Exhibit 10.3

                                FINE HOST CORPORATION
                          ANNUAL INCENTIVE COMPENSATION PLAN


                                      ARTICLE I

                                       PURPOSE

The purpose of the Annual Incentive Compensation Plan (the "Plan") is to provide
incentive compensation to executives of Fine Host Corporation (the "Company") in
recognition of their significant contributions to the growth,  profitability and
success of the Company from year to year.

The Company intends that certain  performance-based  compensation  payable under
the Plan will qualify for deduction under Section 162(m) of the Internal Revenue
Code of 1986, as amended. Subject to approval by the Company's stockholders, the
Plan will be effective January 1, 1998.

                                      ARTICLE II

                                     DEFINITIONS

    2.1 Annual  Incentive  Pool:  For any Fiscal  Year,  the amount equal to the
percentage  of Earnings  determined  by the Board at the beginning of the Fiscal
Year,  subject to the condition  that Earnings meet the Corporate  Threshold for
the Fiscal Year.

    2.2  Board:  The Board of Directors of the Company.

    2.3  Code:  The Internal Revenue Code of 1986, as amended from time to
time.

    2.4 Committee:  The Compensation  Committee of the Board, which is comprised
solely of two or more "outside  directors"  within the meaning of Section 162(m)
of the Code.

    2.5  Company:  Fine Host Corporation, a Delaware corporation, and its
consolidated subsidiaries, or any successors thereto.

    2.6  Corporate  Threshold:  For any Fiscal  Year,  80  percent  of  budgeted
Earnings,  which is the minimum amount of Earnings that the Company must achieve
in order to establish an Annual Incentive Pool for that Fiscal Year.

    2.7  Disability:  Disability,  as  defined  in  a  Participant's  employment
agreement  with the Company,  or,  absent an agreement,  in the Company's  group
disability insurance contract.



    2.8  Earnings:  For  any  Fiscal  Year,  net  income  of the  Company,  on a
consolidated basis,  determined in accordance with generally accepted accounting
principles,   as  reported  in  the  Company's  audited  consolidated  financial
statements for that Fiscal Year.

    2.9  Fiscal Year:  The 52- or 53-week period beginning on the Thursday
after the last Wednesday in December of one year and ending on the last
Wednesday in December of the next year.

    2.10 Incentive Allocation:  For any Fiscal Year, a Participant's formulated
share of the Annual Incentive Pool, determined by the Committee in accordance
with Sections 6.3 and 6.4.
    2.11 Incentive Award:  For any Fiscal Year, the amount of compensation
payable under the Plan to a Participant, determined by the Committee in
accordance with Section 6.5.

    2.12 Participant:  For any Fiscal Year, an executive of the Company
designated by the Committee to participate in the Plan.

    2.13 Performance Goals:  For any Fiscal Year, the performance measures
applicable to a Participant, established by the Committee in accordance with
Article V.

    2.14 Plan: The Fine Host Corporation Annual Incentive  Compensation Plan, as
herein set forth and as it may be amended from time to time.

    2.15 Target  Allocation:  For any Fiscal Year, a Participant's  share of the
Annual  Incentive Pool for achievement of his or her  Performance  Goals for the
Fiscal Year, determined by the Committee in accordance with Section 6.1.

    2.16 Termination Without Cause: Termination of a Participant's employment by
the  Company  without  "Cause,"  as  defined  in  the  Participant's  employment
agreement  with  the  Company,   or,  absent  an  agreement   defining  "Cause,"
termination of the Participant's  employment by the Company for any reason other
than (i)  continuing  and  material  failure  to fulfill  his or her  employment
obligations  or willful  misconduct or gross neglect in the  performance of such
duties,  (ii)  commission  of fraud,  misappropriation  or  embezzlement  in the
performance  of  such  duties,  or  (iii)  conviction  of a  felony,  which,  as
determined  in good  faith by the Board,  constitutes  a crime  involving  moral
turpitude and may result in material harm to the Company.

                                     ARTICLE III

                                    ADMINISTRATION

    3.1 The Plan shall be  administered  by the Committee.  For any Fiscal Year,
the  Committee  shall (i)  designate  the  executives  of the  Company who shall
participate in the Plan, (ii) establish Performance Goals for each Participant


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and  certify  the  extent  of  their   achievement   and  (iii)  determine  each
Participant's Target Allocation, Incentive Allocation and Incentive Award.

    3.2 Subject to the  provisions of the Plan,  the  Committee  shall have full
power and authority to (i) interpret the Plan,  (ii) adopt rules and regulations
relating  to the  conduct  of its  business  and to the Plan and (iii)  make all
determinations  necessary  or  advisable  for the  administration  of the  Plan.
Determinations  of the  Committee  in the  administration  of the Plan  shall be
conclusive and binding on the Participants and all other parties concerned.

                                      ARTICLE IV

                                    PARTICIPATION

    4.1 Only  executives of the Company who, in the Committee's  judgment,  have
contributed, or have the capacity to contribute, in a substantial measure to the
successful performance of the Company for a given Fiscal Year, shall be eligible
to participate in the Plan for that Fiscal Year.

    4.2 In selecting  Participants for any Fiscal Year, the Committee shall take
into account such factors as the individual's position,  experience,  knowledge,
responsibilities, advancement potential and past and anticipated contribution to
Company performance.

                                      ARTICLE V

                                  PERFORMANCE GOALS

    5.1 Not later  than 90 days after the  beginning  of any  Fiscal  Year,  the
Committee shall establish Performance Goals for each Participant for that Fiscal
Year.

    5.2 Performance  Goals  established by the Committee for any Fiscal Year may
differ among  Participants.  The  Performance  Goals of individual  Participants
shall be based on one or more of the following categories, as may be applicable:
(i) Earnings,  (ii) the  contribution  of business unit earnings to Earnings and
(iii)  individual  job  performance,  taking  into  account  pre-set  goals  and
objectives;  provided,  however,  that the Performance  Goals  established  with
respect  to any amount  payable  under the Plan that is  intended  to qualify as
performance-based  compensation  under  Section  162(m)  of the Code  shall  not
include category (iii).

    5.3 In establishing  Performance Goals, the Committee shall determine,  from
among the  categories  specified in Section 5.2,  the  categories  to be used in
measuring each Participant's  performance and the percentage allocation for each
of the categories, the sum of which allocations shall equal 100 percent.
 The Committee  shall also  determine for each  Participant  for the same Fiscal
Year a threshold  level of  performance  below which no Incentive  Award will be
payable and a maximum incentive opportunity.

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                                      ARTICLE VI

             TARGET ALLOCATION, INCENTIVE ALLOCATION AND INCENTIVE AWARD

    6.1 Not later than 90 days after the  beginning  of each  Fiscal  Year,  the
Committee shall determine each  Participant's  Target  Allocation for the Fiscal
Year as a percentage of his or her salary for the Fiscal Year, assuming that the
Performance Goals for the Participant are fully met.

    6.2 When the Committee has  determined  the Target  Allocation  and range of
incentive  opportunity for a Participant for any Fiscal Year and the performance
categories  to be used in  establishing  his or her  Performance  Goals for that
Fiscal Year, it shall communicate this information to the Participant.

    6.3  As  soon  as  practicable  following   verification  by  the  Company's
independent  public  accountants  of Earnings for any Fiscal Year and receipt of
information  regarding  the actual  performance  of  Participants  against their
respective  Performance  Goals for the Fiscal Year, the Committee  shall certify
(i) the amount,  if any, by which  Earnings  for the Fiscal  Year  exceeded  the
Corporate  Threshold  for the  Fiscal  Year and (ii) the  extent  to which  each
Participant achieved his or her Performance Goals for the Fiscal Year.

    6.4 Based on the  information  certified in accordance with Section 6.3, the
Committee shall determine each Participant's Incentive Allocation for the Fiscal
Year by  multiplying  his or her Target  Allocation  for the Fiscal  Year by the
percentage  representing  the extent of  achievement  of his or her  Performance
Goals for the Fiscal Year.

    6.5 The amount of a Participant's Incentive Allocation as finally determined
by the Committee  shall  constitute  his or her  Incentive  Award for the Fiscal
Year;  provided,  however,  that no Incentive  Award for any Participant for any
Fiscal Year shall exceed 6 percent of Earnings for that Fiscal Year.

    6.6 The  Committee  shall  not be  obligated  to  apply  the  entire  Annual
Incentive Pool for any Fiscal Year to Participants' Incentive Awards. Any amount
not so applied shall remain part of the general  assets of the Company and shall
not be carried over to the Annual Incentive Pool for any subsequent Fiscal Year.

                                     ARTICLE VII

                             PAYMENT OF INCENTIVE AWARDS

    7.1 Except as provided in Section 7.2, a  Participant's  Incentive Award for
any  Fiscal  Year  shall  be paid  in a cash  lump  sum as  soon as  practicable
following the Committee's determination of the amount in accordance with Article
VI.


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    7.2 From time to time, the Committee, in its discretion (under uniform rules
applicable to all Participants), may offer Participants the opportunity to defer
receipt of all or a portion of the  Incentive  Award for any  Fiscal  Year.  Any
election to defer shall be made prior to the beginning of the Fiscal Year except
for the first  Fiscal  Year that the Plan is in  effect.  Deferrals  shall be in
increments of 10 percent of the  Participant's  Target Allocation for the Fiscal
Year.

         Deferred amounts are not forfeitable and will be paid after termination
of employment with the Company.  They constitute unfunded general obligations of
the Company.

         Deferred amounts shall be credited with an interest  equivalent  amount
until the time of final payment at a rate  determined by the Committee from time
to time.  The sum of the amount  deferred  for any Fiscal Year plus all interest
equivalents  shall  be  paid in a  single  sum or in up to 15  installments,  as
specified by the Participant when making the deferral election.

    7.3  Each  Participant  shall  designate,  in a  manner  prescribed  by  the
Committee,  a beneficiary to receive payments due under the Plan in the event of
his or her death.  If a Participant  dies prior to the date of payment of his or
her  Incentive  Award for any Fiscal Year or to receipt of all amounts,  if any,
that were  deferred,  and if no properly  designated  beneficiary  survives  the
Participant, the Incentive Award or any other amount due shall be paid to his or
her estate or personal representative.

                                     ARTICLE VIII

                              TERMINATION OF EMPLOYMENT

    8.1 If a Participant's  employment with the Company  terminates by reason of
retirement on or after  attainment of age 65, death,  Disability or  Termination
Without Cause, or for any other reason  specifically  approved in advance by the
Committee, the Committee shall determine the Participant's Incentive Award as if
he or she were employed for the entire Fiscal Year, and the Participant shall be
entitled  to receive  the  Incentive  Award  prorated  to the date of his or her
termination of employment.

    8.2 If a Participant's employment with the Company terminates for any reason
other than as provided in Section  8.1, he or she  forfeits any right to receive
an Incentive Award for the Fiscal Year in which the termination occurs.

                                      ARTICLE IX

                        TERMINATION AND AMENDMENT OF THE PLAN

    9.1 The Company reserves the right, by action of the Committee, to terminate
the Plan at any time. Subject to such earlier termination, the Plan shall have a
term of five years from its effective date.

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    9.2 The Plan may be amended at any time, and from time to time, by a written
document  adopted by the  Committee.  No amendment  shall be effective  prior to
approval by the Company's  stockholders  to the extent such approval is required
by Section 162(m) of the Code or otherwise required by law.

                                      ARTICLE X

                                  GENERAL PROVISIONS

    10.1  Nothing in the Plan shall confer upon any employee a right to continue
in the employment of the Company or affect any right of the Company to terminate
a Participant's employment.

    10.2 A Participant may not alienate,  assign,  pledge,  encumber,  transfer,
sell or otherwise  dispose of any rights or benefits awarded  hereunder prior to
the actual receipt thereof; and any attempt to alienate,  assign,  pledge, sell,
transfer or assign prior to such receipt, or any levy, attachment,  execution or
similar process upon any such rights or benefits shall be null and void.

    10.3 The Plan  shall at all times be  entirely  unfunded,  and no  provision
shall at any time be made to segregate  assets of the Company for payment of any
amounts  hereunder.  No Participant,  beneficiary or other person shall have any
interest  in any  particular  assets  of the  Company  by reason of the right to
receive incentive  compensation  under the Plan.  Participants and beneficiaries
shall have only the rights of a general unsecured creditor of the Company.

    10.4 The Plan shall be governed by and construed in accordance with the laws
of the State of Connecticut without reference to principles of conflict of laws.

    10.5 The Company  shall be  authorized to withhold from any award or payment
it makes under the Plan to a  Participant  the amount of  withholding  taxes due
with  respect to such award or payment  and to take such other  action as may be
necessary  in the  opinion of the  Company to satisfy  all  obligations  for the
payment of such taxes.

    10.6  Nothing in the Plan shall  prevent  the Board from  adopting  other or
additional compensation arrangements,  subject to stockholder approval as may be
necessary,   and  such  arrangements  may  be  either  generally  applicable  or
applicable only in specific cases.

    10.7  Participants  shall not be required to make any payment or provide any
consideration for awards under the Plan other than the rendering of services.




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