SHARPER IMAGE CORPORATION
                OFFICER NON-QUALIFIED DEFERRED COMPENSATION PLAN

                                    ARTICLE I

                                     PURPOSE

         This Officer  Non-Qualified  Deferred  Compensation Plan is designed to
provide an  opportunity  for certain  officers of Sharper Image  Corporation  to
defer compensation. This Plan is intended to be a plan that is unfunded and that
is  maintained  by  Sharper  Image  Corporation  primarily  for the  purpose  of
providing  deferred  compensation  for a select  group of  management  or highly
compensated  employees  within the  meaning of the  Employee  Retirement  Income
Security Act of 1974 ("ERISA").

                                   ARTICLE II

                                   DEFINITIONS

         In this Plan, the following terms have the meanings indicated below:

         2.01 "Account" or "Accounts"  means a book account  reflecting  amounts
credited to a Participant's  Separation Account or Scheduled  Withdrawal Account
under  Article III or IV of the Plan,  as adjusted  for  investment  performance
under Article V of the Plan and  distributions or withdrawals in accordance with
Article VII. To the extent it considers necessary or appropriate,  the Committee
or its  delegate  shall  maintain a  separate  subaccount  under the  Separation
Account and/or Scheduled  Withdrawal Account for each type of contribution under
the Plan or shall otherwise  provide a means for determining  that portion of an
Account attributable to each type.

         2.02  "Affiliate"   means  an  entity  other  than  the  Company  whose
Associates are authorized to participate in this Plan by the Committee.

         2.03 "Base Salary" means the base salary received by a Participant from
the  Company  or any of its  subsidiaries  or  affiliates  during the Plan Year,
before  reductions for salary deferrals under this Plan and the Company's 401(k)
plan and before salary reductions under a cafeteria plan qualified under Section
125 of the Code.  Such base  salary  excludes  commissions,  bonuses,  overtime,
living or other  allowances,  contributions  by the Company  any other  employee
benefit  plan  of  the  Company,  vacation  buy-out  payments  or  other  extra,
incentive, premium, contingent,  supplemental or additional compensation, all as
defined by the Company,  but shall include  salary  continuation  amounts during
vacation, illness, etc., but not severance pay.

         2.04 "Base Salary Deferral" means a Participant's deferral of a portion
of his or her Base Salary pursuant to the terms of this Plan.

         2.05 "Beneficiary"  means the person or persons,  natural or otherwise,
designated  in writing by a  Participant  before his or her death to receive the
Participant's vested Account balance if the Participant dies before distribution
of his or her entire vested Account balance.  A Participant may designate one or
more  primary  Beneficiaries  and  one  or  more  secondary  Beneficiaries.  The
Participant may revoke or change this  designation at any time before his or

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her death by following such procedures as the Committee may establish.  However,
if a Participant is married at the time of his or her death,  the designation of
a person other than the  Participant's  surviving  spouse,  if any, as a primary
Beneficiary  shall be void unless the surviving  spouse has consented in writing
to such designation  pursuant to such procedures as the Committee may establish.
If the Committee has not received a Participant's Beneficiary designation before
the  Participant's  death  or if the  Participant  does  not  otherwise  have an
effective Beneficiary designation on file when he or she dies, the Participant's
vested  Account  balance  will be  distributed  to the  Participant's  surviving
spouse, if any, or, if none, to the Participant's estate.

         2.06 "Bonus" means an amount awarded to an Eligible Associate under the
management  bonus  incentive  program  maintained by the Company or an Affiliate
thereof.

         2.07 "Bonus  Deferral" means a  Participant's  deferral of a portion of
his or her Bonus pursuant to the terms of this Plan.

         2.08 "Change in Control" means:

                  (a) The acquisition,  directly or indirectly, by any person or
         related  group of persons (as such term is used in  Sections  13(d) and
         14(d) of the Exchange Act) of beneficial  ownership (as defined in Rule
         13d-3 of the Exchange Act) of securities that results in such person or
         related group of persons  beneficially  owning securities  representing
         50% or  more  of the  combined  voting  power  of  the  Company's  then
         outstanding  securities),  but excluding (A) acquisitions directly from
         the  Company,  (B)  acquisitions  by the  Participant  or a person that
         directly or  indirectly  controls,  is controlled by or is under common
         control with the Company or any employee benefit plan maintained by any
         such  entity and (C) any  acquisition  by a  corporation  pursuant to a
         transaction  that  satisfies each of the conditions of clauses (A), (B)
         and (C) of Paragraph (b) below;

                  (b) A merger,  consolidation  or similar  transaction to which
         the Company is a party or the sale,  transfer or other  disposition  of
         all or substantially all of the Company's assets, unless (A) securities
         representing  at least  50% of the  combined  voting  power of the then
         outstanding  securities of the surviving entity or the entity acquiring
         the  Company's  assets,  as the case may be, or a parent  thereof,  are
         immediately  thereafter  beneficially owned, directly or indirectly and
         in  substantially  the same  proportions,  by persons who  beneficially
         owned  the  Corporation's  outstanding  voting  securities  immediately
         before the  transaction  (B) the  directors of the Company  immediately
         before  the   transaction   constitute,   upon   consummation   of  the
         transaction,  at least a  majority  of the  board of  directors  of the
         surviving entity or the entity acquiring the Company's  assets,  as the
         case may be, or the ultimate parent thereof (for this purpose, treating
         any change in board of  director  composition  that is  anticipated  or
         pursuant  to an  understanding  or  agreement  in  connection  with the
         transaction   as   deemed  to  have   occurred   at  the  time  of  the
         transaction)and (C) and no person acquires securities  representing 30%
         or more of the combined voting power of the then outstanding securities
         of the surviving entity or the entity  acquiring the Company's  assets,
         as the case may be, or a parent thereof; or

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                  (c) A change in the  composition  of the board of directors of
         the Company  over a period of  thirty-six  months or less such that the
         majority  of the  board  ceases  by  reason  of one or  more  contested
         elections  for board  membership,  to be comprised of  individuals  who
         either (A) have been board  members  since the beginning of such period
         or (B) have elected or nominated for election  during such period by at
         least a majority of the board members who were  described in clause (A)
         or who were  previously  so elected or  approved  and who were still in
         office at the time the board approved such election or nomination;

         provided that no transaction  will constitute a Change in Control under
         (a) or (b) by reason of an increase  in the voting  control of a person
         or  related  group  of  persons  who  owns,   directly  or  indirectly,
         securities  representing  30%  or  more  of  the  voting  power  of all
         securities of the company on the Effective Date.

         In no event shall a Change in Control be deemed to have occurred,  with
         respect to a  Participant,  if the  Participant is part of a purchasing
         group  that  consummates  the  Change-in   Control   transaction.   The
         Participant  shall be deemed "part of a purchasing  group" for purposes
         of the preceding  sentence if the Participant is an equity  participant
         in the purchasing company or group (except for (i) passive ownership of
         less  than  three  percent  (3%) of the  stock or other  equity  of the
         purchasing company;  or (ii) ownership of equity  participantion in the
         purchasing  company or group which is  otherwise  not  significant,  as
         determined  prior  to  the  Change  in  Control  by a  majority  of the
         nonemployee continuing directors).

         2.09 "Code" means the Internal Revenue Code of 1986, as amended.

         2.10 "Commission Deferral" means a Participant's  deferral of a portion
of his or her commissions pursuant to the terms of this Plan.

         2.11  "Committee"  means  the  401(k)  Plan  Committee  of the Board of
Directors of the Company,  as  constituted  from time to time. The Committee has
full discretionary  authority to administer and interpret the Plan, to determine
eligibility for Plan benefits, to select Associates for Plan participation,  and
to correct  errors.  The Committee may delegate its duties and  responsibilities
and,  unless  the  Committee  expressly  provides  to  the  contrary,  any  such
delegation will carry with it the Committee's  full  discretionary  authority to
accomplish the  delegation.  Decisions of the Committee and its delegate will be
final and binding on all persons.

         2.12 "Compensation  Committee" means the compensation  committee of the
Board of Directors of the Company as constituted from time to time.

         2.13 "Company" means Sharper Image Corporation.

         2.14 "Company  Contributions" means a payment to Participant's  Account
in an amount equal to a percentage of  Participant's  Base Salary  designated by
the Compensation Committee pursuant to Article IV.

         2.15 "Effective Date" means October 1, 2002.

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         2.16  "Eligible  Associate"  means each officer of the Company or of an
Affiliate at the level of Vice  President or above who has been  selected by the
Committee for Plan  participation.  An individual will automatically cease to be
an Eligible  Associate on the earliest of (i) the date the individual  ceases to
qualify under the preceding  sentence,  (ii) the date specified by the Committee
for such  cessation or (iii) the date the Plan is terminated.  In addition,  the
Committee  may,  in its  sole  discretion,  place  further  requirements  and/or
limitations on an Eligible Associate's participation in any portion of the Plan.

         2.17  "Participant"  means a current or former  Eligible  Associate who
retains an Account.

         2.18 "Plan" means this Sharper  Image  Officer  Non-qualified  Deferred
Compensation Plan, as amended from time to time.

         2.19 "Plan Year" means the calendar year, however,  the first Plan Year
shall begin on October 1, 2002 and end on December 31, 2003.

         2.20 "Profit  Sharing" means an amount received by a Participant  under
the [name of Profit  Sharing  Plan]  maintained  by the Company or an  Affiliate
thereof.

         2.21 "Profit  Sharing  Deferral"  means a  Participant's  deferral of a
portion of his or her Profit  Sharing  allocation  pursuant to the terms of this
Plan.

         2.22 "Scheduled  Withdrawal Account" means a portion of a Participant's
Account  reflecting  an  amount  to be  distributed  pursuant  to  Participant's
election under Section 7.01(a)(ii).

         2.23  "Separation  Account" means a portion of a Participant's  Account
reflecting an amount to be distributed pursuant to Participant's  election under
Section 7.01(a)(i).

         2.24 "Special  Deferred  Compensation  Arrangement"  means any deferred
compensation  arrangement  entered  into between an Eligible  Associate  and the
Company,  or an  Affiliate  thereof,  which is approved by the  Committee or its
delegate pursuant to Section 8.01 hereof.

         2.25  "Termination  of  Employment"  means  termination  of  employment
(including retirement) with the Company and all Affiliates, other than by reason
of death.


                                  ARTICLE III

                         BASE SALARY AND BONUS DEFERRALS

         3.01  Deferral.  In order to be eligible for Base  Salary,  Commission,
Bonus and Profit Sharing  Deferrals for a Plan Year, an Eligible  Associate must
make an election for such Plan Year in such form as the Committee shall specify.
Such election  generally must be made before the calendar year in which the Base
Salary,  Commission,  Bonus and Profit Sharing would otherwise be paid. However,
elections  with respect to the first Plan Year,  which  begins on the  effective
date may be made on or before September 30, 2002. In addition,  if an individual
becomes an Eligible  Associate and is first  notified that he or she is eligible
to participate in the

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Plan after the beginning of a Plan Year, but before July 1 of that Plan Year, he
or she may elect,  before that July 1, to elect Base Salary,  Commission,  Bonus
and/or  Profit  Sharing  Deferrals  with  respect to Base  Salary,  commissions,
Bonuses and/or Profit  Sharing  payable on and after that July 1. Elections will
remain in effect for one Plan Year or, if and to the extent  that the  Committee
so permits,  for subsequent  Plan Years.  The Committee may authorize a separate
election with respect to one or more types or specific items of compensation and
may authorize later  elections if it determines,  in its sole  discretion,  that
special circumstances so warrant.

         3.02 Revocation and Change of Deferral  Election.  A deferral  election
may be revoked or  changed  by filing a written  revocation  in such form as the
Committee  shall specify,  but any revocation or change cannot be made effective
before  the  first  day of the  first  Plan  Year  beginning  after the date the
revocation is filed.

         3.03 Late  Election.  If an Eligible  Associate  does not make a timely
election, no Base Salary, Commission,  Bonus or Profit Sharing Deferrals will be
made under the Plan on behalf of that  Eligible  Associate  with  regard to that
election for that Plan Year.

         3.04  Amount.  The  amount  of an  Eligible  Associate's  Base  Salary,
Commission, Bonus and Profit Sharing Deferrals for a Plan Year must be made in a
manner and subject to such minimum and maximum  limits as the  Committee  (or in
the case of maximum  limits,  the  Compensation  Committee)  may specify.  Until
specified otherwise,  elections must be made as in accordance with the following
rules:  An election may be made to defer (i) any whole  dollar  amount (not less
than $2,000 ($1,000 for the first Plan Year) or percentage  (not less than 2% or
exceeding 25% (75% for the first Plan Year)) of the  Participant's  Base Salary,
(ii) any whole dollar amount (not less than $2,000) or percentage (not less than
5% or exceeding 25%) of the  Participant's  commissions,  (iii) any whole dollar
amount (not less than $2,000) or percentage  (not less than 5% or exceeding 50%)
of the cash portion of the  Participant's  Bonus (iv) any whole  percentage (not
less than 5% or exceeding  50%) of the cash portion of the  Participant's  Bonus
above a dollar  amount  designated  by  Participant  and/or (v) any whole dollar
amount (not less than $2,000) or whole percentage (not less than 5% or exceeding
50%) of the  Participant's  Profit  Sharing.  An Eligible  Associate's  deferral
election  with respect to such  Eligible  Associate's  Base Salary,  Commission,
Bonus or Profit Sharing shall be void if the amount  deferred under such portion
of the Eligible  Associate's  election is less than $2,000 ($1,000 for the first
Plan Year).  If an Eligible  Associate  allocates  deferrals to both a Scheduled
Withdrawal Account and a Separation  Account,  then the amounts deferred to each
account must satisfy the foregoing minimum dollar amounts and percentages.

         3.05  Crediting.  Base  Salary,  Commission,  Bonus and Profit  Sharing
Deferrals  will  be  credited  to  a  Participant's  Separation  Account  and/or
Scheduled Withdrawal Account in the percentage elected by such Participant as of
the date that the deferred  Base  Salary,  commission,  Bonus or Profit  Sharing
would otherwise have been paid.

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                                   ARTICLE IV

                              COMPANY CONTRIBUTIONS

         4.01  Amount.  For any Plan  Year or  fiscal  year of the  Company  the
Compensation Committee may, in its sole discretion,  provide Participants with a
Company  Contribution  equal to a designated  percentage of  Participant's  Base
Salary for such Plan Year or fiscal  year or the annual rate of Base Salary on a
specified date, as the Compensation Committee may determine.

         4.02 Crediting.  Any Company  Contribution will be credited to Eligible
Associate's Accounts at such date as the Compensation  Committee specifies.  Any
Company Contribution will be allocated to a Participant's Separation Account.


                                   ARTICLE V

                                    EARNINGS

         Amounts  credited to a  Participant's  Account  under the Plan shall be
credited with earnings, at periodic intervals determined by the Committee,  at a
rate equal to the actual rate of return (after reduction for associated expenses
specified by the  Committee)  for such period of an investment  fund or funds or
index  or  indices  selected  by that  Participant  from a range  of  investment
vehicles  authorized  by the  Committee.  A  Participant  may  change his or her
investment  selections at periodic  intervals  determined by the Committee.  The
rate of return on investment vehicles shall be tracked solely for the purpose of
computing the amount of benefits  payable to  Participants  under the Plan.  The
Company shall be under no obligation to invest any assets in any such investment
vehicle,  but if the Company invests in such an investment  vehicle to hedge its
obligations  under  the Plan (or a  hedging  transaction  is made  under a trust
referred to in Section 9.08),  earnings credited to an Account shall be adjusted
for such expenses associated with such investment as the Committee shall specify
and the  timing of an assumed  change in  investment  vehicle  for  purposes  of
determining  earnings  on an Account  and/or the date for valuing an Account for
distribution  purposes may be delayed until a related hedging  transaction be is
implemented or undone, as the case may be.


                                   ARTICLE VI

                                     VESTING

         Participants  will be 100%  vested  in that  portion  of their  Account
balance  attributable  to any Base Salary,  Commission,  Bonus or Profit Sharing
Deferrals at all times. Unless otherwise provided by the Compensation Committee,
a  Participant  will  vest  in  that  portion  of  his or  her  Account  balance
attributable to a Company  Contribution in annual  installments  over a five (5)
year period beginning on the date that such Company  Contribution is credited to
the Participant's  Accounts.  Notwithstanding the foregoing, a Participant shall
become 100% vested in that portion of his or her Account balance attributable to
Company Contributions on the effective date of a Change in Control. That portion
of an Account attributable to amounts deferred under a

                                       6.

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Special  Deferred  Compensation  Arrangement  shall vest in accordance  with the
terms of that arrangement.


                                  ARTICLE VII

                                  DISTRIBUTIONS

         7.01 Normal  Distribution of Benefits.  A Participant's  vested Account
balance  will be  distributed  in a single  lump sum  during  the first  January
following the Participant's Termination of Employment,  subject to any elections
made subject to the procedures described below (and such additional requirements
as the Committee  may  determine)  and other special  provisions of this Article
VII:

                  (a) Elections.  When an Eligible  Associate first confirms his
         or her initial  participation  in the Plan, the Eligible  Associate may
         elect, in writing,  to credit his or her deferrals to either or both of
         the following  distribution  accounts;  provided that the Committee may
         authorized  a separate  election  with  respect to one or more items of
         compensation:

                  (i)      Separation  Account.   Distributions  of  the  vested
                           portion of a  Participant's  Separation  Account will
                           commence  during  the  first  January  following  the
                           Participant's   Termination  of  Employment  (or,  if
                           later,  the first January at least one year after the
                           election is filed).  A participant may elect that, if
                           at the scheduled time of  distribution  of his or her
                           vested  Separation   Account,   the  Participant  has
                           completed at least five (5) years of service with the
                           Company or an Affiliate  and has a vested  Separation
                           Account  balance  of at  least  $50,000,  the  vested
                           portion of the Participant's  Separation Account will
                           be  distributed  in a series of annual  installments,
                           not in  excess  of the  lesser of (A) ten (10) or (B)
                           the number of years of service  that the  Participant
                           rendered with the company or an Affiliate. The amount
                           of each installment will be the remaining  balance of
                           the Participant's  vested Separation  Account divided
                           by the number of  installments  remaining  (including
                           the  installment  to  be  made).  Distributions  from
                           Separation Accounts shall be made in cash.

                  (ii)     Scheduled  Withdrawal  Account.  Distributions of the
                           vested   portion   of   a   Participant's   Scheduled
                           Withdrawal  Account will commence  during the January
                           elected  by  Participant  at least one year after the
                           Participant's  election is filed.  A Participant  may
                           elect  that,   the  vested  portion  of  his  or  her
                           Scheduled Withdrawal Account will be distributed in a
                           series of annual installments,  not in excess of four
                           (4).  The  amount  of  each  installment  will be the
                           remaining   balance  of  the   Participant's   vested
                           Scheduled Withdrawal Account divided by the number of
                           installments  remaining (including the installment to
                           be made). In the event of a

                                       7.

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                           Participant's  Termination  of  Employment  prior  to
                           receipt  of  all   distributions   from  his  or  her
                           Scheduled Withdrawal Account, Participant's remaining
                           vested   Scheduled   Withdrawal   Account   will   be
                           distributed  during the first  January  following the
                           Participant's   Termination  of  Employment  (or,  if
                           later,  the first January at least one year after the
                           election  is filed).  Distributions  from  Separation
                           Accounts shall be made in cash.

                  (b)  Subsequent   Elections.   A  Participant   may  change  a
         distribution  election  with  respect to his or her  vested  Separation
         Account balance by submitting the change to the Committee,  in writing,
         at least twelve (12) months before the  Participant  was  originally to
         receive such a  distribution;  provided that no  distribution  shall be
         made  pursuant to such  subsequent  election  within twelve (12) months
         after  the  date  of  such   subsequent   election.   A   Participant's
         distributions  election with respect to his or her Scheduled Withdrawal
         Account is irrevocable.

                  (c)  Default.   If,  upon  a   Participant's   Termination  of
         Employment,  the Committee does not have a proper distribution election
         on file for that Participant,  the vested portion of that Participant's
         Account  balance will be distributed to the Participant in one lump sum
         in the first January after the date of the Participant's Termination of
         Employment  (or,  if later,  the first  January  at one year  after the
         Participant's initial deferral election is filed).

                  (d)  Unvested  Amounts.  The  unvested  portion of an Eligible
         Associate's  Account  balance  shall  be  forfeited  at the time of the
         Eligible Associate's Termination of Employment.

         7.02 Acceleration of Distributions. The timing and form of distribution
may be accelerated by the Participant only as follows:

                  (a)  Hardship  Withdrawal.  If  a  Participant  has  a  severe
         financial   hardship   resulting  from   extraordinary  and  unforeseen
         circumstances  beyond  the  Participant's  control  and  has  no  other
         resources  that could be  liquidated  or otherwise  accessed to relieve
         this  hardship  without such  liquidation  or access  itself  causing a
         severe  financial  hardship,  the  Participant  may  request a hardship
         withdrawal.  The total  hardship  withdrawal  must be  approved  by the
         Committee,  and shall be limited to the  amount  necessary  to meet the
         financial  need,  and in no event may such  amount  exceed  the  vested
         portion of the Participant's Account balance. Hardship withdrawals will
         be taken first from a Participant's  vested Separation  Account balance
         and  then  from  Participant's   vested  Scheduled  Withdrawal  Account
         balance.

                  (b) Non-Hardship  Withdrawal  Subject to Forfeiture.  Absent a
         demonstration  of immediate and heavy financial need described above in
         paragraph  (a), a  Participant  may elect to receive  90% of his or her
         entire vested Account balance in an early distribution at any time upon
         30 days written request,  in which case the remaining ten percent (10%)
         of the Participant's entire vested Account balance shall be permanently
         forfeited.

                                       8.

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                  (c) Suspension.  A participant  who elects a withdrawal  under
         this Section 7.02 may not make further  deferrals under this Plan until
         the beginning of the second Plan Year commencing  after the date of the
         withdrawal, and any further deferrals under existing deferral elections
         shall be suspended until such date.

         7.03 Death.  If a  Participant  dies with a vested amount in his or her
Account,  whether or not  distributions  had commenced  from that Account at the
time of his or her death,  the  remaining  vested  balance in the  Participant's
Account shall be paid to such Participant's  Beneficiary or Beneficiaries in one
lump sum in the first January after the Participant's death.

         7.04 Change in Control. Notwithstanding Section 7.01, in the event of a
Change in Control,  a Participant  shall receive a lump sum  distribution of the
vested portion of his or her Account (including any portion that vests by reason
of the Change in Control)  within thirty days  following  the effective  date of
such Change in Control.

         7.05 Section  162(m).  In the event the payment of a distribution  will
cause the loss of a tax deduction  for the Company  under Section  162(m) of the
Code, or any successor provision,  the distribution shall be deferred until such
time  the  distribution  can be  paid  by the  Company  without  a loss of a tax
deduction. However, this section 7.05 shall not apply to any Participant seeking
a Hardship  Withdrawal under section 7.02(a) or to distributions  made after the
effective date of a Change in Control of the Company.

         7.06  Withholding.  The Company will deduct from Plan payouts,  or from
other compensation payable to a Participant or Beneficiary,  amounts required by
law to be  withheld  for taxes with  respect to  benefits  under this Plan.  The
Company reserves the right to reduce any  supplemental  deferral or contribution
that  would  otherwise  be made under  this Plan on behalf of a  Participant  to
satisfy the Participant's tax withholding liabilities.

         7.07   Valuation.   For  purposes  of  calculating  the  amount  to  be
distributed to a Participant on each distribution  date,  Participant's  Account
balance  will be valued (i) for  distributions  made in January of any  calendar
year, on December 31 of the preceding calendar year or (ii) for distributions on
any other date,  as of the end of the last month  ending at least 30 days before
the distribution date.


                                  ARTICLE VIII

                   SPECIAL DEFERRED COMPENSATION ARRANGEMENTS

         8.01  General.   If  an  Eligible  Associate  enters  into  a  separate
arrangement  with the Company or an  Affiliate  for the payment of  nonqualified
deferred compensation or the Company authorizes the deferral of additional types
of compensation  arrangements  (including but not limited to severance payments,
special  bonuses,  bonuses  or  other  compensation  earned  with a  predecessor
company,  etc.) ("Special Deferred Compensation  Arrangement"),  payment of such
compensation  shall  be made  through  this  Plan,  unless  expressly  specified
otherwise under such arrangement.

         8.02  Defined  Contribution  Arrangements.   If  the  Special  Deferred
Compensation Arrangement is in the nature of a defined contribution arrangement,
the deferred amount will be

                                       9.

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credited to Eligible  Associates' Account when such amounts would otherwise have
been paid or when specified  under the  arrangement.  Amounts so credited to the
Eligible  Associate's  Account will be credited with earnings and, to the extent
vested under the  arrangement,  shall become  distributed in accordance with the
terms of the Plan, except to the extent specified under the arrangement.

         8.03 Defined Benefit  Arrangements.  If a Special Deferred Compensation
Arrangement is in the nature of a defined benefit arrangement, the benefit shall
be  payable  hereunder  if,  at  the  time  and  in the  form  specified  in the
arrangement.


                                   ARTICLE IX

                                  MISCELLANEOUS

         9.01 Limitation of Rights. Participation in this Plan does not give any
individual  the right to be  retained  in the  service of the  Company or of any
related entity.

         9.02 Claims  Procedure.  If a Participant or  Beneficiary  ("Claimant")
believes  that he or she is entitled to a greater  benefit  under the Plan,  the
Claimant may submit a signed,  written  application  to the Committee  within 90
days of having been denied such a greater  benefit.  The Claimant will generally
be notified  of the  approval  or denial of this  application  within 90 days of
having  been denied such a greater  benefit.  The  Claimant  will  generally  be
notified  of the  approval or denial of this  application  within 90 days of the
date that the Committee  receives the application.  If the claim is denied,  the
notification  will state  specific  reasons for the denial and the Claimant will
have 60 days to file a signed,  written  request for a review of the denial with
the  Committee.  This request will include the reasons for  requesting a review,
facts  supporting  the request and any other relevant  comments.  The Committee,
operating  pursuant to its  discretionary  authority to administer and interpret
the Plan and to determine  eligibility for benefits under the terms of the Plan,
will generally make a final, written determination of the Claimant's eligibility
for benefits within 60 days for receipt of the request for review.

         9.03 Indemnification. The Company and the Affiliates will indemnify and
hold harmless the Directors,  the members of the  Committee,  and Associates and
employees of the Company and the Affiliates who may be deemed fiduciaries of the
Plan,  from and against any and all  liabilities,  claims,  costs and  expenses,
including  attorneys' fees,  arising out of an alleged breach in the performance
of their fiduciary duties under the Plan, other than such  liabilities,  claims,
costs and expenses as may result from the gross negligence or willful misconduct
of such persons.  The Company and the Affiliates  shall have the right,  but not
the  obligation,  to conduct the defense of such  persons in any  proceeding  to
which this Section applies.

         9.04 Assignment. To the fullest extent permitted by law, benefits under
the Plan and rights  thereto  are not  subject  in any  manner to  anticipation,
alienation,  sale, transfer,  assignment,  pledge,  encumbrance,  attachment, or
garnishment by creditors of a Participant or a Beneficiary.

         9.05 Amendment and  Termination.  The Company's Board of Directors may,
at any time,  amend or terminate the Plan. In addition,  the Committee may amend
the Plan (other than this Section  9.05),  provided  that no such  amendment may
cause any substantial increase in cost

                                      10.

<PAGE>

to the Company or to any Affiliate.  Any amendment  must be made in writing;  no
oral amendment will be effective.  No amendment or termination  may, without the
consent of an affected  Participant  (or, if the  Participant  is deceased,  the
Participant's   Beneficiary)  or  as  set  forth  below,  adversely  affect  the
Participant's or the  Beneficiary's  rights and obligations  under the Plan with
respect to amounts already credited to a Participant's Account.  Notwithstanding
the foregoing,  if the Plan is terminated,  the Company's Board of Directors may
determine that all Accounts will be paid out as soon as  practicable  thereafter
in single sum payments. In addition, if the Committee determines that additional
restrictions must be placed on Participants'  rights regarding the determination
of earnings  on amounts  credited to their  Accounts,  their  ability to make or
change distribution elections or their ability to accelerate distributions or on
their rights as creditors in order to avoid current taxation of amounts deferred
under the Plan,  the  Compensation  Committee  may amend the Plan to impose such
restrictions  unless  it  determines  in its sole  discretion  that it is in the
Participants' interests to terminate the Plan and distribute Accounts.

         9.06  Applicable  Law. To the extent not  governed by Federal  law, the
laws of the State of  California,  disregarding  choice of law,  will govern the
Plan. If any provision of the Plan is held to be invalid or  unenforceable,  the
remaining provisions of the Plan will continue to be fully effective.

         9.07 No Funding. The Plan constitutes a mere promise by the Company and
the  Affiliates to make  payments in the future in accordance  with the terms of
the Plan.  Participants and  Beneficiaries  have the status of general unsecured
creditors of the Company and the Affiliates. Except to the extent provided below
in Section  9.08,  Plan  benefits  will be paid from the  general  assets of the
Company and the Affiliates and nothing in the Plan will be construed to give any
Participant or any other person rights to any specific  assets of the Company or
the  Affiliates.  In  all  events,  it is the  intention  of  the  Company,  all
Affiliates  and all  Participants  that the Plan be treated as unfunded  for tax
purposes and for purposes of Title I of ERISA.

         9.08 Trust. The Committee may determine that Plan benefits will be paid
from the assets of a grantor trust (the "Trust")  established  by the Company to
assist it in meeting its obligations and, to the extent that such assets are not
sufficient, by the Company. The Trust shall conform to the terms of the Internal
Revenue Service Model Trust as described in Internal  Revenue Service  Procedure
92-64 or to the requirements of successor authority regarding trusts established
under non-qualified deferred compensation arrangements.

         IN WITNESS WHEREOF,  Sharper Image  Corporation has caused this Plan to
be executed by its duly authorized representative on the date indicated below.



__________________________________________     _________________________________
                                                DATE

                                       11.