<PAGE>

                                                                 Exhibit 10 (e)
                            ALBERTO-CULVER COMPANY

                            1994 STOCK OPTION PLAN
                          FOR NON-EMPLOYEE DIRECTORS

                     (as amended through October 24, 2002)

                               -----------------

   1. Purpose. The principal purpose of the 1994 Stock Option Plan for
Non-Employee Directors (the "Director Plan") is to benefit Alberto-Culver
Company (the "Company") and its subsidiaries by offering its non-employee
directors an opportunity to become holders of the Company's Class A common
stock, par value $.22 per share, in order to enable them to represent the
viewpoint of other stockholders of the Company more effectively and to
encourage them to continue serving as directors of the Company.

   2. Administration. The Director Plan shall be administered by the Board of
Directors, whose interpretation of the terms and provisions of the Director
Plan shall be final, conclusive and binding. No member of the Board of
Directors shall be liable for any action or determination made in good faith
with respect to the Director Plan or any option thereunder.

   3. Eligibility. Options shall be granted under this Director Plan only to
members of the Board of Directors who are not officers or employees of the
Company or any of its subsidiaries.

   4. Granting of Options.

   (a) An option to purchase 7,500 shares of Class A common stock from the
Company shall be automatically granted by the Board of Directors, without
further action required, to each director of the Company upon his or her
initial election or appointment as a director of the Company and to each person
who is an incumbent director on October 27, 1994 ("Initial Grant"); provided
such director is eligible at that time under the terms of paragraph 3 of this
Director Plan. No person may be granted more than one option pursuant to this
paragraph 4(a) of this Director Plan. In the event the Stockholders of the
Company approve the Alberto-Culver Company 2003 Stock Option Plan For
Non-Employee Directors (the "2003 Director Plan") at the Annual Meeting of
Stockholders to be held on January 23, 2003, or any adjournment thereof (the
"2003 Annual Meeting"), no more stock options shall be granted under this
paragraph 4(a) of this Director Plan. In the event that Stockholders do not
approve the 2003 Director Plan at the 2003 Annual Meeting, stock option grants
may continue pursuant to this paragraph 4(a).

   (b) An option to purchase 2,500 shares of Class A common stock from the
Company shall be automatically granted by the Board of Directors, without
further action required, at every Annual Meeting of the Stockholders of the
Company commencing on the Annual Meeting of the Stockholders of the Company
scheduled to occur in January, 2002, to each director of the Company
("Subsequent Grant"); provided such director is eligible at that time under the
terms of paragraph 3 of this Director Plan. No director who has received an
Initial Grant shall be entitled to receive a

<PAGE>

Subsequent Grant during the same fiscal year of the Company. In the event the
Stockholders of the Company approve the 2003 Director Plan at the 2003 Annual
Meeting, no more stock options shall be granted under this paragraph 4(b) of
this Director Plan. In the event that Stockholders do not approve the 2003
Director Plan at the 2003 Annual Meeting, stock option grants may continue
pursuant to this paragraph 4(b).

   (c) An aggregate of 210,000 shares of Class A common stock shall be
available under this Director Plan. Such number of shares, and the number of
shares subject to options outstanding under this Director Plan, shall be
subject in all cases to adjustment as provided in paragraph 10. Shares subject
to options may be made available from unissued or treasury shares of stock. If
any option granted under the Director Plan shall terminate or be surrendered or
expire unexercised, in whole or in part, the shares so released from such
option may be made the subject of additional options granted under the Director
Plan. In the event the Stockholders of the Company approve the 2003 Director
Plan at the 2003 Annual Meeting, no more stock options shall be granted under
this Director Plan. In the event that Stockholders do not approve the 2003
Director Plan at the 2003 Annual Meeting, stock option grants may continue
pursuant to this Director Plan.

   (d) Nothing contained in this Director Plan or in any option granted
pursuant hereto shall confer upon any optionee any right to continue serving as
a director of the Company or interfere in any way with any right of the Board
of Directors or stockholders of the Company to remove such director pursuant to
the certificate of incorporation or by-laws of the Company or applicable law.

   5. Option Price. Subject to adjustment under paragraph 10, the option price
shall be the Fair Market Value (as defined below) of the Company's Class A
common stock on the date the option is granted. For purposes of the Director
Plan, "Fair Market Value" shall mean the average of the high and low
transaction prices of a share of Class A common stock or Class B common stock
of the Company (the "Class B common stock"), as the case may be, as reported in
the New York Stock Exchange Composite Transactions on the date as of which such
value is being determined or, if there shall be no reported transactions for
such date, on the next preceding date for which transactions were reported.

   6. Duration of Options, Increments and Extensions. Subject to the provisions
of paragraph 8, each option shall be for a term of ten (10) years. Subject to
the provisions of paragraph 11, each option shall become exercisable with
respect to 25% of the total number of shares on the day preceding the one (1)
year anniversary of the date of grant and with respect to an additional 25% at
the end of each twelve-month period thereafter during the succeeding three
years.

   7. Exercise of Option. An option may be exercised by giving written notice
to the Company, attention of the Secretary, specifying the number of shares of
Class A common stock to be purchased, accompanied by the full purchase price
for such number of shares, (i) in cash, (ii) by check, (iii) by delivery of
previously owned shares of Class A common stock, (iv) by delivery of previously
owned shares of Class B common stock or (v) by a combination of these methods
of payment. However, under no circumstances may any optionee deliver previously
owned shares of Class A common stock or Class B common stock obtained from the
exercise of options under any option plan of the Company during the six months
immediately preceding the exercise date. The per share value of the Class A
common stock and/or Class B common stock delivered in payment of the option
price shall be the Fair Market Value of the Class A common stock and/or Class B
common stock on the date

                                      2

<PAGE>

of exercise.

   8. Termination--Exercise Thereafter.

   (a) If an optionee dies without having fully exercised his or her options,
the executors or administrators of his or her estate or legatees or
distributees shall have the right during the one (1) year period following his
or her death (but not after the expiration of the term of any such options) to
exercise such options in whole or in part but only to the extent that the
optionee could have exercised each such option at the date of his or her death.

   (b) If any optionee resigns from the Board of Directors due to disability or
retirement, the optionee's options shall terminate three (3) months after his
or her resignation (but not after the expiration of the term of any such
option) and may be exercised only to the extent that such optionee could have
exercised each such option at the date of his or her resignation.

   (c) If the optionee's termination from service on the Board of Directors is
for any reason other than death, disability or retirement, the optionee's
options shall terminate upon said termination; provided, however, that if such
termination occurs following a Change in Control (as such term is defined in
paragraph 11(b) hereof), the optionee's options shall terminate three (3)
months after his or her termination (but not after the expiration of the term
of any such option) and may be exercised to the extent that such optionee could
have exercised each such option at the date of his or her termination.

   9. Non-Transferability of Options. No option shall be transferable by the
optionee otherwise than by will or the laws of descent and distribution, and
each option shall be exercisable during an optionee's lifetime only by the
optionee.

   10. Adjustment upon Change in Stock. Each option, the number and kind of
shares subject to future options and the number of shares subject to options
that shall be automatically granted by the Board of Directors under the
Director Plan may be adjusted, as may be determined to be equitable in the sole
and absolute discretion of the Board of Directors, in the event there is any
change in the outstanding Class A common stock, or any event that could cause a
change in the outstanding Class A common stock, including, without limitation,
by reason of a stock dividend, recapitalization, reclassification, issuance of
Class A common stock, issuance of rights to purchase Class A common stock,
issuance of securities convertible into or exchangeable for Class A common
stock, merger, consolidation, stock split, reverse stock split, spin-off,
combination, exchange or conversion of shares, or any other similar type of
event. The Board of Director's determination of any adjustment pursuant to this
paragraph 10 shall be final, conclusive and binding.

   11. Change in Control

   (a) (1) Notwithstanding any provision of the Director Plan, in the event of
   a Change in Control, all outstanding options shall immediately be
   exercisable in full and shall be subject to the provisions of paragraph
   11(a)(2) or 11(a)(3), to the extent that either such paragraph is applicable.

      (2) Notwithstanding any provision of the Director Plan, in the event of a
   Change in

                                      3

<PAGE>

   Control in connection with which the holders of shares of the Company's
   Class A common stock receive shares of common stock that are registered
   under Section 12 of the Securities Exchange Act of 1934 (the "Exchange
   Act"), all outstanding options shall immediately be exercisable in full and
   there shall be substituted for each share of the Company's Class A common
   stock available under the Director Plan, whether or not then subject to an
   outstanding option, the number and class of shares into which each
   outstanding share of the Company's Class A common stock shall be converted
   pursuant to such Change in Control. In the event of any such substitution,
   the purchase price per share of each option shall be appropriately adjusted
   by the Board of Directors, such adjustments to be made without an increase
   in the aggregate purchase price.

      (3) Notwithstanding any provision in the Director Plan, in the event of a
   Change in Control in connection with which the holders of the Company's
   Class A common stock receive consideration other than shares of common stock
   that are registered under Section 12 of the Exchange Act, each outstanding
   option shall be surrendered to the Company by the holder thereof, and each
   such option shall immediately be cancelled by the Company, and the holder
   shall receive, within ten (10) days of the occurrence of such Change in
   Control, a cash payment from the Company in an amount equal to the number of
   shares of the Company's Class A common stock then subject to such option,
   multiplied by the excess, if any, of (i) the greater of (A) the highest per
   share price offered to stockholders of the Company in any transaction
   whereby the Change in Control takes place or (B) the Fair Market Value of a
   share of the Company's Class A common stock on the date of occurrence of the
   Change in Control over (ii) the purchase price per share of the Company's
   Class A common stock subject to the option. The Company may, but is not
   required to, cooperate with any person who is subject to Section 16 of the
   Exchange Act to assure that any cash payment in accordance with the
   foregoing to such person is made in compliance with Section 16 of the
   Exchange Act and the rules and regulations thereunder providing for an
   exemption from Section 16(b) of the Exchange Act.

   (b) "Change in Control" means:

      (1) The occurrence of any one or more of the following events:

          (A) The acquisition by any individual, entity or group (a "Person"),
       including any "person" within the meaning of Section 13(d)(3) or
       14(d)(2) of the Exchange Act of beneficial ownership within the meaning
       of Rule 13d-3 promulgated under the Exchange Act of both (x) 20% or more
       of the combined voting power of the then outstanding securities of the
       Company entitled to vote generally in the election of directors (the
       "Outstanding Company Voting Securities") and (y) combined voting power
       of Outstanding Company Voting Securities in excess of the combined
       voting power of the Outstanding Company Voting Securities held by the
       Exempt Persons (as such term is defined in paragraph 11(c)); provided,
       however, that a Change in Control shall not result from an acquisition
       of Company Voting Securities:

                                      4

<PAGE>

             (i) directly from the Company, except as otherwise provided in
          paragraph 11(b)(2)(A);

             (ii) by the Company, except as otherwise provided in paragraph
          11(b)(2)(B);

             (iii) by an Exempt Person;

             (iv) by an employee benefit plan (or related trust) sponsored or
          maintained by the Company or any corporation controlled by the
          Company; or

             (v) by any corporation pursuant to a reorganization, merger or
          consolidation involving the Company, if, immediately after such
          reorganization, merger or consolidation, each of the conditions
          described in clauses (i) and (ii) of paragraph 11(b)(1)(C) shall be
          satisfied.

          (B) The cessation for any reason of the members of the Incumbent
       Board (as such term is defined in paragraph 11(d)) to constitute at
       least a majority of the Board of Directors.

          (C) Consummation of a reorganization, merger or consolidation unless,
       in any such case, immediately after such reorganization, merger or
       consolidation:

             (i) more than 60% of the combined voting power of the then
          outstanding securities of the corporation resulting from such
          reorganization, merger or consolidation entitled to vote generally in
          the election of directors is then beneficially owned, directly or
          indirectly, by all or substantially all of the individuals or
          entities who were the beneficial owners of the combined voting power
          of all of the Outstanding Company Voting Securities immediately prior
          to such reorganization, merger or consolidation; and

             (ii) at least a majority of the members of the board of directors
          of the corporation resulting from such reorganization, merger or
          consolidation were members of the Incumbent Board at the time of the
          execution of the initial agreement or action of the Board of
          Directors providing for such reorganization, merger or consolidation.

          (D) Consummation of the sale or other disposition of all or
       substantially all of the assets of the Company other than (x) pursuant
       to a tax-free spin-off of a subsidiary or other business unit of the
       Company or (y) to a corporation with respect to which, immediately after
       such sale

                                      5

<PAGE>

       or other disposition:

             (i) more than 60% of the combined voting power of the then
          outstanding securities thereof 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 of the combined voting power
          of all of the Outstanding Company Voting Securities immediately prior
          to such sale or other disposition; and

             (ii) at least a majority of the members of the board of directors
          thereof were members of the Incumbent Board at the time of the
          execution of the initial agreement or action of the Board of
          Directors providing for such sale or other disposition.

          (E) Approval by the stockholders of the Company of a plan of complete
       liquidation or dissolution of the Company.

      (2) Notwithstanding the provisions of paragraph 11(b)(1):

          (A) no acquisition of Company Voting Securities shall be subject to
       the exception from the definition of Change in Control contained in
       clause (i) of paragraph 11(b)(1)(A) if such acquisition results from the
       exercise of an exercise, conversion or exchange privilege unless the
       security being so exercised, converted or exchanged was acquired
       directly from the Company; and

          (B) for purposes of clause (ii) of paragraph 11(b)(1)(A), if any
       Person (other than the Company, an Exempt Person or any employee benefit
       plan (or related trust) sponsored or maintained by the Company or any
       corporation controlled by the Company) shall, by reason of an
       acquisition of Company Voting Securities by the Company, become the
       beneficial owner of (x) 20% or more of the combined voting power of the
       Outstanding Company Voting Securities and (y) combined voting power of
       Outstanding Company Voting Securities in excess of the combined voting
       power of the Outstanding Company Voting Securities held by the Exempt
       Persons, and such Person shall, after such acquisition of Company Voting
       Securities by the Company, become the beneficial owner of any additional
       Outstanding Company Voting Securities and such beneficial ownership is
       publicly announced, such additional beneficial ownership shall
       constitute a Change in Control.

   (c) "Exempt Person" (and collectively, the "Exempt Persons") means:

      (1) Leonard H. Lavin or Bernice E. Lavin;

                                      6

<PAGE>

      (2) any descendant of Leonard H. Lavin and Bernice E. Lavin or the spouse
   of any such descendant;

      (3) the estate of any of the persons described in paragraph 11(c)(1) or
   (2);

      (4) any trust or similar arrangement for the benefit of any person
   described in paragraph 11(c)(1) or (2); or

      (5) the Lavin Family Foundation or any other charitable organization
   established by any person described in paragraph 11(c)(1) or (2).

   (d) "Incumbent Board" means those individuals who, as of October 24, 2002,
constitute the Board of Directors, provided that:

      (1) any individual who becomes a director of the Company subsequent to
   such date whose election, or nomination for election by the Company's
   stockholders, was approved either by the vote of at least a majority of the
   directors then comprising the Incumbent Board or by the vote of at least a
   majority of the combined voting power of the Outstanding Company Voting
   Securities held by the Exempt Persons shall be deemed to have been a member
   of the Incumbent Board; and

      (2) no individual who was initially elected as a director of the Company
   as a result of an actual or threatened solicitation by a Person other than
   the Board or the Exempt Persons for the purpose of opposing a solicitation
   by any other Person with respect to the election or removal of directors, or
   any other actual or threatened solicitation of proxies or consents by or on
   behalf of any Person other than the Board of Directors or the Exempt Persons
   shall be deemed to have been a member of the Incumbent Board.

   12.   Amendment of Director Plan. The Board of Directors may amend or
discontinue this Director Plan at any time; provided, however, that no such
amendment or discontinuance shall, without the approval of the stockholders
except as provided in paragraph 10, (i) increase the total number of shares for
which options may be granted to eligible directors pursuant to this Director
Plan or (ii) change the purchase price. In addition, no amendment or
discontinuance of the Director Plan shall adversely affect or impair any option
previously granted, without the consent of the optionee.

   In the event the stockholders of the Company approve the 2003 Director Plan
at the 2003 Annual Meeting, the Board of Directors may not amend this Director
Plan to allow for the grant of stock options under this Director Plan after the
date of the 2003 Annual Meeting without the approval of stockholders.

                                      7