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                                                                    EXHIBIT 10.5

                             STRICTLY CONFIDENTIAL

                              EMPLOYMENT AGREEMENT
                                    BETWEEN
                             DOANE PRODUCTS COMPANY
                                      AND
                              F. DONALD COWAN, JR.

     THIS EMPLOYMENT AGREEMENT dated as of August 3, 1998 is made between Doane
Products Company (the "Company"), a Delaware corporation, and F. Donald Cowan,
Jr. (the "Executive"). This Agreement is made with reference to the following
facts and objectives:

                                R E C I T A L S

     A. The Executive shall be the Senior Vice President, Operations of the
Company.

     B. The Executive acknowledges that the services to be performed by him
under this Agreement are of a special and unique character; the business of the
Company is currently international in scope and the Company has plans to
continue to expand its business throughout the world; and the Company competes
with other persons that are or could be located in any part of the world; and
in order to assure the Company that the Company will retain its value and the
Company's business as a going concern, it is necessary that the Executive
undertake not to utilize his special knowledge of the Company, its business and
its relationships with customers and suppliers to compete with the Company if
the Executive were to leave the Company.

     C. The Executive further acknowledges that, during his employment by
the Company, he will occupy a position of trust and confidence with the Company
and, during such employment, the Company will compensate him, among other
purposes, to develop and preserve customer relationships and other goodwill
exclusively for the Company's benefit and that, as a result, he will develop
customer relationships and goodwill that are valuable and important to the
Company, and will become familiar with the Company's trade secrets, including,
without limitation, its profit margins, customer preferences and requirements,
and with other proprietary and confidential information concerning the Company
and its business.

     D. The Executive further acknowledges that, throughout his employment
under this Agreement, he is expected to continue to occupy a position of trust
and confidence with the Company. In return, the Company will compensate him,
among other purposes, to develop and preserve customer relationships and
goodwill exclusively for the Company's benefit, which will be valuable and
important to the Company.

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Further, he will likely be familiar with the Company's trade secrets,
including, without limitation, its profit margins, customer preferences and
requirements, and with other confidential and proprietary information
concerning the Company and its business.

     E. The Executive further acknowledges that the use by him for his own
benefit or that of others of such goodwill, trade secrets or proprietary and
confidential information or the solicitation of and/or doing business with any
of the Company's customers and potential customers would have a material
adverse effect on the Company and its business, and would place the Company at
a substantial competitive disadvantage.

     F. The Executive further acknowledges that the agreements and
covenants contained in this Agreement, and, in particular, sections 6
(Non-Competition Covenants) and 7 (Confidentiality and Proprietary
Information), are essential to protect the Company and the goodwill of the
Company's business, are a condition precedent to the Company's willingness to
enter this Agreement and to pay the consideration set forth in this Agreement,
and are necessary and reasonable in light of the particular business of the
Company, his knowledge thereof and the services he will perform under this
Agreement.

                   THE PARTIES ACCORDINGLY AGREE AS FOLLOWS:

                                   AGREEMENT

     1. EMPLOYMENT     The Company  hereby  agrees to employ the  Executive,
and the Executive hereby accepts employment by the Company, on the terms and
conditions of this Agreement.

    2.  EMPLOYMENT TERM

        (a) Subject to section 9 (Termination of Employment), the term of the
Executive's employment under this Agreement begins on the date of this
Agreement and ends on the third anniversary of that date; provided, however,
that, commencing on the third anniversary of the date of this Agreement and
each subsequent anniversary, the term shall be extended for an additional one
year period unless either the Executive or the Company gives the other party
written notice at least thirty (30) days before such anniversary that this
Agreement shall terminate on the then scheduled expiration date (the
"non-extension notice"). If such non-extension notice is given, this Agreement
shall automatically terminate on such expiration date.

        (b) The actual term of the Executive's employment under this,
including any extension, continuation or earlier termination of the original
term, is referred to in this Agreement as the "employment term."

     3. RESPONSIBILITIES      During the employment term, the Executive shall
serve as Senior Vice President, Operations or in any other position or capacity
to which he may from time to time be elected or appointed, and shall perform
such services for the Company as are reasonably required by the Company, and as
may be required by

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virtue of the offices and positions held by the Executive. The Executive agrees
that, as a part of his duties under this Agreement, he may be required from
time to time to perform services for affiliates of the Company. The Executive
will not be required to relocate his residence outside the continental United
States, but will be available for such travel as his responsibilities under
this Agreement may reasonably require. The Executive shall devote his full time
and best efforts to the performance of all responsibilities to the Company and
its affiliates and to further their respective businesses and interests.

     4. COMPENSATION

        (a) The Company agrees to pay the Executive throughout the employment
term an initial base salary at the rate of $215,000.00 per annum (as adjusted
pursuant to the provision of this paragraph 4(a)) (the "base salary") payable
in equal installments in accordance with Company payroll practices from time to
time in effect. Executive's base salary will be reviewed and may be adjusted
annually by the president of the Company or by the board of directors of the
Company (or the compensation committee thereof) (the "board"), after taking
into consideration the recommendations of the president of the Company,
provided that Executive's base salary may not be decreased below his initial
base salary.

        (b) Subject to Section 9 (Termination of Employment), the Company
agrees to pay the Executive throughout the employment term an annual bonus
(the "annual bonus") calculated pursuant to Exhibit A attached hereto. The
amount of the annual bonus payable to the Executive for 1998 shall be
calculated as if the Executive were employed by the Company for the entire
year, and, except as set forth in Section 9 (Termination of Employment), the
amount of bonus payable to the Executive for other partial years of employment
shall be prorated for the portion of a year the Executive is employed by
multiplying the annual bonus determined pursuant to Exhibit A by a fraction
with a numerator equal to the number of days of the fiscal year during which
the Executive was employed, and with a denominator of 365.

     5. OTHER EXECUTIVE BENEFITS

        (a) The Executive shall, during the employment term, be eligible to
participate in such 401(k), profit sharing, bonus, life insurance,
hospitalization and major medical and other employee benefit plans of the
Company in effect from time to time, to the extent that he is eligible under
and complies with the terms of those plans, but the allocation of benefits
under any plan that provides that allocations thereunder shall be in the
discretion of the board shall be as determined from time to time solely by the
board in its discretion.

                  (b) The Executive shall also participate in the Company's
paid vacation plan but in no event shall Executive's annual entitlement be less
than 4 weeks. Vacation not used by the end of a year shall be forfeited and
shall not be eligible to be carried over to another year or eligible for
reimbursement except as otherwise provided by Company policies.

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     6. NON-COMPETITION COVENANTS      Throughout the employment term and
commencing with the date of this Agreement and ending on the later of the end
of the period that Executive receives severance pay from the Company pursuant
to Section 9 or the second anniversary of the date on which the Executive
ceases to be employed by the Company for any reason whatsoever, (the
"Non-Compete Period"), the Executive promises and agrees that he will not: (a)
directly or indirectly assist in, engage in, have any financial interest in, or
participate in any way in, as an owner, partner, employee, agent, board member,
or shareholder, any business that involves, in whole or in part, the design,
manufacture, distribution or sale of dry pet foods (or any other business in
which the Company may engage or begin preparation to engage during the
employment term) or make preparation with any person to do any of the
foregoing; provided, however, that the Executive may own, solely as an
investment, up to 1.0% of any class of securities of any person if such
securities are listed on any national or regional securities exchange; (b) call
upon or have any contact with any person or any successor in interest to any
person who was at any time during the Executive's last three years of
employment with the Company, a customer of the Company, or call upon or have
any contact with any person or any successor in interest to any person who is a
prospective customer of the Company, and with whom the Executive dealt, or on
whose account the Executive worked, at any time during the Executive's last
three years of employment with the Company, for the purpose of (i) diverting
any business of such person from the Company, or (ii) selling or offering to
sell to any such customer any product or service that is of the same general
type or that performs similar functions as any product or service which has
been sold, provided or offered for sale by the Company at any time during the
Executive's last three years of employment with the Company, (c) solicit any
employee of the Company to terminate his or her employment with the Company or
employ any such individual during his or her employment with the Company and
for a period of twelve months after such individual terminates his or her
employment with the Company, or (d) without the prior written consent of the
Company's board of directors, acquire or discuss the acquisition of any
ownership interest in or warrant or right to acquire any such interest, or
acquire any employment or other pecuniary benefit from any person that, at the
time, is a prospective candidate for or was a party to a control transaction.
The term "control transaction" means any transaction or series of transactions
whereby the Company or a controlling interest in the Company is acquired by
another Person (whether by purchase, merger, consolidation or sale of all or
substantially all of the Company's consolidated assets). The Executive
acknowledges and agrees that the consideration and benefits to be provided to
the Executive under this Agreement have been bargained and negotiated in
exchange for, and in consideration of, Executive's agreement to abide by the
terms and provisions of this section 6 and section 7 (Confidentiality and
Proprietary Information). The Executive acknowledges and agrees that all of the
Executive's duties and obligations under this section 6 shall survive the
expiration or termination of the Executive's employment with the Company,
regardless of the causes therefor.

     7. CONFIDENTIALITY AND PROPRIETARY INFORMATION      In addition to any
common-law restriction upon the Executive's use, disclosure or exploitation of
confidential, proprietary or secret information of the Company, the Executive
covenants

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and agrees that, without prior written consent of the Company, he will not at
any time during or after the employment term use for himself or disclose to or
use for any other person, directly or indirectly, any secret, confidential or
proprietary information of the Company, including, without limitation, the
Company's processes, formulas, techniques, customer identities, preferences,
requirements, reports and other sensitive customer information, servicing
methods, profit margins, analyses, employee, vendor and supplier information,
business or marketing plans or strategies, financial data and presentation or
sales materials, technologies, computer programs, software, designs and
inventions (collectively, the "confidential information"); provided, however,
that the term confidential information does not include or refer to any
information that is in the public domain (other than by a breach of this
Agreement). The Executive acknowledges that the confidential information is
vital, sensitive, confidential and proprietary to the Company. The Executive
covenants and agrees that all files, reports, lists, materials, records,
documents, notes, memoranda, specifications, product or other formulas,
equipment and other items, and any originals, copies, recordings, abstracts or
notes thereof, relating to the confidential information or the Company business
that the Executive is or was either provided, prepares or prepared himself,
uses or used or simply acquires or acquired during this employment with the
Company (either before or during the employment term), are and shall remain the
sole and exclusive property of the Company and shall be immediately returned to
the Company at any time upon demand and, in all events, immediately at the end
of the employment term. The Executive acknowledges and agrees that all of the
Executive's duties and obligations under this section 7 shall survive the
expiration or termination of the Executive's employment with the Company,
regardless of the cause therefor.

     8. REMEDIES FOR BREACH      In the event of a breach or threatened breach
of any of the Executive's duties and obligations under sections 6
(Non-Competition Covenants) or 7 (Confidentiality and Proprietary Information),
the Company shall be entitled, in addition to any other legal or equitable
remedies the Company may have in that connection (including any right to
damages that the Company may suffer), to a temporary, preliminary, and/or
permanent injunction restraining such breach or threatened breach. The
Executive hereby expressly acknowledges that the harm that might result to the
Company's goodwill or its relationships with customers, or as a result of the
disclosure or use of the confidential information, is largely irreparable. The
Executive specifically agrees that, in the event there is a question as to the
enforceability of sections 6 (Non-Competition Covenants) or 7 (Confidentiality
and Proprietary Information), the Executive will not engage in any conduct
inconsistent with or contrary to either of such sections until after the
question has been resolved by a non-appealable final judgement.

     9. TERMINATION OF EMPLOYMENT

          (a) The employment term and the Executive's employment by the Company
shall terminate: (i) upon the death of the Executive; (ii) upon the disability
of the Executive (as defined in section 9(b)(2)) upon thirty (30) days prior
written notice given by the Company to the Executive; (iii) for cause (as
defined in section 9(b)(1)),

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immediately upon the giving of written notice thereof by the Company to the
Executive or at such later time as the notice may specify; (iv) without cause,
upon not less than thirty (30) days prior written notice given by the Company
to the Executive, or (v) voluntarily by the Executive upon not less than thirty
(30) days prior written notice given to the Company by the Executive.

          (b)      In this section 9:

                           (1) "Cause" means; (a) the Executive has been
                           indicted for or convicted of a felony; (b) the
                           commission of any act by Executive constituting
                           financial dishonesty against the Company (including
                           fraud or embezzlement); (c) gross dereliction of
                           duty to the Company (other than by reason of death
                           or disability) after Executive has been advised by
                           the board of directors or the Company's president of
                           any such dereliction of duty (whether of the same or
                           similar nature) and has been given an opportunity to
                           correct his performance; (d) commission of an act
                           involving moral turpitude which (i) brings the
                           Company into public disrepute or disgrace, or (ii)
                           causes material injury to the customer relations,
                           operations or the business prospects of the Company;
                           (e) the repeated refusal or failure by Executive to
                           follow the lawful directives of the board of
                           directors or the president of the Company; or (f)
                           the material breach by Executive of the provisions
                           of this Agreement.

                           (2) "Disability" refers to any circumstances in
                           which the Executive, by reason of illness,
                           incapacity or other disability, has failed to
                           perform his duties or fulfill his obligations under
                           this Agreement for a cumulative total of 180 days in
                           any 12-month period.

          (c) Upon the termination of the Executive's employment under
the Agreement, the employment term shall end and all rights of the Executive
under this Agreement shall terminate, except that the Executive shall
nonetheless be entitled to receive the following:

                           (1) If the termination occurs by reason of the death
                           or disability of the Executive, the Executive shall
                           be entitled to receive the base salary accrued
                           through the date of termination and annual bonus
                           prorated through the date of termination.

                           (2) If the termination is made by the Company
                           without cause, or as a result of the Company
                           delivering a non-extension notice (but not as a
                           result of the Executive delivering a non-extension
                           notice to the Company), the Executive shall be
                           entitled to receive severance pay equivalent to his
                           base salary and annual bonus, if

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                           and as each would have been payable if the Executive
                           had not been so terminated, for the period commencing
                           on the first day after the date of termination and
                           terminating on the second anniversary of the date on
                           which Executive ceases to be employed by the Company.
                           With respect to the annual bonus, for the year in
                           which the termination of employment occurred, the
                           Executive shall receive the annual bonus the
                           Executive would have been entitled to receive if the
                           Executive had remained employed for the entire year,
                           and for the last calendar year in which the
                           Executive is receiving severance payments, the
                           Executive shall receive a pro rata portion of the
                           annual bonus the Executive would have been entitled
                           to receive if the Executive had remained employed
                           for the entire year with such pro rata portion being
                           equal to a fraction with a numerator equal to the
                           number of days of the fiscal year during which the
                           Executive receives severance pay and with a
                           denominator of 365.

                           (3) If the termination is made by the Company for
                           cause, or voluntarily by Executive, the Executive
                           shall be entitled to receive his base salary through
                           the date of termination. If any termination for
                           cause made by the Company is ever ultimately
                           determined by a court, agency or other tribunal to
                           have been without cause, then the Company's sole
                           liability under the Agreement or otherwise at law or
                           in equity shall be to pay the Executive those
                           amounts that would have otherwise been paid to the
                           Executive under section 9(c)(2) (Termination of
                           Employment, without cause) and the reasonable
                           attorney's fees and costs incurred by the Executive
                           in successfully obtaining this determination from
                           the court, agency or other tribunal.

                           (4) To the extent permitted by law or group
                           insurance plans maintained for the Company's
                           employees, Executive will be entitled to continue
                           coverage under any health, disability and life
                           insurance program during the period Executive is
                           receiving severance payments in accordance with
                           paragraphs 9(c)(1), (2) or (3), at no cost to the
                           Executive. The Executive's rights will continue
                           under benefit programs that, by their own terms or
                           by law, extend beyond the date of termination or
                           continued coverage provided for in the preceding
                           sentence, including, without limitation, health care
                           under COBRA, 401(k), stock purchase or stock option
                           agreements, and non-qualified salary continuation
                           agreements.

     10.  NOTICE     Any notice required or permitted to be given under this
agreement must be in writing and is effectively given:

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          (1) To the Company, when signed by the Executive and delivered in
              person to the chairman of the board, president, or secretary
              (excluding the Executive) of the Company, or, one day after the
              date sent by national commercial courier for next day delivery,
              or two days after the date mailed, by certified or registered
              mail, postage prepaid, in either case to the address set forth
              below, or at such other address as the Company may designate for
              this purpose in a notice given to the Executive.

                     Attn: President and Chief Executive Officer
                           Doane Products Company
                           103 Powell Court, Suite 200
                           Brentwood, TN  37027

          (2) To the Executive, when signed by an officer of the Company
              (excluding the Executive) and delivered to the Executive in
              person, or, one day after the date sent by national commercial
              courier for next day delivery, or two days after the date mailed,
              by certified or registered mail, postage prepaid, in either case
              to the address set forth under the Executive's signature at the
              end of this Agreement or at such other address as the Executive
              may designate for this purpose in a notice given to the Company.

     11.  INVALIDITY OF PROVISIONS     If any provision of this Agreement is
adjudicated to be invalid or unenforceable under applicable law, the validity
or enforceability of the remaining provisions shall be unaffected. To the
extent that any provision of this agreement is adjudicated to be invalid or
unenforceable because it is over broad, that provision shall not be void but
rather shall be limited only to the extent required by applicable law and
enforced as so limited.

     12.  ENTIRE AGREEMENT; WRITTEN MODIFICATIONS     This Agreement contains
the entire agreement between the parties and supersedes all prior or
contemporaneous representations, promises, understandings and agreements
between the Executive and the Company. This Agreement may not be changed except
by written agreement of the parties and specifically rescinds and replaces any
written or oral employment agreement between the Company and the Executive and
any written or oral employment agreement between the Executive and the
Company's affiliate, Windy Hill Pet Food Company, Inc.

     13.  GOVERNING LAW     In light of the Company's contacts with the state of
Tennessee and its significant interest in insuring that disputes as to the
validity and enforceability of section 6 (Non-Competition Covenants) and 7
(Confidentiality and Proprietary Information) of this Agreement are resolved on
a uniform basis, the Executive and the Company agree that any litigation
involving noncompliance with or alleged breach of sections 6 (Non-Competition
Covenants) or 7 (Confidentiality and Proprietary Information) must be filed and
conducted in Tennessee and the Executive and

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the Company consent to the personal jurisdiction of the federal and state
courts sitting in Tennessee for purposes of any such litigation. This Agreement
shall be governed by the internal laws of the State of Tennessee without regard
to Tennessee conflict of laws principles.

     14.  CERTAIN DEFINED TERMS     In this agreement:

                        (1)   "Affiliate" of the Company means any person
                        controlling, controlled by or under common control
                        with the Company.

                        (2)   "Annual bonus" is defined in section 4(b).

                        (3)   "Base salary" is defined in section 4(a).

                        (4)   "Board" is defined in section 4(a).

                        (5)   "Company" as used in sections 6 (Non-Competition
                         Covenants) and 7 (Confidentiality and Proprietary
                         Information), includes each affiliate of the Company
                         for which the Executive performs services at any
                         time during his employment if the affiliate is
                         engaged in any business that involves, in whole or
                         in part, the design, manufacture, distribution or
                         sale of dry pet foods (or any other business in
                         which the Company may engage or begin preparation to
                         engage during the employment term).

                        (6)   "Control transaction" is defined in section 6(d).

                        (7)   "Employment term" is defined in section 2(b).

                        (8)   "Non-extension notice" is defined in section 2(a).

                        (9)   "Person" includes any individual, trust, estate,
                        business trust, partnership, corporation, unincorporated
                        association, governmental entity, limited liability
                        company and any other juridical person.

     15.  COMPANY'S AND EXECUTIVE'S RIGHT TO RECOVER COSTS     The Company and
the Executive undertake and agree that, if either party breaches or threatens
to breach any provision of this Agreement, the breaching party shall be liable
for reasonable attorneys' fees and costs incurred by the other party in
enforcing its rights under this Agreement.

     16.  RULE OF CONSTRUCTION     The rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be employed
in interpreting this Agreement.

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     17.  TOLLING    In view of the parties' recognition and agreement that the
Company is entitled after the expiration or termination of the employment term
to certain limited protection from competition by the Executive, the Executive
and the Company agree that the running of the period set forth in section 6
(Non-Competition Covenants) shall be tolled during any period of time in which
the Executive violates that section.

     18.  SUCCESSORS AND ASSIGNS     The Company may assign this Agreement or
any right or interest under this Agreement to any person that hereafter becomes
an affiliate of the Company or to any person to which the Company sells all or
any substantial part of its assets and, in such event, the Company shall,
automatically upon the assignee's assumption of the Company's obligations
hereunder, be released from any such obligations. This Agreement shall inure to
the benefit of the Company, and its successors and assigns.

     19.  NONWAIVER OF RIGHTS     The Company's or the Executive's failure to
enforce at any time any of the provisions of this Agreement or to require at
any time performance by the other party of any of the provisions hereof shall
in no way be construed to be a waiver of such provisions or to affect either
the validity of this Agreement, or any part hereof, or the right of the Company
or the Executive thereafter to enforce each and every provision in accordance
with the terms of this Agreement.

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         PLEASE NOTE: BY SIGNING THIS AGREEMENT, THE EXECUTIVE IS HEREBY
CERTIFYING THAT THE EXECUTIVE (A) RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW
AND STUDY BEFORE EXECUTING IT; (B) READ THIS AGREEMENT CAREFULLY BEFORE SIGNING
IT; (C) HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THIS AGREEMENT TO ASK ANY
QUESTIONS THE EXECUTIVE HAD ABOUT THIS AGREEMENT AND RECEIVED SATISFACTORY
ANSWERS TO ALL SUCH QUESTIONS; (D) UNDERSTANDS THE EXECUTIVE'S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT; AND (E) EXECUTED AND DELIVERED THIS AGREEMENT
AT THE OFFICES OF THE COMPANY IN BRENTWOOD, TENNESSEE.

         EXECUTED AND EFFECTIVE as of the date first written above.

WITNESS:                                     DOANE PRODUCTS COMPANY

/s/ JOYCE LOWERY                             By: /s/ DOUGLAS J. CAHILL
------------------------------                   -----------------------------
                                                 Douglas J. Cahill
                                                 President & CEO

WITNESS:                                     EXECUTIVE:

/s/ JANETTE LAUZON                           By: /s/ DONALD COWAN, JR.
------------------------------                   -----------------------------
                                                 F. Donald Cowan, Jr.

                                                 4590 Columbia Pl.
                                                 -----------------------------
                                                 Street Address

                                                 Thompson Station, TN 37179
                                                 -----------------------------
                                                 City, State, Zip Code

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                                   EXHIBIT A
                          TO EMPLOYMENT AGREEMENT WITH
                              F. DONALD COWAN, JR.

                             DOANE PRODUCTS COMPANY

                              ANNUAL BONUS PROGRAM

         1. For each fiscal year of the Company during the employment term, the
board, after taking into consideration the recommendations of the president of
the Company, will establish objectives comprised of both corporate and
individual goals (each goal will be referred to herein as a "Target"), as well
as the percentage weighting (the "weight") that will apply to each Target,
wherein the sum of the weights shall equal 100%.

         2. For the Company's 1998 fiscal year, the board will set an EBITDA
Target for the Company and its subsidiaries which will be weighted at 100% for
the calculation of the bonus payable under this program for the 1998 fiscal
year. The term "EBITDA" will have the same meaning as set forth in the DPC
Acquisition Corp. Option Agreements granted under the DPC Acquisition Corp.
1996 Stock Option Plan.

         3. For purposes of computing the Executive's annual bonus, the bonus
will be equal to 70% of his base salary in effect at the end of the fiscal year
(the "base bonus") and the annual bonus will be computed by summing the
percentages earned for each Target, as determined by computing the sum of
paragraphs in 3(a) through 3(d) below for each Target that has been assigned a
weight, and then multiplying that sum times the base bonus.

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                           (a) Where the actual performance exceeds 85% of the
                  Target for such fiscal year, Executive will receive 55% of
                  the weight assigned for the Target.

                           (b) For each of the first full 15 percentage points
                  by which actual performance exceeds 85% of the Target,
                  Executive will receive 3% of the weight assigned for the
                  Target. The maximum which Executive may receive under this
                  paragraph 3(b) cannot exceed 45% of the weight assigned for
                  the Target.

                           (c) For each of the first full 15 percentage points
                  by which the actual performance exceeds 100% of the Target,
                  Executive will receive 6% of the weight assigned for the
                  Target. The maximum which Executive may receive under this
                  paragraph 3(c) cannot exceed 90% of the weight assigned for
                  the Target.

                           (d) For each full percentage point by which the
                  actual performance exceeds 115% of the Target, Executive will
                  receive 9% of the weight assigned for the target.

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         For illustrative purposes, assume the Executive's base bonus is
$30,000 and his weighting is as follows:

           Target      Weight           Description of Target
           ------      ------           ---------------------
              1          50%            Corporate EBITDA
              2          35%            Territory Margin Contribution
              3          15%            Expense Control

         Bonus Calculation:
         -----------------

                      Assumed      % Earned                 Weighted
           Target   Performance    for Target     Weight    % Earned
           ------   -----------    ----------     ------    --------
             1          95%           85%     x    50%   =    42.5%
             2         120%          235%     x    35%   =    82.3%
             3          80%            0      x    15%   =       0
                                                             --------

                            % of base bonus earned           124.8%
                            Base bonus                     $30,000
                            Bonus earned                   $37,440

         4. In the event that, after the setting of the Targets, the Company or
         any of its subsidiaries acquires additional assets, entities or
         subsidiaries that produce the same or similar products, which
         acquisition, either singly or together with one or more other
         acquisitions, the board determines in good faith may significantly
         affect the Targets for the fiscal year, the board may, in good faith,
         either (a) adjust such Targets to reflect the projected effect of such
         acquisition or acquisitions on any Targets or (b) exclude the effects
         of such acquisition or acquisitions on the Targets for purposes of
         determining Executive's annual bonus by calculating the Targets for
         such fiscal year on a pro forma basis as though such acquisition or
         acquisitions had not been consummated. Similarly, in the event that,
         after setting the Targets, the Company is acquired by another Person
         (whether by purchase, merger, consolidation or sale of all or
         substantially all of the Company's

                                      14

<PAGE>   15

         consolidated assets) and the board determines in good faith that such
         acquisition may significantly affect the Targets for the fiscal year,
         the board may, in good faith, either (x) adjust such Targets to
         reflect the projected effect of such acquisition on any Target or (y)
         exclude the effects of such acquisition on the Targets for purposes of
         determining Executive's annual bonus by calculating the Targets for
         such fiscal year on a pro forma basis as though such acquisition had
         not been consummated.

                  5. The annual bonus payable for any fiscal year will be paid
         within 30 days after the delivery of the Company's audited financial
         statements for such fiscal year. In the event of any dispute between
         the Company and Executive as to the amount of the bonus for any fiscal
         year, such dispute will be resolved by the Company's auditors or any
         one of Price Waterhouse, Arthur Andersen, or Ernst & Young, or their
         successors, as selected by the board, by having such accounting firm
         calculate the amount of the bonus for such fiscal year utilizing the
         Company's audited financial statements for such fiscal year. The
         decision of such accounting firm will be final and binding on the
         Company and Executive.

                  6. Except as otherwise provided herein, capitalized terms
         used herein which are not defined herein have the meanings given to
         such terms under the Employment Agreement to which this Annual Bonus
         Program is attached.

                                      15<PAGE>   1
                                                                   EXHIBIT 10.10

                        DOANE PET CARE ENTERPRISES, INC.

                           1999 STOCK INCENTIVE PLAN

                                   I. PURPOSE

         The purpose of the DOANE PET CARE ENTERPRISES, INC. 1999 STOCK
INCENTIVE PLAN is to provide a means through which DOANE PET CARE ENTERPRISES,
INC., a Delaware corporation, and its subsidiaries may attract able persons to
serve as directors, consultants, or advisors or to enter the employ of the
Company or its subsidiaries and to provide a means whereby those individuals
upon whom the responsibilities of the successful administration and management
of the Company and its subsidiaries rest, and whose present and potential
contributions to the welfare of the Company and its subsidiaries are of
importance, can acquire and maintain stock ownership, thereby strengthening
their concern for the welfare of the Company and its subsidiaries. A further
purpose of the Plan is to provide such individuals with additional incentive
and reward opportunities designed to enhance the profitable growth of the
Company and its subsidiaries. Accordingly, the Plan provides for granting
Incentive Stock Options, options that do not constitute Incentive Stock
Options, Restricted Stock Awards, or any combination of the foregoing, as is
best suited to the circumstances of the particular employee, consultant,
advisor, or director as provided herein.

                                II. DEFINITIONS

         The following definitions shall be applicable throughout the Plan
unless specifically modified by any paragraph:

         (a)  "AWARD" means, individually or collectively, any Option or
Restricted Stock Award.

         (b)  "BOARD" means the Board of Directors of the Company.

         (c)  "CODE" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.

         (d)  "COMMITTEE" means the Board or a committee of the Board that
is selected by the Board as provided in Paragraph IV(a).

         (e)  "COMMON STOCK" means the Class A common stock, par value $.0001
per share, of the Company, or any security into which such Common Stock may be
changed by reason of any transaction or event of the type described in
Paragraph IX.

         (f)  "COMPANY" means Doane Pet Care Enterprises, Inc., a Delaware
corporation.

<PAGE>   2

         (g)  "CONSULTANT" means any person who is not an employee and who is
providing advisory or consulting services to the Company or any parent or
subsidiary corporation (as defined in section 424 of the Code).

         (h)  "DIRECTOR" means an individual elected to the Board by the
stockholders of the Company or by the Board under applicable corporate law who
is serving on the Board on the date the Plan is adopted by the Board or is
elected to the Board after such date.

         (i)  An "EMPLOYEE" means any person (including a Director) in an
employment relationship with the Company or any parent or subsidiary
corporation (as defined in section 424 of the Code).

         (j)  "FAIR MARKET VALUE" means, as of any specified date, the mean of
the high and low sales prices of the Common Stock (i) reported by the National
Market System of NASDAQ on that date or (ii) if the Common Stock is listed on a
national stock exchange, reported on the stock exchange composite tape on that
date; or, in either case, if no prices are reported on that date, on the last
preceding date on which such prices of the Common Stock are so reported. If the
Common Stock is traded over the counter at the time a determination of its fair
market value is required to be made hereunder, its fair market value shall be
deemed to be equal to the average between the reported high and low or closing
bid and asked prices of Common Stock on the most recent date on which Common
Stock was publicly traded. In the event Common Stock is not publicly traded at
the time a determination of its value is required to be made hereunder, the
determination of its fair market value shall be made by the Committee in such
manner as it deems appropriate. Notwithstanding the foregoing, the Fair Market
Value of a share of Common Stock on the date of an initial public offering of
Common Stock shall be the offering price under such initial public offering.

         (k)  "HOLDER" means an employee, Consultant, or Director who has been
granted an Award.

         (l)  "INCENTIVE  STOCK OPTION" means an incentive stock option within
the meaning of section 422 of the Code.

         (m)  "1934 ACT" means the Securities Exchange Act of 1934, as amended.

         (n)  "OPTION" means an award granted under Paragraph VII of the Plan
and includes both Incentive Stock Options to purchase Common Stock and Options
that do not constitute Incentive Stock Options to purchase Common Stock.

         (o)  "OPTION AGREEMENT  means a written agreement between the Company
and a Holder with respect to an Option.

         (p)  "PLAN" means the Doane Pet Care Enterprises, Inc. 1999 Stock
Incentive Plan, as amended from time to time.

         (q) "RESTRICTED STOCK AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.

                                      -2-

<PAGE>   3

         (r) "RESTRICTED STOCK AWARD" means an award granted under Paragraph
VIII of the Plan.

         (s) "RULE 16B-3" means SEC Rule 16b-3 promulgated under the 1934 Act,
as such may be amended from time to time, and any successor rule, regulation or
statute fulfilling the same or a similar function.

         (t) "STOCK APPRECIATION RIGHT" shall have the meaning assigned to such
term in Paragraph VII(d) of the Plan.

                  III. EFFECTIVE DATE AND DURATION OF THE PLAN

         The Plan shall become effective upon the date of its adoption by the
Board, provided the Plan is approved by the stockholders of the Company within
twelve months thereafter. Notwithstanding any provision in the Plan, in any
Option Agreement or in any Restricted Stock Agreement, no Option shall be
exercisable and no Restricted Stock Award shall vest prior to such stockholder
approval. No further Awards may be granted under the Plan after ten years from
the date the Plan is adopted by the Board. The Plan shall remain in effect
until all Options granted under the Plan have been exercised or expired, and
all Restricted Stock Awards granted under the Plan have vested or been
forfeited.

                               IV. ADMINISTRATION

         (a) COMPOSITION OF COMMITTEE. The Plan shall be administered by the
Board or a committee of, and appointed by, the Board, comprised solely of two
or more outside Directors (within the meaning of the term "outside directors"
as used in section 162(m) of the Code and applicable interpretive authority
thereunder and within the meaning of "Non-Employee Director" as defined in Rule
16b-3).

         (b) POWERS. Subject to the express provisions of the Plan, the
Committee shall have authority, in its sole discretion, to determine which
employees, Consultants, or Directors shall receive an Award, the time or times
when such Award shall be made, whether an Incentive Stock Option or
nonqualified Option shall be granted, and the number of shares to be subject to
each Option or Restricted Stock Award. In making such determinations, the
Committee shall take into account the nature of the services rendered by the
respective employees, Consultants, or Directors, their present and potential
contribution to the Company's success and such other factors as the Committee
in its sole discretion shall deem relevant.

         (c) ADDITIONAL POWERS. The Committee shall have such additional powers
as are delegated to it by the other provisions of the Plan. Subject to the
express provisions of the Plan, this shall include the power to construe the
Plan and the respective agreements executed hereunder, to prescribe rules and
regulations relating to the Plan, and to determine the terms, restrictions and
provisions of the agreement relating to each Award, including such terms,
restrictions and provisions as shall be requisite in the judgment of the
Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan. The Committee may correct any defect or supply any omission or
reconcile

                                      -3-

<PAGE>   4

any inconsistency in the Plan or in any agreement relating to an Award in the
manner and to the extent it shall deem expedient to carry it into effect. The
determinations of the Committee on the matters referred to in this Paragraph IV
shall be conclusive.

                V. SHARES SUBJECT TO THE PLAN; GRANT OF OPTIONS;
                        GRANT OF RESTRICTED STOCK AWARDS

         (a) SHARES SUBJECT TO THE PLAN AND AWARD LIMITS. Subject to adjustment
in the same manner as provided in Paragraph IX with respect to shares of Common
Stock subject to Awards then outstanding, the aggregate number of shares of
Common Stock that may be issued under the Plan shall not exceed 4.2 million
shares (after giving effect to the Company's anticipated 4-for-1 stock split in
connection with its initial public offering). Shares shall be deemed to have
been issued under the Plan only (i) to the extent actually issued and delivered
pursuant to an Award or (ii) to the extent an Award is settled in cash. To the
extent that an Award lapses or the rights of its Holder terminate, any shares
of Common Stock subject to such Award shall again be available for the grant of
an Award under the Plan.

         (b) GRANT OF OPTIONS. The Committee may from time to time grant
Options to one or more employees, Consultants, or Directors determined by it to
be eligible for participation in the Plan in accordance with the terms of the
Plan.

         (c) GRANT OF RESTRICTED STOCK AWARDS. The Committee may from time to
time grant Restricted Stock Awards to one or more employees, Consultants, or
Directors determined by it to be eligible for participation in the Plan in
accordance with the terms of the Plan.

         (d) STOCK OFFERED. Subject to the limitations set forth in Paragraph
V(a), the stock to be offered pursuant to the grant of an Award may be
authorized but unissued Common Stock or Common Stock previously issued and
outstanding and reacquired by the Company. Any of such shares which remain
unissued and which are not subject to outstanding Awards at the termination of
the Plan shall cease to be subject to the Plan but, until termination of the
Plan, the Company shall at all times make available a sufficient number of
shares to meet the requirements of the Plan.

                                VI. ELIGIBILITY

         Awards may be granted only to persons who, at the time of grant, are
employees, Consultants, or Directors. An Award may be granted on more than one
occasion to the same person, and, subject to the limitations set forth in the
Plan, such Award may include an Incentive Stock Option, an Option that is not
an Incentive Stock Option, a Restricted Stock Award, or any combination
thereof.

                               VII. STOCK OPTIONS

         (a) OPTION  PERIOD.  The term of each Option shall be as specified by
the  Committee at the date of grant.

                                      -4-

<PAGE>   5

         (b) LIMITATIONS  ON EXERCISE OF OPTION.  An Option shall be exercisable
in whole or in such installments and at such times as determined by the
Committee.

         (c) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. An Incentive Stock
Option may be granted only to an individual who is an employee at the time the
Option is granted. To the extent that the aggregate Fair Market Value
(determined at the time the respective Incentive Stock Option is granted) of
Common Stock with respect to which Incentive Stock Options granted after 1986
are exercisable for the first time by an individual during any calendar year
under all incentive stock option plans of the Company and its parent and
subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be
treated as Options which do not constitute Incentive Stock Options. The
Committee shall determine, in accordance with applicable provisions of the
Code, Treasury Regulations and other administrative pronouncements, which of a
Holder's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Holder of such determination as
soon as practicable after such determination. No Incentive Stock Option shall
be granted to an individual if, at the time the Option is granted, such
individual owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent or subsidiary
corporation, within the meaning of section 422(b)(6) of the Code, unless (i) at
the time such Option is granted the option price is at least 110% of the Fair
Market Value of the Common Stock subject to the Option and (ii) such Option by
its terms is not exercisable after the expiration of five years from the date
of grant. An Incentive Stock Option shall not be transferable otherwise than by
will or the laws of descent and distribution, and shall be exercisable during
the Holder's lifetime only by such Holder or the Holder's guardian or legal
representative.

         (d) OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. Each Option Agreement shall specify the effect
of termination of (i) employment, (ii) the consulting or advisory relationship,
or (iii) membership on the Board, as applicable, on the exercisability of the
Option. An Option Agreement may provide for the payment of the option price, in
whole or in part, by the delivery of a number of shares of Common Stock (plus
cash if necessary) having a Fair Market Value equal to such option price.
Moreover, an Option Agreement may provide for a "cashless exercise" of the
Option by establishing procedures satisfactory to the Committee with respect
thereto. Further, an Option Agreement may provide for the surrender of the
right to purchase shares under the Option in return for a payment in cash or
shares of Common Stock or a combination of cash and shares of Common Stock
equal in value to the excess of the Fair Market Value of the shares with
respect to which the right to purchase is surrendered over the option price
therefor ("Stock Appreciation Rights"), on such terms and conditions as the
Committee in its sole discretion may prescribe. In the case of any such Stock
Appreciation Right that is granted in connection with an Incentive Stock
Option, such right shall be exercisable only when the Fair Market Value of the
Common Stock exceeds the price specified therefor in the Option or the portion
thereof to be surrendered. The terms and conditions of the respective Option
Agreements need not be identical.

         (e) OPTION PRICE AND PAYMENT. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be determined by the
Committee but, subject to adjustment as provided in Paragraph IX, (i) in the
case of an Incentive Stock Option, such purchase

                                      -5-
<PAGE>   6

price shall not be less than the Fair Market Value of a share of Common Stock
on the date such Option is granted, and (ii) in the case of an Option that does
not constitute an Incentive Stock Option, such purchase price shall not be less
than 50% of the Fair Market Value of a share of Common Stock on the date such
Option is granted. The Option or portion thereof may be exercised by delivery
of an irrevocable notice of exercise to the Company, as specified by the
Committee. The purchase price of the Option or portion thereof shall be paid in
full in the manner prescribed by the Committee. Separate stock certificates
shall be issued by the Company for those shares acquired pursuant to the
exercise of an Incentive Stock Option and for those shares acquired pursuant to
the exercise of any Option that does not constitute an Incentive Stock Option.

         (f) STOCKHOLDER RIGHTS AND PRIVILEGES. The Holder shall be entitled to
all the privileges and rights of a stockholder only with respect to such shares
of Common Stock as have been purchased under the Option and for which
certificates of stock have been registered in the Holder's name.

         (g) OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY
OTHER CORPORATIONS. Options and Stock Appreciation Rights may be granted under
the Plan from time to time in substitution for stock options held by
individuals employed by corporations who become employees as a result of a
merger or consolidation or other business combination of the employing
corporation with the Company or any subsidiary.

                         VIII. RESTRICTED STOCK AWARDS

         (a) FORFEITURE RESTRICTIONS TO BE ESTABLISHED BY THE COMMITTEE. Shares
of Common Stock that are the subject of a Restricted Stock Award shall be
subject to restrictions on disposition by the Holder and an obligation of the
Holder to forfeit and surrender the shares to the Company under certain
circumstances (the "Forfeiture Restrictions"). The Forfeiture Restrictions
shall be determined by the Committee in its sole discretion, and the Committee
may provide that the Forfeiture Restrictions shall lapse upon (i) the
attainment of one or more performance targets established by the Committee that
are based on (1) the price of a share of Common Stock, (2) the Company's
earnings per share, (3) the Company's market share, (4) the market share of a
business unit of the Company designated by the Committee, (5) the Company's
sales, (6) the sales of a business unit of the Company designated by the
Committee, (7) the net income (before or after taxes) of the Company or any
business unit of the Company designated by the Committee, (8) the cash flow
return on investment of the Company or any business unit of the Company
designated by the Committee, (9) the earnings before or after interest, taxes,
depreciation, and/or amortization of the Company or any business unit of the
Company designated by the Committee, (10) the economic value added, or (11) the
return on stockholders' equity achieved by the Company, (ii) the Holder's
continued employment with the Company or continued service as a Consultant or
Director for a specified period of time, (iii) the occurrence of any event or
the satisfaction of any other condition specified by the Committee in its sole
discretion, or (iv) a combination of any of the foregoing. Each Restricted
Stock Award may have different Forfeiture Restrictions, in the sole discretion
of the Committee.

         (b) OTHER TERMS AND CONDITIONS. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered
in the name of the Holder of such

                                      -6-

<PAGE>   7

Restricted Stock Award. The Holder shall have the right to receive dividends
with respect to Common Stock subject to a Restricted Stock Award, to vote
Common Stock subject thereto and to enjoy all other stockholder rights, except
that (i) the Holder shall not be entitled to delivery of the stock certificate
until the Forfeiture Restrictions have expired, (ii) the Company shall retain
custody of the stock until the Forfeiture Restrictions have expired, (iii) the
Holder may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the stock until the Forfeiture Restrictions have expired, and (iv) a
breach of the terms and conditions established by the Committee pursuant to the
Restricted Stock Agreement shall cause a forfeiture of the Restricted Stock
Award. At the time of such Award, the Committee may, in its sole discretion,
prescribe additional terms, conditions or restrictions relating to Restricted
Stock Awards, including, but not limited to, rules pertaining to the
termination of employment or service as a Consultant or Director (by
retirement, disability, death or otherwise) of a Holder prior to expiration of
the Forfeitures Restrictions. Such additional terms, conditions or restrictions
shall be set forth in a Restricted Stock Agreement made in conjunction with the
Award.

         (c) PAYMENT FOR RESTRICTED STOCK. The Committee shall determine the
amount and form of any payment for Common Stock received pursuant to a
Restricted Stock Award, provided that in the absence of such a determination, a
Holder shall not be required to make any payment for Common Stock received
pursuant to a Restricted Stock Award, except to the extent otherwise required
by law.

         (d) COMMITTEE'S DISCRETION TO ACCELERATE VESTING OF RESTRICTED STOCK
AWARDS. The Committee may, in its discretion and as of a date determined by the
Committee, fully vest any or all Common Stock awarded to a Holder pursuant to a
Restricted Stock Award and, upon such vesting, all restrictions applicable to
such Restricted Stock Award shall terminate as of such date. Any action by the
Committee pursuant to this Subparagraph may vary among individual Holders and
may vary among the Restricted Stock Awards held by any individual Holder.

         (e) RESTRICTED STOCK AGREEMENTS. At the time any Award is made under
this Paragraph VIII, the Company and the Holder shall enter into a Restricted
Stock Agreement setting forth each of the matters contemplated hereby and such
other matters as the Committee may determine to be appropriate. The terms and
provisions of the respective Restricted Stock Agreements need not be identical.

                     IX. RECAPITALIZATION OR REORGANIZATION

         (a) NO EFFECT ON RIGHT OR POWER. The existence of the Plan and the
Awards granted hereunder shall not affect in any way the right or power of the
Board or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's or any
subsidiary's capital structure or its business, any merger or consolidation of
the Company or any subsidiary, any issue of debt or equity securities ahead of
or affecting Common Stock or the rights thereof, the dissolution or liquidation
of the Company or any subsidiary or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.

                                      -7-

<PAGE>   8

         (b) SUBDIVISION OR CONSOLIDATION OF SHARES; STOCK DIVIDENDS. The
shares with respect to which Awards may be granted are shares of Common Stock
as presently constituted, but if, and whenever, prior to the expiration of an
Award theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Company, the number of
shares of Common Stock with respect to which such Award may thereafter be
exercised or satisfied, as applicable (i) in the event of an increase in the
number of outstanding shares shall be proportionately increased, and the
purchase price per share shall be proportionately reduced, and (ii) in the
event of a reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall be
proportionately increased. Any fractional share resulting from such adjustment
shall be rounded down to the next whole share.

         (c) RECAPITALIZATIONS AND CORPORATE CHANGES. If the Company
recapitalizes, reclassifies its capital stock, or otherwise changes its capital
structure (a "recapitalization"), the number and class of shares of Common
Stock covered by an Award theretofore granted shall be adjusted so that such
Award shall thereafter cover the number and class of shares of stock and
securities to which the Holder would have been entitled pursuant to the terms
of the recapitalization if, immediately prior to the recapitalization, the
Holder had been the holder of record of the number of shares of Common Stock
then covered by such Award. If (i) the Company shall not be the surviving
entity in any merger or consolidation (or survives only as a subsidiary of an
entity), (ii) the Company sells, leases or exchanges or agrees to sell, lease
or exchange all or substantially all of its assets to any other person or
entity, (iii) the Company is to be dissolved and liquidated, (iv) any person or
entity, including a "group" as contemplated by Section 13(d)(3) of the 1934
Act, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 50% of the outstanding shares of the Company's
voting stock (based upon voting power), or (v) as a result of or in connection
with a contested election of Directors, the persons who were Directors of the
Company before such election shall cease to constitute a majority of the Board
(each such event is referred to herein as a "Corporate Change"), no later than
(x) ten days after the approval by the stockholders of the Company of such
merger, consolidation, reorganization, sale, lease or exchange of assets or
dissolution or such election of Directors or (y) thirty days after a Corporate
Change of the type described in clause (iv), the Committee, acting in its sole
discretion without the consent or approval of any Holder, shall effect one or
more of the following alternatives, which alternatives may vary among
individual Holders and which may vary among Options held by any individual
Holder: (1) accelerate the time at which Options then outstanding may be
exercised so that such Options may be exercised in full for a limited period of
time on or before a specified date (before or after such Corporate Change)
fixed by the Committee, after which specified date all unexercised Options and
all rights of Holders thereunder shall terminate, (2) require the mandatory
surrender to the Company by selected Holders of some or all of the outstanding
Options held by such Holders (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date, before or after
such Corporate Change, specified by the Committee, in which event the Committee
shall thereupon cancel each such Option and pay or cause to be paid to each
Holder the securities or other property (including, without limitation, cash)
referred to in clause (4) below with respect to the shares subject to such
Option in exchange for payment by such Holder of the exercise price(s) under
such Option for such shares, (3) make such adjustments to Options then
outstanding as the Committee deems appropriate to reflect such Corporate Change
(provided, however, that the Committee may determine in its sole discretion
that no adjustment is necessary to Options then

                                      -8-

<PAGE>   9

outstanding), or (4) provide that the number and class of shares of Common
Stock covered by an Option theretofore granted shall be adjusted so that such
Option shall thereafter cover the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which the
Holder would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets and dissolution if, immediately prior
to such merger, consolidation or sale of assets and dissolution, the Holder had
been the holder of record of the number of shares of Common Stock then covered
by such Option. Notwithstanding the foregoing, if (A) the Company is involved
in a merger or consolidation and, immediately after giving effect to such
merger or consolidation, less than 50% of the total voting power of the
outstanding voting stock of the surviving or resulting entity is then
"beneficially owned" (within the meaning of Rule 13d-3 under the 1934 Act) in
the aggregate by the stockholders of the Company immediately prior to such
merger or consolidation or (B) any person or entity, including a "group" as
contemplated by Section 13(d)(3) of the 1934 Act, acquires or gains ownership
or control (including, without limitation, power to vote) of more than 50% of
the outstanding shares of the Company's voting stock (based upon voting power),
then, except as provided in any Award agreement, (I) outstanding Awards shall
immediately vest and become exercisable or satisfiable, as applicable, and (II)
any such Award that is an Option shall continue to be exercisable for the
remainder of the applicable Option term unless the Committee has determined, in
its sole discretion, to take the action described in clause (1) or (2) above
with respect to such Option. The provisions contained in this Subparagraph
shall not terminate any rights of the Holder to further payments pursuant to
any other agreement with the Company following a Corporate Change.

         (d) OTHER CHANGES IN THE COMMON STOCK. In the event of changes in the
outstanding Common Stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, split-ups, split-offs, spin-offs,
exchanges or other relevant changes in capitalization or distributions to the
holders of Common Stock occurring after the date of the grant of any Award and
not otherwise provided for by this Paragraph IX, such Award and any agreement
evidencing such Award shall be subject to adjustment by the Committee at its
sole discretion as to the number and price of shares of Common Stock or other
consideration subject to such Award. In the event of any such change in the
outstanding Common Stock or distribution to the holders of Common Stock, the
aggregate number of shares available under the Plan and the maximum number of
shares that may be subject to Awards granted to any one individual may be
appropriately adjusted by the Committee, whose determination shall be
conclusive.

         (e) STOCKHOLDER ACTION. Any adjustment provided for in the above
Subparagraphs shall be subject to any required stockholder action.

         (f) NO ADJUSTMENTS UNLESS OTHERWISE PROVIDED. Except as hereinbefore
expressly provided, the issuance by the Company of shares of stock of any class
or securities convertible into shares of stock of any class, for cash,
property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares of Common Stock
subject to Awards theretofore granted or the purchase price per share, if
applicable.

                                      -9-

<PAGE>   10

                    X. AMENDMENT AND TERMINATION OF THE PLAN

         The Board in its discretion may terminate the Plan at any time with
respect to any shares of Common Stock for which Awards have not theretofore
been granted. The Board shall have the right to alter or amend the Plan or any
part thereof from time to time; provided that no change in any Award
theretofore granted may be made which would impair the rights of the Holder
without the consent of the Holder, and provided, further, that the Board may
not, without approval of the stockholders, amend the Plan to (a) increase the
maximum aggregate number of shares that may be issued under the Plan or (b)
change the class of individuals eligible to receive Awards under the Plan.

                               XI. MISCELLANEOUS

         (a) NO RIGHT TO AN AWARD. Neither the adoption of the Plan nor any
action of the Board or of the Committee shall be deemed to give an employee,
Consultant, or Director any right to be granted an Option, a right to a
Restricted Stock Award, or any other rights hereunder except as may be
evidenced by an Option Agreement or a Restricted Stock Agreement duly executed
on behalf of the Company, and then only to the extent and on the terms and
conditions expressly set forth therein. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of funds or assets to assure the performance of its
obligations under any Award.

         (b) NO EMPLOYMENT/MEMBERSHIP RIGHTS CONFERRED. Nothing contained in
the Plan shall (i) confer upon any employee or Consultant any right with
respect to continuation of employment or of a consulting or advisory
relationship with the Company or any subsidiary or (ii) interfere in any way
with the right of the Company or any subsidiary to terminate his or her
employment or consulting or advisory relationship at any time. Nothing
contained in the Plan shall confer upon any Director any right with respect to
continuation of membership on the Board.

         (c) OTHER LAWS; WITHHOLDING. The Company shall not be obligated to
issue any Common Stock pursuant to any Award granted under the Plan at any time
when the shares covered by such Award have not been registered under the
Securities Act of 1933, as amended, and such other state and federal laws,
rules and regulations as the Company or the Committee deems applicable and, in
the opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules and regulations available for the
issuance and sale of such shares. No fractional shares of Common Stock shall be
delivered, nor shall any cash in lieu of fractional shares be paid. The Company
shall have the right to deduct in connection with all Awards any taxes required
by law to be withheld and to require any payments required to enable it to
satisfy its withholding obligations.

         (d) NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from taking any
corporate action which is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No employee,
Consultant, Director, beneficiary or other person shall have any claim against
the Company or any subsidiary as a result of any such action.

                                     -10-

<PAGE>   11

         (e) RESTRICTIONS ON TRANSFER. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in
Paragraph VII(c)) shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with
the consent of the Committee.

         (f) RULE 16B-3. It is intended that the Plan and any grant of an Award
made to a person subject to Section 16 of the 1934 Act meet the requirements of
Rule 16b-3 so that any transaction under the Plan involving a grant, award, or
other acquisition from the Company or disposition to the Company is exempt from
Section 16(b) of the 1934 Act. If any provision of the Plan or any such Award
would result in any such transaction not being exempt from Section 16(b) of the
1934 Act, such provision or Award shall be construed or deemed amended so that
such transaction will be exempt from Section 16(b) of the 1934 Act.

         (g) GOVERNING LAW. THE PLAN SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE.

                                     -11-

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