothing contained in this Paragraph
6.1 shall restrict Employee from operating a restaurant and/or bar, provided,
however, such restaurant and/or bar may not use or operate under any service
mark or trade name similar to "Dave & Buster's".

            6.2 Employees. During the Non-Compete Period, Employee will not
knowingly seek to induce any employee of the Corporation or any of its
affiliates to leave his or her employment.


                                        3

<PAGE>   4
      7. Termination. The employment of Employee hereunder shall terminate prior
to the expiration of the term of employment set forth in Paragraph 3 above upon
the happening of any one of the following events:

            7.1 Death. The death of Employee.

            7.2 Disability. The giving of written notice by the Corporation to
Employee of the termination of the employment of Employee upon the disability of
Employee. For purposes of this Paragraph, "disability of Employee" shall mean
the inability of Employee, due to illness, accident or any other physical or
mental incapacity, to perform the services provided for hereunder for a period
of one hundred eighty (180) consecutive calendar days. The inability of Employee
to perform the services provided for hereunder due to his illness, accident or
any other physical or mental incapacity shall not constitute a basis for
discharge under Paragraph 7.4 of this Agreement except to the extent there is
also a basis for discharge under this Paragraph 7.2.

            7.3 Cause. The giving of written notice by the Corporation to
Employee of the termination of the employment of Employee for cause. For
purposes of this Paragraph, "cause" shall mean: (i) a material violation of
Corporation policy or a material breach by the Employee of the Employee's
obligations under Paragraph 2 (other than as a result of incapacity due to
physical or mental illness) that is demonstrably willful and deliberate on the
Employee's part, committed in bad faith or without reasonable belief that the
action or inaction that constitutes such breach is in the best interests of the
Corporation, and, if subject to being effectively remedied, is not remedied in a
reasonable period of time after receipt of written notice from the Corporation
specifying such breach or violation; or (ii) the conviction of the Employee of a
felony involving moral turpitude. Upon Employee's termination pursuant to the
foregoing provisions of this Paragraph 7, the Corporation shall promptly pay to
Employee (or his estate, heirs or personal representatives), the full amount of
his compensation and benefits accrued through the termination date.

            7.4 Without Cause. The Corporation may also terminate the employment
of Employee hereunder for any other reason upon at least ninety (90) days
written notice prior to the expiration of the initial term or any additional one
year term provided in Paragraph 3; provided that upon Employee's termination by
the Corporation for any reason other than those set forth in Paragraphs 7.1,
7.2, or 7.3, (a "Termination Without Cause"), the Corporation shall, until the
Final Payment Date (as hereinafter defined) (i) continue to pay Employee his
then current salary pursuant to Paragraph 4 and (ii) pay Employee the greater
of: (a) the maximum bonus payable to Employee under the executive incentive plan
in effect ninety days prior to such termination, or (b) sixty percent (60%) of
the annual salary then in effect, and (iii) provide the benefits described in
Paragraphs 5.1, 5.3 and 5.4 or their economic equivalent on a pre-tax basis. The
Final Payment Date shall be two years after the date of such termination. Upon
Employee's termination pursuant to this Subparagraph 7.4, the Corporation within
thirty (30) days shall pay in a lump sum to Employee (or his estate, heirs or
personal representative) the full amount of his compensation and benefits
computed through the Final Payment Date.


                                        4

<PAGE>   5
            7.5 Removal from Board of Directors. If, at any time during the term
of this Agreement, Employee is removed from the Board of Directors of the
Corporation or at the expiration of his term as a director is not renominated to
serve as a director of the Corporation by the Board of Directors of the
Corporation (or by any nominating committee of the Board of Directors), and the
cause of such removal or failure to nominate is not the result of Employee's
unwillingness to serve as a director of the Corporation or any reason set forth
in Paragraphs 7.1, 7.2, or 7.3, then Employee may elect to terminate his
employment hereunder and such termination shall be deemed a Termination Without
Cause.

            7.6 By Employee. Employee may elect to terminate his employment
hereunder at any time upon at least ninety (90) days written notice prior to the
expiration of the initial term or any additional one year term provided in
Paragraph 3.

      8. Return of Property. Each party shall promptly deliver to the other all
of the other's property in its possession after termination of this Agreement.

      9. Previous Employment Agreement. The Employment Agreement dated June 16,
1995 between Employee and Corporation (the "Previous Employment Agreement")
shall terminate upon effectiveness of this Agreement.

      10. Maintenance of Employee's Domicile. Employee shall not be required to
relocate his personal residence in order to fulfill his duties under this
Agreement without his prior consent. If the Corporation requires Employee to
relocate his personal residence without the consent of Employee, Employee may
terminate his employment hereunder and such termination shall be deemed a
Termination Without Cause.

      11. Damages and Irreparable Injury. In the event of a breach of this
Agreement by either the Corporation or Employee resulting in damages to the
other party, that party may recover from the party breaching the Agreement any
and all damages that may be sustained. In the event of a breach of Paragraphs 6
or 12, Employee acknowledges that such a breach may result in irreparable injury
and damage to the Corporation that would be difficult, if not impossible, to
determine with certainty and specificity, that the Corporation would have no
adequate remedy at law therefor and that the Corporation may thereupon (a)
obtain such preliminary, temporary or permanent mandatory or restraining
injunctions, orders or decrees as are necessary to protect the Corporation
against, or on account of, any such breach and (b) obtain any other relief
against Employee (including damages) as may be provided by law or in equity.

      12. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Employee during the Employee's employment by the Corporation or
any of its affiliated companies and which shall not be or have become public
knowledge (other than by acts by the Employee or representatives of the Employee
in violation of this Agreement). After termination


                                        5

<PAGE>   6
of the Employee's employment with the Corporation, the Employee shall not,
without the prior written consent of the Corporation or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those designated by
it. In no event shall an asserted violation of the provisions of this Paragraph
12 constitute a basis for deferring or withholding any amounts otherwise payable
to the Employee under this Agreement.

      13. Indemnity of Employee. The Corporation shall indemnify and hold
Employee harmless for all losses, claims, damages, causes of action and
judgments (herein "Losses") sustained by Employee as a direct result of the
discharge of his duties required by this Agreement; provided, however, such
indemnification shall not cover Losses sustained by Employee as a result of
Employee's gross negligence, willful misconduct, fraud or dishonesty.

      14. Miscellaneous.

            14.1 Waiver. The waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.

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

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

            14.4 Assignment. Neither this Agreement, nor any of the rights or
obligations of either party hereunder, may be assigned in whole or in part,
except with the written consent of the other party; provided, however, that all
or any part of the Corporation's right and obligations hereunder may be assigned
by the Corporation without the consent of Employee to any affiliate or, if the
business or assets of the Corporation are sold to a third party, to such third
party, subject to the rights of Employee set forth herein above concerning
Employee's option for termination.

            14.5 Attorney's Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs, and necessary
disbursements in addition to any other relief to which he may be entitled.

            14.6 Invalid Provision. If a court of competent jurisdiction
determines that any restriction contained in this Agreement is void, illegal or
unenforceable, the other provisions shall remain in full force and effect and
the provision held to be void, illegal or unenforceable shall be limited so that
it shall remain in effect to the extent permissible by law.


                                        6

<PAGE>   7
            14.7 Modification. No modification, amendment, change or discharge
of any term or provision of this Agreement shall be valid or binding unless the
same is in writing and signed by all the parties hereto.

            14.8 Entire Agreement. Except as otherwise provided in this
Subparagraph 14.8, this Agreement constitutes the entire agreement and
understanding of the parties on the subject hereof and supersede all prior
written and/or oral agreements, representations and understandings related to
the subject matter hereof.

This Agreement is entered into at the same time as an agreement styled Executive
Retention Agreement ("ERA") between Corporation and Employee. Under the terms of
the ERA, the ERA becomes effective upon a "Change of Control" as that term is
defined in the ERA. Once the ERA becomes effective and until such time as it
ceases to be effective, the ERA shall have precedence over this Agreement in
defining the rights and duties of Corporation and Employer; provided, further
for clarification, it is not intended that Employee will receive duplicate
economic benefits during the time the ERA is effective. The terms of this
Agreement not inconsistent with the ERA, including, but not limited to the
provisions of Subparagraph 4.2, shall continue to apply. After the ERA ceases to
be effective, all terms of this Agreement shall again be effective, unless this
Agreement is otherwise terminated.

            14.9 Notice. Any notice which either party may wish to give to the
other party hereunder shall be deemed to have been given when delivered
personally or by commercial courier or three days after being deposited in the
mail, certified and with proper postage prepaid, if addressed as follows:

            To the Corporation:

            Dave & Buster's, Inc.
            2481 Manana Drive
            Dallas, TX   75220
            Attn.:  General Counsel

            To Employee:

            James W. Corley
            5922 Colhurst Street
            Dallas, TX   75230

or to such other address as the parties may designate for themselves from time
to time by written notice to the other party given in the aforesaid manner.


                                       7

<PAGE>   8
            14.10 Binding Effect. The provisions hereof shall be binding upon
and shall inure to the benefit of Employee, his heirs and personal
representatives.

            14.11 Affiliate. The term "affiliate" or "affiliates" as used herein
shall mean any person, partnership or entity which, directly or indirectly
through one or more intermediaries, is controlled by, controls, or is under
common control with the person or entity specified.

            14.12 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without reference
to principles of conflict of laws.

      EXECUTED this ____ day of May, 2000.

                              THE CORPORATION:

                              DAVE & BUSTER'S, INC., a Missouri corporation

                              By:   ____________________________________
                              Name: ____________________________________
                              Title:____________________________________



                              EMPLOYEE:

                              ___________________________________________
                              Name: James W. Corley


                                        8

<PAGE>   9
                          EXECUTIVE RETENTION AGREEMENT

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
Section                                                                   Page
-------                                                                   ----
<S>                                                                       <C>
      Table of Contents.............................................       1
1.    Certain Definitions...........................................       2
2.    Control.......................................................       3
3.    Employment Period.............................................       6
4.    Terms of Employment...........................................       7
5.    Termination of Employment.....................................      12
6.    Obligations of the Company upon Termination...................      16
7.    Non-exclusivity of Rights.....................................      20
8.    Full Settlement; Resolution of Disputes.......................      21
9.    Limitation on Termination Payment.............................      24
10.   Confidential Information......................................      26
11.   Successors....................................................      27
12.   Miscellaneous.................................................      28
</TABLE>



Executive Retention Agreement       Page 1

<PAGE>   10
                          EXECUTIVE RETENTION AGREEMENT

     AGREEMENT by and between Dave & Buster's, Inc. (the "COMPANY"), and James
W. Corley, (the "EXECUTIVE"), dated as of the 3rd day of April, 2000.

     The Compensation Committee of the Company, (the "COMMITTEE"), has
determined that it is in the best interests of the Company and its owners to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined in Section 2) of Dave & Buster's, Inc. (the "CORPORATION"). The
Committee believes it is imperative to minimize distraction of the Executive
resulting from personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage the Executive's full attention and
dedication to the Company currently and in the event of any threatened or
pending Change of Control, and to provide the Executive with compensation and
benefits arrangements upon a Change of Control that satisfy the compensation and
benefits expectations of the Executive and are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Committee
has caused the Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Certain Definitions.

           (a) The "EFFECTIVE DATE" shall mean the first date during the Change
of Control Period (as defined in Section 1(b)) on which a Change of Control
occurs. Anything in this Agreement to the contrary notwithstanding, if a Change
of Control occurs and if the Executive's employment with the Company is
terminated by the Company within ninety (90) days prior to the date on which the
Change of Control occurs, then for all purposes of this


Executive Retention Agreement       Page 2

<PAGE>   11
Agreement the "EFFECTIVE DATE" shall mean the date immediately prior to the date
of such termination of employment.

           (b) The "CHANGE OF CONTROL PERIOD" shall mean the period commencing
on the date hereof and ending on the third anniversary of such date; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "RENEWAL DATE"), the Change of Control
Period shall be automatically extended so as to terminate three years from such
Renewal Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Change of Control Period shall not
be so extended.

     2. Control. For the purpose of this Agreement, a "CHANGE OF CONTROL" shall
mean:

           (a) Acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT")) (a "PERSON") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the Corporation (the
"OUTSTANDING COMMON STOCK") or (ii) the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote generally in
the election of its directors (the "OUTSTANDING VOTING SECURITIES"); provided,
however, that the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Corporation (excluding an
acquisition by virtue of the exercise of a conversion privilege), (ii) any
acquisition by the Corporation, (iii) any acquisition


Executive Retention Agreement       Page 3

<PAGE>   12
by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (iv) any
acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of subsection (c) of this
Section 2 are satisfied; or

           (b) Individuals who, as of the date hereof, constitute the Board of
Directors of the Corporation (the "INCUMBENT BOARD") cease for any reason to
constitute at least a majority of the Board of Directors said Corporation (the
"BOARD"); provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14.A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or

           (c) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) more than 50% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 50% of the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or


Executive Retention Agreement       Page 4

<PAGE>   13
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such reorganization, merger
or consolidation in substantially the same proportions as their ownership
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Common Stock and Outstanding Voting Securities, as the case may be;
(ii) no Person (excluding the Corporation, any employee benefit plan (or related
trust) of the Corporation or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 30% or more of the Outstanding Common Stock or Outstanding Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 30%
or more of the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors; and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or

           (d) Approval by the shareholders of the Corporation of (i) a complete
liquidation or dissolution of the Corporation or (ii) the sale or other
disposition of all or substantially all of the assets of the Corporation, other
than to a corporation with respect to which, following such sale or other
disposition, (A) more than 50% of the then outstanding shares of common stock of
such corporation and more than 50% of the combined voting


Executive Retention Agreement       Page 5

<PAGE>   14
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership immediately
prior to such sale or other disposition of the Outstanding Common Stock or
Outstanding Voting Securities, as the case may be; (B) no Person (excluding the
Corporation and any employee benefit plan (or related trust) of the Corporation
or such corporation and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly, 30% or more of the
Outstanding Common Stock or Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 30% or more of the then outstanding
shares of common stock of such corporation or 30% or more of the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors; and (C) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of the
Corporation.

     3. Employment Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ of the
Company, in accordance with the terms and provisions of this Agreement, for the
period commencing on the Effective Date and ending on the first anniversary of
such date (the "EMPLOYMENT PERIOD"). Employment by one or more of the affiliated
companies, as hereinafter defined, shall be


Executive Retention Agreement       Page 6

<PAGE>   15
considered employment by the Company.

     4. Terms of Employment.

           (a) Position and Duties.

                 (i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be consistent in all material respects with
the most significant of those held, exercised or assigned at any time during the
90-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office that is the headquarters
of the Company and is less than 25 miles from such location.

                 (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities to the Company. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such


Executive Retention Agreement       Page 7

<PAGE>   16
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not hereafter be deemed to interfere with
the performance of the Executive's responsibilities to the Company.

           (b) Compensation.

                 (i) Base Salary. During the Employment period, the Executive
shall receive an annual base salary ("ANNUAL BASE SALARY"), which shall be paid
in equal installments on a monthly basis, at least equal to twelve times the
highest monthly base salary paid or payable to the Executive by the Company and
its affiliated companies during the twelve-month period immediately preceding
the month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed at least annually and shall be increased at
any time and from time to time as shall be substantially consistent with
increases in base salary generally awarded in the ordinary course of business to
other peer executives of the Company and its affiliated companies. Any increase
in Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term "AFFILIATED COMPANIES" shall include any company controlled
by, controlling or under common control with the Company.

                 (ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "ANNUAL BONUS") in cash at least equal to the
greater of: (a) the maximum bonus that the Executive could have been paid
pursuant to the executive incentive bonus plan in effect


Executive Retention Agreement       Page 8

<PAGE>   17
ninety (90) days prior to the Effective Date and (b) sixty percent (60%) of the
Annual Base Salary then in effect. Each such Annual Bonus shall be paid no later
than the end of the third month of the fiscal year next following the fiscal
year for which the Annual Bonus is awarded, unless the Executive shall elect to
defer the receipt of such Annual Bonus.

                 (iii) Special Bonus. In addition to Annual Base Salary and
Annual Bonus payable as herein above provided, if the Executive remains employed
with the Company and its affiliated companies through the first anniversary of
the Effective Date, the Company shall pay to the Executive a special bonus (the
"SPECIAL BONUS") in recognition of the Executive's services during the crucial
one-year transition period following the Change of Control. Such Special Bonus
shall be an amount in cash equal to the sum of (A) the Executive's Annual Base
Salary and (B) the Annual Bonus paid or payable, including by reason of any
deferral, to the Executive (and annualized for any fiscal year consisting of
less than twelve full months or for which the Executive has been employed for
less than twelve full months) for the most recently completed fiscal year during
the Employment Period. The Special Bonus shall be paid no later than 30 days
following the first anniversary of the Effective Date.

                 (iv) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies. Such plans, practices, policies and programs shall provide the
Executive with incentive opportunities (measured with respect to both regular
and special incentive opportunities, if any), savings opportunities and
retirement benefit


Executive Retention Agreement       Page 9

<PAGE>   18
opportunities, in each case, as favorable as the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
90-day period immediately preceding the Effective Date or, if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

                 (v) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies. Such
plans, practices, policies and programs shall provide the Executive with
benefits that are, in each case, as favorable, as the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

                 (vi) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable employment
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive at any time during the 90- day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in


Executive Retention Agreement       Page 10

<PAGE>   19
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

                 (vii) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date, or if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.

                 (viii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company or its affiliated companies at any time during
the 90-day period immediately preceding the Effective Date or, if more favorable
to the Executive, as provided generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.

                 (ix) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.


Executive Retention Agreement       Page 11

<PAGE>   20
     5.    Termination of Employment.

           (a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the "DISABILITY
EFFECTIVE DATE"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "DISABILITY" shall mean the absence of
the Executive from the Executive's full-time duties with the Company for 180
consecutive calendar days as a result of incapacity due to mental or physical
illness that is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be withheld
unreasonably).

           (b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement, "CAUSE"
shall be determined by the Committee in exercise of good faith and reasonable
judgment and shall mean (i) a material violation of Company policy or a material
breach by the Executive of the Executive's obligations under Section 4(a) (other
than as a result of incapacity due to physical or mental illness) that is
demonstrably willful and deliberate on the Executive's part, committed


Executive Retention Agreement       Page 12

<PAGE>   21
in bad faith or without reasonable belief that the action or inaction that
constitutes such breach is in the best interests of the Company, and, if subject
to being effectively remedied, is not remedied in a reasonable period of time
after receipt of written notice from the Company specifying such breach or
violation ("NOTE OF BREACH"); or (ii) the conviction of the Executive of a
felony involving moral turpitude.

     If Company delivers a Notice of Breach to Executive describing the
situation to be remedied and Executive fails to remedy such violation or breach
within a reasonable period of time (as determined in the Notice of Breach), a
Notice of Termination delivered to the Executive subsequent to the Notice of
Breach shall become effective retroactively back to the date of delivery of the
Notice of Breach to the Executive.

           (c) Good Reason. The Executive's employment may be terminated during
the Employment Period by the Executive for Good Reason. For purposes of this
Agreement, "GOOD REASON" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:

                 (i) the assignment to the Executive of any duties, authority or
responsibilities materially inconsistent with the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities with the most significant of those held, exercised or
assigned at any time during the 90-day period immediately preceding the
Effective Date (excluding those duties that are only for the purpose of
effecting the Change of Control) or any other action by the Company that results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated action that is insubstantial or
inadvertent and that is remedied by the Company promptly after receipt of


Executive Retention Agreement       Page 13

<PAGE>   22
notice thereof given by the Executive;

                 (ii) any failure by the Company to comply with any of the
provisions of Section 4(b), other than an isolated failure that is insubstantial
or inadvertent failure and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

                 (iii) the Company's requiring the Executive to be based at any
office or location other than that described in Section 4(a)(i)(B);

                 (iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;

                 (v) any failure by the Company to obtain a satisfactory
agreement from any successor to the Company to assume and agree to perform the
Company's obligations under this Agreement, as contemplated in Section 11(c)
herein;

                 (vi) the Company requiring the Executive to engage in excessive
travel in comparison to travel required during the 90-day period immediately
preceding the Effective Date; or

                 (vii) a substantial change in organizational reporting
relationships as compared to the 90-day period immediately preceding the
Effective Date that will have a significant impact on the status, offices,
titles and reporting requirements of the Executive.

     The Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good Reason.

           (d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b).
For purposes of this Agreement, a


Executive Retention Agreement       Page 14

<PAGE>   23
"NOTICE OF TERMINATION" means a written notice that (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
of such notice. The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance that supports a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from later asserting such
fact or circumstance in enforcing the Executive's or the Company's rights
hereunder. The Company may not terminate the Executive's employment for Cause
after the Executive has delivered a Notice of Termination for Good Reason; nor
may the Executive terminate employment with Company for Good Reason after
Company has delivered a Notice of Termination to the Executive.

           (e) Date of Termination. "DATE OF TERMINATION" means (i) if the
Executive's employment is terminated by the Company for Cause or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be; (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
date on which the Company notifies the Executive of such termination; and (iii)
if the Executive's employment is terminated by reason of death or Disability,
the date of death of the Executive or the Disability Effective Date, as the case
may be.


Executive Retention Agreement       Page 15

<PAGE>   24
     6. Obligations of the Company upon Termination.

           (a) Good Reason; Other than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall terminate
employment for Good Reason:

                 (i) The Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the following
amounts:

                       A. The sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the extent not theretofore paid, (2) the
product of (x) the Annual Bonus and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is 365 and (3) the Special Bonus, if due to the
Executive pursuant to Section 4(b)(iii), to the extent not theretofore paid and
(4) any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the amounts described in clauses
(1), (2), (3) and (4) shall be hereinafter referred to as the "ACCRUED
OBLIGATIONS"); and

                       B. The amount (such amount shall be hereinafter referred
to as the "SEVERANCE AMOUNT") equal to two times the sum of (x) the Executive's
Annual Base Salary and (y) the Annual Bonus; provided, however, that if the
Special Bonus has not been paid to the Executive, such amount shall be increased
by the amount of the Special Bonus; and, provided further, that such amount
shall be reduced by the present value (determined as provided in Section
280G(d)(4) of the Internal Revenue Code of 1986, as amended (the "CODE")) of any
other amount of severance relating to salary or bonus continuation to be


Executive Retention Agreement       Page 16

<PAGE>   25
received by the Executive upon termination of employment of the Executive under
any severance plan, policy or arrangement of the Company; and

                       C. A separate lump-sum supplemental retirement benefit
(the amount of such benefit shall be hereinafter referred to as the
"SUPPLEMENTAL RETIREMENT AMOUNT") equal to the difference between (1) the amount
payable under any Company retirement plan (or any successor plan thereto) (the
"RETIREMENT PLAN"), of which the Executive was a participant, and any
supplemental and/or excess retirement plan of the Company and its affiliated
companies providing benefits for the Executive (the "SERP") that the Executive
would receive if the Executive's employment continued at the compensation level
provided for in Sections 4(b)(i) and 4(b)(ii) for the remainder of the
Employment Period plus two years, assuming for this purpose that all accrued
benefits are fully vested, and (2) the Executive's actual benefit (paid or
payable), if any, under the Retirement Plan and the SERP; and

                 (ii) For the remainder of the Employment Period plus two years,
or such longer period as any plan, program, practice or policy may provide, the
Company shall continue benefits (or pay the pre-tax economic equivalent) to the
Executive and/or the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs, practices and
policies described in Sections 4(b)(v) and 4(b)(vii) if the Executive's
employment had not been terminated in accordance with the most favorable plans,
practices, programs or policies of the Company and its affiliated companies as
in effect and applicable generally to other peer executives and their families
during the 90- day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in


Executive Retention Agreement       Page 17

<PAGE>   26
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies and their families, provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive medical or other welfare benefits under another employer provided
plan, the medical and other welfare benefits described herein shall be secondary
to those provided under such other plan during such applicable period of
eligibility (such continuation of such benefits for the applicable period herein
set forth shall be hereinafter referred to as "WELFARE BENEFIT CONTINUATION".
For purposes of determining eligibility of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive shall be
considered to have remained employed until the end of the Employment Period and
to have retired on the last day of such period; and

                 (iii) To the extent not theretofore paid or provided, for the
remainder of the Employment Period plus two years, or such longer period as any
plan, program, practice or policy may provide, the Company shall timely pay or
provide to the Executive and/or the Executive's family any other amounts or
benefits (or the pre-tax economic equivalent) required to be paid or provided or
which the Executive and/or the Executive's family is eligible to receive
pursuant to this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies as in effect
and applicable generally to other peer executives of the Company and its
affiliated companies and their families during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally thereafter with respect to other peer executives of the Company
and its affiliated companies and their families (such other amounts and benefits
shall be hereinafter referred to as the "OTHER BENEFITS").


Executive Retention Agreement       Page 18

<PAGE>   27
           (b) Death. If the Executive's employment is terminated by reason of
the Executive's death during, the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for (i) payment of Accrued Obligations (which
shall be paid to the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation and Other Benefits (excluding, in
each case, Death Benefits (as defined below)) and (ii) payment to the
Executive's estate or beneficiary, as applicable, in a lump-sum in cash within
30 days of the Date of Termination of an amount equal to (A) the sum of the
Severance Amount and the Supplemental Retirement Amount reduced, but not below
zero, by (B) the present value (determined as provided in Section 280G(d)(4) of
the Code) of any cash amount to be received by the Executive or the Executive's
family as a death benefit pursuant to the terms of any plan, policy or
arrangement of the Company and its affiliated companies, but not including any
proceeds of life insurance covering the Executive to the extent paid for
directly or on a contributory basis by the Executive (which shall be paid in any
event as an Other Benefit) (the benefits included in this clause (B) shall be
hereinafter referred to as the "DEATH BENEFITS").

           (c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for (i)
payment of Accrued Obligations (which shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination) and the timely payment of
provision of the Welfare Benefit Continuation and Other Benefits (excluding, in
each case, Disability Benefits, as defined below) and (ii) payment to the


Executive Retention Agreement       Page 19

<PAGE>   28
Executive in a lump sum in cash within 30 days of the Date of Termination of an
amount equal to (A) the sum of the Severance Amount and the Supplemental
Retirement Amount reduced, but not below zero, by (B) the present value
(determined as provided in Section 280G(d)(4) of the Code) of any cash amount to
be received by the Executive as a disability benefit pursuant to the terms of
any plan, policy or arrangement of the Company and its affiliated companies, but
not including any proceeds of disability insurance covering the Executive to the
extent paid for directly or on a contributory basis by the Executive (which
shall be paid in any event as an Other Benefit) (the benefits included in this
clause (B) shall be hereinafter referred to as the "DISABILITY BENEFITS").

           (d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive Annual Base Salary through the Date of Termination plus
the amount of any compensation previously deferred by the Executive, in each
case to the extent theretofore unpaid. If the Executive terminates employment
during the Employment Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the Executive, other
than for Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination.

     7. Non-exclusivity of Rights. Except as provided in Sections 6(a)(ii), 6(b)
and 6(c), nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its


Executive Retention Agreement       Page 20

<PAGE>   29
affiliated companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts that are vested benefits or that the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

     8. Full Settlement; Resolution of Disputes.

           (a) The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, except as provided in Section
6(a)(ii), such amounts shall not be reduced if the Executive obtains other
employment.

           (b) Parties recognize that there may be disputes between them as to
whether the circumstances of the Executive's termination are covered by Section
6(a), (b) or (c) as the Executive and/or the Executive's family may contend or
are covered by Section 6(d) as Company may contend. In the event of such a
dispute, there may be a need for a binding ruling by a neutral decision maker.
In such an event, the following shall apply:

                 (i) If the Executive delivers a Notice of Termination to
Company based on Section 6(a), (b) or (c), Company must pay the benefits
provided in Section 6 unless


Executive Retention Agreement       Page 21

<PAGE>   30
Company commences arbitration to resolve the dispute within 30 days of the
receipt of a Notice of Termination by the Executive. Failure to commence
arbitration within the time stated is deemed an admission by Company of the
Executive's reason for termination.

                 (ii) If Company delivers a Notice of Termination based on
Section 6(d), Executive and/or Executive's family must commence arbitration to
dispute the terms of such termination. Failure to commence arbitration within 60
days of the receipt of a Notice of Termination from Company is deemed an
admission by the Executive of termination pursuant to Section 6(d).

                 (iii) Arbitration shall be conducted before a panel of three
(3) arbitrators sitting in a location selected by the Executive within fifty
(50) miles from the location of his job with the Company, in accordance with the
rules of the American Arbitration Association then in effect. One arbitrator
shall be selected by the Company. One arbitrator shall be selected by the
Executive. The third arbitrator shall be selected by the two arbitrators
selected by the Company and the Executive. Judgment may be entered on the award
of the arbitrators in any court having proper jurisdiction, and such shall
constitute the final, nonappealable decision.

                 (iv) Company agrees to pay promptly as incurred, to the full
extent permitted by law, all legal fees and expenses that the Executive may
reasonably incur as a result of any contest by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), including all costs of arbitration, plus in each case interest on
any


Executive Retention Agreement       Page 22

<PAGE>   31
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.

                 (v) During the pendency of a dispute resolution, Company shall
proceed to pay Annual Base Salary and Annual Bonus (referred to collectively as
"CONTINUATION BENEFITS") to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, as though no such termination had occurred.

                       (A) If it is determined that the Executive's contention
that Section 6(a), (b) or (c) was applicable, no portion of the Continuation
Benefits will be recoverable by Company, nor shall any portion of such be
credited towards the benefits due (per Section 6) to the Executive. If such a
contention is not sustained by the arbitration panel, all Continuation Benefits
are recoverable by Company, plus interest at the rate of interest that Company
could have earned on amounts paid for such Continuation Benefits.

                       (B) If it is determined that Company's contention that
Section 6(d) was applicable is found to be incorrect, none of the Continuation
Benefits shall be credited to the benefits due (per Section 6) to the Executive.
If, however, Company's contention that Section 6(d) was applicable is found to
be correct, all amounts paid by Company as Continuation Benefits shall be
recoverable from Executive plus interest at the rate of interest that Company
could have earned on the amounts paid for such Continuation Benefits.

                       (C) If the Executive does not make payment of the
Continuation Benefits and accrued interest due to Company within 60 days
following the resolution of the dispute for any amounts recoverable by Company,
interest (on the total amount due) shall be due at the lesser of:


Executive Retention Agreement       Page 23

<PAGE>   32
                             (1)  The rate published as the Prime Rate in the
                                  Wall Street Journal plus one percentage point
                                  on the date of receipt of the Notice of
                                  Termination; or

                             (2)  The maximum amount of interest allowed by law.

                 (D) If the Company does not pay any amount due to the Executive
hereunder within the time provided, then in addition to such amount, Company
shall pay Executive an amount of interest (on the total amount due) at the
lesser of:

                       (1)   The rate published as the Prime Rate in the Wall
                             Street Journal plus one percentage point on the
                             date such payment is due; or

                       (2)   The maximum amount of interest allowed by law.

     9. Limitation on Termination Payment.

           (a) Determination of Termination Payment Limit. Notwithstanding any
other provision of this Agreement, if any portion of the Severance Amount or any
other payment under this Agreement, or under any other agreement with or plan of
the Company (in the aggregate "TOTAL PAYMENTS") would constitute an Excess
Parachute Payment, then the payments to be made to the Executive under this
Agreement shall be reduced such that the value of the aggregate Total Payments
that the Executive is entitled to receive shall be one dollar ($1) less than the
maximum amount which the Executive may receive without becoming subject to the
tax imposed by Section 4999 of the Code, or which the Company may pay without
loss of deduction under Section 280G(a) of the Code. However, the payments to be
made to the Executive under this Agreement shall be reduced if and only if so
reducing the


Executive Retention Agreement       Page 24

<PAGE>   33
payments results in the Executive receiving a greater net Severance Amount than
he would have received had a reduction not occurred and an excise tax been paid
pursuant to Code Section 4999. For purposes of this Agreement, the terms "EXCESS
PARACHUTE PAYMENT" and "PARACHUTE PAYMENTS" shall have the meanings assigned to
them in Section 280G of the Code, and such Parachute Payments shall be valued as
provided therein.

           (b) Procedure for Establishing Limitation on Termination Payment.
Within sixty (60) days following delivery of the Notice of Termination or notice
by the Company to the Executive of its belief that there is a payment or benefit
due the Executive which will result in an "Excess Parachute Payment", the
Executive and the Company, at the Company's expense, shall obtain the opinion of
such legal counsel, which need not be unqualified, as the Executive may choose,
which sets forth: (i) the amount of the Executive's "Annualized Includible
Compensation For The Base Period" (as defined in Code Section 280G(d)(1)); (ii)
the present value of the Total Payments; and (iii) the amount and present value
of any Excess Parachute Payment. The opinion of such legal counsel may be
supported by the opinion of a certified public accounting firm and, if
necessary, a firm of recognized executive compensation consultants. Such opinion
shall be binding upon the Company and the Executive. In the event that such
opinion determines that there would be an Excess Parachute Payment, the
Severance Amount hereunder or any other payment determined by such counsel to be
includible in Total Payments shall be reduced or eliminated so that under the
basis of calculations set forth in such opinion, there will be no Excess
Parachute Payment. The provisions of this Section 9(b), including the
calculations, notices, and opinion provided for herein shall be based upon the
conclusive presumption that: (i) the compensation and benefits provided for
herein; and (ii)


Executive Retention Agreement       Page 25

<PAGE>   34
any other compensation earned prior to the Effective Date of termination by the
Executive pursuant to the Company's compensation programs (if such payments
would have been made in the future in any event, even though the timing of such
payment is triggered by the Change-of-Control), are reasonable.

           (c) Subsequent Imposition of Excise Tax. If, notwithstanding
compliance with the provisions of Sections 9(a), and 9(b) herein, it is
ultimately determined by a court or pursuant to a final determination by the
Internal Revenue Service that any portion of the Total Payments is considered to
be a Parachute Payment, subject to excise tax under Section 4999 of the Code,
which was not contemplated to be a Parachute Payment at the time of payment (so
as to accurately determine whether a limitation benefit to the Executive, as
provided in Section 9(b) hereof), the Executive shall be entitled to receive a
lump sum cash payment sufficient to place the Executive in the same net
after-tax position, computed by using the Special Tax Rate (as such term is
defined below), that the Executive would have been in had such payment not been
subject to such excise tax, and had the Executive not incurred any interest
charges or penalties with respect to the imposition of such excise tax. For
purposes of this Agreement, the "SPECIAL TAX RATE" shall be the highest
effective federal and state marginal tax rates applicable to the Executive in
the year in which the payment contemplated under this Section 9 is made.

     10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of


Executive Retention Agreement       Page 26

<PAGE>   35
its affiliated companies and which shall not be or have become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.

     11.   Successors.

           (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

           (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

           (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "COMPANY" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid that assumes and agrees to perform this Agreement by operation of law,
or otherwise.


Executive Retention Agreement       Page 27

<PAGE>   36
           (d) Failure of the Company to obtain such assumption and agreement
prior to the effective date of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if he had terminated his employment with the Company voluntarily for
Good Reason. For the purpose of implementing the foregoing, the date on which
any such succession becomes effective shall be deemed the Date of Termination.

     12.   Miscellaneous.

           (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

           (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

     If to the Executive:
           James W. Corley
           5922 Colhurst Street
           Dallas, TX   75230

     If to the Company:
           Dave & Buster's, Inc.
           2481 Manana Drive
           Dallas, TX   75220
     Attention:
           General Counsel

or to such other address as either party shall have furnished to the other in
writing in


Executive Retention Agreement       Page 28

<PAGE>   37
accordance herewith. Notice and communications shall be effective when actually
received by the addressee.

           (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

           (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

           (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)- (v), shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.

           (f) The Executive and the Company acknowledge that this Agreement is
entered into at the same time as an agreement styled Employment Agreement
between Executive and Company. Once this Agreement becomes effective upon a
Change of Control, and until such time as it ceases to be effective, this
Agreement shall have precedence over the Employment Agreement in defining the
rights and duties of Executive and Company.

           (g) No provision of this Agreement may be modified, waived, or
discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.


Executive Retention Agreement       Page 29

<PAGE>   38
           (h) Simultaneously with the execution of this Agreement, the Company
is executing that certain agreement styled "Dave & Buster's, Inc. Executive
Retention Agreement Trust". The Company covenants with Executive to: (i) procure
the execution by Wachovia Bank of North Carolina, N.A., as Trustee pursuant to
such agreement; and (ii) make all payments required of the Company pursuant to
such agreement.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Committee, the Company has caused
these presents to be executed in its name on its behalf, all as of the day and
year first above written.

                             _______________________________________
                             James W. Corley

                             Dave & Buster's, Inc.


                             By:    _______________________________
                             Its:   _______________________________



Executive Retention Agreement       Page 30

<PAGE>   39
                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (herein the "Agreement") is made as of the 3rd
day of April, 2000, by and between DAVE & BUSTER'S, INC. (the "Corporation") and
David O. Corriveau (the "Employee").

                                   RECITALS

      A. The Corporation has offered continued employment to Employee for what
it believes to be a reasonable compensation package in light of the required
duties, responsibilities and restrictions. Employee has accepted such offer of
continued employment subject to the terms set forth herein.

      B. The Corporation and Employee desire to set forth in writing the terms
and conditions of their agreements and understandings with respect to the
continued employment of Employee by the Corporation.

                                  AGREEMENT

      NOW, THEREFORE, for and in consideration of the mutual premises and the
covenants and promises contained herein, as well as good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Corporation and Employee hereby agree as follows:

      1. Employment. The Corporation hereby employs, engages and hires Employee,
and Employee hereby accepts such employment and agrees to such hiring and
engagement, upon the terms and conditions hereinafter set forth.

      2. Duties. Employee shall be employed as Co-Chief Executive Officer and
President of the Corporation for the entire term of his employment as set forth
in this Agreement and shall faithfully and to the best of his abilities perform
the following duties:

            2.1 Employee shall have supervisory and oversight responsibility for
the Corporation. He shall have active management of the business and affairs of
the Corporation. He shall see that all orders and resolutions of the Board of
Directors of the Corporation (herein "Board of Directors") are carried into
effect.

            2.2 Employee shall, when authorized by the Board of Directors, when
required by law or when the ordinary conduct of the Corporation's business
requires, execute, in the name of the Corporation, such contracts, documents,
papers or instruments on behalf of the Corporation to further its operations and
business interests.

            2.3 Employee shall perform such other duties and responsibilities as
may be prescribed from time to time by the Board of Directors. Such other
executive duties or


                                        1

<PAGE>   40
responsibilities shall be consistent with the duties of the office of Co-Chief
Executive Officer and President.

Employee shall devote substantially all of his time and attention to the
Corporation's business and affairs to carry out such responsibilities and shall
not engage in any active management role or own, directly or indirectly, more
than a ten percent (10%) interest in any other business activity except as
authorized by the Board of Directors.

      3. Term. The initial term of the employment of Employee by the Corporation
pursuant to this Agreement shall begin on the date hereof and shall continue for
an initial period of one year, unless sooner terminated as hereinafter provided.
Unless terminated as hereinafter provided, the term of this Agreement shall be
continually renewed after the initial term on a rolling one year basis such that
at any point in time there shall always be a period of one year remaining on the
term of this Agreement.

      4. Compensation.

            4.1 Pre-termination. The Corporation shall pay Employee a salary
(payable in accordance with the Corporation's usual payment practices, but not
less frequently than monthly) for his services under this Agreement beginning at
an annual rate from the date hereof of Four Hundred Thousand Dollars
($400,000.00). Employee's annual salary may not be decreased but may be adjusted
upward at any time by the Board of Directors of the Corporation. Compensation to
Employee hereunder shall be prorated for any partial employment period. Employee
shall also participate in the executive incentive bonus plan and in any other
bonus arrangement mutually agreed between Employee and Corporation.

            4.2 Post-termination. Upon each of the first ten (10) anniversary
dates of the termination of this Agreement, Corporation shall pay to Employee,
or Employee's estate in the event of Employee's death, the sum of One Hundred
Thousand Dollars ($100,000.00). In exchange therefor, Employee, on behalf of
himself and his heirs, grants to Corporation the right to use the personal
identity of Employee in connection with the Corporation's marketing concept for
such ten year period. The provisions of this Paragraph 4.2 shall be treated as
if deleted from this Agreement if Employee's employment is terminated for Cause
pursuant to Paragraph 7.3.

      5. Benefits. In addition to the compensation provided in Paragraph 4,
Corporation shall provide Employee with the benefits described herein. The
amounts provided are a minimum and shall not be reduced during the term hereof,
but may be increased by the Board of Directors or the Compensation Committee
appointed by the Board of Directors.

            5.1 Automobile. During the term of this Agreement, the Corporation
shall provide an automobile allowance to Employee of Fifteen Thousand Dollars
($15,000.00) per fiscal year (with a pro rated amount for any partial fiscal
year).


                                        2

<PAGE>   41
            5.2 Vacations, Holidays, Etc. During the term of this Agreement,
Employee shall be entitled to six (6) weeks vacation per calendar year. Unused
vacation periods may not be carried over to subsequent years.

            5.3 Health Insurance and Death Benefits. Employee shall be provided
group medical and life insurance comparable to the standard medical and life
insurance coverage afforded other senior executive officers of the Corporation.
The Corporation shall also provide Employee with an allowance of Seven Thousand
Five Hundred Dollars ($7,500.00) per fiscal year (with a pro rata amount for any
partial fiscal year) for his use in purchasing additional insurance coverage for
medical, dental, hospitalization and death benefits or in payment of any
uninsured expenses or deductible payments not covered by the medical insurance
provided hereunder.

            5.4 Disability Insurance. Employee shall be provided group
disability insurance comparable to the standard disability insurance coverage
afforded other senior executive officers of the Corporation. The Corporation
shall also provide Employee with an allowance of Four Thousand Five Hundred
Dollars ($4,500.00) per fiscal year (with a pro rated amount for any partial
fiscal year) to purchase disability insurance.

            5.5 Reimbursement of Expenses. Upon submission of appropriate
receipts and other documents, the Corporation shall reimburse Employee for the
reasonable business expenses (other than automobile expenses) incurred by
Employee in fulfilling his duties hereunder.

            5.6 Other Benefits. The Corporation shall provide to Employee such
benefits, other than those benefits expressly provided for in this Agreement,
which are generally made available to other senior executive officers of the
Corporation.

      6. Non-Compete Agreement.

            6.1 Covenant. Employee agrees not to engage in or become an employee
of or consultant or adviser of or have any direct or indirect interest in any
other person, firm, corporation or other entity engaged in, any business
activities directly competitive with the business of the Corporation or any of
its subsidiaries or licensees during the term of his employment by the
Corporation and for a period of six (6) months thereafter. The period of time
under which the Employee is to be bound by this covenant is hereinafter referred
to as the "Non-Compete Period". This restriction shall be applicable with
respect to each and every county and metropolitan area in the United States and
each country in which a licensee is located. Nothing contained in this Paragraph
6.1 shall restrict Employee from operating a restaurant and/or bar, provided,
however, such restaurant and/or bar may not use or operate under any service
mark or trade name similar to "Dave & Buster's".

            6.2 Employees. During the Non-Compete Period, Employee will not
knowingly seek to induce any employee of the Corporation or any of its
affiliates to leave his or her employment.


                                        3

<PAGE>   42
      7. Termination. The employment of Employee hereunder shall terminate prior
to the expiration of the term of employment set forth in Paragraph 3 above upon
the happening of any one of the following events:

            7.1 Death. The death of Employee.

            7.2 Disability. The giving of written notice by the Corporation to
Employee of the termination of the employment of Employee upon the disability of
Employee. For purposes of this Paragraph, "disability of Employee" shall mean
the inability of Employee, due to illness, accident or any other physical or
mental incapacity, to perform the services provided for hereunder for a period
of one hundred eighty (180) consecutive calendar days. The inability of Employee
to perform the services provided for hereunder due to his illness, accident or
any other physical or mental incapacity shall not constitute a basis for
discharge under Paragraph 7.4 of this Agreement except to the extent there is
also a basis for discharge under this Paragraph 7.2.

            7.3 Cause. The giving of written notice by the Corporation to
Employee of the termination of the employment of Employee for cause. For
purposes of this Paragraph, "cause" shall mean: (i) a material violation of
Corporation policy or a material breach by the Employee of the Employee's
obligations under Paragraph 2 (other than as a result of incapacity due to
physical or mental illness) that is demonstrably willful and deliberate on the
Employee's part, committed in bad faith or without reasonable belief that the
action or inaction that constitutes such breach is in the best interests of the
Corporation, and, if subject to being effectively remedied, is not remedied in a
reasonable period of time after receipt of written notice from the Corporation
specifying such breach or violation; or (ii) the conviction of the Employee of a
felony involving moral turpitude. Upon Employee's termination pursuant to the
foregoing provisions of this Paragraph 7, the Corporation shall promptly pay to
Employee (or his estate, heirs or personal representatives), the full amount of
his compensation and benefits accrued through the termination date.

            7.4 Without Cause. The Corporation may also terminate the employment
of Employee hereunder for any other reason upon at least ninety (90) days
written notice prior to the expiration of the initial term or any additional one
year term provided in Paragraph 3; provided that upon Employee's termination by
the Corporation for any reason other than those set forth in Paragraphs 7.1,
7.2, or 7.3, (a "Termination Without Cause"), the Corporation shall, until the
Final Payment Date (as hereinafter defined) (i) continue to pay Employee his
then current salary pursuant to Paragraph 4 and (ii) pay Employee the greater
of: (a) the maximum bonus payable to Employee under the executive incentive plan
in effect ninety days prior to such termination, or (b) sixty percent (60%) of
the annual salary then in effect, and (iii) provide the benefits described in
Paragraphs 5.1, 5.3 and 5.4 or their economic equivalent on a pre-tax basis. The
Final Payment Date shall be two years after the date of such termination. Upon
Employee's termination pursuant to this Subparagraph 7.4, the Corporation within
thirty (30) days shall pay in a lump sum to Employee (or his estate, heirs or
personal representative) the full amount of his compensation and benefits
computed through the Final Payment Date.


                                        4

<PAGE>   43
            7.5 Removal from Board of Directors. If, at any time during the term
of this Agreement, Employee is removed from the Board of Directors of the
Corporation or at the expiration of his term as a director is not renominated to
serve as a director of the Corporation by the Board of Directors of the
Corporation (or by any nominating committee of the Board of Directors), and the
cause of such removal or failure to nominate is not the result of Employee's
unwillingness to serve as a director of the Corporation or any reason set forth
in Paragraphs 7.1, 7.2, or 7.3, then Employee may elect to terminate his
employment hereunder and such termination shall be deemed a Termination Without
Cause.

            7.6 By Employee. Employee may elect to terminate his employment
hereunder at any time upon at least ninety (90) days written notice prior to the
expiration of the initial term or any additional one year term provided in
Paragraph 3.

      8. Return of Property. Each party shall promptly deliver to the other all
of the other's property in its possession after termination of this Agreement.

      9. Previous Employment Agreement. The Employment Agreement dated June 16,
1995 between Employee and Corporation (the "Previous Employment Agreement")
shall terminate upon effectiveness of this Agreement.

      10. Maintenance of Employee's Domicile. Employee shall not be required to
relocate his personal residence in order to fulfill his duties under this
Agreement without his prior consent. If the Corporation requires Employee to
relocate his personal residence without the consent of Employee, Employee may
terminate his employment hereunder and such termination shall be deemed a
Termination Without Cause.

      11. Damages and Irreparable Injury. In the event of a breach of this
Agreement by either the Corporation or Employee resulting in damages to the
other party, that party may recover from the party breaching the Agreement any
and all damages that may be sustained. In the event of a breach of Paragraphs 6
or 12, Employee acknowledges that such a breach may result in irreparable injury
and damage to the Corporation that would be difficult, if not impossible, to
determine with certainty and specificity, that the Corporation would have no
adequate remedy at law therefor and that the Corporation may thereupon (a)
obtain such preliminary, temporary or permanent mandatory or restraining
injunctions, orders or decrees as are necessary to protect the Corporation
against, or on account of, any such breach and (b) obtain any other relief
against Employee (including damages) as may be provided by law or in equity.

      12. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Employee during the Employee's employment by the Corporation or
any of its affiliated companies and which shall not be or have become public
knowledge (other than by acts by the Employee or representatives of the Employee
in violation of this Agreement). After termination


                                        5

<PAGE>   44
of the Employee's employment with the Corporation, the Employee shall not,
without the prior written consent of the Corporation or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those designated by
it. In no event shall an asserted violation of the provisions of this Paragraph
12 constitute a basis for deferring or withholding any amounts otherwise payable
to the Employee under this Agreement.

      13. Indemnity of Employee. The Corporation shall indemnify and hold
Employee harmless for all losses, claims, damages, causes of action and
judgments (herein "Losses") sustained by Employee as a direct result of the
discharge of his duties required by this Agreement; provided, however, such
indemnification shall not cover Losses sustained by Employee as a result of
Employee's gross negligence, willful misconduct, fraud or dishonesty.

      14. Miscellaneous.

            14.1 Waiver. The waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.

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

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

            14.4 Assignment. Neither this Agreement, nor any of the rights or
obligations of either party hereunder, may be assigned in whole or in part,
except with the written consent of the other party; provided, however, that all
or any part of the Corporation's right and obligations hereunder may be assigned
by the Corporation without the consent of Employee to any affiliate or, if the
business or assets of the Corporation are sold to a third party, to such third
party, subject to the rights of Employee set forth herein above concerning
Employee's option for termination.

            14.5 Attorney's Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs, and necessary
disbursements in addition to any other relief to which he may be entitled.

            14.6 Invalid Provision. If a court of competent jurisdiction
determines that any restriction contained in this Agreement is void, illegal or
unenforceable, the other provisions shall remain in full force and effect and
the provision held to be void, illegal or unenforceable shall be limited so that
it shall remain in effect to the extent permissible by law.



                                       6

<PAGE>   45
            14.7 Modification. No modification, amendment, change or discharge
of any term or provision of this Agreement shall be valid or binding unless the
same is in writing and signed by all the parties hereto.

            14.8 Entire Agreement. Except as otherwise provided in this
Subparagraph 14.8, this Agreement constitutes the entire agreement and
understanding of the parties on the subject hereof and supersede all prior
written and/or oral agreements, representations and understandings related to
the subject matter hereof.

This Agreement is entered into at the same time as an agreement styled Executive
Retention Agreement ("ERA") between Corporation and Employee. Under the terms of
the ERA, the ERA becomes effective upon a "Change of Control" as that term is
defined in the ERA. Once the ERA becomes effective and until such time as it
ceases to be effective, the ERA shall have precedence over this Agreement in
defining the rights and duties of Corporation and Employer; provided, further
for clarification, it is not intended that Employee will receive duplicate
economic benefits during the time the ERA is effective. The terms of this
Agreement not inconsistent with the ERA, including, but not limited to the
provisions of Subparagraph 4.2, shall continue to apply. After the ERA ceases to
be effective, all terms of this Agreement shall again be effective, unless this
Agreement is otherwise terminated.

            14.9 Notice. Any notice which either party may wish to give to the
other party hereunder shall be deemed to have been given when delivered
personally or by commercial courier or three days after being deposited in the
mail, certified and with proper postage prepaid, if addressed as follows:

            To the Corporation:

            Dave & Buster's, Inc.
            2481 Manana Drive
            Dallas, TX   75220
            Attn.:  General Counsel

            To Employee:

            David O. Corriveau
            15 Milford Place
            Dallas, TX   75230

or to such other address as the parties may designate for themselves from time
to time by written notice to the other party given in the aforesaid manner.


                                        7

<PAGE>   46
            14.10 Binding Effect. The provisions hereof shall be binding upon
and shall inure to the benefit of Employee, his heirs and personal
representatives.

            14.11 Affiliate. The term "affiliate" or "affiliates" as used herein
shall mean any person, partnership or entity which, directly or indirectly
through one or more intermediaries, is controlled by, controls, or is under
common control with the person or entity specified.


            14.12 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without reference
to principles of conflict of laws.

      EXECUTED this ____ day of May, 2000.

                              THE CORPORATION:

                              DAVE & BUSTER'S, INC., a Missouri corporation

                              By:   ____________________________________
                              Name: ____________________________________
                              Title:____________________________________



                              EMPLOYEE:

                              __________________________________________
                              Name: David O. Corriveau


                                        8

<PAGE>   47
                        EXECUTIVE RETENTION AGREEMENT

                              TABLE OF CONTENTS


<TABLE>
<CAPTION>
Section                                                                     Page
-------                                                                     ----
<S>                                                                         <C>
      Table of Contents................................................       1
1.    Certain Definitions..............................................       2
2.    Control..........................................................       3
3.    Employment Period................................................       6
4.    Terms of Employment..............................................       7
5.    Termination of Employment........................................      12
6.    Obligations of the Company upon Termination......................      16
7.    Non-exclusivity of Rights........................................      20
8.    Full Settlement; Resolution of Disputes..........................      21
9.    Limitation on Termination Payment................................      24
10.   Confidential Information.........................................      26
11.   Successors.......................................................      27
12.   Miscellaneous....................................................      28
</TABLE>



Executive Retention Agreement       Page 1

<PAGE>   48
                       EXECUTIVE RETENTION AGREEMENT

      AGREEMENT by and between Dave & Buster's, Inc. (the "COMPANY"), and David
O. Corriveau, (the "EXECUTIVE"), dated as of the 3rd day of April, 2000.

      The Compensation Committee of the Company, (the "COMMITTEE"), has
determined that it is in the best interests of the Company and its owners to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined in Section 2) of Dave & Buster's, Inc. (the "CORPORATION"). The
Committee believes it is imperative to minimize distraction of the Executive
resulting from personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage the Executive's full attention and
dedication to the Company currently and in the event of any threatened or
pending Change of Control, and to provide the Executive with compensation and
benefits arrangements upon a Change of Control that satisfy the compensation and
benefits expectations of the Executive and are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Committee
has caused the Company to enter into this Agreement.

      NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

      1. Certain Definitions.

            (a) The "EFFECTIVE DATE" shall mean the first date during the Change
of Control Period (as defined in Section 1(b)) on which a Change of Control
occurs. Anything in this Agreement to the contrary notwithstanding, if a Change
of Control occurs and if the Executive's employment with the Company is
terminated by the Company within ninety (90) days prior to the date on which the
Change of Control occurs, then for all purposes of this


Executive Retention Agreement       Page 2

<PAGE>   49
Agreement the "EFFECTIVE DATE" shall mean the date immediately prior to the date
of such termination of employment.

            (b) The "CHANGE OF CONTROL PERIOD" shall mean the period commencing
on the date hereof and ending on the third anniversary of such date; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "RENEWAL DATE"), the Change of Control
Period shall be automatically extended so as to terminate three years from such
Renewal Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Change of Control Period shall not
be so extended.

      2. Control. For the purpose of this Agreement, a "CHANGE OF CONTROL" shall
mean:

            (a) Acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT")) (a "PERSON") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the Corporation (the
"OUTSTANDING COMMON STOCK") or (ii) the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote generally in
the election of its directors (the "OUTSTANDING VOTING SECURITIES"); provided,
however, that the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Corporation (excluding an
acquisition by virtue of the exercise of a conversion privilege), (ii) any
acquisition by the Corporation, (iii) any acquisition


Executive Retention Agreement       Page 3

<PAGE>   50
by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (iv) any
acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of subsection (c) of this
Section 2 are satisfied; or

            (b) Individuals who, as of the date hereof, constitute the Board of
Directors of the Corporation (the "INCUMBENT BOARD") cease for any reason to
constitute at least a majority of the Board of Directors said Corporation (the
"BOARD"); provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14.A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or

            (c) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) more than 50% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 50% of the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or


Executive Retention Agreement       Page 4

<PAGE>   51
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such reorganization, merger
or consolidation in substantially the same proportions as their ownership
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Common Stock and Outstanding Voting Securities, as the case may be;
(ii) no Person (excluding the Corporation, any employee benefit plan (or related
trust) of the Corporation or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 30% or more of the Outstanding Common Stock or Outstanding Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 30%
or more of the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors; and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or

            (d) Approval by the shareholders of the Corporation of (i) a
complete liquidation or dissolution of the Corporation or (ii) the sale or other
disposition of all or substantially all of the assets of the Corporation, other
than to a corporation with respect to which, following such sale or other
disposition, (A) more than 50% of the then outstanding shares of common stock of
such corporation and more than 50% of the combined voting


Executive Retention Agreement       Page 5

<PAGE>   52
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership immediately
prior to such sale or other disposition of the Outstanding Common Stock or
Outstanding Voting Securities, as the case may be; (B) no Person (excluding the
Corporation and any employee benefit plan (or related trust) of the Corporation
or such corporation and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly, 30% or more of the
Outstanding Common Stock or Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 30% or more of the then outstanding
shares of common stock of such corporation or 30% or more of the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors; and (C) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of the
Corporation.

      3. Employment Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ of the
Company, in accordance with the terms and provisions of this Agreement, for the
period commencing on the Effective Date and ending on the first anniversary of
such date (the "EMPLOYMENT PERIOD"). Employment by one or more of the affiliated
companies, as hereinafter defined, shall be


Executive Retention Agreement       Page 6

<PAGE>   53
considered employment by the Company.

     4.    Terms of Employment.

            (a) Position and Duties.

                  (i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be consistent in all material respects with
the most significant of those held, exercised or assigned at any time during the
90-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office that is the headquarters
of the Company and is less than 25 miles from such location.

                  (ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities to the Company. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such


Executive Retention Agreement       Page 7

<PAGE>   54
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not hereafter be deemed to interfere with
the performance of the Executive's responsibilities to the Company.

           (b)   Compensation.

                  (i) Base Salary. During the Employment period, the Executive
shall receive an annual base salary ("ANNUAL BASE SALARY"), which shall be paid
in equal installments on a monthly basis, at least equal to twelve times the
highest monthly base salary paid or payable to the Executive by the Company and
its affiliated companies during the twelve-month period immediately preceding
the month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed at least annually and shall be increased at
any time and from time to time as shall be substantially consistent with
increases in base salary generally awarded in the ordinary course of business to
other peer executives of the Company and its affiliated companies. Any increase
in Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term "AFFILIATED COMPANIES" shall include any company controlled
by, controlling or under common control with the Company.

                  (ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "ANNUAL BONUS") in cash at least equal to the
greater of: (a) the maximum bonus that the Executive could have been paid
pursuant to the executive incentive bonus plan in effect


Executive Retention Agreement       Page 8

<PAGE>   55
ninety (90) days prior to the Effective Date and (b) sixty percent (60%) of the
Annual Base Salary then in effect. Each such Annual Bonus shall be paid no later
than the end of the third month of the fiscal year next following the fiscal
year for which the Annual Bonus is awarded, unless the Executive shall elect to
defer the receipt of such Annual Bonus.

                  (iii) Special Bonus. In addition to Annual Base Salary and
Annual Bonus payable as herein above provided, if the Executive remains employed
with the Company and its affiliated companies through the first anniversary of
the Effective Date, the Company shall pay to the Executive a special bonus (the
"SPECIAL BONUS") in recognition of the Executive's services during the crucial
one-year transition period following the Change of Control. Such Special Bonus
shall be an amount in cash equal to the sum of (A) the Executive's Annual Base
Salary and (B) the Annual Bonus paid or payable, including by reason of any
deferral, to the Executive (and annualized for any fiscal year consisting of
less than twelve full months or for which the Executive has been employed for
less than twelve full months) for the most recently completed fiscal year during
the Employment Period. The Special Bonus shall be paid no later than 30 days
following the first anniversary of the Effective Date.

                  (iv) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies. Such plans, practices, policies and programs shall provide the
Executive with incentive opportunities (measured with respect to both regular
and special incentive opportunities, if any), savings opportunities and
retirement benefit


Executive Retention Agreement       Page 9

<PAGE>   56
opportunities, in each case, as favorable as the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
90-day period immediately preceding the Effective Date or, if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

                  (v) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies. Such
plans, practices, policies and programs shall provide the Executive with
benefits that are, in each case, as favorable, as the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

                  (vi) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable employment
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive at any time during the 90- day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in


Executive Retention Agreement       Page 10

<PAGE>   57
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

                  (vii) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date, or if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.

                  (viii)Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company or its affiliated companies at any time during
the 90-day period immediately preceding the Effective Date or, if more favorable
to the Executive, as provided generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.

                  (ix) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.


Executive Retention Agreement       Page 11

<PAGE>   58
      5. Termination of Employment.

            (a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the "DISABILITY
EFFECTIVE DATE"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "DISABILITY" shall mean the absence of
the Executive from the Executive's full-time duties with the Company for 180
consecutive calendar days as a result of incapacity due to mental or physical
illness that is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be withheld
unreasonably).

            (b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement, "CAUSE"
shall be determined by the Committee in exercise of good faith and reasonable
judgment and shall mean (i) a material violation of Company policy or a material
breach by the Executive of the Executive's obligations under Section 4(a) (other
than as a result of incapacity due to physical or mental illness) that is
demonstrably willful and deliberate on the Executive's part, committed


Executive Retention Agreement       Page 12

<PAGE>   59
in bad faith or without reasonable belief that the action or inaction that
constitutes such breach is in the best interests of the Company, and, if subject
to being effectively remedied, is not remedied in a reasonable period of time
after receipt of written notice from the Company specifying such breach or
violation ("NOTE OF BREACH"); or (ii) the conviction of the Executive of a
felony involving moral turpitude.

     If Company delivers a Notice of Breach to Executive describing the
situation to be remedied and Executive fails to remedy such violation or breach
within a reasonable period of time (as determined in the Notice of Breach), a
Notice of Termination delivered to the Executive subsequent to the Notice of
Breach shall become effective retroactively back to the date of delivery of the
Notice of Breach to the Executive.

           (c) Good Reason. The Executive's employment may be terminated during
the Employment Period by the Executive for Good Reason. For purposes of this
Agreement, "GOOD REASON" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:

                  (i) the assignment to the Executive of any duties, authority
or responsibilities materially inconsistent with the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities with the most significant of those held, exercised or
assigned at any time during the 90-day period immediately preceding the
Effective Date (excluding those duties that are only for the purpose of
effecting the Change of Control) or any other action by the Company that results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated action that is insubstantial or
inadvertent and that is remedied by the Company promptly after receipt of


Executive Retention Agreement       Page 13

<PAGE>   60
notice thereof given by the Executive;

                  (ii) any failure by the Company to comply with any of the
provisions of Section 4(b), other than an isolated failure that is insubstantial
or inadvertent failure and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

                  (iii) the Company's requiring the Executive to be based at any
office or location other than that described in Section 4(a)(i)(B); (iv) any
purported termination by the Company of the Executive's employment otherwise
than as expressly permitted by this Agreement; (v) any failure by the Company to
obtain a satisfactory agreement from any successor to the Company to assume and
agree to perform the Company's obligations under this Agreement, as contemplated
in Section 11(c) herein;

                  (vi) the Company requiring the Executive to engage in
excessive travel in comparison to travel required during the 90-day period
immediately preceding the Effective Date; or

                  (vii) a substantial change in organizational reporting
relationships as compared to the 90-day period immediately preceding the
Effective Date that will have a significant impact on the status, offices,
titles and reporting requirements of the Executive.

      The Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting Good Reason.

            (d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b).
For purposes of this Agreement, a


Executive Retention Agreement       Page 14

<PAGE>   61
"NOTICE OF TERMINATION" means a written notice that (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
of such notice. The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance that supports a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from later asserting such
fact or circumstance in enforcing the Executive's or the Company's rights
hereunder. The Company may not terminate the Executive's employment for Cause
after the Executive has delivered a Notice of Termination for Good Reason; nor
may the Executive terminate employment with Company for Good Reason after
Company has delivered a Notice of Termination to the Executive.

            (e) Date of Termination. "DATE OF TERMINATION" means (i) if the
Executive's employment is terminated by the Company for Cause or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be; (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
date on which the Company notifies the Executive of such termination; and (iii)
if the Executive's employment is terminated by reason of death or Disability,
the date of death of the Executive or the Disability Effective Date, as the case
may be.


Executive Retention Agreement       Page 15

<PAGE>   62
      6. Obligations of the Company upon Termination.

            (a) Good Reason; Other than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall terminate
employment for Good Reason:

                  (i) The Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the following
amounts:

                        A. The sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the extent not theretofore paid, (2) the
product of (x) the Annual Bonus and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is 365 and (3) the Special Bonus, if due to the
Executive pursuant to Section 4(b)(iii), to the extent not theretofore paid and
(4) any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the amounts described in clauses
(1), (2), (3) and (4) shall be hereinafter referred to as the "ACCRUED
OBLIGATIONS"); and

                        B. The amount (such amount shall be hereinafter
referred to as the "SEVERANCE AMOUNT") equal to two times the sum of (x) the
Executive's Annual Base Salary and (y) the Annual Bonus; provided, however, that
if the Special Bonus has not been paid to the Executive, such amount shall be
increased by the amount of the Special Bonus; and, provided further, that such
amount shall be reduced by the present value (determined as provided in Section
280G(d)(4) of the Internal Revenue Code of 1986, as amended (the "CODE")) of any
other amount of severance relating to salary or bonus continuation to be


Executive Retention Agreement       Page 16

<PAGE>   63
received by the Executive upon termination of employment of the Executive under
any severance plan, policy or arrangement of the Company; and

                        C. A separate lump-sum supplemental retirement benefit
(the amount of such benefit shall be hereinafter referred to as the
"SUPPLEMENTAL RETIREMENT AMOUNT") equal to the difference between (1) the amount
payable under any Company retirement plan (or any successor plan thereto) (the
"RETIREMENT PLAN"), of which the Executive was a participant, and any
supplemental and/or excess retirement plan of the Company and its affiliated
companies providing benefits for the Executive (the "SERP") that the Executive
would receive if the Executive's employment continued at the compensation level
provided for in Sections 4(b)(i) and 4(b)(ii) for the remainder of the
Employment Period plus two years, assuming for this purpose that all accrued
benefits are fully vested, and (2) the Executive's actual benefit (paid or
payable), if any, under the Retirement Plan and the SERP; and

                  (ii) For the remainder of the Employment Period plus two
years, or such longer period as any plan, program, practice or policy may
provide, the Company shall continue benefits (or pay the pre-tax economic
equivalent) to the Executive and/or the Executive's family at least equal to
those which would have been provided to them in accordance with the plans,
programs, practices and policies described in Sections 4(b)(v) and 4(b)(vii) if
the Executive's employment had not been terminated in accordance with the most
favorable plans, practices, programs or policies of the Company and its
affiliated companies as in effect and applicable generally to other peer
executives and their families during the 90- day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in


Executive Retention Agreement       Page 17

<PAGE>   64
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies and their families, provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive medical or other welfare benefits under another employer provided
plan, the medical and other welfare benefits described herein shall be secondary
to those provided under such other plan during such applicable period of
eligibility (such continuation of such benefits for the applicable period herein
set forth shall be hereinafter referred to as "WELFARE BENEFIT CONTINUATION".
For purposes of determining eligibility of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive shall be
considered to have remained employed until the end of the Employment Period and
to have retired on the last day of such period; and

                  (iii) To the extent not theretofore paid or provided, for the
remainder of the Employment Period plus two years, or such longer period as any
plan, program, practice or policy may provide, the Company shall timely pay or
provide to the Executive and/or the Executive's family any other amounts or
benefits (or the pre-tax economic equivalent) required to be paid or provided or
which the Executive and/or the Executive's family is eligible to receive
pursuant to this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies as in effect
and applicable generally to other peer executives of the Company and its
affiliated companies and their families during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally thereafter with respect to other peer executives of the Company
and its affiliated companies and their families (such other amounts
and benefits shall be hereinafter referred to as the "OTHER BENEFITS").


Executive Retention Agreement       Page 18

<PAGE>   65
            (b)   Death.  If the Executive's employment is terminated by reason
of the Executive's death during, the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for (i) payment of Accrued Obligations (which
shall be paid to the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination) and the timely payment or
provision of the Welfare Benefit Continuation and Other Benefits (excluding, in
each case, Death Benefits (as defined below)) and (ii) payment to the
Executive's estate or beneficiary, as applicable, in a lump-sum in cash within
30 days of the Date of Termination of an amount equal to (A) the sum of the
Severance Amount and the Supplemental Retirement Amount reduced, but not below
zero, by (B) the present value (determined as provided in Section 280G(d)(4) of
the Code) of any cash amount to be received by the Executive or the Executive's
family as a death benefit pursuant to the terms of any plan, policy or
arrangement of the Company and its affiliated companies, but not including any
proceeds of life insurance covering the Executive to the extent paid for
directly or on a contributory basis by the Executive (which shall be paid in any
event as an Other Benefit) (the benefits included in this clause (B) shall be
hereinafter referred to as the "DEATH BENEFITS").

            (c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for (i) payment of Accrued Obligations (which shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination) and
the timely payment of provision of the Welfare Benefit Continuation and Other
Benefits (excluding, in each case, Disability Benefits, as defined below) and
(ii) payment to the


Executive Retention Agreement       Page 19

<PAGE>   66
Executive in a lump sum in cash within 30 days of the Date of Termination of an
amount equal to (A) the sum of the Severance Amount and the Supplemental
Retirement Amount reduced, but not below zero, by (B) the present value
(determined as provided in Section 280G(d)(4) of the Code) of any cash amount to
be received by the Executive as a disability benefit pursuant to the terms of
any plan, policy or arrangement of the Company and its affiliated companies, but
not including any proceeds of disability insurance covering the Executive to the
extent paid for directly or on a contributory basis by the Executive (which
shall be paid in any event as an Other Benefit) (the benefits included in this
clause (B) shall be hereinafter referred to as the "DISABILITY BENEFITS").

            (d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive Annual Base Salary through the Date of Termination plus
the amount of any compensation previously deferred by the Executive, in each
case to the extent theretofore unpaid. If the Executive terminates employment
during the Employment Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the Executive, other
than for Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination.

      7. Non-exclusivity of Rights. Except as provided in Sections 6(a)(ii),
6(b) and 6(c), nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its


Executive Retention Agreement       Page 20

<PAGE>   67
affiliated companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts that are vested benefits or that the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

      8. Full Settlement; Resolution of Disputes.

            (a) The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, except as provided in Section
6(a)(ii), such amounts shall not be reduced if the Executive obtains other
employment.

            (b) Parties recognize that there may be disputes between them as to
whether the circumstances of the Executive's termination are covered by Section
6(a), (b) or (c) as the Executive and/or the Executive's family may contend or
are covered by Section 6(d) as Company may contend. In the event of such a
dispute, there may be a need for a binding ruling by a neutral decision maker.
In such an event, the following shall apply:

                  (i) If the Executive delivers a Notice of Termination to
Company based on Section 6(a), (b) or (c), Company must pay the benefits
provided in Section 6 unless


Executive Retention Agreement       Page 21

<PAGE>   68
Company commences arbitration to resolve the dispute within 30 days of the
receipt of a Notice of Termination by the Executive. Failure to commence
arbitration within the time stated is deemed an admission by Company of the
Executive's reason for termination.

                  (ii) If Company delivers a Notice of Termination based on
Section 6(d), Executive and/or Executive's family must commence arbitration to
dispute the terms of such termination. Failure to commence arbitration within 60
days of the receipt of a Notice of Termination from Company is deemed an
admission by the Executive of termination pursuant to Section 6(d).

                  (iii) Arbitration shall be conducted before a panel of three
(3) arbitrators sitting in a location selected by the Executive within fifty
(50) miles from the location of his job with the Company, in accordance with the
rules of the American Arbitration Association then in effect. One arbitrator
shall be selected by the Company. One arbitrator shall be selected by the
Executive. The third arbitrator shall be selected by the two arbitrators
selected by the Company and the Executive. Judgment may be entered on the award
of the arbitrators in any court having proper jurisdiction, and such shall
constitute the final, nonappealable decision.

                  (iv) Company agrees to pay promptly as incurred, to the full
extent permitted by law, all legal fees and expenses that the Executive may
reasonably incur as a result of any contest by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), including all costs of arbitration, plus in each case interest on
any


Executive Retention Agreement       Page 22

<PAGE>   69
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.

                  (v) During the pendency of a dispute resolution, Company shall
proceed to pay Annual Base Salary and Annual Bonus (referred to collectively as
"CONTINUATION BENEFITS") to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, as though no such termination had occurred.

                        (A) If it is determined that the Executive's contention
that Section 6(a), (b) or (c) was applicable, no portion of the Continuation
Benefits will be recoverable by Company, nor shall any portion of such be
credited towards the benefits due (per Section 6) to the Executive. If such a
contention is not sustained by the arbitration panel, all Continuation Benefits
are recoverable by Company, plus interest at the rate of interest that Company
could have earned on amounts paid for such Continuation Benefits.

                        (B) If it is determined that Company's contention
that Section 6(d) was applicable is found to be incorrect, none of the
Continuation Benefits shall be credited to the benefits due (per Section 6) to
the Executive. If, however, Company's contention that Section 6(d) was
applicable is found to be correct, all amounts paid by Company as Continuation
Benefits shall be recoverable from Executive plus interest at the rate of
interest that Company could have earned on the amounts paid for such
Continuation Benefits.

                        (C) If the Executive does not make payment of the
Continuation Benefits and accrued interest due to Company within 60 days
following the resolution of the dispute for any amounts recoverable by Company,
interest (on the total amount due) shall be due at the lesser of:


Executive Retention Agreement       Page 23

<PAGE>   70
                             (1)  The rate published as the Prime Rate in the
                                  Wall Street Journal plus one percentage point
                                  on the date of receipt of the Notice of
                                  Termination; or

                             (2)  The maximum amount of interest allowed by law.

                  (D) If the Company does not pay any amount due to the
Executive hereunder within the time provided, then in addition to such amount,
Company shall pay Executive an amount of interest (on the total amount due) at
the lesser of:

                        (1)   The rate published as the Prime Rate in the Wall
                              Street Journal plus one percentage point on the
                              date such payment is due; or

                        (2)   The maximum amount of interest allowed by law.

      9. Limitation on Termination Payment.

            (a) Determination of Termination Payment Limit. Notwithstanding any
other provision of this Agreement, if any portion of the Severance Amount or any
other payment under this Agreement, or under any other agreement with or plan of
the Company (in the aggregate "TOTAL PAYMENTS") would constitute an Excess
Parachute Payment, then the payments to be made to the Executive under this
Agreement shall be reduced such that the value of the aggregate Total Payments
that the Executive is entitled to receive shall be one dollar ($1) less than the
maximum amount which the Executive may receive without becoming subject to the
tax imposed by Section 4999 of the Code, or which the Company may pay without
loss of deduction under Section 280G(a) of the Code. However, the payments to be
made to the Executive under this Agreement shall be reduced if and only if so
reducing the


Executive Retention Agreement       Page 24

<PAGE>   71
payments results in the Executive receiving a greater net Severance Amount than
he would have received had a reduction not occurred and an excise tax been paid
pursuant to Code Section 4999. For purposes of this Agreement, the terms "EXCESS
PARACHUTE PAYMENT" and "PARACHUTE PAYMENTS" shall have the meanings assigned to
them in Section 280G of the Code, and such Parachute Payments shall be valued as
provided therein.

            (b) Procedure for Establishing Limitation on Termination Payment.
Within sixty (60) days following delivery of the Notice of Termination or notice
by the Company to the Executive of its belief that there is a payment or benefit
due the Executive which will result in an "Excess Parachute Payment", the
Executive and the Company, at the Company's expense, shall obtain the opinion of
such legal counsel, which need not be unqualified, as the Executive may choose,
which sets forth: (i) the amount of the Executive's "Annualized Includible
Compensation For The Base Period" (as defined in Code Section 280G(d)(1)); (ii)
the present value of the Total Payments; and (iii) the amount and present value
of any Excess Parachute Payment. The opinion of such legal counsel may be
supported by the opinion of a certified public accounting firm and, if
necessary, a firm of recognized executive compensation consultants. Such opinion
shall be binding upon the Company and the Executive. In the event that such
opinion determines that there would be an Excess Parachute Payment, the
Severance Amount hereunder or any other payment determined by such counsel to be
includible in Total Payments shall be reduced or eliminated so that under the
basis of calculations set forth in such opinion, there will be no Excess
Parachute Payment. The provisions of this Section 9(b), including the
calculations, notices, and opinion provided for herein shall be based upon the
conclusive presumption that: (i) the compensation and benefits provided for
herein; and (ii)


Executive Retention Agreement       Page 25

<PAGE>   72
any other compensation earned prior to the Effective Date of termination by the
Executive pursuant to the Company's compensation programs (if such payments
would have been made in the future in any event, even though the timing of such
payment is triggered by the Change-of-Control), are reasonable.

            (c) Subsequent Imposition of Excise Tax. If, notwithstanding
compliance with the provisions of Sections 9(a), and 9(b) herein, it is
ultimately determined by a court or pursuant to a final determination by the
Internal Revenue Service that any portion of the Total Payments is considered to
be a Parachute Payment, subject to excise tax under Section 4999 of the Code,
which was not contemplated to be a Parachute Payment at the time of payment (so
as to accurately determine whether a limitation benefit to the Executive, as
provided in Section 9(b) hereof), the Executive shall be entitled to receive a
lump sum cash payment sufficient to place the Executive in the same net
after-tax position, computed by using the Special Tax Rate (as such term is
defined below), that the Executive would have been in had such payment not been
subject to such excise tax, and had the Executive not incurred any interest
charges or penalties with respect to the imposition of such excise tax. For
purposes of this Agreement, the "SPECIAL TAX RATE" shall be the highest
effective federal and state marginal tax rates applicable to the Executive in
the year in which the payment contemplated under this Section 9 is made.

      10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of


Executive Retention Agreement       Page 26

<PAGE>   73
its affiliated companies and which shall not be or have become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.

      11.   Successors.

            (a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

            (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

            (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "COMPANY" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid that assumes and agrees to perform this Agreement by operation of law,
or otherwise.


Executive Retention Agreement       Page 27

<PAGE>   74
            (d) Failure of the Company to obtain such assumption and agreement
prior to the effective date of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if he had terminated his employment with the Company voluntarily for
Good Reason. For the purpose of implementing the foregoing, the date on which
any such succession becomes effective shall be deemed the Date of Termination.

      12.   Miscellaneous.

            (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

            (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

     If to the Executive:
           David O. Corriveau
           15 Milford Place
           Dallas, TX   75230

     If to the Company:
           Dave & Buster's, Inc.
           2481 Manana Drive
           Dallas, TX   75220
     Attention:
           General Counsel

or to such other address as either party shall have furnished to the other in
writing in


Executive Retention Agreement       Page 28

<PAGE>   75
accordance herewith. Notice and communications shall be effective when actually
received by the addressee.

            (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

            (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

            (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)- (v), shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.

            (f) The Executive and the Company acknowledge that this Agreement is
entered into at the same time as an agreement styled Employment Agreement
between Executive and Company. Once this Agreement becomes effective upon a
Change of Control, and until such time as it ceases to be effective, this
Agreement shall have precedence over the Employment Agreement in defining the
rights and duties of Executive and Company.

            (g) No provision of this Agreement may be modified, waived, or
discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.


Executive Retention Agreement       Page 29

<PAGE>   76
            (h) Simultaneously with the execution of this Agreement, the Company
is executing that certain agreement styled "Dave & Buster's, Inc. Executive
Retention Agreement Trust". The Company covenants with Executive to: (i) procure
the execution by Wachovia Bank of North Carolina, N.A., as Trustee pursuant to
such agreement; and (ii) make all payments required of the Company pursuant to
such agreement. 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Committee, the Company has caused
these presents to be executed in its name on its behalf, all as of the day and
year first above written.




                             _______________________________________________
                             David O. Corriveau

                             Dave & Buster's, Inc.


                             By:    ________________________________________
                             Its:   ________________________________________


Executive Retention Agreement       Page 30





<PAGE>   1

                                  EXHIBIT 21.1
                           SUBSIDIARIES OF THE COMPANY

1.    Dave & Buster's of Illinois, Inc., an Illinois corporation
2.    Dave & Buster's of Georgia, Inc., a Georgia corporation
3.    Dave & Buster's of Pennsylvania, Inc., a Pennsylvania corporation
4.    DANB Texas, Inc., a Texas corporation
5.    Dave & Buster's of Maryland, Inc., a Maryland corporation
6.    Dave & Buster's of California, Inc., a California corporation
7.    Dave & Buster's of Colorado, Inc., a Colorado corporation
8.    Dave & Buster's of New York, Inc., a New York corporation
9.    Dave & Buster's of Florida, Inc., a Florida corporation
10.   Dave & Buster's of Pittsburgh, Inc., a Pennsylvania corporation
11.   Dave & Buster's of Hawaii, Inc., a Hawaii corporation





<PAGE>   1


                                                                      EXHIBIT 23

                        CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement 
(Form S-8 No. 333-80537 and 333-88183) pertaining to Dave & Buster's Inc. 1995 
Stock Option Plan and Employee 401(k) Savings Plan of our report dated March 
28, 2001 with respect to the consolidated financial statements of Dave & 
Buster's Inc. included in this Annual Report (Form 10-K) for the year ended 
February 4, 2001.


                                                           /s/ ERNST & YOUNG LLP

Dallas, Texas
April 23, 2001