Document:

Exhibit 10.3

                                   THCG, INC.
                  2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                         ARTICLE I - PURPOSE OF THE PLAN

                  The purpose of the THCG, Inc. 2000 Non-Employee Director Stock
Option Plan  ("Plan") is to increase  the  ownership  interest in the Company of
non-employee  directors whose services are considered essential to the Company's
continued  progress,  to align such interests with those of the  shareholders of
the  Company  and to provide a further  incentive  to serve as a director of the
Company.

                            ARTICLE II - DEFINITIONS

                  Unless the context clearly indicates otherwise,  the following
terms shall have the following meanings:

                  2.1.  "2000  Annual  Meeting"  means  the  annual  meeting  of
         shareholders  of the Company  scheduled to be held on May 15, 2000,  or
         any adjournment thereof.

                  2.2. "Award Summary" means the award summary  delivered by the
         Administrator  to each  Non-Employee  Director  upon grant of an Option
         under the Plan.

                  2.3. "Board" means the Board of Directors of THCG, Inc.

                  2.4. "Company" means THCG, Inc.

                  2.5. "Exercise Period" means the date which is ten years after
         the Option Grant Date of such Option.

                  2.6. "Fair Market Value" shall mean, with respect to Shares on
         an applicable date:

                  (i)  If  the  Shares  are  traded  on  a  national  securities
         exchange,  (A) the  average of the high and low  reported  sales  price
         regular way per Share on the principal national  securities exchange on
         which the  Shares is traded or (B) if no  reported  sales take place on
         the  applicable  date,  the average of the highest bid and lowest asked
         price of the Shares on such  exchange  or (C) if no such  quotation  is
         made on such date, on the next preceding day (not more than 10 business
         days prior to the  applicable  date) on which there were reported sales
         or such quotations.

                  (ii) If the Shares  are not  traded on a  national  securities
         exchange but are traded in the NASD National Market ("NASDAQ"), (A) the
         average of the high and low reported sales price per Share on NASDAQ or
         (B) if no reported sales take place on the applicable date, the average
         of the  highest  bid and lowest  asked price of the Shares on NASDAQ or
         (C) if no such  quotation is made on such date,  on the next  preceding
         day (not more than 10 business  days prior to the  applicable  date) on
         which there were reported sales or such quotations.

                  (iii) If the Shares  are not  traded on a national  securities
         exchange or quoted on NASDAQ,  but  quotations  are  available  for the
         Shares on the over-the-counter market, (A) the mean between the highest
         bid and  lowest  asked  quotation  on the  over-the-counter  market  as
         reported   by  the   National   Quotations   Bureau,   or  any  similar
         organization,  on the  applicable  date or (B) if no such  quotation is
         made on such date on the next  preceding day (not more than 10 business
         days prior to the applicable date) on which there were such quotations.

                  (iv) If the Shares are neither traded on a national securities
         exchange or quoted on NASDAQ, nor are quotations  therefor available on
         the  over-the-counter  market or if there are no sales or

<PAGE>

         quotations in the 10 business days immediately  prior to the applicable
         date, as determined in good faith by the Board in a manner consistently
         applied.

                  2.7. "Option" means an option to purchase Shares awarded under
         Article VIII which does not meet the requirements of Section 422 of the
         Internal Revenue Code of 1986, as amended, or any successor law.

                  2.8.  "Option  Grant Date" means the date upon which an Option
         is granted to a Non-Employee Director.

                  2.9.  "Optionee" means a Non-Employee  Director of the Company
         to whom an Option has been granted.

                  2.10.  "Non-Employee Director" means a director of the Company
         who is neither an employee of the  Company  nor any  subsidiary  of the
         Company.

                  2.11. "Plan" means the THCG, Inc. 2000  Non-Employee  Director
         Stock Option Plan, as amended and restated from time to time.

                  2.12.  "Shares"  means shares of the Common  Stock,  par value
         $0.01 per share, of the Company.

                    ARTICLE III - ADMINISTRATION OF THE PLAN

                  3.1 IN GENERAL. The Plan shall be administered by the Board.

                  3.2  AUTHORITY  OF THE  BOARD.  Except as  otherwise  provided
herein,  the Board  shall have full power and  authority  to (i)  interpret  and
construe  the  Plan  and to adopt  such  rules  and  regulations  it shall  deem
necessary and advisable to implement and  administer the Plan and (ii) designate
persons  to  carry  out  its  responsibilities,  subject  to  such  limitations,
restrictions and conditions as it may prescribe,  such determinations to be made
in accordance  with the Board's best business  judgment as to the best interests
of the Company and its  shareholders  and in accordance with the purposes of the
Plan  subject  to  applicable  conditions  of Rule  16b-3  under the  Securities
Exchange  Act of 1934,  as  amended  ("Rule  16b-3").  The  Board  may  delegate
administrative  duties  under the Plan to one or more  agents  as it shall  deem
necessary or advisable.

                       ARTICLE IV - AWARDS UNDER THE PLAN

                  Awards in the form of Options shall be granted to Non-Employee
Directors in accordance  with Article VIII.  Each Option  granted under the Plan
shall be evidenced by a stock option agreement in a form approved by the Board.

                             ARTICLE V - ELIGIBILITY

                  Non-Employee  Directors  of the  Company  shall be eligible to
participate in the Plan in accordance with Article VIII.

                     ARTICLE VI - SHARES SUBJECT TO THE PLAN

                  Subject to adjustment as provided in Article XI, the aggregate
number of Shares  which may be issued  upon the  exercise  of Options  shall not
exceed 500,000 Shares. To the extent an outstanding Option expires or terminates
unexercised  or is canceled or  forfeited,  the Shares  subject to the  expired,
unexercised,  canceled  or  forfeited  portion  of such  option  shall  again be
available for grants of Options under the Plan.

                                       2
<PAGE>

                  ARTICLE VII - NON-TRANSFERABILITY OF OPTIONS

                  All Options under the Plan will be  nontransferable  and shall
not be assignable,  alienable, salable or otherwise transferable by the Optionee
other than by will or the laws of descent and distribution  except pursuant to a
domestic  relations  order  entered by a court of competent  jurisdiction  or as
otherwise  determined  by the  Administrator.  During the life of the  Optionee,
Options under the Plan shall be exercisable only by him or her.

                  Notwithstanding  the  immediately  preceding  paragraph,   the
Optionee may assign or  otherwise  transfer  his  interest  without  restriction
(subject to the application of any and all relevant state or federal  securities
laws) to (i) any trust maintained  solely for the benefit of the Optionee,  (ii)
the  legal  guardian  of the  Optionee,  in the event of the  Optionee's  mental
incapacity,  or (iii) the Optionee's Family Group (as hereinafter defined).  The
term "Family Group" shall mean (I) the spouse, parents,  siblings or descendants
of the  Optionee,  in each such  case,  if  applicable,  whether  natural  or by
adoption,  (II) the  parent,  siblings,  spouses  or  descendants  of any of the
parties listed in clause (I) hereof,  in each such case, if applicable,  whether
natural or adopted,  (III) any trust  established  for the benefit of any of the
individuals  identified in clauses (I) or (II) hereof,  (IV) any  corporation or
partnership,  the principal equity owners of which are,  directly or indirectly,
either (x)  individuals or entities  listed in clauses (I), (II) or (III) hereof
or (y) other corporations or partnerships satisfying the requirements of clauses
(I),  (II) or (III)  hereof or this clause  (IV),  or (V) any exempt  charitable
organization.

                  If so  permitted  by the Board,  an Optionee  may  designate a
beneficiary or  beneficiaries  to exercise the rights of the Optionee under this
Plan upon the death of the Optionee.  However,  any contrary requirement of Rule
16b-3 under the 1934 Act or any successor rule shall prevail over the provisions
of this section.

                             ARTICLE VIII - OPTIONS

                  Each Non-Employee  Director shall be granted Options,  subject
to the following terms and conditions:

                  8.1 TIME OF GRANT. On the date of the 2000 Annual Meeting and,
thereafter,  on the date of each annual meeting of  shareholders of the Company,
(i) each person who is a Non-Employee Director immediately after such meeting of
shareholders shall be granted an Option to purchase 10,000 Shares, and (ii) each
person  who  is a  Non-Employee  Director  immediately  after  such  meeting  of
shareholders  who  serves  on a  committee  of the  Board  shall be  granted  an
additional  Option to purchase  2,500  Shares for each  committee  on which such
person  then  serves.  Any person  elected to the Board  subsequent  to the 2000
Annual Meeting at a time other than at any other annual meeting of  shareholders
who becomes a Non-Employee  Director,  upon the date of such election,  shall be
granted an option to purchase a number of Shares  determined by multiplying  the
numbers set forth in the  preceding  sentence by a fraction,  the  numerator  of
which shall be the number of days between the date of such election and the date
which is the first  anniversary of the date of the last preceding annual meeting
of shareholders and the denominator of which shall be 365.

                  8.2 PURCHASE  PRICE.  The purchase  price per Share under each
Option  granted  pursuant to this Article shall be 100% of the Fair Market Value
per Share on the Option Grant Date.

                  8.3 OPTION  WAITING  PERIOD  AND  EXERCISE  DATES.  The Shares
subject to an Option may be exercised in full immediately after the Option Grant
Date.

                  Subject to Article  IX, an Option may be  exercised  until the
end of the Exercise Period. An Option,  or portion thereof,  may be exercised in
whole or in part only with  respect to whole  Shares,  provided  that no partial
exercise may be for less than twenty Shares.

                                       3
<PAGE>

                  8.4 METHOD OF EXERCISING  OPTION. The Options may be exercised
from  time to time by  written  notice to the  Company,  which  shall  state the
election to exercise  the Options and the number of shares with respect to which
the Options are being  exercised,  and shall be signed by the person  exercising
the Options.  Such notice must be  accompanied by a check payable to the Company
in payment of the full purchase price. After receipt of such notice, the Company
will advise the person  exercising the Option of the amount of  withholding  tax
which must be paid under U.S.  Federal,  and where  applicable,  U.S., state and
local law resulting from such exercise.  Upon receipt of payment of the purchase
price and the withholding tax the Company shall,  without  transfer or issue tax
to the person  exercising the Options,  issue a certificate or certificates  for
the number of shares covered by such notice of exercise.

                    ARTICLE IX - TERMINATION OF DIRECTORSHIP

                  9.1  TERMINATION  OF SERVICE.  If an  Optionee  ceases to be a
director  of the Company  other than by reason of  disability,  retirement  from
service on the Board, or death, each Option held by such Optionee may thereafter
be  exercised  by such  Optionee (or such  Optionee's  executor,  administrator,
guardian, legal representative,  beneficiary or similar person) and shall expire
on the earlier of: (i) three  months from the date of such  termination  or (ii)
expiration of the Exercise Period.

                  9.2 DISABILITY,  RETIREMENT OR DEATH. If an Optionee ceases to
be a director of the Company by reason of disability or retirement  from service
on the Board,  each Option held by such Optionee may  thereafter be exercised by
such Optionee in accordance with the provisions of Article VIII. If the Optionee
dies following  termination of service from the Board by reason of retirement or
disability,   outstanding  Options  shall  be  exercisable  by  such  Optionee's
executor, administrator, guardian, legal representative,  beneficiary or similar
person and shall expire on the earlier of one year  following  the date of death
or expiration of the Exercise Period. If the Optionee ceases to be a director as
a result of death,  such Option shall be  exercisable  by the  Optionee's  legal
representative  at any time  within one year of the  Optionee's  death but in no
event after the expiration of the Exercise Period.

                      ARTICLE X - AMENDMENT AND TERMINATION

                  The Board  may  amend the Plan from time to time or  terminate
the Plan at any  time;  provided,  however,  that no action  authorized  by this
Article shall adversely change the terms and conditions of an outstanding option
without the Optionee's  consent and, subject to Article XI, the number of Shares
subject to an Option granted under Article VIII,  the purchase  price  therefor,
the date of grant of any such Option and the termination  provisions relating to
such Option, shall not be amended more than once every six months, other than to
comply with changes in the Internal  Revenue  Code of 1986,  as amended,  or any
successor  law, or the  Employee  Retirement  Income  Security  Act of 1974,  as
amended, or any successor law, or the rules and regulations thereunder.

                       ARTICLE XI - ADJUSTMENT PROVISIONS

                  11.1 If the  Company  shall at any time  change  the number of
issued  shares  without  new  consideration  to the  Company  (such  as by stock
dividend,  stock split,  recapitalization,  reorganization,  exchange of shares,
liquidation,  combination or other change in corporate  structure  affecting the
Shares)  or make a  distribution  of cash or  property  which has a  substantial
impact on the value of issued  Shares,  the total number of Shares  reserved for
issuance under the Plan shall be appropriately adjusted and the number of Shares
covered by each  outstanding  Option and the purchase price per Share under each
outstanding Option shall be adjusted so that the aggregate consideration payable
to the Company and the value of each such Option shall not be changed.

                  11.2  Notwithstanding  any other  provision  of the Plan,  and
without  affecting  the number of Shares  reserved or available  hereunder,  the
Board shall  authorize the issuance,  continuation  or assumption of outstanding
Options or provide for other equitable  adjustments  after changes in the Shares
resulting  from  any  merger,  consolidation,  sale of  assets,  acquisition  of
property or stock,  recapitalization,  reorganization  or similar  occurrence in
which the Company is the  continuing or surviving  corporation,  upon such terms
and conditions as it may deem necessary to preserve their rights under the Plan.

                                       4
<PAGE>

                  11.3 In the case of any sale of assets, merger,  consolidation
or combination of the Corporation with or into another  corporation other than a
transaction in which the Company is the continuing or surviving  corporation and
which  does  not  result  in the  outstanding  Shares  being  converted  into or
exchanged for different  securities,  cash or other property, or any combination
thereof (an "Acquisition"),  any Non-Employee  Director who holds an outstanding
Option  shall  have the right  (subject  to the  provisions  of the Plan and any
limitation  applicable  to the  Option)  thereafter  and  during the term of the
Option,  to receive upon  exercise  thereof the  Acquisition  Consideration  (as
defined  below)  receivable  upon the  Acquisition  by a holder of the number of
Shares which would have been obtained  upon  exercise of the Option  immediately
prior to the Acquisition.  The term "Acquisition  Consideration"  shall mean the
kind and amount of shares of the surviving or new  corporation  or other entity,
cash,  securities,  evidence of indebtedness,  other property or any combination
thereof  receivable in respect of one Share of the Company upon  consummation of
an Acquisition.

                          ARTICLE XII - EFFECTIVE DATE

                  The Plan shall be submitted to the shareholders of the Company
for, and, if adopted by a majority of all  outstanding  shares  entitled to vote
thereon at the 2000 Annual  Meeting,  shall  become  effective as of the date of
adoption by shareholders.

                     ARTICLE XIII - MISCELLANEOUS PROVISIONS

                  13.1 GOVERNING LAW. The validity,  construction  and effect of
the Plan and any actions  taken or relating to the Plan shall be  determined  in
accordance with the laws of the State of New York and applicable Federal law.

                  13.2 SUCCESSORS AND ASSIGNS.  The Plan shall be binding on ail
successors and permitted assigns of a Non-Employee Director,  including, without
limitation,   the  estate  of  such  Non-Employee  Director  and  the  executor,
administrator  or  trustee  of  such  estate,  or any  receiver  or  trustee  in
bankruptcy or representative of the Non-Employee Director's creditors.

                  13.3 GENERAL RESTRICTION.  Each Option shall be subject to the
requirement  that,  if at any  time  the  Board  shall  determine,  in its  sole
discretion, that the listing,  registration or qualification of any Option under
the Plan upon any securities  exchange or under any state or federal law, or the
consent or approval of any government regulatory body, is necessary or desirable
as a condition  of, or in connection  with,  the granting of such Options or the
exercise  thereof,  such Option may not be  exercised in whole or in part unless
such listing, registration,  qualification,  consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.

                  13.4 FUTURE RIGHTS.  No  Non-Employee  Director shall have any
claim or rights to be  granted  an option  under the Plan,  and no  Non-Employee
Director  shall have any rights by reason of the grant of any Options  under the
Plan to continue as a  Non-Employee  Director for any period of time,  or at any
particular rate of compensation.

                  13.5 RIGHTS AS A SHAREHOLDER.  A  Non-Employee  Director shall
have no rights as a  shareholder  with  respect  to shares  covered  by  Options
granted  hereunder until the date of issuance of a stock  certificate  therefor,
and no  adjustment  will be made for  dividends  or other  rights  for which the
record date is prior to the date such certificate is issued.

                  13.6 FRACTIONS OF SHARES. The Company shall not be required to
issue  fractions  of shares.  Whenever  under the terms of the Plan a fractional
share  would be required to be issued,  the  Optionee  shall be paid in cash for
such  fractional  share based upon Fair Market  Value at the time of exercise of
the Option.

                                       5
<PAGE>SECOND MODIFICATION AGREEMENT

             This Second Modification Agreement (this "Agreement") is
entered into by and between R.H. Phillips, Inc., a California corporation
("Borrower"), and U.S. Bank National Association, a national banking
association ("Lender"), as of April 25, 2000.

                                 RECITALS

             Borrower and Lender entered into a Loan Agreement dated as
of May 1, 1999 (the "Original Loan Agreement"). In connection
therewith, Borrower, as maker, made a promissory note (the "Original
Note") in favor of Lender, as payee, in the principal amount of up to
$15,000,000.00 dated as of May 1, 1999, and Borrower, as grantor,
made an Agricultural Security Agreement (the "Original Security
Agreement") for the benefit of Lender, as secured party.

             B.
             Borrower and Lender entered into a Modification Agreement
(the "First Modification Agreement") dated as of October 8, 1999,
pursuant to which Borrower and Lender agreed to modify and amend
certain terms and conditions of the Original Loan Agreement, the Original
Note and the Original Security Agreement.

             C.
             Borrower and Lender desire further to modify and amend the
terms and conditions of the Original Loan Agreement, the Original Note
and the Original Security Agreement, as amended by the First
Modification Agreement, on the terms and conditions set forth herein.

             Now, therefore, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

             Section 1.   Certain Definitions.

        (a)         As used in the Loan Documents, the
following terms shall now and hereafter have the following meanings:

                    (i) "Loan Agreement":  The Original
Loan Agreement as modified and amended by the First Modification
Agreement and this Agreement.

                    (ii)       "Note":  The Original Note as
modified and amended by the First Modification Agreement and this
Agreement.

                    (iii)      "Security Agreement":  The
Original Security Agreement as modified and amended by the First
Modification Agreement and this Agreement.

        (b)         All capitalized terms used but not defined
herein shall have the meanings ascribed in the Loan Agreement.

                Section 2.     Amount of Loan.

             Section 2.1    Note.  The figure "$15,000,000.00" is
hereby deleted from the heading to the Note and replaced with
"$16,000,000.00."  The words and figure "Fifteen Million Dollars
($15,000,000.00)" are hereby deleted from Section 2 of the Note and
replaced with the words and figure "Sixteen Million and no/100 Dollars
($16,000,000.00)."

             Section 2.2    Loan Agreement.  The words and figure
"Fifteen Million Dollars ($15,000,000.00)" are hereby deleted from
Section 2(g) of the Loan Agreement and replaced with the words and
figure "Sixteen Million and no/100 Dollars ($16,000,000.00)."

             Section 2.3    Security Agreement.  The words and
figure "Fifteen Million Dollars ($15,000,000.00)" are hereby deleted
from Section 1(f) of the Security Agreement and replaced with the words
and figure "Sixteen Million and no/100 Dollars ($16,000,000.00)."

        Section 3.     Term.  The maturity date of the Note, as
specified in Section 5(a) thereof, is hereby extended from April 30,
2001, to April 30, 2002.  The date "April 30, 2001" is hereby deleted
from Section

        Section 4.     Tangible Net Worth.  The words and figure
"Twenty-One Million and no/100 Dollars ($21,000,000.00)" are hereby
deleted from Section 6(e)(1) of the Loan Agreement and replaced with
"Twenty-Three Million Five Hundred Thousand and no/100 Dollars
($23,500,000.00)."

     Section 5.         Funding Losses.  Section 3(c)(6) of the
Original Note is hereby deleted in its entirety and replaced with the
following:

                     Borrower will indemnify Lender upon demand against any
        loss or expense which Lender may sustain or incur (including,
        without limitation, any loss or expense sustained or incurred in
        obtaining, liquidating or employing deposits or other funds
        acquired to effect, fund, or maintain any LIBOR Amount) as a
        consequence of (a) any failure of Borrower to make any
        payment when due of any LIBOR Amount, (b) any failure of
        Borrower to borrow, continue or prepay any LIBOR Amount
        or convert any portion of the Prime Rate Amount to a LIBOR
        Amount on a date specified therefor in a notice thereof, or (c)
        any payment or prepayment of any LIBOR Amount,
        termination of the LIBOR Borrowing Rate (as defined in the
        Original Note) or conversion of a LIBOR Amount to a Prime
        Rate Amount on a date other than the last day of the LIBOR
        Interest Period therefor.  Determinations by Lender of the
        amount required to indemnify Lender shall be conclusive in the
        absence of manifest error.

        Section 6.     Discretion of Bank as to Manner of Funding.
Notwithstanding any provision of the Note to the contrary, Lender shall
be entitled to fund and maintain its funding of all or any part of any
LIBOR Amount in any manner it elects; it being understood, however,
that all determinations hereunder shall be made as if Lender had actually
funded and maintained each LIBOR Amount during the LIBOR Interest
Period therefor through the purchase of deposits having a term
corresponding to such LIBOR Interest Period and bearing an interest
rate equal to the LIBOR Rate (as defined in the Original Note) for such
LIBOR Interest Period (whether or not Lender shall have granted any
participations in such LIBOR Amount).

        Section 7.     Costs and Fees.  Without limiting any other
provisions of this Agreement, Borrower hereby agrees to pay Lender on
demand an amount equal to all costs and expenses incurred by Lender
in connection with the negotiation, preparation, execution, and closing of
this Agreement and the transaction contemplated herein.

        Section 8.     No Other Modification; Full Force and Effect.
Except as specifically provided herein, the Original Loan Agreement, the
Original Note and the Original Security Agreement, as modified by the
First Modification Agreement, are not modified or amended in any
respect and remain in full force and effect.

        Section 9.     Integration.  Subject to Section 8 hereof, this
Agreement constitutes the entire agreement of the parties on the subject
matter hereof and supersedes and replaces all prior agreements, oral and
written, on such subject matter.

        Section 10.    Counterparts.  This Agreement may be executed
in any number of counterparts.  Each signed counterpart shall be deemed
an original, and all of the counterparts taken together shall be deemed to
constitute but one and the same instrument.

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

BORROWER:                           LENDER:

R.H. Phillips, Inc.,                U.S. Bank National Association,
a California corporation            a national banking association

By://s//Michael Motroni             By://s//Karen McManus
   ---------------------------         ------------------------
Title: Chief Financial Officer         Title: Vice President
       -----------------------         ------------------------

By:

Title:

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