Document:

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                                                                Exhibit 4.5

                              NEUBERGER BERMAN INC.

                          Liquid Yield Option(TM) Notes

                                    due 2021

                              (Zero Coupon-Senior)

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                         FIRST SUPPLEMENTAL INDENTURE TO

                        INDENTURE DATED AS OF MAY 4, 2001

                             Dated as of May 2, 2002

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                              THE BANK OF NEW YORK

                                   as Trustee

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                   (TM)Trademark of Merrill Lynch & Co., Inc.

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                  FIRST SUPPLEMENTAL INDENTURE, dated as of May 2, 2002, between
NEUBERGER BERMAN INC., a Delaware corporation (the "Company"), and THE BANK OF
                                                    -------
NEW YORK, a New York banking corporation, as trustee (the "Trustee").
                                                            ------

                                    RECITALS

                  WHEREAS, the Company has heretofore executed and delivered to
the Trustee an Indenture, dated as of May 4, 2001, between the Company and the
Trustee (the "Original Indenture"), providing for the issuance and delivery by
              -------- ---------
the Company of its Liquid Yield Option(TM) Notes due 2021 (Zero Coupon-Senior)
(the "Securities");
      ----------

                  WHEREAS, Section 9.01 of the Original Indenture provides that
the Company and the Trustee may amend the Original Indenture or the Securities
without the consent of any Securityholder (i) to add to the Company's covenants
for the benefit of the Securityholders or (ii) to make any change that does not
adversely affect the rights of any Holder; and

                  WHEREAS, the Company desires to amend the Original Indenture
and the Securities to provide each Holder with the option to require the Company
to purchase Securities held by such Holder as of November 4, 2002 at a purchase
price of $870.67 per $1,000 Principal Amount at Maturity, which price is equal
to the sum of the Issue Price plus accrued Original Issue Discount as of
November 4, 2002.

                  NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the Securities:

                                   ARTICLE I

                       RELATION TO INDENTURE; DEFINITIONS

       Section 1.1.   Relation to Indenture.  This First Supplemental Indenture
                      ---------------------
constitutes an integral part of the Original Indenture.

       Section 1.2.   Definitions.  For all purposes of this First Supplemental
                      -----------
Indenture:

      (a)      Capitalized terms used herein without definition shall have the
meanings specified in the Original Indenture; and

      (b)      The terms "herein," "hereof," "hereunder" and other words of
similar import refer to this First Supplemental Indenture.

                                   ARTICLE II

                                   AMENDMENTS

       Section 2.1.   Amendment to Section 3.08(a) of the Original Indenture.
                      ------------------------------------------------------
The portion of Section 3.08(a) of the Original Indenture beginning with the
words "Securities shall be

<PAGE>

purchased" ending immediately before Section 3.08(a)(1) is amended and restated
in its entirety as follows:

                           "(a)  General.  Securities shall be purchased by the
                                 -------
Company pursuant to paragraph 6 of the Securities (i) as of May 4, 2002, at the
purchase price of $867.42 per $1,000 of Principal Amount at Maturity, (ii) as of
November 4, 2002, at the purchase price of $870.67 per $1,000 of Principal
Amount at Maturity, (iii) as of May 4, 2004, at the purchase price of $880.50
per $1,000 of Principal Amount at Maturity, (iv) as of May 4, 2006, at the
purchase price of $893.79 per $1,000 of Principal Amount at Maturity, (v) as of
May 4, 2011, at the purchase price of $927.87 per $1,000 of Principal Amount at
Maturity and (vi) as of May 4, 2016, at the purchase price of $963.26 per $1,000
of Principal Amount at Maturity (each such date, a "Purchase Date", and each
such purchase price, a "Purchase Price", as applicable), at the option of the
Holder thereof, upon:"

       Section 2.2.   Amendment to Exhibit A-1 of the Original Indenture. The
                      --------------------------------------------------
table contained in paragraph 6 of Exhibit A-1 (Purchase by the
Company at the Option of the Holder) to the Original Indenture is amended and
restated in its entirety to provide as follows:

           "Purchase Date                      Purchase Price
            -------------                      --------------
            May 4, 2002                        $867.42
            November 4, 2002                   $870.67
            May 4, 2004                        $880.50
            May 4, 2006                        $893.79
            May 4, 2011                        $927.87
            May 4, 2016                        $963.26"

                                  ARTICLE III

                                  MISCELLANEOUS

       Section 3.1.   Trust Indenture Act Controls. If any provision of this
                      ----------------------------
First Supplemental Indenture limits, qualifies or conflicts with another
provision which is required to be included in this First Supplemental Indenture
by the TIA, the required provision shall control.

       Section 3.2.   Adoption, Ratification and Confirmation. The Original
                      ---------------------------------------
Indenture, as supplemented and amended by this First Supplemental Indenture, is
in all respects hereby adopted, ratified and confirmed. The Trustee makes no
representations as to the validity or sufficiency of this First Supplemental
Indenture or the accuracy of the statements contained in the recitals set forth
above.

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       Section 3.3.   Modification of Securities. In order to give effect to
                      --------------------------
this First Supplemental Indenture, the modification, annotation and/or exchange
of the Securities shall be evidenced by a substitution of the relevant page
thereto.

       Section 3.4.   Separability Clause. In case any provision in this First
                      -------------------
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

       Section 3.5.   Governing Law.  THIS FIRST SUPPLEMENTAL INDENTURE AND THE
                      -------------
SECURITIES WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

       Section 3.6.   Successors.  All agreements of the Company in this First
                      ----------
Supplemental Indenture shall bind its successor. All agreements of the Trustee
in this First Supplemental Indenture shall bind its successor.

       Section 3.7.   Multiple Originals.  The parties may sign any number of
                      ------------------
copies of this First Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. One signed copy
is enough to prove this First Supplemental Indenture.

                            [Signature page follows]

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                  IN WITNESS WHEREOF, the undersigned, being duly authorized,
have executed this First Supplemental Indenture on behalf of the respective
parties hereto as of the date first above written.

                                         NEUBERGER BERMAN INC.

                                         By: /s/Jeffrey B. Lane
                                             -------------------
                                             Name:  Jeffrey B. Lane
                                             Title: President and
                                                    Chief Executive Officer

                                         THE BANK OF NEW YORK, as Trustee

                                         By: /s/Julie Salovitch-Miller
                                             -------------------------
                                             Name:  Julie Salovitch-Miller
                                             Title:  Vice President<PAGE>

                                                                   Exhibit 10.26

                       CARROLS CORPORATION & SUBSIDIARIES

                           DEFERRED COMPENSATION PLAN

                           (Effective January 1, 2002)

1.   PURPOSE.

     The Plan is established in order to provide deferred compensation to a
select group of management and highly compensated employees of Carrols
Corporation and its Affiliates.

2.   DEFINITIONS.

     Unless the context requires otherwise, the following words as used in the
Plan shall have the meanings ascribed to each below:

2.1  "Active Participant" means a Participant who is currently having Deferred
     Salary credited to his Deferral Account hereunder.

2.2  "Affiliate" shall mean the Company and any entity affiliated with the
     Company within the meaning of Code Section 414(b) with respect to a
     controlled group of corporations, Code Section 414(c) with respect to
     trades or businesses under common control with the Company, Code Section
     414(m) with respect to affiliated service groups and any other entity
     required to be aggregated with the Company under Section 414(o) of the
     Code. No entity shall be treated as an Affiliate for any period during
     which it is not part of the controlled group, under common control or
     otherwise required to be aggregated under Code Section 414.

2.3  "Beneficiary" means the individual designated by the Participant, on a form
     acceptable by the Committee, to receive benefits payable under this Plan in
     the event of the Participant's death. If no Beneficiary is designated, the
     Participant's Beneficiary shall be his legal spouse, or if the Participant
     is not married, the Participant's estate. Upon the acceptance by the
     Committee of a new beneficiary designation form, all Beneficiary
     designations previously filed shall be canceled. The Committee shall be
     entitled to rely on the last beneficiary designation form filed by the
     Participant and accepted by the Committee prior to his death.

2.4  "Board" shall mean the Board of Directors of the Company.

2.5  "Bonus" means the amount payable to the Participant by the Company under an
     annual bonus plan or arrangement.

2.6  "Code" means the Internal Revenue Code of 1986, as amended and as hereafter
     amended from time to time.

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2.7  "Committee" means an administrative committee appointed by the Board or the
     Board.

2.8  "Company" means Carrols Corporation and any successor corporation by
     merger, consolidation or transfer of assets.

2.9  "Deferral Agreement" means an agreement entered into between a Participant
     and the Employer to authorize the Employer to reduce the Participant's
     Salary and, if permitted by the Committee, and/or Bonus and credit the
     amount of such reduction to the Plan. A Deferral Agreement shall contain
     such provisions, consistent with the provisions of the Plan, as may be
     established from time to time by the Employer (through the Committee).

2.10 "Deferred Benefit" means the benefit payable under the Plan, which shall be
     payable in accordance with Section 7 hereof.

2.11 "Deferred Bonus" means the amount of Bonus, if any, deferred by a
     Participant pursuant to Section 4.

2.12 "Deferred Salary" means the amount of Salary, if any, deferred by a
     Participant pursuant to Section 4.

2.13 "Deferral Period" means, with regard to each Deferred Salary and/or
     Deferred Bonus, the earlier of: (i) the period of deferral selected by the
     Participant for the period described in Section 4.1, or (ii) the period
     beginning on the effective date of a deferral election and ending on a
     Participant's Termination of Employment.

2.14 "Earnings" means, for any Plan Year, earnings on amounts in the Salary
     Deferral Account computed in accordance with Section 5 hereof.

2.15 "Effective Date" means January 1, 2002.

2.16 "Eligible Employee" means any Employee who is an officer or department
     manager and whose annual rate of base salary as of January 1 of the
     deferral year (or, if later, his date of hire) is at least equal to or
     greater than the required amount under Code Section 414(q) to be treated as
     a highly compensated employee for such year based on the assumption that
     measurements of highly compensated employees will be on current and not the
     prior year basis. The deferral year for a Bonus shall be the year the Bonus
     is earned and not necessarily the year of payment. Notwithstanding the
     foregoing, the Committee may exclude any Employee from being an Eligible
     Employee.

2.17 "Employee" means any person classified as an employee that is to receive a
     W-2 from the Employer on its payroll system. Employee does not include
     persons classified as independent contractors at the time (whether or not
     reclassified).

                                       2

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2.18 "Employer" means the Company and any Affiliate which has adopted this Plan.

2.19 "Holdings" means Carrols Holdings Corporation.

2.20 "Participant" means any Eligible Employee who shall have become an Active
     Participant in the Plan and any individual with a balance credited to his
     Salary Deferral Account.

2.21 "Plan" means the Carrols Corporation Deferred Compensation Plan.

2.22 "Plan Year" means the calendar year.

2.23 "Salary" means a Participant's base cash compensation for services paid by
     the Employer to the Participant. Salary shall not include commissions,
     bonuses, overtime pay, incentive compensation, benefits paid under any
     qualified plan, any group medical, dental or other welfare benefit plan,
     non-cash compensation or any other additional compensation but shall
     include amounts reduced pursuant to a Participant's salary reduction
     agreement under Sections 125, 132 or 401(k) of the Code (if any) or a
     nonqualified elective deferred compensation arrangement to the extent that
     in each such case the reduction is to base salary.

2.24 "Salary Deferral Account" means the account to which a Participant's book
     entry contributions made pursuant to Section 4 herein shall be credited.

2.25 "Service" means the period of time during which the Participant was
     considered employed by the Employer and ending on his Termination of
     Employment, Disability or death. For all purposes of the Plan, Service
     shall be expressed as years and a fraction of a year, with such fraction
     representing completed months of employment.

2.26 "Termination of Employment" means separation from the employment of the
     Employer for any reason, including, but not limited to, retirement, death,
     disability, resignation, dismissal (with or without Cause), or the ceasing
     of the Employer to be an Affiliate. Notwithstanding the foregoing, if an
     Affiliate of the Company ceases to be an Affiliate of the Company, an
     employee of such entity will not be deemed to incur a Termination of
     Employment solely as a result of such change in status unless and until the
     Committee determines, in its sole discretion, that such employee has
     incurred a Termination of Employment and when such Termination of
     Employment is deemed to have occurred.

3.   PARTICIPATION.

     Each Employee who is an Eligible Employee with respect to a Plan Year shall
be eligible to become an Active Participant in the Plan pursuant to Section 4
with respect to such Plan Year. A Participant shall cease to be an Active
Participant with regard to a Plan Year if he is not, or ceases to be, an
Eligible Employee with regard to the Plan. The Committee shall have the
exclusive right, power, and authority, in its sole and absolute discretion, to
remove the Active Participant from

                                       3

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participation in the Plan at any time. A Participant's classification as an
Eligible Employee shall be made anew for each Plan Year and a new Deferral
Agreement must be made for each Plan Year.

4.   DEFERRAL OF SALARYND/OR BONUS.

4.1  Deferral Agreement. An Eligible Employee may elect, on a Deferral
     ------------------
     Agreement, to defer receipt of all or a specified percentage of his Salary
     and, if applicable, all or a specified percentage of Bonus (unless
     specified otherwise by the Company), payable with respect to a Plan Year.
     At the time of the deferral election, a Participant shall also elect a
     Deferral Period of either three (3) or five (5) years or until Termination
     of Employment, which Deferral Period shall begin on the last day of the
     calendar year with regard to which the Salary and/or Bonus deferred
     relates. Deferred Salary and/or Deferred Bonus shall be credited to a
     Salary Deferral Account in the name of the Participant on the date such
     amount would otherwise be payable to the Participant. Any election to defer
     payment of a portion of a Participant's Salary and/or Bonus shall be made
     by the Participant in writing to the Committee on a Deferral Agreement on
     or before the last day of the Plan Year preceding the Plan Year in which
     the Salary and/or Bonus is earned, and shall apply on a pro rata basis with
     respect to the entire amount of Salary and/or Bonus earned in or for such
     Plan Year, whenever payable, or on such other basis as may be agreed to by
     the Committee. Any such election made by the last day of the preceding Plan
     Year shall become effective on the first day of the following Plan Year. If
     no new election is made with respect to any subsequent Plan Year, the
     Salary and/or Bonus earned in such Plan Years shall not be deferred under
     the Plan.

     Notwithstanding the foregoing, if an employee first becomes an Eligible
     Employee during a Plan Year, he may elect to become a Participant with
     respect to such Plan Year (solely with respect to Salary and/or Bonus
     earned after the Deferral Agreement is executed and delivered to the
     Employer pursuant to the procedures established by the Committee) prior to
     the end of the thirty (30) day period following the date he becomes an
     Eligible Employee, by making an election, in writing, on a form prescribed
     by the Committee.

     An election made pursuant to this Section 4 by a Participant who ceases to
     be an Eligible Employee but who does not incur a Termination of Employment
     shall remain in effect and such Participant shall not be entitled to
     receive a distribution from the Plan solely as a result of such change in
     status.

4.2  Irrevocability of Deferral Agreement. Subject to Section 7 of the Plan, an
     ------------------------------------
     election to defer Salary and/or Bonus hereunder is irrevocable and is valid
     only for the Plan Year following the election. If no new election is made
     with respect to any subsequent Plan Year, the Salary and/or Bonus earned in
     such Plan Years shall not be deferred under the Plan. A Participant shall
     not be entitled to, and the Employer shall not be obligated to pay to such
     Participant, the whole or any part of the amounts deferred under the Plan,
     except as provided in the Plan. Notwithstanding the previous sentence, upon
     the request of a Participant, the Committee, in its sole discretion, may
     permit the Participant to revoke his Deferral Agreement with respect to
     future Salary and/or Bonus due to the Participant's Hardship. A Participant
     who revokes a

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     Deferral Agreement pursuant to this Section 4.2 shall not be entitled to
     enter into a new Deferral Agreement during a suspension period which shall
     commence with respect to the pay period which follows the pay period which
     includes the date of such revocation, and shall continue until the first
     calendar year commencing more than six (6) months after such revocation.

4.3  Earnings. Earnings shall be credited to a Participant's Salary Deferral
     --------
     Account as provided in Section 5 below.

5.   MEASUREMENT OF EARNINGS.

     The Committee shall credit the Earnings computed under this Section to the
balance in each Participant's Account as of the last business day of each Plan
Year or such other dates as are selected by the Committee, in its sole
discretion. The measurement used to calculate Earnings on the amounts in a
Participant's Account, if applicable, shall be an eight (8%) percent interest
rate accrued monthly.

6.   VESTING.

     A Participant's Salary Deferral Account shall be fully vested at all times,
including Earnings thereon.

7.   AMOUNT AND DISTRIBUTION OF DEFERRED BENEFIT

7.1  Amount of Deferred Benefit. A Participant's Deferred Benefit shall consist
     --------------------------
     of the vested balance in his Salary Deferral Account.

7.2  Time of Deferred Benefit. A Participant's Deferred Benefit and the Earnings
     ------------------------
     shall be paid, or commence being paid, to the Participant as soon as
     administratively practicable after the end of the applicable Deferral
     Period in the form set forth in Section 7.3. Notwithstanding the foregoing,
     the Committee may, in its sole discretion, provide for the commencement of
     the payment of a Participant's Deferred Benefits and the Earnings at any
     time following the Participant's Termination of Employment.

7.3  Form of Deferred Benefit. Unless the Participant elects in writing, on a
     ------------------------
     form prescribed by the Company, to receive payment of his Deferred Benefit
     and the Earnings attributable thereto in annual installment payments (not
     to exceed five (5) years), a Participant's Deferred Benefit and the
     Earnings attributable thereto shall be paid to him (or, in the event of
     death, his Beneficiary) in a lump sum. A Participant's election to receive
     annual installment payments must be made at such time as the Company shall
     prescribe but in any event no later than one (1) year prior to the
     expiration of the applicable Deferral Period. An election by a Participant
     pursuant to this Section 7.3 will apply to all then current and future
     amounts in such Participant's Salary Deferral Account. A Participant shall
     not be entitled to, and the

                                       5

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     Company shall not be obligated to pay to such Participant, the whole or any
     part of the amounts deferred or credited under the Plan, except as provided
     in the Plan.

7.4  Death. If a Participant dies prior to receiving the total amount of his
     -----
     Salary Deferral Account, the unpaid portion of his Salary Deferral Account
     shall be paid to the Participant's Beneficiary in a single lump sum, upon
     the first business day of the month coincident with or next following the
     Participant's death (or as administratively feasible thereafter). If the
     Committee is in doubt as to the right of any person to receive any amount,
     the Committee may retain such amount, without liability for any interest
     thereon, until the rights thereto are determined, or the Committee may pay
     such amount into any court of appropriate jurisdiction, and such payment
     shall be a complete discharge of the liability of the Plan, the Committee
     and the Company.

7.5  Change in Control. Notwithstanding anything herein to the contrary,
     -----------------
     including, without limitation, the Deferral Period, in the event of a
     Change in Control, each Participant hereunder shall receive his entire
     Deferred Benefit, from the Plan, equal to the Participant's entire Salary
     Deferral Account, payable in the form of one (1) lump sum, as soon as
     administratively practicable following such Change in Control, but in no
     event later than five (5) days after the date of such Change in Control. A
     "Change in Control" has the meaning set forth in Appendix A attached
     hereto.

8.   Hardship Withdrawals.
     --------------------

     (a)  Upon the request of a Participant, the Committee, in its sole
          discretion, may approve, due to the Participant's Hardship, an
          immediate lump sum distribution of the unpaid portion of a
          Participant's Deferred Benefits to a Participant. Such a distribution
          shall be made from the Salary Deferral Account. For the purposes of
          this Section 8, a Participant shall experience a "Hardship" if, and
          only if, such Participant experiences an immediate and heavy financial
          need (as defined in (b) below) and the withdrawal is necessary to
          satisfy the financial need of the Participant (as defined in (c)
          below).

     (b)  A Participant shall experience a "Hardship" if, and only if, such
          Participant experiences an immediate and heavy financial need (as
          defined in paragraph (c) below) and the withdrawal is necessary to
          satisfy the financial need of the Participant.

               (i) A Participant will be deemed to experience a Hardship if, and
          only if, the Participant needs the withdrawal to pay for expenses
          directly resulting from an "Unforeseeable Emergency." An Unforeseeable
          Emergency is a severe financial hardship to the Participant resulting
          from a sudden and unexpected illness or accident of the Participant or
          of a dependent (as defined in Code Section 152(a)) of the Participant,
          loss of the Participant's property due to casualty, or other similar
          extraordinary and unforeseeable circumstances arising as a result of
          events beyond the control of the Participant. The circumstances
          constituting an Unforeseeable

                                       6

<PAGE>

          Emergency shall depend upon the facts of each case, but, in any event,
          shall not be made to the extent that such Hardship is or may be
          relieved:

                    (A) Through liquidation or compensation by insurance or
               otherwise;

                    (B) By liquidation of the Participant's assets, to the
               extent the liquidation of such assets would not itself cause
               severe financial hardship; or

                    (C) By cessation of deferrals under a cash-or-deferred
               arrangement maintained by the Participant's current employer.

     (c)  A withdrawal will be deemed necessary to satisfy the financial need of
          a Participant if, and only if:

               (i) The withdrawal is not in excess of the amount of the
          immediate and heavy financial need of the Participant. The amount of
          an immediate and heavy financial need may include any amounts
          necessary to pay any federal, state or local income taxes or penalties
          reasonably anticipated to result from the distribution.

               (ii) The Participant must have obtained all distributions, other
          than hardship distributions of salary reduction contributions under
          any cash-or-deferred arrangement maintained by any employer pursuant
          to Code Section 401(k), currently available under all plans maintained
          by any employer.

               (iii) The Participant has provided documentation to the Committee
          satisfactory to the Committee that he has a reasonable financial need
          for the withdrawal.

9.   ADMINISTRATION.

     The Plan shall be administered by the Committee. The Committee (or its
delegate) shall have the exclusive right, power, and authority, in its sole and
absolute discretion, to administer, apply and interpret the Plan and any other
Plan documents and to decide all matters arising in connection with the
operation or administration of the Plan. Without limiting the generality of the
foregoing, the Committee shall have the sole and absolute discretionary
authority: (a) to take all actions and make all decisions with respect to the
eligibility for, and the amount of, benefits payable under the Plan; (b) to
formulate, interpret and apply rules, regulations and policies necessary to
administer the Plan in accordance with its terms; (c) to decide questions,
including legal or factual questions, relating to the calculation and payment of
benefits under the Plan; (d) to resolve and/or clarify any ambiguities,
inconsistencies and omissions arising under the Plan or other Plan documents;
and (e) to process and approve or deny benefit claims and rule on any benefit
exclusions. All determinations made by the Committee (or any delegate) with
respect to any matter arising under the Plan and any other Plan

                                       7

<PAGE>

documents including, without limitation, any question concerning the selection
of Participants and the interpretation and administration of the Plan shall be
final, binding and conclusive on all parties.

     The Committee may impose such rules designed to facilitate compliance with
the securities laws. To the extent required by applicable law, this Plan is
intended to comply with, and shall be subject to the limitations of Rule 701
under the Securities Act of 1933 and/or the exemption from registration set
forth in Section 4(2) of the Securities Act of 1933. The Committee shall have
the authority to suspend the Plan and take any action necessary, including
revoking Participants' Deferral Agreements, prospectively and/or retroactively,
to ensure that the Plan complies with Federal and state securities laws,
including to the extent applicable, the limitations of Section 4(2) and Rule 701
under the Securities Act of 1933 and/or Section 4(2) of the Securities Act of
1933.

     Decisions of the Committee shall be made by a majority of its members
attending a meeting at which a quorum is present (which meeting may be held
telephonically), or by written action in accordance with applicable law.

     No member of the Committee and no officer, director or employee of the
Company or any other Affiliate shall be liable for any action or inaction with
respect to his functions under the Plan unless such action or inaction is
adjudged to be due to fraud. Further, no such person shall be personally liable
merely by virtue of any instrument executed by him or on his behalf in
connection with the Plan.

     Each Employer shall indemnify, to the full extent permitted by law and its
Certificate of Incorporation and By-laws (but only to the extent not covered by
insurance) its officers and directors (and any employee involved in carrying out
the functions of such Employer under the Plan) and each member of the Committee
against any expenses, including amounts paid in settlement of a liability, which
are reasonably incurred in connection with any legal action to which such person
is a party by reason of his duties or responsibilities with respect to the Plan
(other than as a Participant), except with regard to matters as to which he or
she shall be adjudged in such action to be liable for fraud in the performance
of his duties.

10.  CLAIMS PROCEDURES.

     Any claim by a Participant or Beneficiary ("Claimant") with respect to
eligibility, participation, contributions, benefits or other aspects of the
operation of the Plan shall be made in writing to the Committee or such other
person designated by the Committee from time to time for such purpose. If the
designated person receiving a claim believes, following consultation with the
Chairman of the Committee, that the claim should be denied, he shall notify the
Claimant in writing of the denial of the claim within ninety (90) days after his
receipt thereof (this period may be extended an additional ninety (90) days in
special circumstances and, in such event, the Claimant shall be notified in
writing of the extension). Such notice shall (a) set forth the specific reason
or reasons for the denial making reference to the pertinent provisions of the
Plan or of Plan documents on which the denial is based, (b) describe any
additional material or information necessary to perfect

                                       8

<PAGE>

the claim, and explain why such material or information, if any, is necessary,
and (c) inform the Claimant of his right pursuant to this section to request
review of the decision.

     A Claimant may appeal the denial of a claim by submitting a written request
for review to the Committee, within sixty (60) days after the date on which such
denial is received. Such period may be extended by the Committee for good cause
shown. The claim will then be reviewed by the Committee. A Claimant or his duly
authorized representative may discuss any issues relevant to the claim, may
review pertinent documents and may submit issues and comments in writing. If the
Committee deems it appropriate, it may hold a hearing as to a claim. If a
hearing is held, the Claimant shall be entitled to be represented by counsel.
The Committee shall decide whether or not to grant the claim within sixty (60)
days after receipt of the request for review, but this period may be extended by
the Committee for up to an additional sixty (60) days in special circumstances.
Written notice of any such special circumstances shall be sent to the Claimant.
Any claim not decided upon in the required time period shall be deemed denied.
All interpretations, determinations and decisions of the Committee with respect
to any claim shall be made in its sole discretion based on the Plan and other
relevant documents and shall be final, conclusive and binding on all persons.

11.  CONSTRUCTION OF PLAN.

     This Plan is "unfunded" and Deferred Benefits payable hereunder shall be
paid by the Employer out of its general assets. Participants and their
designated Beneficiaries shall not have any interest in any specific asset of
the Employer as a result of this Plan. Nothing contained in this Plan and no
action taken pursuant to the provisions of this Plan shall create or be
construed to create a trust of any kind, or a fiduciary relationship amongst any
Employer, the Committee, and the Participants, their designated Beneficiaries or
any other person. Any funds which may be invested under the provisions of this
Plan shall continue for all purposes to be part of the general funds of the
applicable Employer and no person other than the applicable Employer shall by
virtue of the provisions of this Plan have any interest in such funds. To the
extent that any person acquires a right to receive payments from any Employer
under this Plan, such right shall be no greater than the right of any unsecured
general creditor of the Employer. The Employer may, in its sole discretion,
establish a "rabbi trust" to pay Deferred Benefits hereunder.

12.  NON-TRANSFERABILITY OF RIGHTS UNDER THE PLAN.

     No amounts payable or other rights under the Plan shall be sold,
transferred, assigned, pledged or otherwise disposed of or encumbered by a
Participant, except as provided herein.

                                       9

<PAGE>

13.  MINORS AND INCOMPETENTS.

     In the event that the Committee finds that a Participant is unable to care
for his affairs because of illness or accident, then benefits payable hereunder,
unless claim has been made therefor by a duly appointed guardian, committee, or
other legal representative, may be paid in such manner as the Committee shall
determine, and the application thereof shall be a complete discharge of all
liability for any payments or benefits to which such Participant was or would
have been otherwise entitled under this Plan. Any payments to a minor from this
Plan may be paid by the Committee in its sole and absolute discretion (a)
directly to such minor; (b) to the legal or natural guardian of such minor; or
(c) to any other person, whether or not appointed guardian of the minor, who
shall have the care and custody of such minor. The receipt by such individual
shall be a complete discharge of all liability under the Plan therefor.

14.  WITHHOLDING TAXES.

     The Employer shall have the right to make such provisions as it deems
necessary or appropriate to satisfy any obligations it may have to withhold
federal, state or local income or other taxes incurred by reason of payments
pursuant to the Plan. In lieu thereof, the Employer shall have the right to
withhold the amount of such taxes from any other sums due or to become due from
the Employer to the Participant upon such terms and conditions as the Committee
may prescribe.

15.  ASSIGNMENT.

     The Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns and the Participants and their heirs, executors,
administrators and legal representatives. In the event that the Company sells
all or substantially all of the assets of its business and the acquirer of such
assets assumes the obligations hereunder, the Company shall be released from any
liability imposed herein and shall have no obligation to provide any benefits
payable hereunder.

16.  NON-ALIENATION OF BENEFITS.

     The benefits payable under the Plan shall not be subject to alienation,
transfer, assignment, garnishment, execution or levy of any kind, and any
attempt to cause any benefits to be so subjected shall not be recognized.

17.  LIMITATION OF RIGHTS.

     Nothing contained herein shall be construed (a) as conferring upon an
employee the right to continue in the employ of the Employer as an executive or
in any other capacity; (b) to interfere with the Employer's right to discharge
him at any time for any reason whatsoever, or (c) as guaranteeing a payment to a
Participant.

                                       10

<PAGE>

18.  NO FUNDING OBLIGATION.

     The Plan shall not be construed to require the Employer to fund any of the
benefits payable under the Plan or to set aside or earmark any monies or other
assets specifically for payments under the Plan. If the Company decides to
establish any advance accrued reserve on its books against the future expense of
benefits payable hereunder, or if the Company is required to fund a trust under
this Plan, such reserve or trust shall not under any circumstances be deemed to
be an asset of the Plan.

19.  AMENDMENT OR TERMINATION OF PLAN.

     The Board (or a duly authorized committee thereof) may, in its sole and
absolute discretion, amend the Plan from time to time and at any time in such
manner as it deems appropriate or desirable, and the Board (or a duly authorized
committee thereof) may, in its sole and absolute discretion, terminate the Plan
for any reason from time to time and at any time in such manner as it deems
appropriate or desirable. No amendment or termination shall reduce or terminate
the then vested benefit of any Participant or Beneficiary. Upon an amendment or
termination, the Company shall not be required to distribute a Participant's
Deferred Benefit prior to the Participant's Termination of Employment, but, in
the event of a termination of the Plan, may do so in a lump sum at the
discretion of the Company.

20.  SEVERABILITY OF PROVISIONS.

     In case any provision of this Plan shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such provisions had
not been included.

21.  ENTIRE AGREEMENT.

     This Agreement, along with the Executive's elections hereunder, constitutes
the entire agreement between the Corporation and the Executive pertaining to the
subject matter herein and supersedes any other plan or agreement, whether
written or oral, pertaining to the subject matter herein. No agreements or
representations, other than as set forth herein, have been made by the
Corporation with respect to the subject matter herein.

22.  HEADINGS AND CAPTIONS.

     The headings and captions herein are provided for reference and convenience
only. They shall not be considered part of the Plan and shall not be employed in
the construction of the Plan.

23.  GENDER AND NUMBER.

     Whenever used in the Plan, the masculine shall be deemed to include the
feminine and the singular shall be deemed to include the plural, unless the
context clearly indicates otherwise.

                                       11

<PAGE>

24.  NON-EMPLOYMENT.

     The Plan is not an agreement of employment and it shall not grant an
employee any rights of employment.

25.  PAYMENT NOT SALARY.

     Any Deferred Benefits payable under this Plan shall not be deemed salary or
other compensation to the employee for the purposes of computing benefits to
which he or she may be entitled under any pension plan or other arrangement of
any Employer for the benefit of its employees, except as otherwise provided in
any benefit plan or arrangement.

26.  CONTROLLING LAW.

     To the extent legally required, the Code and the Employee Retirement Income
Security Act of 1974, as amended shall govern the Plan and, if any provision
hereof is in violation of any applicable requirement thereof, the Company
reserves the right to retroactively amend the Plan to comply therewith. To the
extent not governed by the Code and the Employee Retirement Income Security Act
of 1974, as amended, the Plan shall be governed by the laws of the State of New
York.

IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of the 1st
day of January 2002.

                               CARROLS CORPORATION

                                  By:  /s/ Joseph A. Zirkman
                                       -----------------------------------------

                               Title:  Vice President, General Counsel
                                       -----------------------------------------

                                       12

<PAGE>

                                   APPENDIX A

                                Change in Control
                                -----------------

"Change of Control" shall mean:

(a) The acquisition (other than from Holdings) by any person, entity or "group",
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act"), excluding for this purpose any employee
benefit plan of Holdings or its subsidiaries which acquires beneficial ownership
of voting securities of Holdings, of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act), of more than 50% of either the
then outstanding shares of common stock or the combined voting power of
Holdings' then outstanding voting securities entitled to vote generally in the
election of directors;

(b)(1) Individuals who are elected as members of the new Board of Directors of
Holdings (the "Incumbent Board") pursuant to the terms of the Stockholders
Agreement executed in connection with the Stock Purchase Agreement thereto (the
"Stockholders Agreement") cease for any reason to constitute at least a majority
of the Board of Directors; provided that any person becoming a director on or
after the effective date of the Stockholders Agreement whose election, or
nomination for election by Holdings' shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of Directors of Holdings, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board;

(b)(2) Notwithstanding the foregoing, paragraph (b)(1) above shall not apply to
any change in the Incumbent Board during the period in which the Stockholders
Agreement is in effect and a majority of the Board of Directors of Holdings is
designated or otherwise appointed to serve on the Board of Directors under the
provisions of such Stockholders Agreement;

(c) Approval and consummation of a reorganization, merger, or consolidation, in
each case, with respect to which persons who were the stockholders of Holdings
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities in approximately the
same proportion as prior to such reorganization, merger or consolidation, or a
liquidation or dissolution of Holdings or of the sale of all or substantially
all of the assets of Holdings; or

(d) Holdings ceases to own at least 50 percent of the Employer.

(e) A Change of Control shall not be deemed to have occurred as a result of any
purchase or acquisition of shares of capital stock in Holdings by Madison
Dearborn Capital Partners, L.P. and

                                       13

<PAGE>

Madison Dearborn Capital Partners II, L.P. and its affiliates, Atlantic
Restaurants, Inc. and its affiliates, or any combination thereof.

                                       14

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