Employment Agreement - James D. Carreker
 
 
                             EMPLOYMENT AGREEMENT
 
 
      This Employment Agreement (this "Agreement") is entered into as of this
20th day of August 2003, by and between The Bombay Company,
Inc., a Delaware corporation (the "Company"), and James D. Carreker (the
"Executive").
 
                                   RECITALS
 
      WHEREAS, the Company is engaged, directly or indirectly, in the business
of designing, sourcing and marketing home accessories, wall decor and
furniture (the "Business");
 
      WHEREAS, the Company believes that it would benefit from the Executive's
skill, experience and background, and wishes to employ the Executive as its
Chairman of the Board and Chief Executive Officer;
 
      WHEREAS, the Company and the Executive entered into a letter agreement
dated June 3, 2003 (the "Letter Agreement"), that provided for the Executive's
employment and that contemplated a further, more definitive written agreement;
and
 
      WHEREAS, the parties desire by this Agreement to set forth in greater
detail the terms and conditions of the employment relationship between the
Company and the Executive and to supersede and replace the Letter Agreement.
 
      NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein set forth, and for other good and valuable consideration, the
Company and the Executive hereby agree as follows:
 
      1.    Employment of Executive
 
            (a)   General Duties.  The Company hereby employs the
Executive as its Chairman of the Board and Chief Executive Officer, and the
Executive accepts such employment, on the terms and subject to the conditions
provided in this Agreement.  The Executive shall report to the Company's Board
of Directors (the "Board") and shall devote substantially all of his
professional time, efforts, attention, energy and skill to performing the
duties of Chairman of the Board and Chief Executive Officer of the Company.  As
part of these duties, the Executive may serve on the Board of Directors of
subsidiaries of the Company as may be requested by the Company from time to
time.  Provided that such activities do not violate any term or condition of
this Agreement, or materially interfere with the performance of his duties
hereunder, nothing herein shall prohibit the Executive from (a) participating
in other business activities approved in advance by the Board in accordance
with any terms and conditions of such approval, (b) engaging in charitable,
civic, fraternal or trade group activities or (c) investing his personal assets
in the Company or other entities or business ventures, subject to any
applicable legal requirements and any policies of the Company applicable
to all executive personnel of the Company and members of the Board
All communications and notices that the Executive desires to give to the Board
in his capacity as an officer of the Company shall be given to the "lead
director" that is designated from time to time by the entire Board.
 
            (b)   D&O Insurance.  The Company shall use reasonable best efforts
to provide directors' and officers' liability insurance coverage for the
benefit of the Executive and his estate at all times during the Employment Term
(defined below) on the same terms and in the same amount as the Company then
provides for its other directors and executive officers.  Upon the expiration
of the Employment Term and for a period thereafter equal to the shorter of (i)
six (6) years or (ii) the expiration of the applicable statute of limitations
(the "Post-Termination Coverage Period"), the Company will use reasonable best
efforts to maintain directors' and officers' liability insurance coverage for
its directors and executive officers in a manner that will continue to provide
coverage for the Executive's acts and omissions during the Employment Term.
Notwithstanding the foregoing sentences of this Section 1(b), from and after
the occurrence of a Change of Control, the Company shall be obligated to use
best efforts to maintain directors' and officers' liability insurance coverage
during the Employment Term and the Post-Termination Coverage Period on terms
and in amounts substantially similar to those maintained by the Company
immediately prior to the Change of Control.
 
      2.    Employment Term.
 
            (a)   Initial Term.  The Executive's employment with the Company
commenced on the date of the Letter Agreement.  Accordingly and subject
to the terms and conditions of this Agreement, the Executive's term of
employment under this Agreement (the "Employment Term") shall commence
effective as of June 3, 2003 (the "Effective Date") and continue until June 3,
2006, subject to the extension provision of Section 2(b), unless terminated
earlier in accordance with the provisions of Section 4.  The parties
acknowledge and agree that the Executive's employment from June 3, 2003 to the
date of this Agreement was governed solely by the terms of this Agreement.  To
the extent there is any conflict between the Letter Agreement and this
Agreement, the provisions of this Agreement shall govern.  The Executive
acknowledges that the Company is not in breach of the provisions of this
Agreement as of the date hereof, and hereby waives any breach of the Letter
Agreement by the Company prior to the date hereof.
 
            (b)   One-Time Extension.  On June 3, 2006, the Employment Term
shall automatically be extended until June 3, 2007 unless (i) prior to March 1,
2006, the Company delivers to the Executive, or the Executive delivers to the
Company, written notice that the automatic extension provision of this Section
2(b) shall be inoperative, (ii) a notice of termination has been delivered and
not withdrawn under Section 4 or (iii) prior to June 3, 2006, the
Executive dies.
 
      3.    Compensation.  As compensation for performing the services required
by this Agreement, and during the term of this Agreement, the Executive shall
be compensated as follows:
 
            (a)   Base Compensation.  The Company shall pay to the Executive as
base compensation an annual salary ("Base Compensation") of at least Six
Hundred Thousand Dollars ($600,000).  Subject to subparagraph (b) below, the
Base Compensation shall be payable in accordance with the general policies and
procedures for payment of salaries to senior executive personnel of the Company
as implemented by the Board, in substantially equal installments, subject to
withholding for applicable federal, state, local and foreign taxes.  Increases
in Base Compensation, if any, shall be determined by the Compensation and Human
Resources Committee of the Board (the "Compensation Committee") based on an
annual review of the Executive's performance to be conducted after January 1
and prior to June 3 of each year during the Employment Term, subject to
approval by the Board.  Upon the completion of each such review, but no
later than June 3 of each year, the Company shall provide the Executive with a
written notice (each, a "Base Compensation Notice") that sets forth the amount
of Base Compensation to be paid to the Executive during the twelve-month period
that begins on June 3 of such year (the "Next Compensation Period");
provided, however, that in no event shall the amount of Base Compensation be
less than the Six Hundred Thousand Dollars ($600,000) per annum minimum above
specified.
 
            (b)   Stock Payment Election.  At any time during the first
fourteen (14) days of the next "window period" (such period being the days when
the Company's senior executive officers are permitted to execute trades in the
Company's Common Stock, as determined by the Company) after the delivery of
each Base Compensation Notice (the "Election Period"), the Executive may
deliver to the Company a written notice of the Executive's election (each, a
"Stock Election") to receive all or part of his Base Compensation for the
Next Compensation Period for which such Base Compensation Notice was given
in the form of restricted shares of the Company's common stock, par value
$1.00 per share ("Common Stock").  Each Stock Election must set forth the
dollar amount of Base Compensation to be converted.  The number of shares of
restricted Common Stock to be awarded to the Executive upon any such election
shall be determined in accordance with the following:
 
                  (1)   If the dollar amount set forth in a Stock Election is
      greater than fifty percent (50%) of the Base Compensation to be paid to
      the Executive during the portion of such Next Compensation Period
      remaining after delivery of the Stock Election, then the Executive shall
      receive a number of shares of restricted Common Stock equal to 1.25 times
      the quotient of (A) the dollar amount set forth in the
      Stock Election, divided by (B) the closing sale price of a
      share of Common Stock as quoted on the New York Stock Exchange (or, if no
      longer traded on the New York Stock Exchange, the other primary stock
      exchange or market upon which shares of Common Stock are traded) on the
      date the Stock Election is received by the Company (such date the "Stock
      Election Date" and such price, the "Closing Price").  Twenty percent
      (20%) of the number of shares of restricted Common Stock included in each
      grant made in accordance with the provisions of this Section 3(b)(1)
      shall be deemed "Bonus Restricted Shares," and the remaining eighty
      percent (80%) of such shares shall be deemed "Regular Restricted
      Shares."
 
                  (2)   If the dollar amount set forth in a Stock Election is
      equal to or less than fifty percent (50%) of the Base Compensation to be
      paid to the Executive during the portion of such Next Compensation Period
      remaining after delivery of the Stock Election, then the Executive shall
      receive a number of shares of restricted Common Stock equal to
      (A) the dollar amount set forth in the Stock Election,
      divided by (B) the Closing Price.  All shares of
      restricted Common Stock included in each grant made in accordance with
      the provisions of this Section 3(b)(2) shall be deemed "Regular
      Restricted Shares."
 
            (c)   Share Award Agreement.  All shares of restricted Common Stock
issued to the Executive under subparagraph (b) above shall be evidenced by, and
subject to the terms and provisions of, a Restricted Share Award Agreement
substantially in the form of Exhibit A attached hereto (a "Share Award
Agreement").  The Company shall deliver to the Executive an executed Share
Award Agreement for each Stock Election within thirty (30) days of the receipt
thereof by the Company.
 
            (d)   Risk of Forfeiture.  Each share of Common Stock issued to the
Executive under subparagraph (b) above shall be subject to forfeiture and shall
be deposited with, and held by, the Company until the earlier of the three-year
anniversary of the Stock Election Date or the early termination of such
forfeiture restriction, as set forth in the Share Award Agreement (as defined
above).  Notwithstanding the foregoing, to the extent the
Company's Compensation Committee determines to permit senior executives of the
Company to defer salary in exchange for Common Stock that is subject to a
forfeiture restriction shorter than three years, then the Executive shall be
permitted, at the option of the Executive, to elect to receive such
shorter forfeiture restriction on any subsequent Stock Election;
provided, however, that for any such Stock Election for which the Executive so
elects, the number of shares shall be determined pursuant to subparagraph
(b)(2) above.
 
            (e)   Insider Trading Policy.  Notwithstanding anything to the
contrary contained herein, the Executive's ability to make a Stock Election
shall at all times remain subject to the provisions of the Company's insider
trading policies.
 
            (f)   Stock Grants to Executive.  The Executive hereby ratifies his
election to receive his Base Compensation for the period beginning on the
Effective Date and ending on June 2, 2004 (the "First Compensation Period") in
the form of shares of restricted Common Stock.  Accordingly and
contemporaneously with the execution of this Agreement, the Company is
executing and delivering to the Executive a Share Award Agreement for 81,256
shares of restricted Common Stock as payment of such Base Compensation (the
"First Compensation Period Grant").  The Company previously granted the
Executive 50,000 shares of restricted Common Stock on December
16, 2002 in connection with his service as the
non-executive Chairman of the Board (the "Previous Grant").  Both the Executive
and the Company acknowledge that the shares granted in the Previous
Grant have been replaced with shares included in the First Compensation Period
Grant.  Accordingly, the Previous Grant and the corresponding award agreement
are hereby cancelled, and the Executive further acknowledges that the Executive
shall not have any rights whatsoever in the shares of restricted Common Stock
included in the Previous Grant.
 
            (g)   Cash Incentive Compensation.  At the end of each fiscal year
of the Company during the Employment Term and subject to the conditions
specified herein, the Executive shall be eligible to receive a cash bonus as
incentive compensation in addition to his Base Compensation (the "Cash
Incentive Compensation").  The Cash Incentive Compensation that may be payable
to the Executive shall consist of two components, as described below and shall
be equal to a percentage of his Base Compensation for each such fiscal year;
provided, in no event shall the amount of Cash Incentive Compensation paid to
the Executive for any fiscal year exceed one hundred fifty percent (150%) of
his Base Compensation:
 
                  (1)   The Executive shall be eligible to receive seventy-five
      percent (75%) of any bonus amount that would be payable to him pursuant
      to the Executive Performance Bonus Grid for such fiscal year.  "Executive
      Performance Bonus Grid" means the criteria established for each fiscal
      year by the Compensation Committee for all executive officers of the
      Company that specifies the percentage of each executive's base salary
      that is eligible to be paid to such executive as an incentive bonus upon
      the Company's achievement of certain profitability thresholds for such
      fiscal year.
 
                  (2)   The Executive shall also be eligible to receive an
      additional cash bonus of up to twenty-five percent (25%) of his Base
      Compensation in any fiscal year upon his achievement of the Executive's
      MBO Performance Goals for such fiscal year.  The "MBO Performance Goals"
      for the Executive are the Company performance goals that are individually
      established for the Executive by the Compensation Committee and approved
      by the Board each fiscal year.
 
            For the avoidance of doubt, it is expressly understood that (i) the
amount of Base Compensation to be used in the calculation of any Cash Incentive
Compensation to which the Executive may be entitled for each fiscal year of the
Company during the Employment Term shall not be less than $600,000 and (ii) the
amount of Base Compensation to be used in such calculation in subsequent fiscal
years may be increased by the Compensation Committee in accordance with Section
3(a) hereof.  Payment of Cash Incentive Compensation for each fiscal year will
be made in accordance with the general
policies and procedures for payment of incentive compensation to senior
executive personnel of the Company.
 
            (h)   Equity-Based Incentive Compensation.  On the Effective
Date, the Executive was granted options to purchase up to
400,000 shares of Common Stock with an exercise price per share equal to the
closing sale price of a share of Common Stock as quoted on the New York Stock
Exchange on such date (the "Initial Option Award").  The shares included
in the Initial Option Award shall vest 33.3% on the one-year and two-year
anniversaries of the date of grant, and 33.4% on the three-year anniversary of
the date of the grant.  The terms and conditions relating to
the Initial Option Award are set forth in the stock option agreement
attached hereto as Exhibit "B" (the "Initial Option Award Agreement").  Subject
to the Executive's continued employment pursuant to the terms of this
Agreement, the Company shall grant to the Executive options to purchase (i) up
to an additional 250,000 shares of Common Stock on the date of the first
anniversary of the Effective Date at an exercise price equal to the closing
sale price of a share of Common Stock as quoted on the New York Stock Exchange
(or, if no longer traded on the New York Stock Exchange, the other primary
stock exchange or market upon which shares of Common Stock are traded) (the
"Option Price") as of such date and (ii) up to an additional 125,000 shares of
Common Stock on the second anniversary of the Effective Date at an exercise
price equal to the Option Price as of such date.  Each of these additional
grants shall be subject to the vesting provisions of the Initial
Option Award and the other terms and conditions of a stock option
award agreement in form and substance that is substantially similar to the
Initial Option Award Agreement.  The Company shall cause all stock options
granted to the Executive pursuant to this Agreement to be issued under equity
award plans that provide for such options to be treated as "incentive stock
options" to the extent permissible under the Internal Revenue Code of 1986 and
related rules and regulations.
 
 
 
            (i)Employee Benefits: Fringe Benefits.  During the Employment
Term, the Executive and his eligible dependents (where applicable) shall have
the right to participate in each retirement, pension, insurance, health and
other benefit plan or program that has been or is hereafter adopted by the
Company (or in which the Company participates) according to the terms of such
plan or program with all the benefits, rights and privileges as are generally
enjoyed by senior executive personnel of the Company.  The Executive also shall
be entitled to all fringe benefits, if any, that generally are enjoyed by
senior executive personnel of the Company.  Regardless of whether such
benefits are available to other senior executives, the Executive shall be
entitled to the following benefits at the expense of the Company:
 
                  (1) supplemental long-term disability insurance
      that, collectively with the Company's other disability insurance plans,
      provides the Executive with an annual benefit equal to sixty percent
      (60) of the Executive's Base Compensation in effect on
      the date that he becomes disabled;
 
                  (2) a supplemental life insurance policy that,
      collectively with the Company's other life insurance policies, provides
      the Executive with term life insurance coverage in an amount equal to two
      times his Base Compensation in effect at any time during the Employment
      Term; and
 
                  (3) personal tax and financial planning
      services in an amount of up to $5,000 per year.
 
 
 
            (j)Vacation; Sick Leave; Holidays; Leaves of Absence.  The
Executive shall be entitled to four weeks of paid vacation leave each year on
dates reasonably selected by the Executive.  The Executive also
shall be entitled to the same paid holidays provided to the other employees of
the Company.  In addition, the Executive may be granted leaves of absence with
or without pay for such valid and legitimate reasons as the Board in its sole
and absolute discretion may determine or as required by law.
 
            (k)   Expenses.  The Executive shall be entitled to receive
reimbursement for all reasonable and necessary expenses incurred by him in
connection with the performance of his Company related duties
under this Agreement, subject to the Executive's compliance in all material
respects with the Company's reasonable policies for recording such
expenses and for submitting them for reimbursement.
 
            (l)   Taxes.     The  Executive shall be responsible for payment of
all  federal, state, and local income  and  employment  taxes,  any  applicable
excise  taxes,  and any other government assessments owing by the Executive for
all benefits received  pursuant  to this Agreement. All payments required to be
made by the Company hereunder and  all other benefits provided to the Executive
hereunder shall be subject to the withholding of such amounts relating to taxes
and other government assessments as  the  Company  may  reasonably determine it
should withhold pursuant to any applicable law, rule or regulation.
 
      4.Termination and Termination Benefits.
 
            (a)   Termination by the Company.
 
                  (i)   For Cause.  The Company may terminate the Executive's
      employment under this Agreement for Cause by written notice to the
      Executive.  The Executive's employment hereunder shall terminate
      immediately upon his receipt of such notice.  In the event of such
      a termination, the Executive shall be paid his Base Compensation earned
      but not paid to the Executive prior to the effective date of
      termination, and the Company will provide the Executive with (A) the
      benefits described in Section 3(i) through the effective date of
      termination and (B) a cash payment in lieu of the
      Executive's accrued vacation leave provided for in Section 3(j) that is
      unused as of the effective date of termination.  The
      Company shall have no further obligation or liability to the Executive
      under this Agreement (other than (A) pursuant to Section 3(k) and
      then only up to the effective date of termination, (B) any unpaid Cash
      Incentive Compensation for a prior fiscal year of the Company and (C)
      with respect to options for Common Stock which have vested in favor of
      the Executive prior to the date of termination, which shall remain
      exercisable by the Executive or his estate, as applicable, in whole or in
      part for a period of ninety (90) days after termination).
 
            For purposes of this Agreement, "Cause" means (1) the
      Executive's substantial failure to perform his duties under this
      Agreement if not remedied in all material respects by the Executive
      within thirty (30) days after receipt of a written notice from the
      Company specifying such failure in reasonable detail, (2) misconduct by
      the Executive that causes or is likely to cause material harm to the
      Company as determined by the Board in good faith (such misconduct may
      include, without limitation, insobriety at the workplace during working
      hours or the use of illegal drugs), (3) any failure to follow directions
      of the Board that are consistent with the Executive's duties under this
      Agreement that results in material harm to the Company, (4) the
      Executive's conviction of, or entry of a pleading of guilty or nolo
      contendre to, any crime involving moral turpitude, or the entry of an
      order duly issued by any federal or state regulatory agency having
      jurisdiction in the matter permanently prohibiting the Executive from
      participating in the conduct of the affairs of the Company or (5) any
      other breach of this Agreement by the Executive that is not remedied in
      all material respects within 30 days after receipt of written notice from
      the Company specifying such breach in reasonable detail.
 
                  (ii)  Without Cause.  The Company may terminate the
      Executive's employment under this Agreement without Cause by written
      notice to the Executive.  The Executive's employment hereunder shall
      terminate immediately upon the receipt of such notice.  If the
      Company terminates the Executive's employment without Cause:
 
                        (1)   The Company shall pay the Executive or his
            estate, as applicable, a base severance equal to the
            Executive's Base Compensation for one (1) year in effect on
            the date of such termination.  Such amount shall be paid
            periodically over a twelve month period in accordance
            with the general policies and procedures for payment of
            compensation to senior executive personnel of the Company as
            implemented by the Board, in substantially equal installments,
            subject to withholding for applicable federal, state, local and
            foreign taxes.
 
                        (2)   Subject to the Company's achievement of the
            applicable performance objectives and
            at the time that the Company's other senior executives receive
            their incentive bonus payments for the fiscal year in which the
            Executive's employment under this Agreement was terminated,
            the Executive shall be eligible to receive an
            additional severance payment equal to the amount of
            the Cash Incentive Compensation, if any, that would
            have been paid to the Executive under the provisions of Section
            3(g) hereof for the fiscal year of the Executive's
            termination.  Such amount shall be paid to the
            Executive in accordance with the general policies and
            procedures for payment of compensation to senior executive
            personnel of the Company as implemented by the Board,
            subject to withholding for applicable federal, state, local and
            foreign taxes.
 
                        (3)   The Company shall continue to provide for twelve
            (12) months the same level of health and life
            insurance benefits for the Executive and the Executive's
            eligible dependents in the same manner as the
            Company provided for them at the time of termination of the
            Executive's employment.
 
                        (4)   Contemporaneously with such termination, all
            unvested stock options for Common Stock previously granted to the
            Executive by the Company that would have otherwise vested during
            the one (1) year period following termination shall become vested.
            The Executive or his estate (as applicable) may continue to
            exercise all or any part of the vested stock options for Common
            Stock held immediately following termination for a period of ninety
            (90) days thereafter.
 
                        (5)   All Regular Restricted Shares that have been held
            by the Executive pursuant to a Share Award Agreement for a period
            of one (1) year or more shall cease to be subject to the
            restrictions imposed by the Company and shall be distributed to the
            Executive or his estate, as applicable, as promptly as practicable.
            Additionally, a prorated amount of the Regular Restricted Shares
            that were awarded to the Executive (if any) for the year of the
            Employment Term during which the Executive is terminated equal to
            (x) the total number of such Regular Restricted Shares granted to
            the Executive for such year multiplied by (y) a fraction, the
            numerator of which is equal to the number of days during such year
            of the Employment Term prior to the date of the Executive's
            termination, and the denominator of which is equal to three hundred
            sixty-five (365) (the "Prorated Share Amount") shall also cease to
            be subject to the restrictions imposed by the Company and shall be
            distributed to the Executive or his estate, as applicable, as
            promptly as practicable.
 
                        (6)  Notwithstanding anything contained
            herein to the contrary, if the Executive violates and fails to
            timely cure the provisions of Sections 6 or 7 of this Agreement
            (the "Restrictive Covenants") at any time while the Company is
            obligated to make severance payments or provide severance benefits
            under this Section 4(a), the Company may send the Executive written
            notice that specifies in reasonable detail the circumstances
            surrounding the violation.  If the Executive does not cease the
            activities that are violating the Restrictive Covenants within five
            (5) days of the date of receipt of the Company's written
            notice to the Executive, then, in additional to any and all other
            rights that the Company may have at law or in equity,  the Company
            may permanently cancel and terminate such severance payments and
            benefits provided for in this Section 4(a)(ii) that then remain
            to be paid or provided.
 
                  (iv)  Disability.  If due to illness, physical or mental
      disability, or other incapacity which cannot be
      reasonably accommodate, the Executive shall
      fail, for a total of any ninety (90) days or more
      within any period of twelve (12) consecutive months, to perform the
      duties required by this Agreement, the Board may terminate the
      Executive's employment under this Agreement upon thirty (30) days'
      written notice to the Executive.  In such event, the Executive shall be
      paid his Base Compensation up to the effective date of such termination.
      The Executive shall not be entitled to any other compensation or payments
      (other than pursuant to Section 3(k) and then only up to the effective
      date of termination.  The Executive or his estate, as
      applicable, shall have ninety (90) days following such termination to
      exercise all or any part of vested stock options for Common Stock that
      are held by the Executive on the date of termination.  Further, all
      Regular Restricted Shares that have been held by the Executive pursuant
      to a Share Award Agreement for a period of one (1) year or more, plus an
      additional number of Regular Restricted Shares equal to the Prorated
      Share Amount, shall cease to be subject to the restrictions imposed by
      the Company and shall be distributed to the Executive or his estate, as
      applicable, as promptly as practicable.
 
            (b)   Termination by the Executive.
 
                  (i)   Resignation Without Company Breach.  The Executive may
      voluntarily terminate his employment hereunder voluntarily upon ninety
      (90) days' prior written notice to the Company.  Such a
      termination shall be effective ninety (90) days after the delivery of
      such notice unless the Executive and the Company agree in
      writing to another effective date.  In the event of such a termination,
      the Company shall pay to the Executive his Base Compensation earned but
      not paid to the Executive prior to the effective date of such
      termination, and the Company shall thereafter have no further
      obligation or liability to the Executive under this Agreement (other than
      (A) pursuant to Section 3(k) and then only up to the effective
      date of termination and (B) with respect to options for Common Stock
      which have vested in favor of the Executive prior to the date of
      termination, which shall remain exercisable by the Executive or his
      estate, as applicable, in whole or in part for a period of ninety (90)
      days after termination).
 
                  (ii)  Resignation Upon Company Breach.  Upon the
      occurrence of a Company Breach (defined below), the Executive may provide
      the Company with a written notice that specifies in reasonable detail the
      circumstances surrounding the alleged Company Breach.  If such Company
      Breach is not cured within thirty (30) days of the Company's receipt of
      such notice, then the Executive may terminate his
      employment hereunder by written notice to the Company.  The
      Executive's employment hereunder shall terminate immediately upon the
      delivery of such termination notice unless the Executive specifies
      a later effective date of termination therein.  Upon such termination,
      the Executive shall, subject to the provisions of Section 4(a)(ii)(6)
      hereof, be entitled to receive the payments and benefits
      specified in Sections 4(a)(ii)(1)-(5) hereof.
 
            For the purposes of this Agreement, "Company Breach" means: (1)
      a change in the Executive's duties or responsibilities with the
      Company or the Board that (A) represents a substantial
      reduction of the duties or responsibilities as in effect immediately
      prior thereto and (B) the Executive does not expressly
      consent to in writing; (2) a change by the Board in the
      duties or responsibilities of other senior executive officers of the
      Company that have the effect of precluding the Executive from
      effectively performing his duties and responsibilities; (3) a
      material reduction in the Executive's Base Compensation (it being
      understood that the Executive's Base Compensation may not be reduced
      below $600,000 per annum); (4) the Company requiring the
      Executive to be based at any place outside a fifty
      (50) mile radius of the Company's Fort Worth, Texas
      headquarters location as in use on the date of this Agreement, except for
      reasonable travel on behalf of the Company (5)
      any material breach by the Company of any provision of
      this Agreement.
 
            (c)   Additional Effects of Termination.  The Executive's
obligations and liabilities to the Company under this Agreement shall cease as
of the effective date of any termination pursuant to Sections 4(a) or 4(b),
except his obligations under the Restrictive Covenants shall survive and
continue any such termination.
 
            (d)   Death.  Notwithstanding any other provision of this
Agreement, this Agreement shall terminate on the date of the Executive's
death; provided, however, the Company's obligation under Section 1(b) shall
survive the Executive's death.  In such event, the Executive's estate shall
be paid the Executive's Base Compensation earned but not paid prior to the date
of his death, plus an amount equal to the product of (i) the Cash Incentive
Compensation, if any, that would have been paid to the Executive under the
provisions of Section 3(g) hereof for the fiscal year of the Executive's death
multiplied by (ii) a fraction, the numerator of which is equal to the number of
days of such fiscal year prior to the Executive's death, and the denominator of
which is equal to three hundred sixty-five (365).  For example, if the
Executive dies on the 100th day of a fiscal year of the Company and the
Executive would have been entitled to a Cash Incentive Compensation payment
equal to $600,000 if he had continued his employment through the end of that
fiscal year, then the Executive's estate would entitled to an additional
payment of $164,383.56 ($600,000 x (100/365)).  Any such amount shall be paid
to the Executive's estate at the time that the Company's senior executives
receive their incentive bonus payments for the fiscal year of the Executive's
death.  n addition, if after the death of the
Executive, his spouse or other representative of his dependents elects to
exercise rights to continue receiving health insurance benefits under COBRA,
then the Company shall bear the expense of the first ninety (90)
days of such health insurance coverage at the same level
and in the same manner as the Company provided for them at
the time of the Executive's death.  Further, (A) all vested stock options
for Common Stock held by the Executive as of the date of his death shall
continue to be exercisable by his estate (in whole or part) for a period of one
(1) year and (B) all Regular Restricted Shares that have been held by the
Executive pursuant to a Share Award Agreement for a period of one (1) year or
more, plus an additional number of Regular Restricted Shares equal to the
Prorated Share Amount, shall cease to be subject to the restrictions imposed by
the Company and shall be distributed to the Executive's estate as promptly as
practicable.
 
 
      5.Change of Control.
 
            (a)   Definitions.  For the purposes of this Agreement:
 
            "Affiliate" shall have the meaning given in Rule 405 promulgated
      under the Securities Act of 1933, as amended.
 
            "Change of Control" shall mean any of the following:
                  (i)   the acquisition, other than from the Company, by any
      individual, entity or group (within the meaning of Section 13(d)(3) or
      14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) of
      beneficial ownership of 20% or more of either the then outstanding shares
      of Common Stock of the Company or the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally
      either in the election of directors of the Company or for the termination
      of the chief executive officer of the Company; provided, however, that
      any acquisition by the Company or any of its subsidiaries, or any
      employee benefit plan (or related trust) of the Company or its
      subsidiaries, or any corporation with respect to which following such
      acquisition, more than fifty percent (50%) of, respectively, the then
      outstanding shares of common stock of such corporation and the combined
      voting power of the then outstanding voting securities of such
      corporation entitled to vote generally in the election of directors is
      then beneficially owned, directly or indirectly, by all or substantially
      all of the individuals and entities who were the beneficial owners,
      respectively, of the Common Stock and voting securities of the Company
      immediately prior to such acquisition in substantially the same
      proportion as their ownership, immediately prior to such acquisition, of
      the then outstanding shares of Common Stock of the Company or the
      combined voting power of the then outstanding voting securities of the
      Company entitled to vote generally in the election of directors, as the
      case may be, shall not constitute a Change of Control;
 
                  (ii)   individuals who, as of the Effective Date, constitute
      the Board (the "Incumbent Board") cease for any reason to constitute at
      least a majority of the Board, provided that any individual becoming a
      director subsequent to such date whose election, or nomination for
      election by the Company's shareholders, was approved by a vote of at
      least a majority of the directors then comprising the Incumbent Board
      shall be considered as though such individual were a member of the
      Incumbent Board, but excluding, for this purpose, any such individual
      whose initial assumption of office is in connection with an actual or
      threatened election contest relating to the election of the directors of
      the Company (as such terms are used in rule 14a-11 of Regulation 14A
      promulgated under the Exchange Act); or
 
                  (iii) approval by the shareholders of the Company of a
      reorganization, merger or consolidation of the Company, in each case,
      with respect to which the individuals and entities who were the
      respective beneficial owners of the Common Stock and voting securities of
      the Company immediately prior to such reorganization, merger or
      consolidation do not, following such reorganization, merger or
      consolidation, beneficially own, directly or indirectly, more than fifty
      percent (50%) of, respectively, the then outstanding shares of Common
      Stock and the combined voting power of the then outstanding voting
      securities entitled to vote generally in the election of directors, as
      the case may be, of the corporation resulting from such reorganization,
      merger or consolidation, or a complete liquidation or dissolution of the
      Company or of the sale or other disposition of all or substantially all
      of the assets of the Company.
 
 
 
 
 
 
 
 
            "Change of Control Amount" shall mean an amount equal to two
      times the sum of (i) the Base Compensation of the Executive
      that is in effect immediately prior to a Change of Control plus (ii) the
      average of the Executive's Cash Incentive Compensation payment for the
      two years prior to a Change of Control, or, if the Executive has been
      employed by the Company for less than two years, the amount of the
      Executive's last Cash Incentive Compensation payment.
 
            (b)   Change of Control Benefit.  If (i) a Change of Control has
occurred and (ii) within one year thereafter, the Executive's employment with
the Company terminates for any reason other than (1) termination by the Company
for Cause or (2) termination by the Executive for other than Company Breach,
then the Company shall pay to the Executive within thirty
(30) days of such termination a lump sum equal to the Change of
Control Amount.  The receipt of such Change of Control Amount shall be in lieu
of any right of payment that the Executive may have in connection with such
termination of employment, whether pursuant to this Agreement or otherwise.
Additionally, if the Company becomes obligated to pay the Change of Control
Amount as specified herein, then (A) all shares of restricted Common Stock then
held by the Executive (both Regular Restricted Shares and Bonus Restricted
Shares) shall cease to be subject to the restrictions imposed by the Company
under the applicable Share Award Agreements and shall be distributed to the
Executive as promptly as practicable and (B) all unvested options for Common
Stock held by the Executive shall immediately vest, and all previously vested
and newly vested stock options then held by the Executive shall remain
exercisable by the Executive or his estate (in whole or part) at any time and
from time to time for a period of one year thereafter.
 
            (c)   Adjustment of Change of Control Payment.  Notwithstanding the
foregoing, after the third anniversary of the Effective Date,  the Compensation
Committee shall have the sole and exclusive right to re-determine and adjust
the Change of Control Amount to which the Executive may be entitled upon a
Change of Control; provided, that any adjustment to the Change of Control
Amount that is made within a period of one hundred eighty
(180) days prior to the execution of a definitive agreement for
a Change of Control transaction shall be null and void.   Any adjustment to the
Change of Control Amount shall be communicated to the Executive in writing
at least ten (10) days prior to the effective date thereof.
 
      6.    Confidential Information.
 
            (a)   Acknowledgment.  The Executive recognizes and
acknowledges he will have access to, and the Company shall provide
the Executive with, confidential proprietary information of the Company,
including information regarding costs, profits, markets, sales, products, key
personnel, pricing policies, operational methods, other business methods, plans
for future developments, and other information not readily available to the
public, the disclosure of which to third parties would in each case have a
material adverse effect on the Company's Business operations ("Confidential
Information").
 
            (b)   Agreement Regarding Confidentiality.  The Executive will keep
secret, during and after the termination of his employment, all
Confidential Information and will not use or disclose Confidential
Information to anyone outside of the Company other than in the course of
performance of his duties under this Agreement, except that (i)
the Executive shall have no such obligation to the extent Confidential
Information is or becomes publicly known other than as a result of the
Executive's breach of his obligations hereunder, and (ii) the Executive
may disclose such matters to the extent required by applicable laws, or
governmental regulations or judicial or regulatory processes.
 
            (c)   Return of Records.  The Executive will deliver promptly to
the Company on termination of his employment by the Company, or at any other
time the Board may so request, all memoranda, notes, records, reports and other
documents (and all copies thereof) relating to the Company's Business that be
obtained while employed by, or otherwise serving or acting on behalf of, the
Company and that he may then possess or have under his control.
 
      7.    Noncompetition.
 
            (a)   In exchange for the Company's agreement to provide
Confidential Information to the Executive, during the Executive's
employment under this Agreement and for a period of twelve
(12) months after the Executive's termination, the Executive will not, without
the prior written approval of a majority of the members of the Board (not
including the Executive), (i) engage directly or indirectly in,
or become employed by, serve as an agent or consultant to or become an officer,
director, partner, principal or stockholder of any association, group,
partnership, person, corporation or other entity which is engaged in
a business in the United States or Canada that (A) is located in a
region of the United States or Canada in which the Company conducts its
Business and (B) competes with the Business, (ii) directly or
indirectly seek, solicit or accept for employment or retention as an
independent contractor any person who (X) was employed
or retained as an independent contractor by the Company during the
Executive's employment under this Agreement and (Y) had a level of seniority
equivalent to at least the seniority held by a district sales manager of the
Company or (iii) directly or indirectly seek, solicit or accept the
business of any person, partnership, corporation, entity, association or
group of any kind that was (1) a customer of the Company, (2) a
supplier of a type of product sold by the Company, (3) an actively solicited
prospective customer of the Company or (4) an actively solicited
prospective supplier of a type of product sold by the Company, in
each case, during the Executive's employment under this Agreement.
As long as the Executive does not engage in any other activity prohibited by
this Section 7(a), the Executive's ownership of less than 2% of the issued and
outstanding stock of any corporation whose stock is traded on an established
national securities market shall not constitute an activity prohibited under
this Section 7(a).
 
            (b)   Specific Performance.  If the Executive breaches or threatens
to commit a breach of the provisions of Sections 6 or 7 hereof, the Company
shall have the right to have such Restrictive Covenants specifically enforced
by any court of competent jurisdiction, it being agreed that any breach or
threatened breach (if carried out) of the Restrictive Covenants would
cause irreparable injury to the Company and that money damages would not
provide an adequate remedy for such injury.  Accordingly, the Company shall be
entitled to injunctive relief to enforce the terms of the Restrictive Covenants
and to restrain the Executive or any of its Affiliates from any violation
thereof, without the need to post any type of bond or other form of security in
connection with such relief and enforcement.  The rights and remedies set forth
in this Section 7(b) shall be independent of all other others rights and
remedies available to the Company for a breach of the Restrictive Covenants,
and shall be severally enforceable from, in addition to, and not in lieu of,
any other rights and remedies available at law or in equity.
Notwithstanding the foregoing, if the breach or threatened breach by the
Executive of the Restrictive Covenants is of the type that can be cured by the
Executive, the Company shall provide the Executive with five (5) days prior
written notice before seeking such specific performance, and the Company shall
not seek such relief if the Executive, within such five (5) day period, fully
cures any such breach or delivers a sworn written affidavit to the Company
stating that he will not commit such threatened breach, as applicable.
 
 
 
 
 
      8.Miscellaneous.
 
            (a)   Integration; Amendment.  This Agreement constitutes the
entire agreement among the parties hereto with respect to the matters set forth
herein and supersedes and renders of no force and effect all prior
understandings and agreements among the parties with respect to the matters set
forth herein.  No amendments or additions to this Agreement shall be binding
unless in writing and signed by the Executive and the Company.
 
            (b)   Assignment.  The Company may assign this Agreement
to any successor by operation of law or purchaser of all or substantially all
of the assets of the Company.  The Company shall, following any permitted
assignment, remain liable and responsible for all obligations of the Company
hereunder.  The Executive may not assign this Agreement or any right or
interest therein, whether by operation of law or otherwise, without the prior
written consent of the Company.
 
            (c)   Severability.  If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable law or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited, or invalid, but the remainder of this Agreement shall not be
invalid and shall be given full force and effect so far as possible.
 
            (d)   Waivers.  The failure or delay of any party at any time to
require performance by any other party of any provision of this Agreement, even
if known, shall not affect the right of such party to require performance of
that provision or to exercise any right, power, or remedy hereunder, and any
waiver by any party of any breach of any provision of this Agreement shall not
be construed as a waiver of any continuing or succeeding breach of such
provision, a wavier of the provision itself, or a waiver of any right, power,
or remedy under this Agreement.  No notice to or demand on any party in any
case shall, of itself, entitle such party to any other or further notice or
demand in similar or other circumstances.
 
            (e)   Power and Authority.  The Company represents and warrants to
the Executive that it has the requisite corporate power to enter into this
Agreement and perform the terms hereof; and that the execution, delivery and
performance of this Agreement by it has been duly authorized by all appropriate
corporate action.
 
            (f)   Burden and Benefit.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, personal and legal representatives, successors and, subject to
Section 8(b) above, assigns.  Any provision of this Agreement which by its
terms requires performance beyond the term of this Agreement shall survive the
term of this Agreement in accordance with the terms of such provision.
 
            (g)   Time is of the Essence.  Time is of the essence for all
purposes of this Agreement.
 
            (h)  Arbitration.  Any dispute or controversy arising out of
or relating to this Agreement shall be settled finally and exclusively by
arbitration in accordance with the rules of the American Arbitration
Association then in effect.  Such arbitration shall be conducted in Fort
Worth, Texas by a sole arbitrator appointed by the American
Arbitration Association in accordance with its rules and any finding by such
arbitrator shall be final and binding upon the parties.  Judgment upon any
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof, and the parties consent to the jurisdiction of the courts
of the State of Texas for this purpose.  Nothing contained in this
Section 8(h) shall be construed to preclude the Company or the
Executive from obtaining injunctive or other equitable relief to secure
specific performance or to otherwise prevent a breach or contemplated breach of
this Agreement.  In the event of arbitration or other legal action, the
arbitrator or a court of competent jurisdiction may award attorneys' fees and
costs to the prevailing party.
 
            (i)   Governing Law; Headings.  This Agreement and its
construction, performance, and enforceability shall be governed by, and
construed in accordance with, the laws of the State of Texas.  Headings and
titles herein are included solely for convenience and shall not affect the
interpretation of this Agreement.
 
            (j)   Notices.  All notices called for under this Agreement shall
be in writing and shall be deemed given upon receipt if delivered personally or
by facsimile transmission and followed promptly by mail, or mailed by
registered or certified mail (return receipt requested), postage prepaid, to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice; provided that notices of a change of address
shall be effective only upon receipt thereof):
 
            If to the Executive:
 
            James D. Carreker
 
            2100 McKinney Avenue
            Suite 1460
            Dallas, Texas 75201
            Facsimile:
 
            If to the Company:
 
            The Bombay Company, Inc.
            550 Bailey Avenue
            Fort Worth, 76107-2111
            Attn: General Counsel
            Facsimile:  817-339-3739
 
            Any notice delivered to the party hereto to whom it is addressed
shall be deemed to have been given and received on the day it was received;
provided, however, that if such day is not a business day then the notice shall
be deemed to have been given and received on the business day next following
such day.  Any notice sent by facsimile transmission shall be deemed to have
been given and received on the next business day following the day of
transmission.
 
            (k)   Counterparts.  This Agreement may be executed in one or more
counterparts, each of which counterparts shall be deemed to be an original, and
all such counterparts shall constitute one and the same agreement.
 
            (l)   No Strict Construction.  The parties hereto confirm that they
have each participated in the negotiation and preparation of this Agreement and
that this Agreement represents the joint agreement and understanding of the
parties.  The language used in this Agreement has been mutually chosen by the
parties hereto, and no rule of strict construction construing ambiguities
against any party hereto shall be applied.
 
                                ***************
 
 
 
 
 
 
      IN WITNESS WHEREOF, the parties have duly executed this Agreement, or
caused this Agreement to be duly executed on their behalf, as of the date first
above written.
 
 
                                           THE BOMBAY COMPANY, INC.
 
 
                                           By:     /S/MICHAEL J. VEITENHEIMER
                                           Name:   MICHAEL J. VEITENHEIMER
                                           Title:  VICE PRESIDENT
 
 
 
 
                                           /S/JAMES D. CARREKER
                                           James D. Carreker
 
 
 
 
 
</TEXT>
</DOCUMENT>