Mfhc Director Stock Option Plan

MRS. FIELDS' HOLDING COMPANY, INC.
DIRECTOR STOCK OPTION PLAN


1 Purpose.
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The purpose of the MRS. FIELDS' HOLDING COMPANY, INC. Director Stock Option Plan (the "Plan") is to align the interests of outside directors of MRS. FIELDS' HOLDING COMPANY, INC., a Delaware corporation (the "Company"), and its subsidiaries, with those of the stockholders of the Company; and to attract, motivate and retain as directors the best available individuals.


2 Definitions.
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The following terms, as used herein, shall have the following meanings:


(a) "Award" shall mean any Option granted pursuant to the Plan.


(b) "Award Agreement" shall mean any written agreement, contract or other
instrument or document between the Company and a Participant
evidencing an Award.


(c) "Board" shall mean the Board of Directors of the Company.


(d) "Capricorn" shall mean Capricorn Investors II,L.P. together with any
affiliated persons.


(e) "Change of Control" shall mean the earliest to occur of (i) a
transaction in which Capricorn's equity investment in the Company is
reduced(including through the operation of a merger in which the
Company is not the surviving corporation and the Common Stock is
converted into the right to receive cash or other property) such that
Capricorn is no longer the largest equity investor in the Company or
(ii) a sale by the Company or MFOC of all or substantially all of its
assets.


(f) "Common Stock" shall mean the Common Stock, par value $.01 per share,
of the Company.


(g) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.


(h) "Committee" shall mean a committee of the Board which administers the
Plan as provided herein.


(i) "Company" shall mean MRS. FIELDS' HOLDING COMPANY, INC.


(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time now or hereafter construed, interpreted and
applied by regulations, rulings and cases.


(k) "Initial Public Offering" shall mean a public offering of Common Stock
pursuant to a registration statement under the Securities Act.


(l) "MFOC" shall mean Mrs. Fields' Original Cookies, Inc., the Company's
subsidiary.


(m) "Option" shall mean the right, granted pursuant to the Plan, of a
holder to purchase shares of Common Stock. Options granted hereunder
shall not qualify as "incentive stock options" within the meaning of
Section 422 of the Code.


(n) "Participant" shall mean a director of the Company who is, pursuant to
Section 4 of the Plan, selected to participate in the Plan.


(o) "Plan" shall have the meaning set forth in Section 1 hereof.


(p) "Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases.


(q) "Time Vested Option" shall mean an Option that will vest 25% per year
on the anniversaries of the date as of which it was awarded and will
vest in full upon the occurrence of a Change of Control.


3 Administration.
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The Plan shall be administered by the Committee. The Committee shall have the authority, in its sole discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in connection with the administration of the Plan, including, without limitation, the authority to take the following actions: to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards to be granted, the number of shares of Common Stock to which an Award may relate and the terms, conditions, restrictions and performance criteria relating to any Award; to determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, adjusted, forfeited, exchanged, or surrendered or accelerated or an Option or Options may be repriced to a lower exercise price; to make adjustments to performance goals in recognition of unusual or non-recurring events affecting the Company or its financial statements, or in response to changes in applicable laws, regulations or accounting principles; to construe and interpret the Plan and any Award; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of Award Agreements, consistent with the terms and provisions of the Plan; and to make all other determinations deemed necessary or advisable for the administration of the Plan, consistent with the terms and provisions of the Plan. From and after the Initial Public Offering, the Committee shall consist of two or more persons who are intended to be "disinterested persons" within the meaning of Rule 16b-3 under the Exchange Act.


4 Eligibility.
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Awards may be granted to officers or other employees of the Company and its subsidiaries in the sole discretion of the Committee. In determining the persons to whom Awards shall be granted and the type of Award, the Committee shall take into account such factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan.


5 Stock Subject to the Plan.
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(a) Number of Shares. The maximum number of shares of Common Stock
---------------- reserved for issuance pursuant to the Plan shall be 50,000. All such shares of Common Stock shall be subject to equitable adjustment as provided herein. Such shares may, in whole or in part, be authorized but unissued shares or shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise. If any shares subject to an Award are forfeited, cancelled, ex-
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