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                                                                    EXHIBIT 10.3


                              BIG 5 HOLDINGS CORP.

                           1997 MANAGEMENT EQUITY PLAN


     1. Purpose. The purpose of this Plan is to secure for Big 5 Holdings Corp.
(the "COMPANY") and its stockholders the benefits arising from stock ownership
by officers, directors and selected key employees of the Company and its
subsidiaries, including without limitation, Big 5 Corp. ("BIG 5"), a
wholly-owned subsidiary of the Company, as the Committee (as hereinafter
defined) may from time to time determine.

     The Company intends that awards of Purchased Shares and Stock Options, and
the issuance of Common Stock upon exercise of Stock Options hereunder (all as
hereinafter defined), shall constitute the offer and sale of securities pursuant
to a compensatory benefit plan within the meaning of Rule 701 promulgated under
the Securities Act of 1933, as amended, and that this 1997 Management Equity
Plan (the "PLAN") constitutes a stock option plan and stock purchase plan within
the meaning of Section 25102(o) of the California Corporate Securities Law of
1968, as amended.

     With respect to Stock Options, the Plan will provide a means whereby (i)
key employees may purchase shares of Common Stock of the Company pursuant to
Stock Options that will qualify as "incentive stock options" under Section 422
of the Internal Revenue Code of 1986, as amended (the "CODE"), and (ii) such
employees may purchase shares of Common Stock of the Company pursuant to
"non-incentive" or "non-qualified" Stock Options.

     2. Administration. The Plan shall be administered by the Board of Directors
of the Company or, in the discretion of the Board, a Committee (in either case,
the "COMMITTEE") consisting of three or more directors of the Company to whom
administration of the Plan has been duly delegated. If the Committee is not the
entire Board of Directors, the Committee shall be appointed by the Board of
Directors of the Company. From and after such time as the Company is subject to
the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), no director shall be appointed to or
shall serve on the Committee who is not a "Non-Employee Director" (as defined in
Rule 16b-3 promulgated under the Exchange Act) any other plan of the Company or
its affiliates during the period of one year prior to such appointment. Except
as otherwise provided in the Company's Certificate of Incorporation or Bylaws,
any action of the Committee with respect to administration of the Plan shall be
taken by a majority vote at a meeting at which a quorum is duly constituted or
unanimous written consent of the Committee's members.

     Subject to the provisions of the Plan, the Committee shall have sole and
final authority (i) to construe and interpret the Plan, (ii) to define the terms
used herein, (iii) to prescribe, amend and rescind rules and regulations
relating to the Plan, (iv) to make awards of Purchased Shares and Stock Options
hereunder, (v) to determine the individuals to whom and the time or times at
which such awards shall be made, the


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number of shares of Common Stock to be subject to such awards, the vesting of
such awards and the other terms of such awards, (vi) in the case of Stock
Options, to determine whether such Stock Options shall be intended as "incentive
stock options" or "non-incentive" or "non-qualified" Stock Options under Section
422 of the Code, and (vii) to make all other determinations necessary or
advisable for the administration of the Plan. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants in the Plan and their legal representatives and beneficiaries.

     3. Shares Subject to the Plan. The shares to be allocated under this Plan
shall consist of the Company's authorized but unissued Common Stock, $.01 par
value per share ("COMMON STOCK"). Subject to adjustment as provided in Section 8
hereof, the aggregate number of shares of the Common Stock which may be
allocated to awards made to Participants (as defined) shall not exceed Five
Hundred Sixty Thousand (560,000) of such shares (no more than One Hundred
Thousand (100,000) of which shall be subject to Stock Options outstanding at any
time). Shares of Common Stock issued pursuant to the Plan and subsequently
reacquired by the Company shall be available for reissuance under the Plan; and
shares of Common Stock that are subject to Stock Options that lapse or terminate
without exercise shall be available to be subject to newly issued Stock Options
under the Plan or otherwise reissued under the Plan.

     4. Eligibility and Participation. All key employees of Big 5 shall be
eligible for selection to participate in the Plan (each, a "PARTICIPANT").

     5. Awards. A Participant may receive one of more awards hereunder, at any
time and from time to time, as determined by the Committee. Awards may be in the
form of (i) permitted purchases of Common Stock ("PURCHASED SHARES") or (ii)
options to purchase Common Stock ("STOCK OPTIONS"), or any combination of the
foregoing, as determined by the Committee. All awards of Purchased Shares shall
be pursuant to, and shall be subject to the terms and restrictions provided in,
a Management Subscription and Stockholders Agreement substantially in the form
approved from time to time by the Committee; and all awards of Stock Options
shall be pursuant to, and shall be subject to the terms and restrictions
provided in, either a Management Stock Option and Stockholders Agreement or an
Employee Stock Option Agreement substantially in the form attached hereto or as
approved from time to time by the Committee (collectively, the "GRANT
DOCUMENTS"). Subject to the terms of this Plan, the Committee shall determine
the exact terms and restrictions included in each of the foregoing agreements,
as applicable, with respect to each award to a Participant.

     6. Provisions Applicable to Stock Options.

     (a) No Stock Option granted hereunder shall have an exercise price which is
less than 85% of the fair market value of the Common Stock at the time the Stock
Option is granted. In the case of a Stock Option granted to any person who owns
Common Stock possessing more than 10% percent of the total combined voting power
of all classes of stock of the Company, no Stock Option shall be granted with an
exercise


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price of less than 110% of the fair market value of the Common Stock at the time
of the grant.

     (b) If a holder of an "incentive stock option" ceases to be employed by Big
5, the Company or another subsidiary of the Company for any reason other than
the option holder's death or permanent disability (within the meaning of Section
22(e)(3) of the Code), the option holder's "incentive stock option" shall not be
entitled to incentive treatment under the Code if exercised after more than
three months after the date the option holder ceased to be an employee of one of
such corporations (unless by its terms such Stock Option sooner expires). If a
holder of an "incentive stock option" ceases to be employed by Big 5, the
Company or another subsidiary of the Company on account of death or permanent
disability (within the meaning of Section 22(e)(3) of the Code), such Stock
Option shall not be entitled to incentive treatment under the Code if exercised
after one year after the date of such death or permanent disability unless by
its terms it sooner expires. During such period after death, any vested
unexercised portion of the Stock Option may be exercised by the person or
persons to whom the option holder's rights under the Stock Option shall pass by
will or the laws of descent and distribution.

     To the extent that the aggregate fair market value of Common Stock or other
capital stock with respect to which "incentive stock options" are exercisable
for the first time by any individual during any calendar year (under all plans
of the Company and its parent and subsidiary corporations) exceeds $100,000,
such Stock Options shall be treated as Stock Options which are not "incentive
stock options."

     (c) Stock Options granted hereunder shall have an exercise period not to
exceed 120 months from the date the Stock Option is granted.

     (d) The right to exercise Stock Options granted hereunder shall vest at a
rate of at least 20% per year over five years from the date the option is
granted, provided, however, that all Stock Options shall cease to vest
immediately upon termination of a Participant's employment for any reason
(unless otherwise approved by the Committee); and provided further, that in the
case of Stock Options granted to officers or directors, such Stock Options may
become fully exercisable, subject to continued employment (unless otherwise
approved by the Committee), at any time or during any period as the Committee
shall determine.

     (e) In the event that any Participant previously granted Stock Options
hereunder ceases to be employed Big 5, the Company or another subsidiary of the
Company by which Stock Options such Participant had the right to exercise as of
the date such individual ceases to be employed by Big 5, the Company or another
subsidiary of the Company, such Stock Options will be exercisable:

          (i) For at least six months if the Participant ceases to be employed
by Big 5, the Company or another subsidiary of the Company because of death
or disability; or


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          (ii) For at least thirty days if the Participant ceases to be employed
by Big 5, the Company or another subsidiary of the Company for reasons other
than death or disability.

     Notwithstanding the foregoing or any provision to the contrary contained in
any Grant Document, unless otherwise approved by the Committee, Stock Options
granted to any Participant whose employment is terminated for "just cause" shall
terminate immediately and cease to be exercisable. "Just Cause" shall mean
termination of the Participant' employment as a result of (i) such Participant's
violation of any rule or policy of the Company or its subsidiaries that results
in damage to the Company or its subsidiaries or which, after written notice to
do so, the Participant fails to correct within a reasonable time; (ii) any
material failure by the Participant to comply with a reasonable direction of the
Board of Directors of the Company or its subsidiaries or the willful misconduct
by the Participant in the responsibilities reasonably assigned to him or her;
(iii) any willful failure by the Participant to perform his or her job as
required to meet the objectives of the Company or its subsidiaries; (iv) the
Participant's performing services for any other corporation or person which
competes with the Company or its subsidiaries while he or she is employed by the
Company or its subsidiaries and without the written approval of the Chief
Executive Officer of the Company (or, in case the Chief Executive Officer is the
Participant, then by approval of the Company's Board of Directors); (v)
conviction by a court of competent jurisdiction of a felony; or (vi) any other
action or condition that may result in termination of an employee for cause
pursuant to any generally applied standard adopted by the Board of Directors of
the Company from time to time.

     7. Provisions Applicable to Purchased Shares. No grant of Purchased Shares
hereunder shall have a purchase price which is less than 85% of the fair market
value of the stock at the time the right to purchase Purchased Shares is
granted. In the case a right to purchase Purchased Shares is granted to any
person who owns stock possessing more than 10% percent of the total combined
voting power of all classes of stock of the Company, such right to purchase
Purchased Shares shall be granted with a purchase price of at least 100% of the
fair market value of the stock at the time of the grant.

     8. Adjustments. If the outstanding shares of the Common Stock of the
Company are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company or any other corporation
through reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other similar transaction, or in connection
with any merger or reorganization, (i) an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares which may be
awarded under this Plan and (ii) the restrictions and rights set forth in this
Plan or any of the Grant Documents shall apply with respect to such other
capital stock to the same extent as they are, or would have been applicable, to
the Common Stock on or with respect to which such other capital stock was
distributed or exchanged.


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     Adjustments under this paragraph 8 shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.

     9. Nontransferability of Stock Options or Rights to Purchase Shares. Stock
Options and a Participant's rights to purchase Purchased Shares granted
hereunder may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Participant, only
by the Participant.

     10. Amendment and Termination of the Plan. Subject to Section 11 of the
Plan, the Plan shall become effective upon the earlier to occur of its adoption
by the Board of Directors or its approval by the stockholders of the Company as
described in Section 11 of the Plan and shall continue in effect for a term of
ten (10) years; provided, however, that the Committee may at any time suspend or
terminate the Plan. The Committee may also at any time amend or revise the terms
of the Plan.

     Notwithstanding the foregoing, no amendment, suspension or termination of
the Plan that would materially adversely affect any rights or obligations of any
Participant under any Management Subscription and Stockholders Agreement,
Management Stock Option and Stockholders Agreement or Employee Stock Option
Agreement shall be effective as to such Participant unless there shall have been
specific action of the Committee and consent of the Participant.

     11. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.
Stock Options may be granted but not exercised and Purchased Shares may be
granted and purchased prior to shareholder approval of the Plan. If any Stock
Options are so granted and stockholder approval shall not have been obtained
within twelve months of the date of adoption of this Plan by the Board of
Directors, such Stock Options shall terminate retroactively as of the date they
were granted. If any Purchased Shares are so granted and purchased and
shareholder approval shall not have been obtained within twelve months of the
date of adoption of this Plan by the Board of Directors, the sale of such
Purchased Shared shall be rescinded as of the date granted.

     12. No Employment Rights. The selection of any person to receive an award
under this Plan shall not give such person any right to be retained in the
employment of Big 5, the Company or any of their affiliates and the right and
the power of Big 5 to discharge any such person shall not be affected by such
award. No person shall have any right or claim whatever, directly, indirectly or
by implication, to receive an award, nor any expectancy thereof, unless and
until an award in fact shall have been made to such person by the Committee as
provided herein. The award to any person hereunder at any time shall not create
any right or implication that any other or further award may or shall be made at
another time. Each award hereunder shall be separate and distinct


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from every other award and shall not be construed as a part of any continuing
series of awards or compensation.

     13. Annual Financial Information. Each Participant who receives Grant
Shares, Purchased Shares or Stock Options shall be provided with a copy of the
financial statements of the Company at least annually shall be provided with a
copy of financial statements of the Company at least annually.

     14. Repurchase Rights. The Grant Documents may include provisions which
grant the Company the right to repurchase Purchased Shares, Stock Options or
shares of Common Stock acquired upon the exercise of Stock Options substantially
similar to the repurchase rights in the form of the Grant Documents attached
hereto, provided that such rights comply with any state securities laws or
regulations, if any, applicable to the Plan or grants thereunder.

     15. Plan Not Exclusive. The Plan is not exclusive. The Company may have
other plans, programs and arrangements for compensation or the issuance of
shares or options. The Plan does not require that Participants hereunder be
precluded from participation in such other plans, programs and arrangements.


NOVEMBER 1997 MANAGEMENT SUBSCRIPTION AND STOCKHOLDERS AGREEMENT ATTACHED
HERETO.









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