Document:

<PAGE>

                                                                    EXHIBIT 10.3

                               XANDO, INCORPORATED
                    NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
                            (AS AMENDED AND RESTATED)

                                    ARTICLE 1
                                    THE PLAN

         1.1. Name. The name of this Plan is the Xando, Incorporated
Non-Employee Directors Stock Option Plan.

         1.2 Purpose and Scope. (a) The purposes of the Plan are to (i) attract
able individuals to serve as Directors, (ii) encourage ownership of the
Company's common stock by Directors of the Company, and (iii) promote the
Company's business success by creating a long-term mutuality of interests
between the Directors and the Company's shareholders.

                  (b) The Plan provides for the granting of Nonqualified Stock
Options and SARs to non-employee Directors of the Company.

         1.3 Effective Date of Plan. This Plan is effective October 1, 1997.

                                    ARTICLE 2
                                   DEFINITIONS

         Capitalized terms in this Plan shall have the following meanings
(unless the context plainly requires that a different meaning apply):

         2.1 Board. The Board of Directors of the Company.

         2.2 Code. The Internal Revenue Code of 1986, as amended from time to
time, or any replacement legislation.

         2.3 Common Stock. The common stock of Xando, Incorporated

<PAGE>
         2.4 Company. Xando, Incorporated, a Connecticut corporation, and any
successor to such corporation, whether by merger, consolidation, liquidation or
otherwise.

         2.5 Director. Any duly elected member of the Board.

         2.6 Disability. Permanent and total disability within the meaning of
Section 22(c)(3) of the Code.

         2.7 Exchange Act. The Securities Exchange Act of 1934, as amended from
time to time, or any replacement legislation.

         2.8 Fair Market Value. The closing price per share of Common Stock on
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
System or nationally recognized securities exchange on which the stock is
listed. If the stock is not listed on a generally recognized securities exchange
or the NASDAQ system, Fair Market Value shall be determined by the Board in good
faith, using such criteria as the Board may, in its sole discretion, deem
appropriate.

         2.9 Nonqualified Stock Option. A stock option which is not intended to
qualify as an "incentive stock option" within the meaning of Section 422 of the
Code.

         2.10 Optioned Shares. Those Shares subject to a stock option granted
pursuant to this Plan.

         2.11 Optionee. A Director who has received a stock option or SAR
pursuant to this Plan.

         2.12 Plan. The Xando, Incorporated Non-Employee Directors Stock Option
Plan, as amended from time to time.

         2.13 Share. One share of the Company's Common Stock, as adjusted in
accordance with Section 5.5 of this Plan.

         2.14 SAR. A stock appreciation right which entitles the holder upon
exercise of that right to the product of (a) the excess of the Fair Market Value
of one Share on the date of

                                      -2-
<PAGE>
exercise over the price per share established by Board (in its sole discretion)
for the grant and (b) the number of Shares subject to the grant, payable in
either Shares, cash or a combination of the two, as provided in Section 5.4(b).

                                    ARTICLE 3
                               PLAN ADMINISTRATION

         3.1 Administration. (a) The Plan shall be administered by the Board.
The Board shall have full discretion to administer and interpret the Plan and to
adopt such rules, regulations, and procedures as it deems necessary or
advisable.

                  (b) Records shall be kept of any actions taken by the Board. A
majority of the Board shall constitute a quorum at any meeting. Any acts
approved either (1) by all the members present at any meeting at which there is
a quorum or (2) in writing by all members of the Board, shall be deemed to be
acts of the Board for purposes of this Plan.

                  (c) The Board may delegate any or all of its powers and duties
hereunder to one or more committees consisting of such members of the Board as
it may designate. The interpretation of, and all actions taken under, the Plan
by the Board or its delegate shall be final, binding, and conclusive on all
interested parties, including the Company, its shareholders, and any current or
former Director. The Board may, as to questions of accounting, rely conclusively
upon any determinations made by independent public accountants of the Company.

                                    ARTICLE 4
                             ELIGIBILITY FOR GRANTS

         4.1 Eligibility and Terms of Grants. The Board shall have full
discretionary authority to determine the non-employee Directors eligible to
receive a stock option or SAR, the time or times at which the Optioned Shares
may be purchased or SARs may be exercised, and whether all of the options or
SARs may be exercised at one time or in increments.

         4.2 Granting of Options. (a) The granting of any option or SAR shall be
entirely in the discretion of the Board and nothing in the Plan shall be
construed as giving non-employee Directors the right to participate under this
Plan or to receive any option or right under it.

                                      -3-
<PAGE>
                  (b) The Board may, in its sole discretion, accept the
cancellation of outstanding stock options or SARs in return for the grant of new
stock options or SARs for the same or different number and at the same or
different option price.

                                    ARTICLE 5
                               GENERAL PROVISIONS

         5.1 Stock Subject to Plan. Subject to the provisions of Section 5.5,
the maximum number of Shares which may be issued and used in payment of
exercised SARs or for which options may be granted pursuant to this Plan is
250,000. Shares subject to any unexercised option granted under this Plan which
has expired or terminated shall again become available under this Plan. The
Shares which may be issued or delivered under the Plan may, as determined by the
Board from time to time in its sole discretion, be authorized but unissued
shares, reacquired shares or both.

         5.2 Term and Expiration of Options. Each option or SAR granted under
this Plan shall be in writing, shall be subject to such amendment or
modification from time to time as the Board shall deem necessary or appropriate
to comply with or take advantage of applicable laws or regulations, and shall,
in addition to such other terms as the Board may include, provide:

                  (a) that, subject to Section 5.2(b), the option or SAR, may be
exercised only by the Optionee or Optionee's personal representative;

                  (b) that no option or SAR shall be transferable by the
Optionee or by operation of law other than by will of, or by the laws of descent
and distribution applicable to, a deceased Optionee and that the option or SAR
and any and all rights granted to the Optionee thereunder and not previously
exercised shall automatically terminate and expire upon any sale, transfer, or
hypothecation or any attempted sale, transfer, or hypothecation of such rights
or upon the bankruptcy or insolvency of the Optionee or Optionee's estate:

                  (c) that subject to the foregoing provisions, an option or SAR
may be exercised at different times for portions of the total number of Shares
which have vested, provided that no option or SAR may be exercised for a
fraction of a Share;

                                      -4-
<PAGE>
                  (d) that no Optionee shall have the right to receive any
dividend on or to vote or exercise any right in respect to any Shares unless and
until the certificates for such Shares have been issued to such Optionee;

                  (e) that the option or SAR shall expire at the earliest of the
     following:

                           (1) the date specified in the agreement;

                           (2) three (3) months after the Optionee ceases to be
                  a Director;

                           (3) upon the removal of the Optionee as a member of
                  the Board for dishonesty, gross negligence, willful
                  misconduct, or conduct that adversely affects the interests of
                  the Company (or any affiliate) as determined by the Company's
                  shareholders; or (4) twelve (12) months after the Optionee's
                  death or Disability.

                  (f) that, to the extent an option provides for the vesting
     thereof in increments, such vesting shall cease as of the date the Optionee
     ceases to be a Director or the date of the Optionee's death or Disability.

         5.3 Notice of Intent to Exercise Option or SAR. An option or SAR
granted under the Plan may be exercised in whole or in part by notifying the
Company (or its designee) in the manner and upon the terms as may be provided in
the Optionee's agreement.

         5.4 Exercise of Option or SAR. (a) Upon receipt by the Company (or its
designee) of the notice provided in Section 5.3, an option shall be deemed to be
exercised as to the number of Shares specified in such notice and Shares in that
amount shall be issued to the Optionee upon payment to the Company of the amount
specified in Section 6.2. Payment of the option purchase price shall be made in
cash (or cash equivalent) in United States dollars, and may be done in
accordance with any procedures for a "cashless exercise" established by the
Company or permitted under the Optionee's agreement.

                  (b) Upon receipt by the Company (or its designee) of the
notice provided in Section 5.3 of the exercise of a SAR, the SAR shall deemed to
be exercised as to the number of Shares specified in the notice and the Company
shall (as it may determine in its sole discretion) issue to the Optionee either
(1) Shares based on the Fair Market Value on the date of payment (with any
fractional Shares to be paid in cash), (2) cash or (3) a combination of Shares
and cash,

                                      -5-
<PAGE>
equal in value (in United States dollars) to the amount payable under the SAR.
Any cash payment to be made by the Company under this Section may, as determined
by the Company in its sole discretion, be payable in installments over a period
of no more than 6 months.

         5.5 Recapitalization. Subject to any required action by the
shareholders of the Company, the aggregate number of Shares for which options
may be granted hereunder, the number of Shares covered by any outstanding option
or SAR, and the price per Share thereof under each such option or SAR shall be
proportionately adjusted for the following: (a) Any dividend or other
distribution declared as to Common Stock which is payable in Shares: and (b) an
increase or decrease in the number of outstanding shares of Common Stock
resulting from a stock split or reverse split of shares, recapitalization or
other capital adjustment. All fractional Shares or other securities which result
from such an adjustment shall be eliminated and not carried forward to any
subsequent adjustment.

         5.6 Rights of Optionee in Event of Merger, Consolidation, Acquisition
of Majority Voting Control, Sale of Assets, Dissolution or Change in Board
Membership. (a) Notwithstanding anything in this Plan to the contrary, the
Optionee may exercise any unexpired options or SARs in the following
circumstances:

                           (1) The Optionee may conditionally purchase any or
         all Optioned Shares or exercise any or all SARs during the period
         commencing twenty-seven (27) days and ending seven (7) days prior to
         the scheduled effective date of a merger or consolidation (as such
         effective date may be delayed from time to time) wherein the Company is
         not to be the surviving corporation, which merger or consolidation is
         not between or among the Company and other corporations related to or
         affiliated with the Company;

                           (2) the Optionee may conditionally purchase any or
         all Optioned Shares or exercise any or all SARs during the period
         commencing twenty-seven (27) days and ending seven (7) days prior to
         the scheduled effective date of the acquisition of more than fifty
         percent (50%) of the combined voting power of the Company's then
         outstanding voting stock by any person or entity (other than the
         Company or other corporations related to or affiliated with the
         Company);

                           (3) the Optionee may conditionally purchase any or
         all Optioned Shares or exercise any or all SARs during the period
         commencing on the date the shareholders of the Company approve a sale
         of substantially all the assets of the Company and ending

                                      -6-
<PAGE>
         seven (7) days prior to the scheduled closing date of such sale (as
         such closing date may be delayed from time to time);

                           (4) the Optionee may conditionally purchase any or
         all Optioned Shares or exercise any or all SARs during the period
         commencing the date the shareholders of the Company approve the
         dissolution of the Company and ending seven (7) days prior to the date
         of filing its Articles of Dissolution; and

                           (5) the Optionee may conditionally purchase any or
         all Optioned Shares or exercise any or all SARs during the period
         commencing twenty-seven (27) days and ending seven (7) days prior to
         the date the individuals who, as of the date of the grant, are members
         of the Board (the "Incumbent Board"), cease for any reason to
         constitute at least a majority of the Board; provided, that if the
         election, or nomination for election, of a mew director was approved by
         a vote of at least two-thirds of the then Incumbent Board, such new
         director shall, for purposes of this Agreement, be considered to be a
         member of the Incumbent Board.

                  (b) If an event described in Subsection (a)(1) through (a)(4)
above, once commenced, is canceled or revoked, the conditional purchase of
Shares or exercise of SARs under this Section which are not otherwise
exercisable at the time of said cancellation or revocation (but for the
operation of this Section), shall be rescinded. With the respect to all other
Shares conditionally purchased or SARs, the Optionee may elect to rescind such
purchase or exercise.

                  (c) Upon the occurrence of event described in Subsections
(a)(1) through (a)(4) above, and the Optionee has not conditionally purchased
all Optioned Shares or exercise all SARs, all unexercised options and SARs shall
terminate on the effective, termination, closing, or filing date, as the case
may be.

                  (d) If the Company shall be the surviving corporation in any
merger or is a party to a merger or consolidation which is between or among the
Company and other corporations related to or affiliated with the Company, any
option or SAR granted hereunder shall pertain and apply to the securities to
which a holder of the number of Shares subject to the option or SAR would have
been entitled.

                                      -7-
<PAGE>
                  (e) Nothing herein shall allow an Optionee to exercise an
option or SAR which has expired.

         5.7 Withdrawal. An Optionee may at any time elect in writing to abandon
an option or SAR with respect to the number of Shares as to which the option or
SAR shall not have been exercised.

         5.8 Compliance with Applicable Laws and Articles of Incorporation. (a)
The Company shall have the right to place appropriate legends upon the
certificate for any Shares issued pursuant to this Plan and take such other acts
as it may deem necessary or appropriate to ensure that the issuance of Optioned
Shares or the exercise of a SAR complies with applicable provisions of state and
federal securities laws.

                  (b) The Company shall not be obligated to issue Shares under
any option or in payment of any SAR granted under this Plan that would violate
any law. Each Optionee may be required to make representations, enter into
restrictive agreements, or take such other actions as may be deemed necessary or
appropriate by the Company to ensure compliance with applicable law and the
Company's Articles of Incorporation and By-laws.

                                    ARTICLE 6
                      RULES FOR NONQUALIFIED STOCK OPTIONS

         6.1 Option Price. The purchase price of Shares subject to a
Nonqualified Stock Option shall be determined by the Board at the time the
option is granted; provided, that the purchase price shall not be less than 85%
of the Fair Market Value of such Shares on the date of the grant.

         6.2 Payment Upon Exercise of Option. The amount to be paid by the
Optionee upon exercise of a Nonqualified Stock Option shall be the full purchase
price for the Shares involved provided in the option agreement, together with
the amount of any required federal, state, and local tax withholding (as
determined by the Company in its sole discretion). The Company may, in its sole
discretion, permit an Optionee to elect to pay the required tax withholding by
having the Company withhold Shares having a Fair Market Value at the time of
exercise equal to the amount required to be withheld. An election by an Optionee
to have shares withheld for this

                                      -8-
<PAGE>
purpose will (together with such additional restrictions as the Company may
impose) be subject to the following:

                  (a) If an Optionee has received multiple option grants, a
separate election must be made for each grant;

                  (b) The election must be made prior to the date the option is
exercised;

                  (c) The election shall be irrevocable; and

                  (d) The election may be rejected by the Company.

                                    ARTICLE 7
                            AMENDMENT AND TERMINATION

         7.1 Amendment. (a) The Board shall have the right to amend the Plan at
any time and from time to time; provided, that no such amendment of the Plan
shall, without stockholder approval, be effective if stockholder approval of the
amendment is required at such time in order to qualify for any available
exemption from Section 16 of the Exchange Act or by any other applicable law,
regulation, rule of order.

                  (b) No amendment may be made that would cause stock options or
SARs under the Plan not to qualify for exemption under Section 16.

                  (c) No amendment of the Plan shall, without the written
consent of the holder of a stock option or SAR awarded under the Plan prior to
the date of the amendment or termination adversely affect the rights of such
holder with respect to such option or SAR (except to the extent necessary to
comply with applicable law, regulation, rule or order).

                  (d) Notwithstanding anything herein or in any stock option
agreement to the contrary, the Board shall have the power to amend the Plan in
any manner deemed necessary or advisable for stock options or SARs granted under
the Plan to qualify for any exemption provided under Section 16 and any such
amendment shall, to the extent deemed necessary or advisable by the Board, be
applicable to any outstanding stock options previously granted under the Plan.
In the event of such an amendment to the Plan, the holder of any stock option or
SAR outstanding under the Plan shall, upon request of the Board and as a
condition for exercising of such option or SAR, execute a conforming amendment
in the form prescribed by the Board to the

                                      -9-
<PAGE>
stock option or SAR agreement within such reasonable period of time as the Board
shall specify in such request.

         7.2 Termination. The Board shall have the right to terminate the Plan
at any time; provided, that no such termination shall terminate any outstanding
stock option or SAR previously granted under the Plan or adversely affect the
rights of such holder without his or her written consent. No new options or SARs
may be granted on or after the date the Plan is terminated.

                                    ARTICLE 8
                                  MISCELLANEOUS

         8.1 Registration, listing and Qualification of Shares. Each option
shall be subject to the requirement that if at any time the Board shall
determine that the registration, listing, or qualification of the Shares covered
thereby upon any securities exchange or under any foreign, federal, state, or
local law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such option or the purchase of Shares thereunder, no such option may be
exercised unless and until such registration, listing, qualification, consent,
or approval shall have been effected or obtained free of any condition not
reasonably acceptable to the Company. Any person exercising an option shall make
such representations and agreements and furnish such information as the Board or
the Company may request to assure compliance with the foregoing or any other
applicable legal requirements.

         8.2 No Rights To Continue as a Director; No Restrictions. Neither this
Plan nor any action taken hereunder shall be construed as giving any Director
the right to continue as a Director. Nothing in this Plan shall restrict the
Company's rights to adopt other option plans pertaining to any or all Directors
covered under this Plan or other Directors not covered under this Plan.

         8.3 Costs And Expenses. Except as provided herein, all costs and
expenses of administering the Plan shall be paid by the Company.

                                      -10-
<PAGE>
         8.4 Plan Unfunded. This Plan shall be unfunded. Except for the Board's
reservation of a sufficient number of authorized shares to the extent required
by law to meet the requirements of the Plan, the Company shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure payment of any grant under the Plan.

         8.5 Government Regulations. The rights of Optionees and the obligations
of the Company hereunder shall be subject to all applicable laws, rules, and
regulations and to such approvals as may be required by any governmental agency.

         8.6 Proceeds From Sale of Stock. Proceeds of the purchase of Optioned
Shares by an Optionee may be used by the Company for any business purpose.

         8.7 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Connecticut.

         8.8 Invalidity. If any provision of the Plan shall be held invalid or
unlawful for any reason, such event shall not affect or render invalid or
unenforceable the remaining provisions of the Plan.

                                      -11-<PAGE>

                                                                    Exhibit 10.4

                                   Cosi. Inc.

                               Deferred Stock Plan

         1. The Plan. The purpose of this Cosi, Inc. Deferred Stock Plan (the
"Deferred Stock Plan") is to assist a select group of key employees in
maintaining their level of ownership of the common stock, par value $.01 per
share (the "Common Stock"), of Cosi, Inc. (the "Company") by providing a way to
defer the proceeds form exercises of stock options granted under the Company's
Stock Incentive Plan and such other stock option plan or plans as may be in
effect from time to time (the "Stock Option Plans"). The Deferred Stock Plan is
an unfunded liability of the Company for federal income tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Participants in the Deferred Stock Plan are general unsecured
creditors of the Company with respect to assets held by the Company pursuant to
his Deferred Stock Plan.

         2. Definitions. Capitalized terms used but not otherwise defined in the
Deferred Stock Plan shall have the meanings set forth below:

         "Board" shall mean the Board of Directors of Cosi, Inc.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Common Stock Unit" shall mean a derivative security of the Company
entitling the holder thereof to receive (i) at the time of the payment of any
cash or stock dividend by the Company on its Common Stock (other than a stock
dividend effectuating a stock split), that amount of cash or that number of
shares distributed to the holder of a share of Common Stock and (ii) at the time
of payment of Proceeds pursuant to the terms hereof and any Election Form, one
share of Common Stock.

         "Compensation Committee" shall mean the Compensation Committee of the
Board of Directors of the Company.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         "Exercise Price" shall mean the exercise price of the Options granted
under the Stock Option Plans as set forth in the stock option agreements
relating to such Options.

         "Fair Market Value" shall mean the closing bid price of the Company's
Common Stock on the national exchange, over-the-counter or other stock market on
which the Company is listed on the specified day and, if such day is not a
trading day on such exchange or stock market, the closing price on the prior
trading day. If the Company's Common Stock is not publicly traded on a national
exchange or stock market, the Fair market Value shall be determined by the
Board.
<PAGE>
         "Mature Shares" shall mean shares of the Company's Common Stock owned
by a Participant for six months or more at the time of the exercise of Options.

         "Options" shall mean all of the non-qualified stock options granted
pursuant to a specific grant under one of the Company's Stock Option Plans. Such
Options must be fully exercisable pursuant to the terms of the applicable Stock
Option Plan and the stock option agreement pertaining to such Options.

         "Participants" shall mean those persons designated by the Compensation
Committee of the Board as participants in this Deferred Stock Plan.

         "Proceeds" shall mean the proceeds of an exercise of Options. In the
case of an exercise with the payment of the Exercise Price in cash, such
Proceeds shall be the number of shares of Common Stock subject to the Options
being exercised. In the case of an exercise with the payment of the Exercise
Price by tender of (or attestation to ownership of) previously acquired shares
of Common Stock, the Proceeds shall be the number of shares of Common Stock
subject to such Options, reduced by the number of shares of Common Stock with a
value equal to the aggregate Exercise Price payable to the Company. upon
exercise of the Options. For purposes of determining the Proceeds, the number of
shares of Common Stock with a value equal to the aggregate Exercise Price shall
be determined by dividing the aggregate Exercise Price of the Options by the
Fair Market Value of a share of Common Stock on the date of exercise, and
rounding down to the next lowest whole number.

         "Securities Act" shall mean the Securities Act of 1933, as amended.

         3. Administration of the Plan. The Deferred Stock Plan shall be
administered by the Compensation Committee which shall, in its sole discretion,
determine the persons who may participate in and the terms and conditions of
deferrals under the Deferred Stock Plan. The Compensation Committee shall have
the authority to interpret the Deferred Stock Plan and to adopt from time to
time such guidelines, rules, agreements and documents for the administration of
the Deferred Stock Plan as it deems necessary or appropriate.

         4. Deferral of Proceeds of Stock Option Exercises. A Participant may
elect to defer the receipt of Proceeds by executing and delivering a deferral
election form, substantially in the form attached hereto as Exhibit A and
subject to the conditions hereinafter rest forth (an "Election Form"), to the
Compensation Committee or its designee. Such election to defer receipt of the
Proceeds pursuant to this Deferred Stock Plan shall be irrevocable. The Election
Form must be received by the Compensation Committee or its designee at least six
months prior to the date that the option will be exercised (or such shorter
period as may be approved in advance by the Compensation Committee).

         5. Direction of Deferral. The Election Form must specify the time
period during which receipt of the Proceeds is deferred. Such period must be at
least five years from the date of exercise of the Options, but may be longer at
the discretion of the Participant. A Participant may extend the deferral period
relating to Options previously deferred by executing and

                                      -2-
<PAGE>
delivering an additional Election Form with respect to such Options to the
Compensation Committee or its designee at any time up to one year before the
previous deferral expires.

         6. Exercise of Options. Participants shall exercise Options by
delivering a Notice of Exercise to Kenneth S. Betuker, Chief Financial Officer,
prior to the date of exercise of the Options. Such notice shall either (i) be
accompanied by a check in payment of the aggregate Exercise Price of the options
or (ii) shall request an exercise of such Options pursuant to the tender of or
attestation to the ownership of previously acquired shares of Common Stock and
contain an attestation by the Participant that he or she owns Mature Shares with
a Fair Market Value equal to or greater than the aggregate Exercise Price of the
Options.

         7. Payment of Proceeds. Unless otherwise specified in the Election Form
pertaining to the Options and their Proceeds, upon the expiration of the
deferral period, the Company shall pay the Proceeds to the Participant in one
payment by issuing shares of Common Stock. Participants may elect to receive the
Proceeds in several payments over a number of years or may elect to receive that
portion of the Proceeds having a specified value in several payments over a
number of years by specifying the desired payment terms in the Election Form.
Notwithstanding any election by the Participant, in the event of the
Participant's death, the Committee shall promptly determine, in its sole
discretion after consideration of the tax and other consequences of such
decision, whether to pay the Proceeds into the Participant's estate immediately
or to defer payment in accordance with the term specified in the Election Form.
A Participant may specify in his or her Election Form that payment of the
Proceeds shall be made to a designated beneficiary or beneficiaries upon his or
her death.

         8. Payment of Proceeds in Special Circumstances. Notwithstanding any
election made by a Participant and the terms thereof, upon (i) any occurrence
causing a Participant to become substantially or completely disabled or (ii) the
occurrence of an unforeseeable emergency beyond the reasonable control of a
Participant that causes or threatens to cause severe financial hardship to a
Participant or his or her family if early withdrawal of Proceeds is not
permitted, then, at the request of such Participant the Committee may, in its
sole discretion, approve the payment of the Proceeds prior to the expiration of
the deferral period specified in the Election Form pertaining to specified
Options and the Proceeds thereof. Any early payment of Proceeds shall be limited
to the amount reasonably necessary to meet the emergency.

         9. Deferred Compensation Account. Upon the exercise by a Participant of
Options subject to an Election Form, the Company shall establish a deferred
compensation account for such Participant. The Company shall issue and credit to
such account the number of Common Stock Units equal to the number of shares of
Common Stock constituting the Proceeds. If the Company declares and pays cash or
stock dividends on its Common Stock (other than a stock dividend effectuating a
stock split) the Company shall pay such dividends to the Participant directly.
In the event of a stock split or reverse stock split, the number of Common Stock
Units in each Participant's account shall be adjusted appropriately. In the
event of a merger or other corporate event effecting a payment for or exchange
of the Company's outstanding securities, Common Stock Units shall be treated as
if they were shares of Common Stock owned by the Participant, except that the
Compensation Committee shall determine, in its sole discretion and

                                      -3-
<PAGE>
on an individual Participant basis, whether such payments or shares received in
exchange for the Company's Common Stock shall be subject to the terms of the
Election Form pertaining to the Options and Proceeds thereof reflected as Common
Stock Units in each Participant's deferred compensation account. Upon the
expiration of the deferral period specified by a Participant in an Election
Form, or upon the date specified for a partial payment of the Proceeds by a
Participant in an Election Form, the number of Common Stock Units in a
Participant's account shall be reduced by the number of shares of Common Stock
issued to the Participant in payment of the Proceeds.

         10. Tax Withholding upon Payment. Prior to the date of any payment of
Proceeds, a Participant shall arrange for the payment of required tax
withholdings for federal, state and local income taxes and any other applicable
taxes by either delivering such tax withholding amounts to the Company or by
authorizing the Company to withhold shares of Common Stock with a value equal to
such tax withholdings from the payment of the Proceeds.

         11. Assignment of Deferred Compensation Account. A Participant may not
sell, transfer, assign, pledge or otherwise encumber the balance in his or her
deferred compensation account. A Participant may, however, specify in his or her
Election Form a beneficiary or beneficiaries to receive the Proceeds upon his or
her death.

         12. Amendment or Termination of the Plan. The Compensation Committee
may modify or amend this Deferred Stock Plan at any time; provided, however,
that no modification or amendment may adversely affect deferrals made prior to
the date thereof without the written consent of the affected Participant. The
Compensation Committee may also terminate the Deferred Stock Plan, but such
termination shall not affect the Company's obligations to pay Proceeds to
Participants pursuant to any deferral made prior to the effective date of such
termination.

         13. Governing Law. This Deferred Stock Plan shall be governed by
federal laws and the laws of the State of New York.

                                      -4-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}]]