Exhibit 10.1

EMPLOYMENT AGREEMENT

Dated as of June 30, 1997

The parties to this agreement are Bed Bath & Beyond Inc., a New York corporation (the "Company"), and Warren Eisenberg (the "Executive").

The Company wishes to continue to employ the Executive and enter into this agreement, which embodies the terms of such employment, and the Executive wishes to enter into this agreement and accept such continued employment on such terms.

Accordingly, the parties agree as follows:

1. Positions, Duties and Responsibilities

(a) During the Executive's employment under this agreement, the Executive shall be employed as the co-chief executive officer with Leonard Feinstein or chief executive officer of the Company and be responsible for the general management of the affairs of the Company. It is the intention of the parties that the Executive be elected to and serve as a member of the board of directors of the Company. The Executive, in carrying out his duties under this agreement, shall report to the board of directors of the Company.

(b) Nothing in this agreement shall preclude the Executive from
(i) serving on the boards of directors of a reasonable number of other corporations or the boards of a reasonable number of trade associations and/or charitable organizations, (ii) engaging in charitable activities and community affairs and (iii) managing his personal investments and affairs, provided that such activities do not materially interfere with the proper performance of his duties and responsibilities under this agreement.

2. Term of Employment. The Executive's employment under this agreement shall continue until the earlier of (a) the fifth anniversary of this agreement (as may be extended from time to time by mutual agreement of the parties) (the "Final Date") or (b) the termination of his employment in accordance with this agreement.

3. Senior Status. Notwithstanding anything to the contrary in sections 1 and 2, at any time during the Executive's employment under this agreement and before the Final Date, the Executive may, at his option, upon 90 days' written notice given to the Company, elect to terminate his positions, duties and responsibilities under section 1, and during the period (the "Senior Status Period") commencing 90 days after such written notice is first given and continuing until the earlier of (a) the tenth anniversary of the termination of his positions, duties and responsibilities under section 1 or (b) the termination of the Executive's employment in accordance with this agreement, provide consulting (but not line executive) services as an employee. If the Executive shall not have exercised this option on or before the 90th day before the Final Date, then, at the written request of the Company given not later than 60 days before the Final Date, the Executive shall nonetheless be deemed to have exercised this option. It is the intention of the parties that, during the Senior Status Period, the Executive shall continue to be elected to and serve as a member of the board of directors of the Company. The Executive, in carrying out his duties during the Senior Status Period, shall report to the Company's chief executive officer or, if the board of directors of the Company so determines, to the board of directors of the Company. During the Senior Status Period, the Executive shall, at the request from time to time of the Company's chief executive officer or board of directors, make himself available to the Company, at times that are reasonably convenient for him, to provide advisory services (it being understood, however, that such services shall not require the Executive to travel

to a location more than 25 miles from his residence from time to time or to devote more than fifty (50) hours in any three-month period to the Company). During the Senior Status Period, the Company shall provide the Executive an office (at a location specified by the Executive, which need not be where the Company's offices are located) and secretary that, in the Executive's good faith judgment, are appropriate to enable him to perform his duties under this agreement.

4. Salary. During his employment under this agreement and prior to the Senior Status Period, the Executive shall be entitled to an annual salary, payable in accordance with the regular payroll practices of the Company, of $750,000. During the Senior Status Period, the Executive shall be entitled to an annual salary, payable in accordance with the regular payroll practices of the Company, of $400,000. The Company may pay additional compensation to the Executive, whether in the form of an increase in salary, bonus or otherwise, if and to the extent authorized by the board of directors of the Company, in its sole discretion, from time to time, it being understood that the board of directors may give consideration to increasing such compensation at various intervals during the term of this agreement.

5. Employee Benefit Programs Generally. During the Executive's employment under this agreement, the Executive shall be entitled to participate in all employee pension and welfare benefits plans and programs available to the Company's senior level executives or to its employees generally, as such plans or programs may be in effect from time to time, including, without limitation, pension, profit sharing, savings and other retirement plans or programs, medical, dental, hospitalization, short-term and long-term disability and life insurance plans, accidental death and dismemberment protection, travel accident insurance, and any other pension or retirement plans or programs and any other employee welfare benefit plans or programs that may be sponsored by the Company from time to time, including any plans that supplement the

above-listed types of plans or programs, whether funded or unfunded.

6. Reimbursement of Business and Other Expenses. The Executive is authorized to incur reasonable expenses in carrying out his duties and responsibilities under this agreement, and the Company shall promptly reimburse him for all business expenses incurred in carrying out the business of the Company, subject to documentation in accordance with the Company's policies.

7. Termination of Employment

(a) In the event the Executive's employment terminates due to his death, his estate or his beneficiaries, as the case may be, shall be entitled to his salary for a period of 90 days following his death, any amount owing but not yet paid under section 6 and other or additional benefits in accordance with applicable plans and programs of the Company.

(b) In the event the Executive's employment terminates due to his inability substantially to perform his duties and responsibilities under this agreement for a period of 180 consecutive days, he shall be entitled to his salary for a period of 90 days following the date of termination, any amount owing but not yet paid under section 6, continued participation at the Company's expense in medical, dental, hospitalization and life insurance coverage and in all other employee plans and programs in which he or his family was participating on the date of termination of his employment until the tenth anniversary of the date of termination and other or additional benefits in accordance with applicable plans and programs of the Company (and thereafter, at the Executive's option and expense, to the extent he or his family can be included in such plans and programs). If the Executive is precluded from continuing his participation in any benefit plan or program referred to in the immediately preceding sentence, he shall be provided the after-tax economic equivalent of the benefits provided under the plan or program in which he

is unable to participate. The economic equivalent of any benefit foregone shall be deemed to be the lowest cost that would be incurred by the Executive in obtaining such benefit himself on an individual basis. In no event shall a termination of the Executive's employment under this section 7(b) occur, unless the party terminating the Executive's employment gives written notice to the other party in accordance with this agreement.

(c) (i) As used in this agreement, the term "Cause" means (A) the Executive is convicted of a felony involving moral turpitude or (B) the Executive is guilty of willful gross neglect or willful gross misconduct in carrying out his duties under this agreement, resulting, in either case, in material economic harm to the Company, unless the Executive believed in good faith that such act or nonact was in the best interests of the Company.

(ii) The Company may terminate the Executive's employment under this agreement for Cause. A termination for Cause shall not take effect, however, unless the provisions of this paragraph (c)(ii) are complied with. The Executive shall be given written notice by the board of directors of the Company of the intention to terminate his employment for Cause, such notice to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Cause is based. The Executive shall have 10 days after the date that such written notice has been given in which to cure such conduct, to the extent a cure is possible. If he fails to cure such conduct, his employment shall be terminated for Cause.

(iii) In the event the Company terminates the Executive's employment for Cause, he shall be entitled to his salary through the date of the termination of his employment, any amounts owing but not yet paid under section 6 and other or additional benefits in accordance with applicable plans or programs of the Company.

(d) (i) As used in this agreement, the term "Constructive Termination Without Cause" means a termination of the Executive's employment at his initiative following the occurrence, without the Executive's prior written consent, of one or more of the following events (except in consequence of a prior termination):

(A) a reduction in the Executive's salary or a material reduction of any employee benefit or perquisite enjoyed by him (other than as part of any across-the-board action applicable to all executive officers of the Company);

(B) the failure to elect or reelect the Executive to any of the officer or director positions referred to in section 1(a) or removal of him from any of such positions;

(C) a material diminution in the Executive's duties or the assignment to the Executive of duties materially inconsistent with his duties or that materially impair the Executive's ability to function, prior to the Senior Status Period, as the co-chief executive officer or chief executive officer of the Company;

(D) the relocation of the Company's principal office, or the Executive's own office location as assigned to him by the Company, to a location more than twenty-five (25) miles from Union, New Jersey.

(ii) In the event the Company terminates the Executive's employment without Cause, other than pursuant to section 7(a) or (b), or in the event there is a Constructive Termination Without Cause, the Executive shall be entitled to his salary through the date of termination of employment, his salary at the annual rate of $750,000 through the Final Date and thereafter at the annual rate of $400,000 through the 10th anniversary of the Final Date (provided that, at the Executive's option, exercised by written notice given to the Company, the Company

shall pay him the present value of such salary continuation payments in a lump sum (using as the discount rate the Applicable Federal Rate for short-term Treasury obligations as published by the Internal Revenue Service for the month in which such termination occurs)), any amount owing but not yet paid under section 6, and he shall be afforded continued participation in all medical, dental, hospitalization and life insurance coverage and in other employee benefit plans or programs in which he was participating on the date of the termination of his employment until the earlier of:

(A) the end of the period during which he is receiving salary continuation payments (or in respect of which a lump-sum payment is made);

(B) the date, or dates, he receives equivalent coverage and benefits under the plans and programs of a subsequent employer (such coverages and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit, basis);

(provided that (x) if the Executive is precluded from continuing his participating in any employee benefit plan or program as so provided, he shall be provided with the after-tax economic equivalent of the benefits provided under the plan or program in which he is unable to participate for the periods so specified, (y) the economic equivalent of any benefit foregone shall be deemed to be the lowest cost that would be incurred by the Executive in obtaining such benefit himself on an individual basis and (z) payment of such after-tax economic equivalent shall be made quarterly in advance), and he shall be afforded other or additional benefits in accordance with applicable plans and programs of the Company.

(e) Subject to section 8(b), in the event of a termination of employment by the Executive on his own initiative other than a termination otherwise provided for in this section 7,

the Executive shall have the same entitlements as provided in section 7(c)(iii) for a termination for Cause. A voluntary termination under this section 7(e) shall be effective upon 30 days written notice given to the Company and shall not be deemed a breach of this agreement.

(f) In the event of any termination of employment under this section 7, the Executive shall be under no obligation to seek other employment and there shall be no offset against amounts due the Executive under this agreement on account of any remuneration attributable to any subsequent employment that he may obtain, except as specifically provided in this section 7.

8. Change in Control

(a) As used in this agreement, the term "Change in Control" means the occurrence of any one of the following events:

(i) any "person," as such term is used in sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934, becomes a "beneficial owner," as such term is used in Rule 13d-3 under that act, of 30% or more of the outstanding common stock of the Company, excluding a person that is an affiliate (as such term is used under that act) of the Company on the date of this agreement, or any affiliate of any such person;

(ii) the majority of the board of directors of the Company consists of individuals other than Incumbent Directors, which term means the members of the board of directors of the Company on the date of this agreement; provided that any person becoming a director subsequent to such date whose election or nomination for election was supported by two-thirds of the directors who then comprised the Incumbent Directors shall be considered an Incumbent Director;

(iii) the Company adopts any plan of liquidation providing for the

distribution of all or substantially all its assets;

(iv) all or substantially all the assets or business of the Company are disposed of pursuant to a merger, consolidation or other transaction (unless the shareholders of the Company immediately prior to such merger, consolidation or other transaction beneficially own, directly or indirectly, in substantially the same proportion as they own the common stock of the Company, all the common stock or other ownership interests of the entity or entities, if any, that succeed to the business of the Company); or

(v) the Company combines with another company and is the surviving corporation, but, immediately after the combination, the shareholders of the Company immediately prior to the combination hold, directly or indirectly, 50% or less of the common stock or other ownership interests of the combined company (there being excluded from the number of shares held by such shareholders, but not from the common stock or other ownership interests of the combined company, any shares other ownership interests received by affiliates of such other company in exchange for stock of such other company).

(b) Following a Change in Control, the Executive may, at his option, upon 90 days' written notice given to the Company, terminate his employment under this agreement and, in lieu of any other amounts otherwise payable to him under section 7, (i) he will be entitled to receive, in a single lump sum on or before the 90th day after such written notice is given, an amount equal to (A) the product of (1) the Executive's annual salary then in effect and
(2) three, if the written notice is given before the Senior Status Period, or (B) the product of (1) $200,000 and (2) the number of years (including fractions), if any, remaining in the Senior Status Period on the 90th day after such written notice is given, if the written notice is given during the Senior Status Period, and (ii) subject to the provisos set forth in (x), (y) and (z) of section 7(d)(ii), he

shall be afforded continued participation in all medical, dental, hospitalization and life insurance coverage and in other employee benefit plans or programs in which he was participating on the date of the termination of his employment until the earlier of (A) the tenth anniversary of the termination of employment or (B) the date, or dates, he receives equivalent coverage and benefits under the plans and programs of a subsequent employer (such coverages and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit, basis).

(c) In the event the amount provided to the Executive under section 8(b) is determined to constitute a Parachute Payment, as such term is defined in section 280G(b)(2) of the Internal Revenue Code of 1986 (the "Code"), notwithstanding anything to the contrary in this agreement, the amount so provided shall be reduced to the maximum amount (if any) that can be so provided without any of that amount being subject to any excise tax imposed by section 4999 of the Code ("Excise Tax"). The determination of whether the amount so provided constitutes a Parachute Payment and, if so, the amount to be paid to the Executive and the time of payment pursuant to this section 8(c) shall be made by an independent auditor (the "Auditor") jointly selected by the Company and the Executive and paid by the Company. The Auditor shall be a nationally recognized United States public accounting firm, which has not, during the two years preceding the date of its selection, acted in any way on behalf of the Company or any affiliate of the Company. If the Executive and the Company cannot agree on the firm to serve as the Auditor, the Executive and Company shall each select one accounting firm and those two firms shall jointly select the accounting firm to serve as the Auditor.

9. Indemnification

(a) The Company agrees that, if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal,

administrative or investigation (a "Proceeding"), by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is the Executive's alleged action in an official capacity while serving as director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Company to the fullest extent permitted or authorized by the Company's certificate of incorporation or bylaws or, if greater, by the laws of the state of New York, against all cost, expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if he has ceased to be a director, member, employee or agent of the Company or other entity and shall inure to the benefit of the Executive's heirs, executors and administrators. The Company shall advance to the Executive all reasonable costs and expenses incurred by him in connection with a Proceeding within 20 days after receipt by the Company of a written request for such advance. Such request shall include a undertaking by the Executive to repay the amount of such advance if it shall ultimately be determined that he is not entitled to be indemnified against such costs and expenses.

(b) Neither the failure of the Company (including its board or directors, independent legal counsel or shareholders) to have made a determination prior to the commencement of any proceeding concerning payment of amounts claimed by the Executive under section 9(a) that indemnification of the Executive is proper because he has met the applicable standard of conduct, nor a determination by the Company (including its board of

directors, independent legal counsel or shareholders) that the Executive has not met such applicable standard of conduct, shall create a presumption that the Executive has not met the applicable standard of conduct.

(c) The Company agrees to continue and maintain a director's and officers' liability insurance policy covering the Executive to the extent the Company provides such coverage for its other executive officers.

10. Confidentiality. The Executive shall at all times during the period of his employment and thereafter hold in confidence any and all Confidential Information (as defined below) that may have come or may come into his possession or within his knowledge concerning the products, services, processes, businesses, suppliers, customers and clients of the Company or its controlled affiliates. The Executive agrees that neither he nor any person or enterprise controlled by him will for any reason directly or indirectly, for himself or any other person, use or disclose any trade secrets, proprietary or confidential information, inventions, manufacturing or industrial processes or procedures, patents, trademarks, trade names, customer lists, service marks, service names, copyrights, applications for any of the foregoing or licenses or other rights in respect thereof (collectively, "Confidential Information"), owned or used by, or licensed to, the Company or any of its controlled affiliates, provided that the Executive may disclose Confidential Information that has become generally available to the public other than as a result of a breach of this agreement by the Executive or pursuant to an order of a court of competent jurisdiction or of a governmental agency, department or commission. Upon termination of his employment under this agreement, the Executive shall promptly surrender to the Company all documents he believes contain Confidential Information and that are within his possession or control, other than documents to which the Executive is or was a party or that relate to the

Executive or the basis, or purported basis, on which his employment was terminated.

11. Noncompetition and Nonsolicitation

(a) The Executive agrees that from the date of this agreement and subsequent to the termination of his employment under this agreement and continuing for the period (the "Non-Compete Period") after termination of employment under section 7 (but not under section 8) in respect of which salary continuation payments would be required to be made under section 7(d) (regardless of whether termination of employment occurs pursuant to section
7(d)), neither the Executive nor any person or enterprise controlled by him will become a shareholder, lender, director, officer, agent or employee of a corporation or member of or lender to a partnership, engage as a sole proprietor in any business, act as a consultant to any of the foregoing or otherwise engage directly or indirectly in any business that is in competition with the business then conducted by the Company or any of its controlled affiliates in any state in the United States or any other country in which the Company or any of its controlled affiliates has engaged in such business during the Executive's employment under this agreement; provided, however, that the foregoing shall not prohibit the Executive from owning less than two percent of the outstanding securities of any class of capital stock of a corporation the securities of which are regularly traded or quoted on a national securities exchange or on an inter-dealer quotation system.

(b) The Executive agrees that, during the Non-Compete Period, neither he nor any person or enterprise controlled by him will (i) solicit for employment any person who was employed by the Company or any of its controlled affiliates at any time within one year prior to the time of the act of solicitation or (ii) in any way cause, influence or participate in the solicitation for employment of any such individual by anyone else.

(c) The Executive acknowledges that there is no adequate remedy at law for a

breach of this section 11 and that, in the event of such a breach or attempted breach, the Company shall be entitled to injunctive or other equitable relief to prevent any such breach, attempted breach or continuing breach, without prejudice to any other remedies for damages or otherwise.

12. Assignability; Binding Nature. This agreement shall inure to the benefit of the parties and their respective successors, heirs (in the case of the Executive) and assigns. No rights or obligations of the Company under this agreement may be assigned or transferred by the Company, except pursuant to a merger or consolidation, or the sale or liquidation of all or substantially all the assets of the Company, provided that, in the case of such a sale or liquidation, the assignee or transferee assumes in writing the obligation to perform this agreement (it being understood, however, that no such assignment or transfer shall relieve the Company of its liabilities or obligations under this agreement).

13. Amendment or Waiver. This agreement may not be amended or waived, except by an instrument in writing signed by the party to be charged.

14. Severability. If any provision of this agreement is invalid or unenforceable, the remaining provisions of this agreement shall remain in effect.

15. Governing Law. This agreement shall be governed by and construed and interpreted in accordance with the law of the state of New York without reference to principles of conflict of laws.

16. Disputes. Except as otherwise expressly provided in this agreement, any dispute arising under or in connection with this agreement shall, at the election of the Executive, be resolved by binding arbitration to be held in New York City in accordance with the rules of the American Arbitration Association. Judgment upon the arbitrator's award may be entered in any

court having jurisdiction. Costs of any arbitration or litigation, including, without limitation, attorneys' fees of both parties, shall be borne by the Company and advanced to the Executive as appropriate from time to time, provided that, if the arbitrator or judge, as the case may be, determines that the claims or defenses of the Executive were without any reasonable basis, each party shall bear his or its own costs.

17. Notices. All notices and other communications under this agreement shall be in writing and may be given by any of the following methods: (a) personal delivery; (b) facsimile transmission; (c) registered or certified mail, postage prepaid, return receipt requested; or (d) overnight delivery service. Notices shall be sent to the appropriate party at its or his address or facsimile number given below (or at such other address or facsimile number for that party as specified by notice given under this section 17):

if to the Company, to it at:

650 Liberty Avenue
Union, New Jersey 07083
Fax: 908-688-8385

if to the Executive, to him at:

245 Dale Drive
Short Hills, New Jersey 07078

All such notices and communications shall be deemed given and received upon (a) actual receipt by the addressee, (b) actual delivery to the appropriate address or (c) in the case of a facsimile transmission, upon transmission by the sender and issuance by the transmitting machine of a confirmation slip confirming that the number of pages constituting the notice have been transmitted without error. In the case of notices sent by facsimile transmission, the sender shall

contemporaneously mail a copy of the notice to the addressee at the address provided above; however, such mailing shall in no way alter the time at which the facsimile notice is deemed given and received.

18. Headings. The section headings in this agreement are for convenience only and shall not affect the meaning or construction of any provision of this agreement.

19. Counterparts. This agreement may be executed in counterparts.

20. Entire Agreement. This agreement contains the entire agreement and understanding of the parties concerning its subject matter and supersedes all prior agreements and understandings with respect to that subject matter. Nothing in this agreement is intended to or shall affect the rights or obligations of the parties under any agreement relating to the maintenance of life insurance or stock options.

BED BATH & BEYOND INC.

By:   /s/ LEONARD FEINSTEIN
      --------------------------------------------
      LEONARD FEINSTEIN, President and
      Co-Chief Executive Officer

THE EXECUTIVE:

/s/ Warren Eisenberg
--------------------------------------------
Warren Eisenberg

Exhibit 10.2

EMPLOYMENT AGREEMENT

Dated as of June 30, 1997

The parties to this agreement are Bed Bath & Beyond Inc., a New York corporation (the "Company"), and Leonard Feinstein (the "Executive").

The Company wishes to continue to employ the Executive and enter into this agreement, which embodies the terms of such employment, and the Executive wishes to enter into this agreement and accept such continued employment on such terms.

Accordingly, the parties agree as follows:

1. Positions, Duties and Responsibilities

(a) During the Executive's employment under this agreement, the Executive shall be employed as the co-chief executive officer with Warren Eisenberg or chief executive officer of the Company and be responsible for the general management of the affairs of the Company. It is the intention of the parties that the Executive be elected to and serve as a member of the board of directors of the Company. The Executive, in carrying out his duties under this agreement, shall report to the board of directors of the Company.

(b) Nothing in this agreement shall preclude the Executive from (i) serving on the boards of directors of a reasonable number of other corporations or the boards of a reasonable number of trade associations and/or charitable organizations, (ii) engaging in charitable activities and community affairs and
(iii) managing his personal investments and affairs, provided that such activities do not materially interfere with the proper performance of his duties and responsibilities under this agreement.

2. Term of Employment. The Executive's employment under this agreement shall continue until the earlier of (a) the fifth anniversary of this agreement (as may be extended from time to time by mutual agreement of the parties) (the "Final Date") or (b) the termination of his employment in accordance with this agreement.

3. Senior Status. Notwithstanding anything to the contrary in sections 1 and 2, at any time during the Executive's employment under this agreement and before the Final Date, the Executive may, at his option, upon 90 days' written notice given to the Company, elect to terminate his positions, duties and responsibilities under section 1, and during the period (the "Senior Status Period") commencing 90 days after such written notice is first given and continuing until the earlier of (a) the tenth anniversary of the termination of his positions, duties and responsibilities under section 1 or (b) the termination of the Executive's employment in accordance with this agreement, provide consulting (but not line executive) services as an employee. If the Executive shall not have exercised this option on or before the 90th day before the Final Date, then, at the written request of the Company given not later than 60 days before the Final Date, the Executive shall nonetheless be deemed to have exercised this option. It is the intention of the parties that, during the Senior Status Period, the Executive shall continue to be elected to and serve as a member of the board of directors of the Company. The Executive, in carrying out his duties during the Senior Status Period, shall report to the Company's chief executive officer or, if the board of directors of the Company so determines, to the board of directors of the Company. During the Senior Status Period, the Executive shall, at the request from time to time of the Company's chief executive officer or board of directors, make himself available to the Company, at times that are reasonably convenient for him, to provide advisory services (it being understood, however, that such services shall not require the Executive to travel

to a location more than 25 miles from his residence from time to time or to devote more than fifty (50) hours in any three-month period to the Company). During the Senior Status Period, the Company shall provide the Executive an office (at a location specified by the Executive, which need not be where the Company's offices are located) and secretary that, in the Executive's good faith judgment, are appropriate to enable him to perform his duties under this agreement.

4. Salary. During his employment under this agreement and prior to the Senior Status Period, the Executive shall be entitled to an annual salary, payable in accordance with the regular payroll practices of the Company, of $750,000. During the Senior Status Period, the Executive shall be entitled to an annual salary, payable in accordance with the regular payroll practices of the Company, of $400,000. The Company may pay additional compensation to the Executive, whether in the form of an increase in salary, bonus or otherwise, if and to the extent authorized by the board of directors of the Company, in its sole discretion, from time to time, it being understood that the board of directors may give consideration to increasing such compensation at various intervals during the term of this agreement.

5. Employee Benefit Programs Generally. During the Executive's employment under this agreement, the Executive shall be entitled to participate in all employee pension and welfare benefits plans and programs available to the Company's senior level executives or to its employees generally, as such plans or programs may be in effect from time to time, including, without limitation, pension, profit sharing, savings and other retirement plans or programs, medical, dental, hospitalization, short-term and long-term disability and life insurance plans, accidental death and dismemberment protection, travel accident insurance, and any other pension or retirement plans or programs and any other employee welfare benefit plans or programs that may be sponsored by the Company from time to time, including any plans that supplement the

above-listed types of plans or programs, whether funded or unfunded.

6. Reimbursement of Business and Other Expenses. The Executive is authorized to incur reasonable expenses in carrying out his duties and responsibilities under this agreement, and the Company shall promptly reimburse him for all business expenses incurred in carrying out the business of the Company, subject to documentation in accordance with the Company's policies.

7. Termination of Employment

(a) In the event the Executive's employment terminates due to his death, his estate or his beneficiaries, as the case may be, shall be entitled to his salary for a period of 90 days following his death, any amount owing but not yet paid under section 6 and other or additional benefits in accordance with applicable plans and programs of the Company.

(b) In the event the Executive's employment terminates due to his inability substantially to perform his duties and responsibilities under this agreement for a period of 180 consecutive days, he shall be entitled to his salary for a period of 90 days following the date of termination, any amount owing but not yet paid under section 6, continued participation at the Company's expense in medical, dental, hospitalization and life insurance coverage and in all other employee plans and programs in which he or his family was participating on the date of termination of his employment until the tenth anniversary of the date of termination and other or additional benefits in accordance with applicable plans and programs of the Company (and thereafter, at the Executive's option and expense, to the extent he or his family can be included in such plans and programs). If the Executive is precluded from continuing his participation in any benefit plan or program referred to in the immediately preceding sentence, he shall be provided the after-tax economic equivalent of the benefits provided under the plan or program in which he

is unable to participate. The economic equivalent of any benefit foregone shall be deemed to be the lowest cost that would be incurred by the Executive in obtaining such benefit himself on an individual basis. In no event shall a termination of the Executive's employment under this section 7(b) occur, unless the party terminating the Executive's employment gives written notice to the other party in accordance with this agreement.

(c) (i) As used in this agreement, the term "Cause" means (A) the Executive is convicted of a felony involving moral turpitude or (B) the Executive is guilty of willful gross neglect or willful gross misconduct in carrying out his duties under this agreement, resulting, in either case, in material economic harm to the Company, unless the Executive believed in good faith that such act or nonact was in the best interests of the Company.

(ii) The Company may terminate the Executive's employment under this agreement for Cause. A termination for Cause shall not take effect, however, unless the provisions of this paragraph (c)(ii) are complied with. The Executive shall be given written notice by the board of directors of the Company of the intention to terminate his employment for Cause, such notice to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Cause is based. The Executive shall have 10 days after the date that such written notice has been given in which to cure such conduct, to the extent a cure is possible. If he fails to cure such conduct, his employment shall be terminated for Cause.

(iii) In the event the Company terminates the Executive's employment for Cause, he shall be entitled to his salary through the date of the termination of his employment, any amounts owing but not yet paid under section 6 and other or additional benefits in accordance with applicable plans or programs of the Company.

(d) (i) As used in this agreement, the term "Constructive Termination Without Cause" means a termination of the Executive's employment at his initiative following the occurrence, without the Executive's prior written consent, of one or more of the following events (except in consequence of a prior termination):

(A) a reduction in the Executive's salary or a material reduction of any employee benefit or perquisite enjoyed by him (other than as part of any across-the-board action applicable to all executive officers of the Company);

(B) the failure to elect or reelect the Executive to any of the officer or director positions referred to in section 1(a) or removal of him from any of such positions;

(C) a material diminution in the Executive's duties or the assignment to the Executive of duties materially inconsistent with his duties or that materially impair the Executive's ability to function, prior to the Senior Status Period, as the co-chief executive officer or chief executive officer of the Company;

(D) the relocation of the Company's principal office, or the Executive's own office location as assigned to him by the Company, to a location more than twenty-five (25) miles from Farmingdale, New York.

(ii) In the event the Company terminates the Executive's employment without Cause, other than pursuant to section 7(a) or (b), or in the event there is a Constructive Termination Without Cause, the Executive shall be entitled to his salary through the date of termination of employment, his salary at the annual rate of $750,000 through the Final Date and thereafter at the annual rate of $400,000 through the 10th anniversary of the Final Date (provided that, at the Executive's option, exercised by written notice given to the Company, the Company

shall pay him the present value of such salary continuation payments in a lump sum (using as the discount rate the Applicable Federal Rate for short-term Treasury obligations as published by the Internal Revenue Service for the month in which such termination occurs)), any amount owing but not yet paid under section 6, and he shall be afforded continued participation in all medical, dental, hospitalization and life insurance coverage and in other employee benefit plans or programs in which he was participating on the date of the termination of his employment until the earlier of:

(A) the end of the period during which he is receiving salary continuation payments (or in respect of which a lump-sum payment is made);

(B) the date, or dates, he receives equivalent coverage and benefits under the plans and programs of a subsequent employer (such coverages and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit, basis);

(provided that (x) if the Executive is precluded from continuing his participating in any employee benefit plan or program as so provided, he shall be provided with the after-tax economic equivalent of the benefits provided under the plan or program in which he is unable to participate for the periods so specified, (y) the economic equivalent of any benefit foregone shall be deemed to be the lowest cost that would be incurred by the Executive in obtaining such benefit himself on an individual basis and (z) payment of such after-tax economic equivalent shall be made quarterly in advance), and he shall be afforded other or additional benefits in accordance with applicable plans and programs of the Company.

(e) Subject to section 8(b), in the event of a termination of employment by the Executive on his own initiative other than a termination otherwise provided for in this section 7,

the Executive shall have the same entitlements as provided in section 7(c)(iii) for a termination for Cause. A voluntary termination under this section 7(e) shall be effective upon 30 days written notice given to the Company and shall not be deemed a breach of this agreement.

(f) In the event of any termination of employment under this section 7, the Executive shall be under no obligation to seek other employment and there shall be no offset against amounts due the Executive under this agreement on account of any remuneration attributable to any subsequent employment that he may obtain, except as specifically provided in this section 7.

8. Change in Control

(a) As used in this agreement, the term "Change in Control" means the occurrence of any one of the following events:

(i) any "person," as such term is used in sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934, becomes a "beneficial owner," as such term is used in Rule 13d-3 under that act, of 30% or more of the outstanding common stock of the Company, excluding a person that is an affiliate (as such term is used under that act) of the Company on the date of this agreement, or any affiliate of any such person;

(ii) the majority of the board of directors of the Company consists of individuals other than Incumbent Directors, which term means the members of the board of directors of the Company on the date of this agreement; provided that any person becoming a director subsequent to such date whose election or nomination for election was supported by two-thirds of the directors who then comprised the Incumbent Directors shall be considered an Incumbent Director;

(iii) the Company adopts any plan of liquidation providing for the

distribution of all or substantially all its assets;

(iv) all or substantially all the assets or business of the Company are disposed of pursuant to a merger, consolidation or other transaction (unless the shareholders of the Company immediately prior to such merger, consolidation or other transaction beneficially own, directly or indirectly, in substantially the same proportion as they own the common stock of the Company, all the common stock or other ownership interests of the entity or entities, if any, that succeed to the business of the Company); or

(v) the Company combines with another company and is the surviving corporation, but, immediately after the combination, the shareholders of the Company immediately prior to the combination hold, directly or indirectly, 50% or less of the common stock or other ownership interests of the combined company (there being excluded from the number of shares held by such shareholders, but not from the common stock or other ownership interests of the combined company, any shares other ownership interests received by affiliates of such other company in exchange for stock of such other company).

(b) Following a Change in Control, the Executive may, at his option, upon 90 days' written notice given to the Company, terminate his employment under this agreement and, in lieu of any other amounts otherwise payable to him under section 7, (i) he will be entitled to receive, in a single lump sum on or before the 90th day after such written notice is given, an amount equal to (A) the product of (1) the Executive's annual salary then in effect and (2) three, if the written notice is given before the Senior Status Period, or (B) the product of (1) $200,000 and (2) the number of years (including fractions), if any, remaining in the Senior Status Period on the 90th day after such written notice is given, if the written notice is given during the Senior Status Period, and (ii) subject to the provisos set forth in (x), (y) and (z) of section
7(d)(ii), he

shall be afforded continued participation in all medical, dental, hospitalization and life insurance coverage and in other employee benefit plans or programs in which he was participating on the date of the termination of his employment until the earlier of (A) the tenth anniversary of the termination of employment or (B) the date, or dates, he receives equivalent coverage and benefits under the plans and programs of a subsequent employer (such coverages and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit, basis).

(c) In the event the amount provided to the Executive under section 8(b) is determined to constitute a Parachute Payment, as such term is defined in section 280G(b)(2) of the Internal Revenue Code of 1986 (the "Code"), notwithstanding anything to the contrary in this agreement, the amount so provided shall be reduced to the maximum amount (if any) that can be so provided without any of that amount being subject to any excise tax imposed by section 4999 of the Code ("Excise Tax"). The determination of whether the amount so provided constitutes a Parachute Payment and, if so, the amount to be paid to the Executive and the time of payment pursuant to this section 8(c) shall be made by an independent auditor (the "Auditor") jointly selected by the Company and the Executive and paid by the Company. The Auditor shall be a nationally recognized United States public accounting firm, which has not, during the two years preceding the date of its selection, acted in any way on behalf of the Company or any affiliate of the Company. If the Executive and the Company cannot agree on the firm to serve as the Auditor, the Executive and Company shall each select one accounting firm and those two firms shall jointly select the accounting firm to serve as the Auditor.

9. Indemnification

(a) The Company agrees that, if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal,

administrative or investigation (a "Proceeding"), by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is the Executive's alleged action in an official capacity while serving as director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Company to the fullest extent permitted or authorized by the Company's certificate of incorporation or bylaws or, if greater, by the laws of the state of New York, against all cost, expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if he has ceased to be a director, member, employee or agent of the Company or other entity and shall inure to the benefit of the Executive's heirs, executors and administrators. The Company shall advance to the Executive all reasonable costs and expenses incurred by him in connection with a Proceeding within 20 days after receipt by the Company of a written request for such advance. Such request shall include a undertaking by the Executive to repay the amount of such advance if it shall ultimately be determined that he is not entitled to be indemnified against such costs and expenses.

(b) Neither the failure of the Company (including its board or directors, independent legal counsel or shareholders) to have made a determination prior to the commencement of any proceeding concerning payment of amounts claimed by the Executive under section 9(a) that indemnification of the Executive is proper because he has met the applicable standard of conduct, nor a determination by the Company (including its board of

directors, independent legal counsel or shareholders) that the Executive has not met such applicable standard of conduct, shall create a presumption that the Executive has not met the applicable standard of conduct.

(c) The Company agrees to continue and maintain a director's and officers' liability insurance policy covering the Executive to the extent the Company provides such coverage for its other executive officers.

10. Confidentiality. The Executive shall at all times during the period of his employment and thereafter hold in confidence any and all Confidential Information (as defined below) that may have come or may come into his possession or within his knowledge concerning the products, services, processes, businesses, suppliers, customers and clients of the Company or its controlled affiliates. The Executive agrees that neither he nor any person or enterprise controlled by him will for any reason directly or indirectly, for himself or any other person, use or disclose any trade secrets, proprietary or confidential information, inventions, manufacturing or industrial processes or procedures, patents, trademarks, trade names, customer lists, service marks, service names, copyrights, applications for any of the foregoing or licenses or other rights in respect thereof (collectively, "Confidential Information"), owned or used by, or licensed to, the Company or any of its controlled affiliates, provided that the Executive may disclose Confidential Information that has become generally available to the public other than as a result of a breach of this agreement by the Executive or pursuant to an order of a court of competent jurisdiction or of a governmental agency, department or commission. Upon termination of his employment under this agreement, the Executive shall promptly surrender to the Company all documents he believes contain Confidential Information and that are within his possession or control, other than documents to which the Executive is or was a party or that relate to the

Executive or the basis, or purported basis, on which his employment was terminated.

11. Noncompetition and Nonsolicitation

(a) The Executive agrees that from the date of this agreement and subsequent to the termination of his employment under this agreement and continuing for the period (the "Non-Compete Period") after termination of employment under section 7 (but not under section 8) in respect of which salary continuation payments would be required to be made under section 7(d) (regardless of whether termination of employment occurs pursuant to section
7(d)), neither the Executive nor any person or enterprise controlled by him will become a shareholder, lender, director, officer, agent or employee of a corporation or member of or lender to a partnership, engage as a sole proprietor in any business, act as a consultant to any of the foregoing or otherwise engage directly or indirectly in any business that is in competition with the business then conducted by the Company or any of its controlled affiliates in any state in the United States or any other country in which the Company or any of its controlled affiliates has engaged in such business during the Executive's employment under this agreement; provided, however, that the foregoing shall not prohibit the Executive from owning less than two percent of the outstanding securities of any class of capital stock of a corporation the securities of which are regularly traded or quoted on a national securities exchange or on an inter-dealer quotation system.

(b) The Executive agrees that, during the Non-Compete Period, neither he nor any person or enterprise controlled by him will (i) solicit for employment any person who was employed by the Company or any of its controlled affiliates at any time within one year prior to the time of the act of solicitation or (ii) in any way cause, influence or participate in the solicitation for employment of any such individual by anyone else.

(c) The Executive acknowledges that there is no adequate remedy at law for a

breach of this section 11 and that, in the event of such a breach or attempted breach, the Company shall be entitled to injunctive or other equitable relief to prevent any such breach, attempted breach or continuing breach, without prejudice to any other remedies for damages or otherwise.

12. Assignability; Binding Nature. This agreement shall inure to the benefit of the parties and their respective successors, heirs (in the case of the Executive) and assigns. No rights or obligations of the Company under this agreement may be assigned or transferred by the Company, except pursuant to a merger or consolidation, or the sale or liquidation of all or substantially all the assets of the Company, provided that, in the case of such a sale or liquidation, the assignee or transferee assumes in writing the obligation to perform this agreement (it being understood, however, that no such assignment or transfer shall relieve the Company of its liabilities or obligations under this agreement).

13. Amendment or Waiver. This agreement may not be amended or waived, except by an instrument in writing signed by the party to be charged.

14. Severability. If any provision of this agreement is invalid or unenforceable, the remaining provisions of this agreement shall remain in effect.

15. Governing Law. This agreement shall be governed by and construed and interpreted in accordance with the law of the state of New York without reference to principles of conflict of laws.

16. Disputes. Except as otherwise expressly provided in this agreement, any dispute arising under or in connection with this agreement shall, at the election of the Executive, be resolved by binding arbitration to be held in New York City in accordance with the rules of the American Arbitration Association. Judgment upon the arbitrator's award may be entered in any

court having jurisdiction. Costs of any arbitration or litigation, including, without limitation, attorneys' fees of both parties, shall be borne by the Company and advanced to the Executive as appropriate from time to time, provided that, if the arbitrator or judge, as the case may be, determines that the claims or defenses of the Executive were without any reasonable basis, each party shall bear his or its own costs.

17. Notices. All notices and other communications under this agreement shall be in writing and may be given by any of the following methods: (a) personal delivery; (b) facsimile transmission; (c) registered or certified mail, postage prepaid, return receipt requested; or (d) overnight delivery service. Notices shall be sent to the appropriate party at its or his address or facsimile number given below (or at such other address or facsimile number for that party as specified by notice given under this section 17):

if to the Company, to it at:

650 Liberty Avenue
Union, New Jersey 07083
Fax: 908-688-8385

if to the Executive, to him at:

80 Valentine Lane
Old Brookville, New York 11545

All such notices and communications shall be deemed given and received upon (a) actual receipt by the addressee, (b) actual delivery to the appropriate address or (c) in the case of a facsimile transmission, upon transmission by the sender and issuance by the transmitting machine of a confirmation slip confirming that the number of pages constituting the notice have been transmitted without error. In the case of notices sent by facsimile transmission, the sender shall contemporaneously mail a copy of the notice to the addressee at the address provided above;

however, such mailing shall in no way alter the time at which the facsimile notice is deemed given and received.

18. Headings. The section headings in this agreement are for convenience only and shall not affect the meaning or construction of any provision of this agreement.

19. Counterparts. This agreement may be executed in counterparts.

20. Entire Agreement. This agreement contains the entire agreement and understanding of the parties concerning its subject matter and supersedes all prior agreements and understandings with respect to that subject matter. Nothing in this agreement is intended to or shall affect the rights or obligations of the parties under any agreement related to the maintenance of life insurance or stock options.

BED BATH & BEYOND INC.

By:   /s/ WARREN EISENBERG
      -----------------------------------------------
      Warren Eisenberg, Chairman and
      Co-Chief Executive Officer

THE EXECUTIVE:

/s/ Leonard Feinstein
-----------------------------------------------
Leonard Feinstein

Exhibit 10.3

STOCK OPTION AGREEMENT dated as of August 26, 1997 between BED BATH & BEYOND INC., a New York corporation, and Warren Eisenberg (the "Optionee").

PRELIMINARY STATEMENT

Pursuant to the Bed Bath & Beyond Inc. 1992 Stock Option Plan (the "1992 Plan") and the Bed Bath & Beyond Inc. 1996 Stock Option Plan (the "1996 Plan") (the 1992 Plan and the 1996 Plan hereinafter the "Plans"), the Stock Option Committee for Senior Executives that administers the Plans (the "Committee") has authorized the granting to Optionee of an option (the "Option") to purchase 500,000 shares of the Company's common stock, par value $.01 per share ("Common Stock"), subject to the Plans and the terms and conditions set forth herein. The Option consists of a grant of 300,000 shares of Common Stock pursuant to the 1992 Plan and a grant of 200,000 shares of Common Stock pursuant to the 1996 Plan. The parties hereto desire to enter into this Agreement in order to set forth the terms of such Option.

Accordingly, the parties hereto agree as follows:

1. Grant of Option. Subject to the Plans and the terms and conditions of this Agreement, the Company hereby grants to Optionee the Option to purchase from the Company up to 500,000 shares of Common Stock at a price of $31.25 per share. The Option shall not be immediately exercisable but shall become exercisable in installments, which shall be cumulative, as indicated below (which installments may be accelerated as indicated below):

Date on which Installment                             Number of Shares
First Vests and Becomes Exercisable                   In Installments
-----------------------------------                   ---------------

      August 26, 1998 (1992 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 1999 (1992 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 2000 (1992 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 2001 (1996 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 2002 (1996 Plan)                     20% of the number of shares
                                                      originally subject to the Option

The dates on which installments vest and become exercisable shall be accelerated upon the death of the Optionee, or the termination of the Optionee's employment with the Company pursuant to section 7(a) (i.e., death), 7(b) (i.e., disability) or 7(d) (i.e., Constructive Termination Without Cause),

or following a Change in Control, as defined in section 8(a), of the Optionee's employment agreement with the Company dated as of June 30, 1997, and upon the occurrence of any of such events, the total number of shares originally subject to the Option shall vest and become immediately exercisable. In the event of any acceleration pursuant to the immediately preceding sentence, the unexercised portion of the Option shall continue to be exercisable for 12 months thereafter as provided in paragraph 4 of this Agreement, but in no event later than the tenth anniversary of the date hereof.

2. Plans Governing Terms of Option. Except as otherwise specifically herein provided, the Option is subject in all respects to the terms and conditions of the Plans, copies of which are attached hereto as Exhibits A and B.

3. Type of Option. The Option is not intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

4. Termination. The Option shall terminate on the tenth anniversary of the date hereof, unless the Optionee's employment with the Company terminates before that date, in which event the Option shall terminate upon termination of the Optionee's employment with the Company, if the termination is for Cause pursuant to section 7(c) of the Optionee's employment agreement or is on the Optionee's own initiative pursuant to section 7(e) of the Optionee's employment agreement, but the unexercised portion of the Option shall continue to be exercisable for 12 months after such termination of employment (but in no event later than the tenth anniversary of the date hereof), if such termination of employment is for any other cause. The Optionee's election pursuant to section 3 of the Optionee's employment agreement to commence the Senior Status Period and provide the limited consulting services contemplated therein shall not be deemed a termination of the Optionee's employment for the purposes of this Agreement.

5. Exercise. The Option may be exercised by delivering to the Company a written notice (signed by the Optionee) stating the number of shares with respect to which the Option is being exercised, together with full payment of the purchase price therefor. Payment may be made in cash or by certified check, bank draft, or money order payable to the order of the Company or, if permitted by the Committee, through delivery of shares of Common Stock (such shares to be valued as provided in the Plans). As provided in the Plans, the Committee may require the Optionee to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax requirements (or make other arrangements satisfactory to the Company with regard to such taxes) prior to delivering to the Optionee any shares purchased upon exercise of the Option. The Option may not be exercised with respect to a fractional share.

6. Restriction on Transfer. The Option may not be assigned or transferred except by will or the laws of descent and distribution and except by a written assignment (signed by the Optionee and delivered to the Company), provided such assignment assigns all or a portion of the Option to the Optionee's spouse, descendants or trusts for the sole benefit of the Optionee's spouse or descendants. The Option may be exercised only by the Optionee, the Optionee's assignee pursuant to an assignment permitted hereunder, or by the executor or personal representative of the Optionee or of such assignee.

7. Notice. Any notice or communication to the Company hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, or by United States mail, to the following address (or to such other address as the Company shall from time to time specify):

Bed Bath & Beyond Inc. C/O Petitti, Eisenberg & Gamache, P.C.

Attention: Todd Eisenberg
488 Pleasant Street
New Bedford, MA 02740

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

BED BATH & BEYOND INC.

By:   /s/ LEONARD FEINSTEIN
      ----------------------------------
      Leonard Feinstein, President and
      Co-Chief Executive Officer

      /s/ WARREN EISENBERG
      ----------------------------------
      Warren Eisenberg

Exhibit 10.4

STOCK OPTION AGREEMENT dated as of August 26, 1997 between BED BATH & BEYOND INC., a New York corporation, and Leonard Feinstein (the "Optionee").

PRELIMINARY STATEMENT

Pursuant to the Bed Bath & Beyond Inc. 1992 Stock Option Plan (the "1992 Plan") and the Bed Bath & Beyond Inc. 1996 Stock Option Plan (the "1996 Plan") (the 1992 Plan and the 1996 Plan hereinafter the "Plans"), the Stock Option Committee for Senior Executives that administers the Plans (the "Committee") has authorized the granting to Optionee of an option (the "Option") to purchase 500,000 shares of the Company's common stock, par value $.01 per share ("Common Stock"), subject to the Plans and the terms and conditions set forth herein. The Option consists of a grant of 300,000 shares of Common Stock pursuant to the 1992 Plan and a grant of 200,000 shares of Common Stock pursuant to the 1996 Plan. The parties hereto desire to enter into this Agreement in order to set forth the terms of such Option.

Accordingly, the parties hereto agree as follows:

1. Grant of Option. Subject to the Plans and the terms and conditions of this Agreement, the Company hereby grants to Optionee the Option to purchase from the Company up to 500,000 shares of Common Stock at a price of $31.25 per share. The Option shall not be immediately exercisable but shall become exercisable in installments, which shall be cumulative, as indicated below (which installments may be accelerated as indicated below):

Date on which Installment                             Number of Shares
First Vests and Becomes Exercisable                   In Installments
-----------------------------------                   ---------------

      August 26, 1998 (1992 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 1999 (1992 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 2000 (1992 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 2001 (1996 Plan)                     20% of the number of shares
                                                      originally subject to the Option

      August 26, 2002 (1996 Plan)                     20% of the number of shares
                                                      originally subject to the Option

The dates on which installments vest and become exercisable shall be accelerated upon the death of the Optionee, or the termination of the Optionee's employment with the Company pursuant to

section 7(a) (i.e., death), 7(b) (i.e., disability) or 7(d) (i.e., Constructive Termination Without Cause), or following a Change in Control, as defined in section 8(a), of the Optionee's employment agreement with the Company dated as of June 30, 1997, and upon the occurrence of any of such events, the total number of shares originally subject to the Option shall vest and become immediately exercisable. In the event of any acceleration pursuant to the immediately preceding sentence, the unexercised portion of the Option shall continue to be exercisable for 12 months thereafter as provided in paragraph 4 of this Agreement, but in no event later than the tenth anniversary of the date hereof.

2. Plans Governing Terms of Option. Except as otherwise specifically herein provided, the Option is subject in all respects to the terms and conditions of the Plans, copies of which are attached hereto as Exhibits A and B.

3. Type of Option. The Option is not intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

4. Termination. The Option shall terminate on the tenth anniversary of the date hereof, unless the Optionee's employment with the Company terminates before that date, in which event the Option shall terminate upon termination of the Optionee's employment with the Company, if the termination is for Cause pursuant to section 7(c) of the Optionee's employment agreement or is on the Optionee's own initiative pursuant to section 7(e) of the Optionee's employment agreement, but the unexercised portion of the Option shall continue to be exercisable for 12 months after such termination of employment (but in no event later than the tenth anniversary of the date hereof), if such termination of employment is for any other cause. The Optionee's election pursuant to section 3 of the Optionee's employment agreement to commence the Senior Status Period and provide the limited consulting services contemplated therein shall not be deemed a termination of the Optionee's employment for the purposes of this Agreement.

5. Exercise. The Option may be exercised by delivering to the Company a written notice (signed by the Optionee) stating the number of shares with respect to which the Option is being exercised, together with full payment of the purchase price therefor. Payment may be made in cash or by certified check, bank draft, or money order payable to the order of the Company or, if permitted by the Committee, through delivery of shares of Common Stock (such shares to be valued as provided in the Plans). As provided in the Plans, the Committee may require the Optionee to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax requirements (or make other arrangements satisfactory to the Company with regard to such taxes) prior to delivering to the Optionee any shares purchased upon exercise of the Option. The Option may not be exercised with respect to a fractional share.

6. Restriction on Transfer. The Option may not be assigned or transferred except by will or the laws of descent and distribution and except by a written assignment (signed by the Optionee and delivered to the Company), provided such assignment assigns all or a portion of the Option to the Optionee's spouse, descendants or trusts for the sole benefit of the Optionee's spouse or descendants. The Option may be exercised only by the Optionee, the Optionee's assignee pursuant to an assignment permitted hereunder, or by the executor or personal representative of the Optionee or of such assignee.

7. Notice. Any notice or communication to the Company hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, or by United States mail, to the following address (or to such other address as the Company shall from time to time specify):

Bed Bath & Beyond Inc. C/O Petitti, Eisenberg & Gamache, P.C.

Attention: Todd Eisenberg
488 Pleasant Street
New Bedford, MA 02740

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

BED BATH & BEYOND INC.

By:   /s/ WARREN EISENBERG
      ----------------------------------
      Warren Eisenberg, Chairman and
      Co-Chief Executive Officer

       /s/ Leonard Feinstein
      ----------------------------------
      Leonard Feinstein

Exhibit 10.5

BED BATH AND BEYOND INC.
1992 STOCK OPTION PLAN, AS AMENDED**

1. PURPOSE

The purpose of the Bed Bath & Beyond Inc. 1992 Stock Option Plan (the "Plan") is to encourage and enable key employees (which term, as used herein, shall include officers), and directors of Bed Bath & Beyond Inc. or a parent (if any) or subsidiaries thereof (collectively, unless the context otherwise requires, the "Company"), consultants, and advisors to the Company, and other persons or entities providing goods or services to the Company to acquire a proprietary interest in the Company through the ownership of common stock of the Company. (Such directors, members, consultants, advisors, and other persons or entities providing goods or services to the Company and entitled to receive options hereunder being collectively referred to as the "Associates," and the relationship of the Associates to the Company being referred to as "association with" the Company.) Such ownership will provide such employees and Associates with a more direct stake in the future welfare of the Company and encourage them to remain employed by or associated with the Company. It is also expected that the Plan will encourage qualified persons to seek and accept employment or association with the Company.

2. TYPE OF OPTIONS

Options granted pursuant to the Plan may be incentive stock options as defined in Section 422 of the Internal Revenue Code of 1986 (as from time to time amended, the "Code") (any option that is intended so to qualify as an incentive stock option being referred to herein as an "incentive option"), or options that are not incentive options, or both. Incentive options may only be granted to "employees" as defined in the provisions of the Code or regulations thereunder applicable to incentive stock options.

3. EFFECTIVE DATE AND TERM OF PLAN

The Plan shall become effective upon satisfaction of the following conditions: (i) the Plan shall have been approved by the shareholders of the Company and (ii) the Certificate of Incorporation of the Company shall have been amended to reclassify the Company's outstanding capital stock into common stock, par value $0.01 per share ("Stock"), and to effect a 145.625 for 1 stock split (the "Stock Split"). Grants of options under the Plan may be made prior to satisfaction of such conditions, but after adoption of the Plan by the Board of Directors of the Company (the "Board"), subject to the satisfaction of such conditions.

No option shall be granted under the Plan on or after the tenth anniversary of the date on which the Plan is adopted by the Board, but options previously granted may extend beyond that date.

** As amended through August 26, 1997.

4. ADMINISTRATION

(a) The Plan shall be administered by one or more committees appointed from time to time by the Board (each such committee being referred to as a "Committee"). In the event that more than one Committee is appointed by the Board, the Board shall specify with respect to each Committee the group of employees and Associates with respect to which such Committee shall have the power to grant options. In the event that more than one Committee is appointed by the Board, then each reference in the Plan to "the Committee" shall be deemed a reference to each such Committee (subject to the last sentence of this paragraph); provided, however, that each such Committee may only exercise the power and authority granted to "the Committee" by the Plan with respect to those employees and Associates that it has the power to grant options to as specified in the resolution of the Board appointing such Committee. Each Committee shall be comprised of two or more directors. A majority of the members of each Committee shall constitute a quorum, and all determinations of the Committee shall be made by a majority of its members. Any determination of any Committee under the Plan may be made, without notice or meeting of the Committee, by a writing signed by a majority of the Committee members. Following registration of the Company's Stock under the Securities Exchange Act of 1934 (the "Act"), all members of each Committee shall be "disinterested persons" within the meaning of Rule 16(b)-3 under the Act and "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code (the "Code"); provided, however, that the foregoing shall not apply to any Committee that does not have the power to grant options to officers or directors of the Company or otherwise make any decisions with respect to the timing or the pricing of any options granted to such officers and directors. If pursuant to the preceding sentence a Committee is required to be comprised of "disinterested persons" and "outside directors," then the members of such Committee shall not be eligible to receive options under the Plan. In the event that more than one Committee is appointed by the Board, the power to amend the Plan granted by Section 10(b) hereof may only be exercised by a Committee all of whose members are "disinterested persons" and "outside directors" within the meaning of Rule 16(b)-3 under the Act and Section 162(m) of the Code.

(b) The Committee shall have authority, not inconsistent with the express provisions of the Plan, (i) to grant options to such eligible employees and Associates of the Company as the Committee may select; provided, however, that the maximum number of options that may be granted under this Plan during any calendar year to any employee or Associate of the Company shall not exceed 100,000 shares (subject to any adjustment in accordance with Section 8(b)), and it is further provided that if the Committee grants to any employee or Associate during any calendar year options to purchase a number of shares that is less than 100,000, or does not grant any options during any calendar year to such employee or Associate, then the amount of such shortfall shall be carried forward and added to the maximum number of options which may be granted in a subsequent year to such employee or Associate, (ii) to determine the time or times when options shall be granted and the number of shares of Stock subject to each option; (iii) to determine which options are, and which options arc not, incentive options; (iv) to determine the terms and conditions of each option;
(v) to prescribe the form or forms of instruments evidencing options and any other instruments required under the Plan and to change such forms from time to time; (vi) to adopt, amend and rescind rules and regulations for the administration of the Plan; and (vii) to interpret the Plan and to decide any

questions and settle all controversies and disputes that may arise in connection with the Plan. Any determination, decision or action of the Committee in connection with the construction, interpretation, administration or application of the Plan shall be final and conclusive on all persons participating in the Plan.

5. SHARES SUBJECT TO THE PLAN

(a) Number of Shares.

Subject to adjustment as provided in Section 8, the aggregate number of shares of Stock that may be delivered upon the exercise of options granted under the Plan (taking into account the Stock Split) shall be 2,800,000. If any option granted under the Plan terminates without having been exercised in full, the number of shares of Stock as to which such option was not exercised shall be available for future grants within the limits set forth in this Section 5(a).

(b) Shares to be Delivered.

Shares delivered under the Plan shall be authorized but unissued Stock or, if the Committee so decides in its sole discretion, previously issued Stock acquired by the Company and held in treasury. No fractional shares of Stock shall be delivered under the Plan.

6. ELIGIBILITY FOR OPTIONS

Employees and Associates of the Company eligible to receive options under the Plan shall be those employees and Associates who, in the opinion of the Committee, are in a position to make a significant contribution to the success of the Company. Receipt of options under the Plan or of awards under any other employee benefit plan of the Company shall not preclude an employee from receiving options or additional options under the Plan.

7. TERMS AND CONDITIONS OF OPTIONS

(a) Special Rule for Incentive Options. Consistent with Section 422 of the Code and any regulations, notices or other official pronouncements of general applicability, to the extent the aggregate fair market value (determined in accordance with Section 7(b) as of the time the option is granted) of the shares of Stock with respect to which incentive options are exercisable for the first time by the optionee during any calendar year (under all plans of his employer corporation and its parent and subsidiary corporations) exceeds $100,000, such options shall not be treated as incentive options. Nothing in this special rule shall be construed as limiting the exercisability of any option, unless the Committee expressly provides for such a limitation at time of grant.

(b) Exercise Price. The exercise price of each option shall be determined by the Committee, subject to the following: (i) in the case of an incentive option and all options granted by a Committee comprised of "disinterested persons" and "outside directors," the exercise price per share of stock shall not be less than 100% (110% for an incentive stock option granted to a greater than ten-percent shareholder) of the fair market value per share of Stock at the time the option is

granted and (ii) in the case of all other options, the exercise price per share of Stock shall not be less than the par value per share (unless the Stock subject to the option is treasury stock). A "greater than ten-percent shareholder" shall mean for purposes of the Plan any employee who at the time of grant owns directly, or is deemed to own by reason of the attribution rules set forth in Section 424(d) of the Code, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company. The fair market value of a share of Stock as of any date shall be determined for purposes of the Plan as follows: (i) if the Stock is listed on a securities exchange or quoted through the National Association of Securities Dealers Automatic Quotation ("NASDAQ") National Market System, the fair market value shall equal the mean between the high and low sales prices on such exchange or through such market system, as the case may be, on such day or in the absence of reported sales on such day, the mean between the reported bid and asked prices on such exchange or through such market system, as the case may be, on such day, (ii) if the Stock is not listed or quoted as described in the preceding clause but is quoted through NASDAQ (but not through the National Market System), the fair market value shall equal the mean between the bid and offered prices as quoted by the National Association of Securities Dealers through NASDAQ for such day and (iii) if the Stock is not listed or quoted on a securities exchange or through NASDAQ, then the fair market value shall be determined by such other method as the Committee determines to be reasonable and consistent with applicable requirements of the Code and the regulations issued thereunder applicable to incentive options; provided, however, that if pursuant to clause (i) or (ii) fair market value is to be determined based upon the mean of bid and asked prices and the Committee determines that such mean does not property reflect fair market value, then fair market value shall be determined by the Committee as provided in clause (iii).

(c) Duration of Options. An option, shall be exercisable during such period or periods as the Committee may specify. The latest date on which an option may be exercised (the "Final Exercise Date") shall be the date which is ten years (five years, in the case of an incentive option granted to a "greater than ten-percent shareholder" as defined in Section 7(b)) from the date the option was granted or such earlier date as may be specified by the Committee at the time the option is granted.

(d) Exercise of Options.

(1) At the time of the grant of an option, the Committee shall specify whether the option shall be exercisable in full at any time prior to the Final Exercise Date or in installments (which may be cumulative or noncumulative). In the case of an option not immediately exercisable in full, the Committee may at any time accelerate the time at which all or any part of the option may be exercised.

(2) The award forms or other instruments evidencing incentive options shall contain such provisions relating to exercise and other matters as are required of incentive options under the applicable provisions of the Code and the regulations thereunder, as from time to time in effect.

(3) Any exercise of an option shall be in writing, signed by the proper person and delivered or mailed to the Company, accompanied by (a) the option certificate and any other

documents required by the Committee and (b) payment in full for the number of shares for which the option is exercised.

(4) In the case of an option that is not an incentive option, the Committee shall have the right to require that the individual exercising the option remit to the Company an amount sufficient to satisfy any federal, state, or local withholding tax requirements (or make other arrangements satisfactory to the Company with regard to such taxes) prior to the delivery of any Stock pursuant to the exercise of the option. In the case of an incentive option, if at the time the option is exercised the Committee determines that under applicable law and regulations the Company could be liable for the withholding of any federal, state or local tax with respect to a disposition of the Stock received upon exercise, the Committee may require as a condition of exercise that the individual exercising the option agree (i) to inform the Company promptly of any disposition (within the meaning of Section 424(c) of the Code and the regulations thereunder) of Stock received upon exercise, and (ii) to give such security as the Committee deems adequate to meet the potential liability of the Company for the withholding of tax, and to augment such security from time to time in any amount reasonably deemed necessary by the Committee to preserve the adequacy of such security.

(5) If an option is exercised by the executor or administrator of a deceased employee or Associate, or by the person or persons to whom the option has been transferred by the employee's or Associate's will or the applicable laws of descent and distribution, the Company shall be under no obligation to deliver Stock pursuant to such exercise until the Company is satisfied as to the authority of the person or persons exercising the option.

(e) Termination of Employment. An employee's options shall terminate immediately upon the termination of his employment with the Company, subject to the following exceptions: (i) if the termination is by reason of the death or disability of the employee, the unexercised portion of such options shall continue to be exercisable for 12 months after such termination and (ii) if the termination is for any other reason, excluding termination for cause, the unexercised portion of such options shall continue to be exercisable for three months after such termination. Notwithstanding the foregoing, the Committee in its discretion in any particular case may provide that upon termination of an employee's employment with the Company, the unexercised portion of his options shall continue to be exercisable for a longer or shorter period than the period provided for in the preceding sentence; provided, however, that (i) in the case of an incentive option, the Committee may not provide for a shorter or longer period after the option is granted and, in any event, may not provide for a longer period except in the case where the employee's employment is terminated by reason of death and (ii) in the case of an option that is not an incentive option, the Committee may not provide for a shorter period after the option is granted. For purposes of this Section 7(e), employment shall not be considered terminated (i) in the case of sick leave or other bona fide leave of absence approved for purposes of the Plan by the Committee, so long as the employee's right to reemployment is guaranteed either by statute or by contract, or (ii) in the case of a transfer of employment between the Company and a subsidiary or between subsidiaries, or to the employment of a corporation (or a parent or subsidiary corporation of such corporation) issuing or assuming an option in a transaction to which Section 424(a) of the Code applies.

(f) Payment for Stock. Stock purchased under the Plan shall be paid for as follows: (i) in cash or by certified check, bank draft or money order payable to the order of the Company or (ii) if so permitted by the Committee (not later than the time of grant, in the case of an incentive option), (A) through the delivery of shares of Stock (including shares acquired under the option then being exercised) having a fair market value (determined as provided in Section
7(b)) on the date of exercise equal to the purchase price or (B) by a combination of cash and Stock as provided in clauses (i) and (ii)(A) above or
(C) by delivery of a promissory note of the option holder to the Company, such note to be payable in the case of an incentive Option, on such terms as are specified in the option (except that, in lieu of a stated rate of interest, an incentive option may provide that the rate of interest on the note will be such rate as is sufficient, at the time the note is given, to avoid the imputation of interest under the applicable provisions of the Code), or by a combination of cash (or cash and Stock) and the option holder's promissory note; provided, that if the Stock delivered upon exercise of the option is an original issue of authorized Stock, at least so much of the exercise price as represents the par value of such Stock shall be paid in cash or by a combination of cash and Stock.

(g) Delivery of Stock. An option holder shall not have the rights of a shareholder with regard to awards under the Plan except as to Stock actually received by him under the Plan. The Company shall not be obligated to deliver any shares of Stock (a) until, in the opinion of the Company's counsel, all applicable federal and state laws and regulations have been complied with, and
(b) if the outstanding Stock is at the time listed on any stock exchange, until the shares to be delivered have been listed or authorized to be listed on such exchange upon official notice of issuance, and (c) until all other legal matters in connection with the issuance and delivery of such shares have been approved by the Company's counsel. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the option, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act and may require that the certificates evidencing such Stock bear an appropriate legend restricting-transfer.

(h) Transferability of Options. The Committee may provide that options may be transferred to the extent and subject to such limitations as the Committee may specify.

(i) Restrictions on Stock. The Committee may provide that shares of Stock purchased through the exercise of options under the Plan be subject to such restrictions on resale, including restrictions requiring resale to the Company at or below fair market value, or such other restrictions, as the Committee in its sole discretion shall determine, and shall take such steps as it deems necessary or appropriate to carry out the purposes of any such restriction.

8. MERGERS, RECAPITALIZATIONS, ETC.

(a) In the event of a consolidation or merger in which the Company is not the surviving corporation or in the event of any transaction that results in the acquisition of substantially all of the Company's outstanding Stock by a single person or entity or by a group of persons and/or entities acting in concert, or in the event of the sale or transfer of substantially all of the Company's assets (all the foregoing being referred to as "Acquisition Events"), then the Committee may in its discretion terminate all outstanding options by delivering notice of termination to each option holder,

provided, however, that, during the 20-day period following the date on which such notice of termination is delivered, each option holder shall have the right to exercise in full all of his options that are then outstanding (without regard to limitations on exercise otherwise contained in the options). If an Acquisition Event occurs and the Committee does not terminate the outstanding options pursuant to the preceding sentence, then the provisions of Section 8(b) shall apply.

(b) In the event of a stock dividend stock split (other than the Stock Split) or combination of shares, recapitalization or other change in the Company's capital stock, the number and kind of shares of stock of securities of the Company subject to options then outstanding or subsequently granted under the Plan, the maximum number of shares or securities that may be delivered under the Plan, the exercise price, and other relevant provisions shall be appropriately adjusted by the Committee. The Committee may also adjust the number of shares subject to outstanding options, the exercise price of outstanding options and the terms of outstanding options to take into consideration any other event (including, without limitation, accounting changes) if the Committee determines that such adjustment is appropriate to avoid distortion in the operation of the Plan. All determinations and adjustments made by the Committee pursuant to this Section 8(b) shall be binding on all persons.

(c) The Committee may grant options under the Plan in substitution for options held by employees of another corporation who concurrently become employees of the Company or a subsidiary of the Company as the result of a merger or consolidation of the employing corporation with the Company or a subsidiary of the Company, or as the result of the acquisition by the Company of property or stock of the employing corporation. The Company may direct that substitute awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances.

9. LIMITATION ON RIGHTS

Neither the adoption of the Plan nor the grant of options shall confer upon any employee any right to continued employment with the Company or affect in any way the right of the Company to terminate the employment of an employee at any time. Except as specifically provided by the Committee in any particular case, the loss of existing or potential profit in options granted under this Plan shall not constitute an element of damages in the event of termination of the employment of an employee even if the termination is in violation of an obligation of the Company to the employee by contract or otherwise.

10. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION

(a) Neither adoption of the Plan nor the grant of options to an employee shall affect the Company's right to grant to such employee options that are not subject to the Plan, to issue to such employees Stock as a bonus or otherwise, or to adopt other plans or arrangements under which Stock may be issued to employees.

(b) The Committee may at any time discontinue granting options under the Plan. With the consent of the option holder, the Board may at any time cancel an existing option in whole or in part and grant the option holder another option for such number of shares as the Committee specifies. The Committee may at any time or times amend the Plan or any outstanding option for the purpose of satisfying the requirement of Section 422 of the Code or of any changes in applicable laws or regulations or for any other purpose which may at the time be permitted by law, or at any time terminate the Plan as to any further grants of options, provided that (except to the extent expressly required or permitted above) no such amendment shall, without the approval of the shareholders of the Company, (a) increase the maximum number of shares available under the Plan, (b) change the group of employees eligible to receive options under the Plan, (c) reduce the price at which incentive options may be granted, (d) extend the time within which incentive options may be granted, (e) extend the time within which options may be granted, (f) alter the Plan in such a way that incentive options already granted hereunder would not be considered incentive stock options under
Section 422 of the Code, or (g) amend the provisions of this Section 8, and no such amendment shall adversely affect the rights of any option holder (without his consent) under any option previously granted.

Exhibit 10.6

BED BATH AND BEYOND INC.
1996 STOCK OPTION PLAN***

1 PURPOSE.

The purpose of the Bed Bath & Beyond Inc. 1996 Stock Option Plan (the "Plan") is to encourage and enable key employees (which term, as used herein, shall include officers), and directors of Bed Bath & Beyond Inc. or a parent (if any) or subsidiaries thereof (collectively, unless the context otherwise requires, the "Company"), consultants, and advisors to the Company, and other persons or entities providing goods or services to the Company to acquire a proprietary interest in the Company through the ownership of common stock of the Company. (Such directors, members, consultants, advisors, and other persons or entities providing goods or services to the Company and entitled to receive options hereunder being collectively referred to as the "Associates," and the relationship of the Associates to the Company being referred to as "association with" the Company). Such ownership will provide such employees and Associates with a more direct stake in the future welfare of the Company and encourage them to remain employed by or associated with the Company. It is also expected that the Plan will encourage qualified persons to seek and accept employment or association with the Company.

2. TYPE OF OPTIONS.

Options granted pursuant to the Plan may be incentive stock options as defined in Section 422 of the Internal Revenue Code of 1986 (as from time to time amended, the "Code") (any option that is intended so to qualify as an incentive stock option being referred to herein as an "incentive option"), or options that are not incentive options, or both. Incentive options may only be granted to "employees" as defined in the provisions of the Code or regulations thereunder applicable to incentive stock options.

3. EFFECTIVE DATE AND TERM OF THE PLAN.

(a) The Plan shall become effective upon approval by the shareholders of the Company.

(b) No option shall be granted under the Plan on or after the tenth anniversary of the date on which the Plan is adopted, but options previously granted may extend beyond that date.

4. ADMINISTRATION.

(a) The Plan shall be administered by one or more committees appointed from time to time by the Board (each such committee being referred to as a "Committee"). In the event that more than one Committee is appointed by the Board, the Board shall specify with respect to each Committee the group of employees and Associates with respect to which such Committee shall have the power to grant options. In the event that more than one Committee is appointed by the Board, then each reference in the Plan to "the Committee" shall be deemed a reference to each such Committee (subject to the last sentence of this paragraph); provided, however, that each such Committee may only exercise the power

*** As amended through August 26, 1997.

and authority granted to "the Committee" by the Plan with respect to those employees and Associates that it has the power to grant options to as specified in the resolution of the Board appointing such Committee. Each Committee shall be comprised of two or more directors. A majority of the members of each Committee shall constitute a quorum, and all determinations of the Committee shall be made by a majority of its members. Any determination of any Committee under the Plan may be made, without notice or meeting of the Committee, by a writing signed by a majority of the Committee members. All members of each Committee shall be "disinterested persons" within the meaning of Rule 16(b)-3 under the Act and "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code (the "Code"); provided, however, that the foregoing shall not apply to any Committee that does not have the power to grant options to officers or directors of the Company or otherwise make any decisions with respect to the timing or the pricing of any options granted to such officers and directors. If pursuant to the preceding sentence a Committee is required to be comprised of "disinterested persons" and "outside directors", then the members of such Committee shall not be eligible to receive options under the Plan. In the event that more than one Committee is appointed by the Board, the power to amend the Plan granted by Section 10(b) hereof may only be exercised by a Committee all of whose members are "disinterested persons" and "outside directors" within the meaning of Rule 16(b)-3 under the Act and Section 162(m) of the Code.

(b) The Committee shall have authority, not inconsistent with express provisions of the Plan, (i) to grant options to such eligible employees and Associates of the Company as the Committee may select; provided, however, that the maximum number of options that may be granted under this Plan during any calendar year to any employee or Associate of the Company shall not exceed 100,000 shares (subject to any adjustment in accordance with Section 8(b)), and it is further provided that if the Committee grants to any employee or Associate during any calendar year options to purchase a number of shares that is less than 100,000, or does not grant any options during any calendar year to such employee or Associate, then the amount of such shortfall shall be carried forward and added to the maximum number of options which may be granted in a subsequent year to such employee or Associate; (ii) to determine the time or times when options shall be granted and the number of shares of Stock subject to each option; (iii) to determine which options are, and which options are not, incentive options; (iv) to determine the terms and conditions of each option;
(v) to prescribe the form or forms of instruments evidencing options and any other instruments required under the Plan and to change such forms from time to time; (vi) to adopt, amend and rescind rules and regulations for the administration of the Plan; and (vii) to interpret the Plan and to decide any questions and settle all controversies and disputes that may arise in connection with the Plan. Any determination, decision or action of the Committee in connection with the construction, interpretation, administration or application of the Plan shall be final and conclusive on all persons participating in the Plan.

5. SHARES SUBJECT TO THE PLAN.

(a) Number of Shares.

Subject to adjustment as provided in Section 8, the aggregate number of shares of Stock that may be delivered upon the exercise of options granted under the Plan shall be 2,000,000. If any option granted under the Plan terminates without having been exercised in full, the number of shares of Stock as to which such option was not exercised shall be available for future grants within the limits set forth in this Section 5(a).

(b) Shares to be Delivered.

Shares delivered under the Plan shall be authorized but unissued Stock or, if the Committee so decides in its sole discretion, previously issued Stock acquired by the Company and held in treasury. No fractional shares of Stock shall be delivered under the Plan.

6. ELIGIBILITY FOR OPTIONS.

Employees and Associates of the Company eligible to receive options under the Plan shall be those employees and Associates who, in the opinion of the Committee, are in a position to make a significant contribution to the success of the Company. Receipt of options under the Plan or of awards under any other employee benefit plan of the Company shall not preclude an employee from receiving options or additional options under the Plan.

7. TERMS AND CONDITIONS OF OPTIONS.

(a) Special Rule for Incentive Options. Consistent with Section 422 of the Code and any regulations, notices or other official pronouncements of general applicability, to the extent the aggregate fair market value (determined in accordance with Section 7(b) as of the time the option is granted) of the shares of Stock with respect to which incentive options are exercisable for the first time by the optionee during any calendar year (under all plans of his employer corporation and its parent and subsidiary corporations) exceeds $100,000, such options shall not be treated as incentive options. Nothing in this special rule shall be construed as limiting the exercisability of any option, unless the Committee expressly provides for such a limitation at time of grant.

(b) Exercise Price. The exercise price of each option shall be determined by the Committee, subject to the following: (i) in the case of an incentive option and all options granted by a Committee comprised of "disinterested persons" and "outside directors", the exercise price per share of stock shall not be less than 100% (110% for an incentive stock option granted to a greater than ten-percent shareholder) of the fair market value per share of Stock at the time the option is granted and (ii) in the case of all other options, the exercise price per share of Stock shall not be less than the par value per share (unless the Stock subject to the option is treasury stock). A "greater than ten-percent shareholder" shall mean for purposes of the Plan any employee who at the time of grant owns directly, or is deemed to own by reason of the attribution rules set forth in Section 424(d) of the Code, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company. The fair market value of a share of Stock as of any date shall be determined for purposes of the Plan as follows: (i) if the Stock is listed on a securities exchange or quoted through the National Association of Securities Dealers Automatic Quotation ("NASDAQ") National Market System, the fair market value shall equal the mean between the high and low sales prices on such exchange or through such market system, as the case may be, on such day or in the absence of reported sales on such day, the mean between the reported bid and asked prices on such exchange or through such market system, as the case may be, on such day, (ii) if the Stock is not listed or quoted as described in the preceding clause but is quoted through NASDAQ (but not through the National Market System), the fair market value shall equal the mean between the bid and offered prices as quoted by the National Association of Securities Dealers through NASDAQ for such day and (iii) if the Stock is not listed or quoted on a securities exchange or through NASDAQ, then the fair market value shall be determined by such other method as the Committee

determines to be reasonable and consistent with applicable requirements of the Code and the regulations issued thereunder applicable to incentive options; provided, however, that if pursuant to clause (i) or (ii) fair market value is to be determined based upon the mean of bid and asked prices and the Committee determines that such means does not properly reflect fair market value, then fair market value shall be determined by the Committee as provided in clause (iii).

(c) Duration of Options. An option shall be exercisable during such period or periods as the Committee may specify. The latest date on which an option may be exercised (the "Final Exercise Date") shall be the date which is ten years (five years, in the case of an incentive option granted to a "greater than ten-percent shareholder" as defined in Section 7(b)) from the date the option was granted or such earlier date as may be specified by the Committee at the time the option is granted.

(d) Exercise of Options.

(1) At the time of the grant of an option, the Committee shall specify whether the option shall be exercisable in full at any time prior to the Final Exercise Date or in installments (which may be cumulative or noncumulative). In the case of an option not immediately exercisable in full, the Committee may at any time accelerate the time at which all or any part of the option may be exercised.

(2) The award forms or other instruments evidencing incentive options shall contain such provisions relating to exercise and other matters as are required of incentive options under the applicable provisions of the Code and the regulations thereunder, as from time to time in effect.

(3) Any exercise of an option shall be in writing, signed by the proper person and delivered or mailed to the Company, accompanied by (a) the option certificate and any other documents required by the Committee and (b) payment in full for the number of shares for which the option is exercised.

(4) In the case of an option that is not an incentive option, the Committee shall have the right to require that the individual exercising the option remit to the Company an amount sufficient to satisfy any federal, state, or local withholding tax requirements (or make other arrangements satisfactory to the Company with regard to such taxes) prior to the delivery of any Stock pursuant to the exercise of the option. In the case of an incentive option, if at the time the option is exercised the Committee determines that under applicable law and regulations the Company could be liable for the withholding of any federal, state or local tax with respect to a disposition of the Stock received upon exercise, the Committee may require as a condition of exercise that the individual exercising the option agree (i) to inform the Company promptly of any disposition (within the meaning of
Section 424(c) of the Code and the regulations thereunder) of Stock received upon exercise, and (ii) to give such security as the Committee deems adequate to meet the potential liability of the Company for the withholding of tax, and to augment such security from time to time in any amount reasonably deemed necessary by the Committee to preserve the adequacy of such security.

(5) If an option is exercised by the executor or administrator of a deceased employee or Associate, or by the person or persons to whom the option has been transferred by the employee's or Associate's will or the applicable laws of descent and distribution, the Company shall be under no obligation to deliver Stock pursuant to such exercise until the Company is satisfied as to the authority of the person or persons exercising the option.

(e) Termination of Employment.

An employee's options shall terminate immediately upon the termination of his employment with the Company, subject to the following exceptions: (i) if the termination is by reason of the death or disability of the employee, the unexercised portion of the such options shall continue to be exercisable for 12 months after such termination and (ii) if the termination is for any other reason, excluding termination for cause, the unexercised portion of such options shall continue to be exercisable for three months after such termination. Notwithstanding the foregoing, the Committee in its discretion in any particular case may provide that upon termination of an employee's employment with the Company, the unexercised portion of his options shall continue to be exercisable for a longer or shorter period than the period provided for in the preceding sentence; provided, however, that (i) in the case of an incentive option, the Committee may not provide for a shorter or longer period after the option is granted and, in any event, may not provide for a longer period except in the case where the employee's employment is terminated by reason of death and (ii) in the case of an option that is not an incentive option, the Committee may not provide for a shorter period after the option is granted. For purposes of this
Section 7(e), employment shall not be considered terminated (i) in the case of sick leave or other bona fide leave of absence approved for purposes of the Plan by the Committee, so long as the employee's right to reemployment is guaranteed either by statute or by contract, or (ii) in the case of a transfer of employment between the Company and a subsidiary or between subsidiaries, or to the employment of a corporation (or a parent or subsidiary corporation of such corporation) issuing or assuming an option in a transaction to which Section 424(a) of the Code applies.

(f) Payment for Stock.

Stock purchased under the Plan shall be paid for as follows: (i) in cash or by certified check, bank draft or money order payable to the order of the Company or (ii) if so permitted by the Committee (not later than the time of grant, in the case of an incentive option), (A) through the delivery of shares of Stock (including shares acquired under the option then being exercised) having a fair market value (determined as provided in Section 7(b)) on the date of exercise equal to the purchase price or (B) by a combination of cash and Stock as provided in clauses (i) and (ii)(A) above or (C) by delivery of a promissory note of the option holder to the Company, such note to be payable in the case of an incentive option, on such terms as are specified in the option (except that, in lieu of a stated rate of interest, an incentive option may provide that the rate of interest on the note will be such rate as is sufficient, at the time the note is given, to avoid the imputation of interest under the applicable provisions of the Code), or by a combination of cash (or cash and Stock) and the option holder's promissory note; provided, that if the Stock delivered upon exercise of the option is an original issue of authorized Stock, at least so much of the exercise price as represents the par value of such Stock shall be paid in cash or by a combination of cash and Stock.

(g) Delivery of Stock.

An option holder shall not have the rights of a shareholder with regard to awards under the Plan except as to Stock actually received by him under the Plan. The Company shall not be obligated to deliver any shares of Stock (a) until, in the opinion of the Company's counsel, all applicable federal and state laws and regulations have been complied with, and (b) if the outstanding Stock is at the time listed on any stock exchange, until the shares to be delivered have been listed or authorized to be listed on such exchange upon official notice of issuance, and (c) until all other legal matters in connection with the issuance and delivery of such shares have been approved by the Company's counsel. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the option, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act and may require that the certificates evidencing such Stock bear an appropriate legend restricting transfer.

(h) Transferability of Options.

The Committee may provide that options may be transferred to the extent and subject to such limitations as the Committee may specify.

(i) Restrictions on Stock.

The Committee may provide that shares of Stock purchased through the exercise of options under the Plan be subject to such restrictions on resale, including restrictions requiring resale to the Company at or below fair market value, or such other restrictions, as the Committee in its sole discretion shall determine, and shall take such steps as it deems necessary or appropriate to carry out the purposes of any such restriction.

8. MERGERS, RECAPITALIZATIONS, ETC.

(a) In the event of a consolidation or merger in which the Company is not the surviving corporation or in the event of any transaction that results in the acquisition of substantially all of the Company's outstanding Stock by a single person or entity or by a group of persons and/or entities acting in concert, or in the event of the sale or transfer of substantially all of the Company's assets (all the foregoing being referred to as "Acquisition Events"), then the Committee may in its discretion terminate all outstanding options by delivering notice of termination to each option holder; provided, however, that, during the 20-day period following the date on which such notice of termination is delivered, each option holder shall have the right to exercise in full all of his options that are then outstanding (without regard to limitations on exercise otherwise contained in the options). If an Acquisition Event occurs and the Committee does not terminate the outstanding options pursuant to the preceding sentence, then the provisions of Section 8(b) shall apply.

(b) In the event of a stock dividend stock split or combination of shares, recapitalization or other change in the Company's capital stock, the number and kind of shares of stock of securities of the Company subject to options then outstanding or subsequently granted under the Plan, the maximum number of shares or securities that may be delivered under the Plan, the exercise price, and other relevant provisions shall be appropriately adjusted by the Committee. The Committee may also adjust the

number of shares subject to outstanding options, the exercise price of outstanding options and the terms of outstanding options to take into consideration any other event (including, without limitation, accounting changes) if the Committee determines that such adjustment is appropriate to avoid distortion in the operation of the Plan. All determinations and adjustments made by the Committee pursuant to this Section 8(b) shall be binding on all persons.

(c) The Committee may grant options under the Plan in substitution for options held by employees of another corporation who concurrently become employees of the Company or a subsidiary of the Company as the result of a merger or consolidation of the employing corporation with the Company or a subsidiary of the Company, or as the result of the acquisition by the Company of property or stock of the employing corporation. The Company may direct that substitute awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances.

9. LIMITATION ON RIGHTS.

Neither the adoption of the Plan nor the grant of options shall confer upon any employee any right to continued employment with the Company or affect in any way the right of the Company to terminate the employment of an employee at any time. Except as specifically provided by the Committee in any particular case, the loss of existing or potential profit in options granted under this Plan shall not constitute an element of damages in the event of termination of the employment of an employee even if the termination is in violation of an obligation of the Company to the employee by contract or otherwise.

10. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.

(a) Neither adoption of the Plan nor the grant of options to an employee shall affect the Company's right to grant to such employee options that are not subject to the Plan, to issue to such employees Stock as a bonus or otherwise, or to adopt other plans or arrangements under which Stock may be issued to employees.

(b) The Committee may at any time discontinue granting options under the plan. With the consent of the option holder, the Board may at any time cancel an existing option in whole or in part and grant the option holder another option for such number of shares as the Committee specifies. The Committee may at any time or times amend the Plan or any outstanding option for the purpose of satisfying the requirement of Section 422 of the Code or of any changes in applicable laws or regulations or for any other purpose which may at the time be permitted by law, or at any time terminate the Plan as to any further grants of options, provided that (except to the extent expressly required or permitted above) no such amendment shall, without the approval of the shareholders of the Company, (a) increase the maximum number of shares available under the Plan, (b) change the group of employees eligible to receive options under the Plan, (c) reduce the price at which incentive options may be granted, (d) extend the time within which incentive options may be granted, (e) extend the time within which options may be granted, (f) alter the Plan in such a way that incentive options already granted hereunder would not be considered incentive stock options under
Section 422 of the Code, or (g) amend the provisions of this Section 10, and no such amendment shall adversely affect the rights of any option holder (without his consent) under any option previously granted.