Document:

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                                                                   Exhibit 10.15

                      ALLTECH INTERNATIONAL HOLDINGS, INC.

                         2003 EMPLOYEE STOCK OPTION PLAN

                              Effective May 1, 2003

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                                TABLE OF CONTENTS

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ARTICLE I
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ESTABLISHMENT 1 ............................................................   1
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     1.1   Purpose .........................................................   1

ARTICLE II
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DEFINITIONS ................................................................   1
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     2.1   "Affiliate ......................................................   1
     2.2   "Agreement" or "Award Agreement .................................   1
     2.3   "Award ..........................................................   1
     2.4   "Beneficiary ....................................................   1
     2.5   "Board of Directors" or "Board ..................................   2
     2.7   "Cause ..........................................................   2
     2.9   "Code" or "Internal Revenue Code ................................   2
     2.10  "Commission .....................................................   2
     2.11  "Committee" .....................................................   2
     2.12  "Common Stock ...................................................   2
     2.13  "Company ........................................................   2
     2.14  "Covered Employee ...............................................   3
     2.16  "Disability .....................................................   3
     2.17  "Disinterested Person ...........................................   3
     2.19  "Effective Date .................................................   3
     2.20  "Exchange Act ...................................................   3
     2.21  "Fair Market Value ..............................................   3
     2.22  "Grant Date .....................................................   3
     2.23  "Incentive Stock Option .........................................   3
     2.24  "NASDAQ .........................................................   3
     2.25  "Non-Qualified Stock Option .....................................   3
     2.26  "Option .........................................................   3
     2.27  "Option Period ..................................................   4
     2.28  "Option Price ...................................................   4
     2.30  "Participant ....................................................   4
     2.32  "Plan ...........................................................   4
     2.33  "Representative" ................................................   4
     2.35  "Retirement" ....................................................   4
     2.36  "Rule 16b-3" and "Rule 16a-l(c)(3) ..............................   4
     2.37  "Securities Act .................................................   4
     2.39  "Termination of Employment ......................................   5
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ARTICLE III

ADMINISTRATION .............................................................   5
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     3.1   Committee Structure and Authority ...............................   5

ARTICLE IV

STOCK SUBJECT TO PLAN ......................................................   8
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     4.1   Number of Shares ................................................   8
     4.2   Release of Shares ...............................................   8
     4.3   Restrictions on Shares ..........................................   8
     4.4   Stockholder Rights ..............................................   8
     4.5   Registration ....................................................   9
     4.6   Anti-Dilution ...................................................   9

ARTICLE V

ELIGIBILITY ................................................................  10
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     5.1   Eligibility .....................................................  10

ARTICLE VI

STOCK OPTIONS ..............................................................  10
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     6.1   General .........................................................  10
     6.2   Grant and Exercise ..............................................  10
     6.3   Terms and Conditions ............................................  11
     6.4   Termination by Reason of Death ..................................  12
     6.5   Termination by Reason of Disability .............................  13
     6.6   Other Termination ...............................................  13

ARTICLE VII

PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THE PLAN .....................  13
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     7.1   Limited Transfer During Offering ................................  13
     7.2   Committee Discretion ............................................  13
     7.3   No Company Obligation ...........................................  14

ARTICLE VIII

MISCELLANEOUS ..............................................................  14
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     8.1   Amendments and Termination ......................................  14
     8.2   Stand-Alone, Additional, Tandem, and Substitute Awards ..........  14
     8.3   Form and Timing of Payment Under Awards; Deferrals ..............  15
     8.4   Status of Awards Under Code Section 162(m) ......................  15
     8.5   Unfunded Status of Plan; Limits on Transferability ..............  15
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     8.6   General Provisions ...............................................  16
     8.7   Mitigation of Excise Tax .........................................  17
     8.8   Rights with Respect to Continuance of Employment .................  18
     8.9   Awards in Substitution for Awards Granted by Other Corporations ..  18
     8.10  Procedure for Adoption ...........................................  18
     8.11  Procedure for Withdrawal .........................................  18
     8.12  Delay ............................................................  18
     8.13  Headings .........................................................  19
     8.14  Severability .....................................................  19
     8.15  Successors and Assigns ...........................................  19
     8.16  Entire Agreement .................................................  19
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                      ALLTECH INTERNATIONAL HOLDINGS, INC.
                         2003 EMPLOYEE STOCK OPTION PLAN

                                    ARTICLE I

                                  ESTABLISHMENT

     1.1  Purpose.

     Alltech International Holdings, Inc. 2003 Employee Stock Option Plan
("Plan") is hereby established by Alltech International Holdings, Inc.
("Company"), effective as of May 1 2003. The purpose of the Plan is to promote
the overall financial objectives of the Company and its stockholders by
motivating those persons selected to participate in the Plan to achieve
long-term growth in stockholder equity in the Company and by retaining the
association of those individuals who are instrumental in achieving this growth.
The Plan and the grant of awards thereunder are expressly conditioned upon the
Plan's approval by the stockholders of the Company. If such approval is not
obtained, then this Plan and all Awards (as defined herein) shall be null and
void ab initio.

                                   ARTICLE II

                                   DEFINITIONS

     For purposes of the Plan, the following terms are defined as set forth
below:

     2.1  "Affiliate" means any individual, corporation, partnership,
association, limited liability company, joint-stock company, trust,
unincorporated association or other entity (other than the Company) that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Company including, without
limitation, any member of an affiliated group of which the Company is a common
parent corporation as provided in Section 1504 of the Code.

     2.2  "Agreement" or "Award Agreement" means, individually or collectively,
any agreement entered into pursuant to the Plan pursuant to which an Award is
granted to a Participant.

     2.3  "Award" means any Option, together with any other right or interest
granted to a Participant under the Plan.

     2.4  "Beneficiary" means the person, persons, trust or trusts which have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under the
Plan upon such Participant's death or to which Awards or other rights are
transferred if and to the extent permitted hereunder. If, upon a Participant's
death, there is no designated Beneficiary or surviving designated Beneficiary,
then

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the term Beneficiary means the person, persons, trust or trusts entitled by will
or the laws of descent and distribution to receive such benefits.

     2.5  "Board of Directors" or "Board" means the Board of Directors of the
Company.

     2.6  "Cause" shall mean, for purposes of whether and when a Participant has
incurred a Termination of Employment for Cause, any act or omission which
permits the Company to terminate the employment of the Participant between the
Company or an Affiliate for "cause" as defined in such agreement or arrangement,
or in the event there is no such agreement or arrangement or the agreement or
arrangement does not define the term "cause" or a substantially equivalent term,
then Cause shall consist of the following: Participant's conviction on a felony
charge or Participant's commission of any crime involving moral turpitude;
Participant's dishonesty or fraud resulting in damage to the business of the
Company or an Affiliate; Participant's embezzlement or theft of assets of the
Company or an Affiliate; in the sole discretion of the Company, Participant's
grossly negligent conduct, Participant's course of personal conduct of an
illegal or unethical nature which tends to place the Company or an Affiliate in
disrepute, or otherwise negatively affects the ability of the Company or an
Affiliate to conduct its business; Participant's competition with the Company or
aid to a competitor of the Company to the detriment of the Company; or failure
to perform duties and services to the Company or an Affiliate. In the event
Participant is arrested for any of the types of matters above, the Company may
place Participant on suspension without pay until such matter is dismissed or
Participant is convicted.

     2.7  "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, Treasury Regulations (including proposed regulations)
thereunder and any subsequent Internal Revenue Code.

     2.8  "Commission" means the Securities and Exchange Commission or any
successor agency.

     2.9  "Committee" means the person or persons appointed to administer this
Plan, as further described herein.

     2.10 "Common Stock" means the shares of the regular voting Common Stock,
$.001 par value, whether presently or hereafter issued, and any other stock or
security resulting from adjustment thereof as described hereinafter or the
common stock of any successor to the Company which is designated for the purpose
of the Plan.

     2.11 "Company" means Alltech International Holdings, Inc., a Delaware
corporation, and includes any successor or assignee corporation or corporations
into which the Company may be merged, changed or consolidated; any corporation
for whose securities all or substantially all of the securities of the Company
shall be exchanged; and any assignee of or successor to substantially all of the
assets of the Company.

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     2.12 "Covered Employee" means a Participant who is a "covered employee"
within the meaning of Section 162(m) of the Code.

     2.13 "Disability" means a mental or physical illness that entitles the
Participant to receive benefits under the long-term disability plan of the
Company or an Affiliate, or if the Participant is not covered by such a plan,
the Participant is not an employee of the Company or an Affiliate or a long-term
disability plan has not been adopted by the Company or an Affiliate, a mental or
physical illness that renders a Participant totally and permanently incapable of
performing the Participant's duties for the Company or an Affiliate.
Notwithstanding the foregoing, a Disability shall not qualify under this Plan if
it is the result of (i) a willfully self-inflicted injury or willfully
self-induced sickness; or (ii) an injury or disease contracted, suffered, or
incurred while participating in a criminal offense. The determination of
Disability shall be made by the Committee. The determination of Disability for
purposes of this Plan shall not be construed to be an admission of disability
for any other purpose.

     2.14 "Disinterested Person" shall have the meaning set forth in Rule 16b-3,
or any successor definition adopted by the Commission, and shall mean a person
who is also an "outside director" under Section 162(m) of the Code.

     2.15 "Effective Date" means May 1, 2003.

     2.16 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

     2.17 "Fair Market Value" means the fair market value of Common Stock or
other property as determined by the Committee or under procedures established by
the Committee. Unless otherwise determined by the Committee, the Fair Market
Value per share of Common Stock as of any given date shall be the closing sale
price per share reported on a consolidated basis for stock listed on the
principal stock exchange or market on which Common Stock is traded on the date
as of which such value is being determined or, if there is no sale on that date,
then on the last previous day on which a sale was reported.

     2.18 "Grant Date" means the date as of which an Award is granted pursuant
to the Plan.

     2.19 "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.

     2.20 "NASDAQ" means The Nasdaq Stock Market, including the Nasdaq National
Market.

     2.21 "Non-Qualified Stock Option" means an Option to purchase Common Stock
in the Company granted under the Plan, the taxation of which is pursuant to
Section 83 of the Code.

     2.22 "Option" or "Stock Option" means a right, granted to a Participant
under Section 6.1 hereof, to purchase Common Stock at a specified price during
specified time periods.

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     2.23 "Option Period" means the period during which an Option shall be
exercisable in accordance with the related Agreement and Article VI.

     2.24 "Option Price" means the price at which the Common Stock may be
purchased under an Option as provided in Section 6.3(b).

     2.25 "Participant" means a person who satisfies the eligibility conditions
of Article V and to whom an Award has been granted by the Committee under the
Plan, and in the event a Representative is appointed for a Participant or
another person becomes a Representative, then the term "Participant" shall mean
such Representative. The term shall also include a trust for the benefit of the
Participant, a partnership the interest of which is held by or for the benefit
of the Participant, the Participant's parents, spouse or descendants, or a
custodian under a uniform gifts to minors act or similar statute for the benefit
of the Participant's descendants, to the extent permitted by the Committee and
not inconsistent with Rule 16b-3 or the status of the Option as an Incentive
Stock Option, to the extent intended. Notwithstanding the foregoing, the term
"Termination of Employment" shall mean the Termination of Employment of the
person to whom the Award was originally granted.

     2.26 "Plan" means Alltech International Holdings, Inc. 2003 Employee Stock
Option Plan, as herein set forth and as amended from time to time.

     2.27 "Representative" means (a) the person or entity acting as the executor
or administrator of a Participant's estate pursuant to the last will and
testament of a Participant or pursuant to the laws of the jurisdiction in which
the Participant had the Participant's primary residence at the date of the
Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
Beneficiary of the Participant upon or following the Participant's death; or (d)
any person to whom an Option has been transferred with the permission of the
Committee or by operation of law; provided that only one of the foregoing shall
be the Representative at any point in time as determined under applicable law
and recognized by the Committee.

     2.28 "Retirement" means the Participant's Termination of Employment after
attaining either the normal retirement age or the early retirement age as
defined in the principal (as determined by the Committee) tax-qualified plan of
the Company or an Affiliate, if the Participant is covered by such a plan, or if
the Participant is not covered by such a plan, then age 65, or age 60 with the
accrual of 5 years of service.

     2.29 "Rule 16b-3" means Rule 16b-3 as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

     2.30 "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

                                       4

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     2.31 "Termination of Employment" means the occurrence of any act or event,
whether pursuant to an employment agreement or otherwise, that actually or
effectively causes or results in the person's ceasing, for whatever reason, to
be an officer, independent contractor, or employee of the Company or of any
Affiliate of the Company, or ceasing to be an officer, independent contractor,
or employee of any entity that provides services to the Company or a Affiliate
of the Company, including, without limitation, death, Disability, dismissal,
severance at the election of the Participant, Retirement, or severance as a
result of the discontinuance, liquidation, sale or transfer by the Company or
its Affiliates of all businesses owned or operated by the Company or its
Affiliates. With respect to any person who is not an employee with respect to
the Company or a Affiliate of the Company, the Agreement shall establish what
act or event shall constitute a Termination of Employment for purposes of the
Plan. A transfer, of employment from the Company to a Affiliate, or from a
Affiliate to the Company, will not be a Termination of Employment, unless
expressly determined by the Committee. A Termination of Employment shall occur
for an employee who is employed by an Affiliate if the Affiliate shall cease to
be a Affiliate and the Participant shall not immediately thereafter become an
employee of the Company or an Affiliate.

     In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.

                                   ARTICLE III

                                 ADMINISTRATION

     3.1  Committee Structure and Authority. The Plan shall be administered by
the Committee which shall be comprised of one or more persons. The Committee
shall be the Compensation Committee of the Board of Directors, unless such
committee does not exist or the Board establishes or identifies another
committee whose purpose is the administration of this Plan; provided that only
those members of the Compensation Committee who participate in the decision
relative to Awards under this Plan shall be deemed to be the "Committee" for
purposes of this Plan. The Committee shall be comprised of such number of
Disinterested Persons as is required for application of Rule 16b-3 and the
deduction of compensation under Section 162(m) of the Code, if applicable. In
the absence of an appointment, the Board or the portion thereof that is a
Disinterested Person shall be the Committee. A majority of the Committee shall
constitute a quorum at any meeting thereof (including by telephone conference)
and the acts of a majority of the members present, or acts approved in writing
by a majority of the entire Committee without a meeting, shall be the acts of
the Committee for purposes of this Plan. The Committee may authorize any one or
more of its members or an officer of the Company to execute and deliver
documents on behalf of the Committee. A member of the Committee shall not
exercise any discretion respecting himself or herself under the Plan. The Board
shall have the authority to remove, replace or fill any vacancy of any member of
the Committee upon notice to the Committee and the affected member. Any member
of the Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members, or may delegate to one or more of its agents,
such duties and responsibilities as it determines.

                                       5

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     Among other things, the Committee shall have the authority, subject to the
terms of the Plan and the limitation of Rule 16b-3 so that the Plan is described
in that section:

          (a)  to select those persons to whom Awards may be granted from time
     to time;

          (b)  to determine whether and to what extent Awards or any combination
     thereof are to be granted hereunder;

          (c)  to determine the number of shares of Common Stock to be covered
     by each Award granted hereunder;

          (d)  to determine the terms and conditions of any Award granted
     hereunder (including, but not limited to, the Option Price, the Option
     Period, any exercise restriction or limitation and any exercise
     acceleration, forfeiture or waiver regarding any Award, any shares of
     Common Stock relating thereto, any performance criteria and the
     satisfaction of each criteria);

          (e)  to adjust the terms and conditions, at any time or from time to
     time, of any Award, subject to the limitations of Section 8.1;

          (f)  to determine to what extent and under what circumstances Common
     Stock and other amounts payable with respect to an Award shall be deferred;

          (g)  to determine under what circumstances an Award may be settled in
     cash or Common Stock;

          (h)  to provide for the forms of Agreements to be utilized in
     connection with the Plan;

          (i)  to determine whether a Participant has a Disability or a
     Retirement;

          (j)  to determine what securities law requirements are applicable to
     the Plan, Awards and the issuance of shares of Common Stock under the Plan
     and to require of a Participant that appropriate action be taken with
     respect to such requirements;

          (k)  to cancel, with the consent of the Participant or as otherwise
     provided in the Plan or an Agreement, outstanding Awards;

          (1)  to interpret and make final determinations with respect to the
     remaining number of shares of Common Stock available under this Plan;

          (m)  to require, as a condition of the exercise of an Award or the
     issuance or transfer of a certificate of Common Stock, the withholding from
     a Participant of the

                                       6

<PAGE>

     amount of any Federal, state or local taxes as may be necessary in order
     for the Company or any other employer to obtain a deduction or as may be
     otherwise required by law;

          (n)  to determine whether and with what effect a Participant has
     incurred a Termination of Employment;

          (o)  to determine whether the Company or any other person has a right
     or obligation to purchase Common Stock from a Participant and, if so, the
     terms and conditions on which such Common Stock is to be purchased;

          (p)  to determine the restrictions or limitations on the transfer of
     Common Stock;

          (q)  to determine whether an Award is to be adjusted, modified or
     purchased, or is to become fully exercisable, under the Plan or the terms
     of an Agreement;

          (r)  to determine the permissible methods of Award exercise and
     payment, including cashless exercise arrangements if permissible in
     accordance with applicable law;

          (s)  to adopt, amend and rescind such rules and regulations as, in its
     opinion, may be advisable in the administration of the Plan; and

          (t)  to appoint and compensate agents, counsel, auditors or other
     specialists to aid it in the discharge of its duties.

     The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any Agreement) and to otherwise
supervise the a0dministration of the Plan. The Committee's policies and
procedures may differ with respect to Awards granted at different times or to
different Participants.

     Any determination made by the Committee pursuant to the provisions of the
Plan shall be made in its sole discretion, and in the case of any determination
relating to an Award, may be made at the time of the grant of the Award or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company and
Participants. No determination shall be subject to de novo review if challenged
in court.

                                       7

<PAGE>

                                   ARTICLE IV

                              STOCK SUBJECT TO PLAN

     4.1  Number of Shares. Subject to the adjustment under Section 4.6, the
total number of shares of Common Stock reserved and available for distribution
pursuant to Awards under the Plan shall be 500,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in whole
or in part, of authorized and unissued shares or treasury shares.

     4.2  Release of Shares. The Committee shall have full authority to
determine the number of shares of Common Stock available for Award, and in its
discretion may include (without limitation) as available for distribution any
shares of Common Stock that have ceased to be subject to an Award, any shares of
Common Stock subject to any Award that are forfeited, any Award that otherwise
terminates without issuance of shares of Common Stock being made to the
Participant, or any shares (whether or not restricted) of Common Stock that are
received by the Company in connection with the exercise of an Award, including
the satisfaction of any tax liability or the satisfaction of a tax withholding
obligation. If any shares could not again be available for Options to a
particular Participant under applicable law, such shares shall be available
exclusively for Options to Participants who are not subject to such limitations.

     4.3  Restrictions on Shares. Shares of Common Stock issued as or in
conjunction with an Award shall be subject to the terms and conditions specified
herein and to such other terms, conditions and restrictions as the Committee in
its discretion may determine or provide in an Award Agreement. The Company shall
not be required to issue or deliver any certificates for shares of Common Stock,
cash or other property prior to: (i) the listing of such shares on any stock
exchange or NASDAQ (or other public market) on which the Common Stock may then
be listed (or regularly traded), (ii) the completion of any registration or
qualification of such shares under Federal or state law, or any ruling or
regulation of any government body which the Committee determines to be necessary
or advisable, and (iii) the satisfaction of any applicable withholding
obligation in order for the Company or an Affiliate to obtain a deduction with
respect to the exercise of an Award. The Company may cause any certificate for
any share of Common Stock to be delivered to be properly marked with a legend or
other notation reflecting the limitations on transfer of such Common Stock as
provided in this Plan or as the Committee may otherwise require. The Committee
may require any person exercising an Award to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of the shares of Common Stock in compliance with applicable
law or otherwise. Fractional shares shall not be delivered, but shall be rounded
to the next lower whole number of shares.

     4.4  Stockholder Rights. No person shall have any rights of a stockholder
as to shares of Common Stock subject to an Award until, after proper exercise of
the Award or other action required, such shares shall have been recorded on the
Company's official stockholder records as having been issued and transferred.
Upon exercise of the Award or any portion thereof, the

                                       8

<PAGE>

Company will have a reasonable time in which to issue the shares, and the
Participant will not be treated as a stockholder for any purpose whatsoever
prior to such issuance. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date such shares are recorded
as issued and transferred in the Company's official stockholder records, except
as provided herein or in an Agreement.

     4.5  Registration. Upon becoming a "reporting company" (as defined in the
Exchange Act, the Securities Act and regulations promulgated thereunder) the
Company may register under the Securities Act the Common Stock delivered or
deliverable pursuant to Awards on Commission Form S-8 if available to the
Company for this purpose (or any successor or alternate form that is
substantially similar to that form to the extent available to effect such
registration), in accordance with the rules and regulations governing such
forms, as soon after as the Board, in its sole discretion, shall deem such
registration appropriate. If and to the extent that the Company determines to
complete such registration, the Company will use its best efforts to cause the
registration statement to become effective and will file such supplements and
amendments to the registration statement as may be necessary to keep the
registration statement in effect until the earliest of (a) one year following
the expiration of the Option Period of the last Option outstanding, (b) the date
the Company is no longer a reporting company under the Exchange Act and (c) the
date all Participants have disposed of all shares delivered pursuant to any
Award.

     4.6  Anti-Dilution. In the event of any Company stock dividend, stock
split, reverse stock split, combination or exchange of shares, recapitalization
or other change in the capital structure of the Company, corporate separation or
division of the Company (including, but not limited to, a split-up, spin-off,
split-off or distribution to Company stockholders other than a normal cash
dividend), sale by the Company of all or a substantial portion of its assets
(measured on either a stand-alone or consolidated basis, as determined by the
Committee in its sole discretion), reorganization, rights offering, a partial or
complete liquidation, or any other corporate transaction, Company stock offering
or event involving the Company and having an effect similar to any of the
foregoing, then the Committee may adjust or substitute, as the case may be, the
number of shares of Common Stock available for Awards under the Plan, the number
of shares of Common Stock covered by outstanding Awards, the maximum number of
Awards available for grant to any Participant for a stated period of time
(including the maximum number of Stock Appreciation Rights), the exercise price
per share of outstanding Awards, and performance conditions and any other
characteristics or terms of the Awards as the Committee shall deem necessary or
appropriate to reflect equitably the effects of such changes to the
Participants; provided, however, that the Committee may limit any such
adjustment so as to maintain the deductibility of the Awards under Section
162(m) of the Code, if applicable, and that any fractional shares resulting from
such adjustment shall be eliminated by rounding to the next lower whole number
of shares with appropriate payment for such fractional shares as shall
reasonably be determined by the Committee.

                                       9

<PAGE>

                                    ARTICLE V

                                   ELIGIBILITY

     5.1  Eligibility. Except as herein provided, the persons who shall be
eligible to participate in the Plan and be granted Awards shall be those persons
who are officers, employees and consultants of the Company or any subsidiary of
the Company, who shall be in a position, in the opinion of the Committee, to
make contributions to the growth, management, protection and success of the
Company and its subsidiaries. Of those persons described in the preceding
sentence, the Committee may, from time to time, select persons to be granted
Awards and shall determine the terms and conditions with respect thereto. In
making any such selection and in determining the form of the Award with respect
to Participants, the Committee may give consideration to the person's functions
and responsibilities, the person's contributions to the Company and its
subsidiaries, the value of the individual's service to the Company and its
subsidiaries and such other factors deemed relevant by the Committee. The
Committee may designate in writing any person who is not eligible to participate
in the Plan if such person would otherwise be eligible to participate in this
Plan (and members of the Committee are expressly excluded to the extent such
persons are intended to be Disinterested Persons).

                                   ARTICLE VI

                                  STOCK OPTIONS

     6.1  General. The Committee shall have authority to grant Stock Options
under the Plan at any time or from time to time. Stock Options may be granted
alone or in addition to other Awards and may be either Incentive Stock Options
or Non-Qualified Stock Options. An Option shall entitle the Participant to
receive shares of Common Stock upon exercise of such Option, subject to the
Participant's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement (the terms and
provisions of which may differ from other Agreements), including, without
limitation, payment of the Option Price.

     6.2  Grant and Exercise. The grant of a Stock Option shall occur as of the
date the Committee determines. Each Option granted under this Plan shall be
evidenced by an Agreement, in a form approved by the Committee, which shall
embody the terms and condition of such Option and which shall be subject to the
express terms and conditions set forth in the Plan. Such Agreement shall become
effective upon execution by the Participant. Only a person who is a common-law
employee of the Company, any parent corporation of the Company or a subsidiary
(as such terms are defined in Section 424 of the Code) on the date of grant
shall be eligible to be granted an Option which is intended to be and is an
Incentive Stock Option. To the extent that any Stock Option is not designated as
an Incentive Stock Option or even if so designated does not qualify as an
Incentive Stock Option, it shall constitute a Non-Qualified Stock Option.

                                       10

<PAGE>

     6.3  Terms and Conditions. Stock Options shall be subject to such terms and
conditions as shall be determined by the Committee, including the following:

          (a)  Option Period. The Option Period of each Stock Option shall be
     fixed by the Committee; provided that no Stock Option shall be exercisable
     more than ten (10) years after the date the Stock Option is granted. In the
     case of an Incentive Stock Option granted to an individual who owns more
     than ten percent (10%) of the combined voting power of all classes of stock
     of the Company, a corporation which is a parent corporation of the Company
     or any subsidiary of the Company (each as defined in Section 424 of the
     Code), the Option Period shall not exceed five (5) years from the date of
     grant. No Option which is intended to be an Incentive Stock Option shall be
     granted more than ten (10) years from the date the Plan is adopted by the
     Company or the date the Plan is approved by the stockholders of the
     Company, whichever is earlier.

          (b)  Option Price. The Option Price per share of the Common Stock
     purchasable under an Option shall be determined by the Committee; provided,
     however, that the Option Price of an Incentive Stock Option shall be not
     less than the Fair Market Value per share on the date the Option is
     granted. If such Option is intended to qualify as an Incentive Stock Option
     and is granted to an individual who owns or who is deemed to own stock
     possessing more than ten percent (10%) of the combined voting power of all
     classes of stock of the Company, a corporation which is a parent
     corporation of the Company or any subsidiary of the Company (each as
     defined in Section 424 of the Code), the Option Price per share shall not
     be less than one hundred ten percent (110%) of such Fair Market Value per
     share.

          (c)  Exercisability. Stock Options shall be exercisable at such time
     or times and subject to such terms and conditions as shall be determined by
     the Committee. If the Committee provides that any Stock Option is
     exercisable only in installments, the Committee may at any time waive such
     installment exercise provisions, in whole or in part. In addition, the
     Committee may at any time accelerate the exercisability of any Stock
     Option. If the Committee intends that an Option be an Incentive Stock
     Option, the Committee may, in its discretion, provide that the aggregate
     Fair Market Value (determined at the Grant Date) of the Common Stock as to
     which such Incentive Stock Option is exercisable for the first time during
     any calendar year shall not exceed $100,000.

          (d)  Method of Exercise. Subject to the provisions of this Article VI,
     a Participant may exercise Stock Options, in whole or in part, at any time
     during the Option Period by the Participant's giving written notice of
     exercise on a form provided by the Committee (if available) to the Company
     specifying the number of shares of Common Stock subject to the Stock Option
     to be purchased. Except when waived by the Committee, such notice shall be
     accompanied by payment in full of the purchase price by cash or check or
     such other form of payment as the Company may accept. If approved by the
     Committee (including approval at the time of exercise), and permitted to be
     given by the Participant in accordance with the provisions of applicable
     law in effect at the time

                                       11

<PAGE>

     the notice of exercise is given, payment in full or in part may also be
     made (i) by delivering Common Stock already owned by the Participant having
     a total Fair Market Value on the date of such delivery equal to the Option
     Price; (ii) by the execution and delivery of a note or other evidence of
     indebtedness (and any security agreement thereunder) satisfactory to the
     Committee and permitted in accordance with Section 6.3(e); (iii) by
     authorizing the Company to retain shares of Common Stock which would
     otherwise be issuable upon exercise of the Option having a total Fair
     Market Value on the date of delivery equal to the Option Price; (iv) by the
     delivery of cash or the extension of credit by a broker-dealer to whom the
     Participant has submitted a notice of exercise or otherwise indicated an
     intent to exercise an Option (in accordance with Part 220, Chapter 11,
     Title 12 of the Code of Federal Regulations, so-called "cashless"
     exercise); or (v) by certifying ownership of shares of Common Stock by the
     Participant to the satisfaction of the Committee for later delivery to the
     Company as specified by the Committee; or by any combination of the
     foregoing or by any other method permitted by the Committee. In the case of
     an Incentive Stock Option, the right to make a payment in the form of
     already owned shares of Common Stock of the same class as the Common Stock
     subject to the Stock Option may be authorized only at the time the Stock
     Option is granted. No shares of Common Stock shall be issued until full
     payment therefor, as determined by the Committee, has been made. A
     Participant shall have all of the rights of a stockholder of the Company
     holding the class of Common Stock that is subject to such Stock Option
     (including, if applicable, the right to vote the shares and the right to
     receive dividends), when the Participant has given written notice of
     exercise, has paid in full for such shares and such shares have been
     recorded on the Company's official stockholder records as having been
     issued or transferred.

          (e)  Non-transferability of Options. Except as provided herein or in
     an Agreement and then only consistent with the intent that the Option be an
     Incentive Stock Option, no Stock Option or interest therein shall be
     transferable by the Participant other than by will or by the laws of
     descent and distribution or by a designation of beneficiary effective upon
     the death of the Participant, and all Stock Options shall be exercisable
     during the Participant's lifetime only by the Participant. If and to the
     extent transferability is permitted by Rule 16b-3 or does not result in
     liability to any Participant and except as otherwise provided herein or by
     an Agreement, every Option granted hereunder shall be freely transferable,
     but only if such transfer does not result in liability under Section 16 of
     the Exchange Act to the Participant or other Participants and is consistent
     with registration of the Option and sale of Common Stock on Form S-8 (or a
     successor form) or is consistent with the use of Form S-8 (or the
     Committee's waiver of such condition) and consistent with an Award's
     intended status as an Incentive Stock Option (as applicable).

     6.4  Termination by Reason of Death. Unless otherwise provided in an
Agreement or determined by the Committee, if a Participant incurs a Termination
of Employment due to death, any unexpired and unexercised Stock Option held by
such Participant shall thereafter be fully exercisable for a period of one (1)
year following the date of the appointment of a Representative

                                       12

<PAGE>

(or such other period or no period as the Committee may specify) or until the
expiration of the Option Period, whichever period is the shorter.

     6.5  Termination by Reason of Disability. Unless otherwise provided in an
Agreement or determined by the Committee, if a Participant incurs a Termination
of Employment due to a Disability, any unexpired and unexercised Stock Option
held by such Participant shall thereafter be fully exercisable by the
Participant for the period of one (1) year (or such other period or no period as
the Committee may specify) immediately following the date of such Termination of
Employment or until the expiration of the Option Period, whichever period is
shorter, and the Participant's death at any time following such Termination of
Employment due to Disability shall not affect the foregoing. In the event of
Termination of Employment by reason of Disability, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.

     6.6  Other Termination. Unless otherwise provided in an Agreement or
determined by the Committee, if a Participant incurs a Termination of Employment
due to Retirement, or the Termination of Employment is involuntary on the part
of the Participant (but is not due to death or Disability or with Cause), any
Stock Option held by such Participant shall thereupon terminate, except that
such Stock Option, to the extent then exercisable, may be exercised for the
lesser of the ninety (90) day period commencing with the date of such
Termination of Employment or until the expiration of the Option Period. Unless
otherwise provided in an Agreement or determined by the Committee, if the
Participant incurs a Termination of Employment which is either (a) voluntary on
the part of the Participant (and is not due to Retirement) or (b) with Cause,
the Option shall terminate immediately. Unless otherwise provided in an
Agreement or determined by the Committee, the death or Disability of a
Participant after a Termination of Employment otherwise provided herein shall
not extend the time permitted to exercise an Option.

                                   ARTICLE VII

             PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THE PLAN

     7.1  Limited Transfer During Offering. In the event there is an effective
registration statement under the Securities Act pursuant to which shares of
Common Stock shall be offered for sale in an underwritten offering, a
Participant shall not, during the period requested by the underwriters managing
the registered public offering, effect any public sale or distribution of shares
received directly or indirectly pursuant to an exercise of an Award.

     7.2  Committee Discretion. The Committee may in its sole discretion include
in any Agreement an obligation that the Company purchase a Participant's shares
of Common Stock received upon the exercise of an Award (including the purchase
of any unexercised Awards which have not expired), or may obligate a Participant
to sell shares of Common Stock to the Company, upon such terms and conditions as
the Committee may determine and set forth in an

                                       13

<PAGE>

Agreement. The provisions of this Article VII shall be construed by the
Committee in its sole discretion, and shall be subject to such other terms and
conditions as the Committee may from time to time determine. Notwithstanding any
provision herein to the contrary, the Company may upon determination by the
Committee assign its right to purchase shares of Common Stock under this Article
VII, whereupon the assignee of such right shall have all the rights, duties and
obligations of the Company with respect to purchase of the shares of Common
Stock.

     7.3  No Company Obligation. None of the Company, an Affiliate or the
Committee shall have any duty or obligation to disclose affirmatively to a
record or beneficial holder of Common Stock or an Award, and such holder shall
have no right to be advised of, any material information regarding the Company
or any Affiliate at any time prior to, upon or in connection with receipt or the
exercise of an Award or the Company's purchase of Common Stock or an Award from
such holder in accordance with the terms hereof.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     8.1  Amendments and Termination. The Board may amend, alter or discontinue
the Plan at any time, but no amendment, alteration or discontinuation shall be
made which would impair the rights of a Participant under a Award theretofore
granted without the Participant's consent, except such an amendment (a) made to
avoid an expense charge to the Company or an Affiliate, (b) made to cause the
Plan to qualify for the exemption provided by Rule 16b-3, (c) to prevent the
Plan from being disqualified from the exemption provided by Rule 16b-3, or (d)
made to permit the Company or an Affiliate a deduction under the Code. In
addition, no such amendment shall be made without the approval of the Company's
stockholders to the extent such approval is required by law or agreement.

     The Committee may amend the Plan at any time subject to the same
limitations (and exceptions to limitations) as applied to the Board and further
subject to any approval or limitations the Board may impose.

     The Committee may amend the terms of any Award or other Award theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights of any Participant without the Participant's consent or reduce an Option
Price, except such an amendment made to cause the Plan or Award to qualify for
the exemption provided by Rule 16b-3, avoid an expense charge to the Company or
an Affiliate or qualify for a deduction.

     Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.

     8.2  Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in

                                       14

<PAGE>

tandem with, or in substitution or exchange for, any other Award or any award
granted under another plan of the Company, any subsidiary, or any business
entity to be acquired by the Company or a subsidiary, or any other right of a
Participant to receive payment from the Company or any subsidiary. Such
additional, tandem, and substitute or exchange Awards may be granted at any
time. If an Award is granted in substitution or exchange for another Award or
award, the Committee shall require the surrender of such other Award or award in
consideration for the grant of the new Award. In addition, Awards may be granted
in lieu of cash compensation, including in lieu of cash amounts payable under
other plans of the Company or any subsidiary, in which the Fair Market Value of
Common Stock subject to the Award is equivalent in value to the cash
compensation, or in which the exercise price, grant price or purchase price of
the Award in the nature of a right that may be exercised is equal to the Fair
Market Value of the underlying Common Stock minus the value of the cash
compensation surrendered.

     8.3  Form and Timing of Payment Under Awards; Deferrals. Subject to the
terms of the Plan and any applicable Agreement, payments to be made by the
Company or an Affiliate upon the exercise of an Award or settlement of an Award
may be made in such forms as the Committee shall determine, including, without
limitation, cash, Common Stock, other Awards or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis. The
settlement of any Award may be accelerated, and cash paid in lieu of Common
Stock in connection with such settlement, in the discretion of the Committee or
upon occurrence of one or more specified events. Installment or deferred
payments may be required by the Committee (subject to Section 8.1 of the Plan)
or permitted at the election of the Participant. Payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments.

     8.4  Status of Awards Under Code Section 162(m). On and after the date
Section 162(m) of the Code applies to Awards, it is the intent of the Company
that Awards granted to persons who are Covered Employees within the meaning of
Code Section 162(m) shall constitute "qualified performance-based compensation"
satisfying the requirements of Code Section 162(m). Accordingly, the provisions
of the Plan shall be interpreted in a manner consistent with Code Section 162(m)
after the date Section 162(m) is applicable. If any provision of the Plan or any
agreement relating to such an Award does not comply or is inconsistent with the
requirements of Code Section 162(m), such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements.

     8.5  Unfunded Status of Plan; Limits on Transferability. It is intended
that the Plan be an "unfunded" plan for incentive and deferred compensation. The
Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Common Stock or make payments;
provided, however, that, unless the Committee otherwise determines, the
existence of such trusts or other arrangements is consistent with the "unfunded"
status of the Plan. Unless otherwise provided in this Plan or in an Agreement,
no Award shall be subject to the claims of Participant's creditors and no Award
may be transferred, assigned, alienated or encumbered in any way other than by
will or the laws of descent and distribution or to a Representative upon the
death of the Participant.

                                       15

<PAGE>

     8.6  General Provisions.

          (a)  Representation. The Committee may require each person purchasing
     or receiving shares pursuant to an Award to represent to and agree with the
     Company in writing that such person is acquiring the shares without a view
     to the distribution thereof. The certificates for such shares may include
     any legend which the Committee deems appropriate to reflect any
     restrictions on transfer.

          (b)  No Additional Obligation. Nothing contained in the Plan shall
     prevent the Company or an Affiliate from adopting other or additional
     compensation arrangements for its employees.

          (c)  Withholding. No later than the date as of which an amount first
     becomes includible in the gross income of the Participant for Federal
     income tax purposes with respect to any Award, the Participant shall pay to
     the Company (or other entity identified by the Committee), or make
     arrangements satisfactory to the Company or other entity identified by the
     Committee regarding the payment of, any Federal, state, local or foreign
     taxes of any kind required by law to be withheld with respect to such
     amount required in order for the Company or an Affiliate to obtain a
     current deduction. Unless otherwise determined by the Committee,
     withholding obligations may be settled with Common Stock, including Common
     Stock that is part of the Award that gives rise to the withholding
     requirement provided that any applicable requirements under Section 16 of
     the Exchange Act are satisfied. The obligations of the Company under this
     Plan shall be conditional on such payment or arrangements, and the Company
     and its Affiliates shall, to the extent permitted by law, have the right to
     deduct any such taxes from any payment otherwise due to the Participant. If
     the Participant disposes of shares of Common Stock acquired pursuant to an
     Incentive Stock Option in any transaction considered to be a disqualifying
     transaction under the Code, the Participant must give written notice of
     such transfer and the Company shall have the right to deduct any taxes
     required by law to be withheld from any amounts otherwise payable to the
     Participant. Unless otherwise determined by the Committee, withholding
     obligations may be settled with Common Stock, including Common Stock that
     is part of the Award that gives rise to the withholding requirement,
     provided that any applicable requirements under Section 16 of the Exchange
     Act are satisfied. The obligations of the Company under the Plan shall be
     conditional on such payment or arrangements, and the Company and its
     Affiliates shall, to the extent permitted by law, have the right to deduct
     any such taxes from any payment otherwise due to the Participant.

          (d)  Reinvestment. The reinvestment of dividends in additional Common
     Stock at the time of any dividend payment shall be permissible only if
     sufficient shares of Common Stock are available under the Plan for such
     reinvestment (taking into account then outstanding Options and other
     Awards).

                                       16

<PAGE>

          (e)  Representation. The Committee shall establish such procedures as
     it deems appropriate for a Participant to designate a Representative to
     whom any amounts payable in the event of the Participant's death are to be
     paid.

          (f)  Controlling Law. The Plan and all Awards made and actions taken
     thereunder shall be governed by and construed in accordance with the laws
     of the State of Illinois (other than its law respecting choice of law)
     except to the extent the General Corporation Law of the State of Delaware
     would be mandatorily applicable. The Plan shall be construed to comply with
     all applicable law and to avoid liability to the Company, an Affiliate or a
     Participant, including, without limitation, liability under Section 16(b)
     of the Exchange Act.

          (g)  Offset. Any amounts owed to the Company or an Affiliate by the
     Participant of whatever nature may be offset by the Company from the value
     of any shares of Common Stock, cash or other thing of value under this Plan
     or an Agreement to be transferred to the Participant, and no shares of
     Common Stock, cash or other thing of value under this Plan or an Agreement
     shall be transferred unless and until all disputes between the Company and
     the Participant have been fully and finally resolved and the Participant
     has waived all claims to such against the Company or an Affiliate.

          (h)  Fail Safe. With respect to persons subject to Section 16 of the
     Exchange Act, transactions under this Plan are intended to comply with all
     applicable conditions of Rule 16b-3. To the extent any provision of the
     Plan or action by the Committee fails to so comply, it shall be deemed null
     and void, except to the extent permitted by law and deemed advisable by the
     Committee. Moreover, in the event the Plan does not include a provision
     required by Rule 16b-3 to be stated herein, such provision (other than one
     relating to eligibility requirements or the price and amount of Awards)
     shall be deemed to be incorporated by reference into the Plan with respect
     to Participants subject to Section 16.

          (i)  Capitalization. The grant of an Award shall in no way affect the
     right of the Company to adjust, reclassify, reorganize or otherwise change
     its capital or business structure or to merge, consolidation, dissolve,
     liquidate or sell or transfer all or any part of its business or assets.

     8.7  Mitigation of Excise Tax. Subject to any agreement with the
Participant, if any payment or right accruing to a Participant under this Plan
(without the application of this Section 8.7), either alone or together with
other payments or rights accruing to the Participant from the Company or an
Affiliate ("Total Payments"), would constitute a "parachute payment" (as defined
in Section 280G of the Code and regulations thereunder), such payment or right
shall be reduced to the largest amount or greatest right that will result in no
portion of the amount payable or right accruing under the Plan being subject to
an excise tax under Section 4999 of the Code or being disallowed as a deduction
under Section 280G of the Code. The determination of whether any reduction in
the rights or payments under this Plan is to apply shall be made by the
Committee in good faith after consultation with the Participant, and such
determination shall be conclusive and

                                       17

<PAGE>

binding on the Participant. The Participant shall cooperate in good faith with
the Committee in making such determination and providing the necessary
information for this purpose. The foregoing provisions of this Section 8.7 shall
apply with respect to any person only if, after reduction for any applicable
Federal excise tax imposed by Section 4999 of the Code and Federal income tax
imposed by the Code, the Total Payments accruing to such person would be less
than the amount of the Total Payments as reduced, if applicable, under the
foregoing provisions of the Plan and after reduction for only Federal income
taxes.

     8.8  Rights with Respect to Continuance of Employment. Nothing contained
herein shall be deemed to alter the relationship between the Company or an
Affiliate and a Participant, or the contractual relationship between a
Participant and the Company or an Affiliate if there is a written contract
regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment between the Company or an Affiliate and a
Participant. The Company or an Affiliate and each of the Participants continue
to have the right to terminate the employment or service relationship at any
time for any reason, except as provided in a written contract. The Company or an
Affiliate shall have no obligation to retain the Participant in its employ or
service as a result of this Plan. There shall be no inference as to the length
of employment or service hereby, and the Company or an Affiliate reserves the
same rights to terminate the Participant's employment or service as existed
prior to the individual's becoming a Participant in this Plan.

     8.9  Awards in Substitution for Awards Granted by Other Corporations.
Awards may be granted under the Plan from time to time in substitution for
awards in respect of other plans of other entities. The terms and conditions of
the Awards so granted may vary from the terms and conditions set forth in this
Plan at the time of such grant as the Committee may deem appropriate to conform,
in whole or in part, to the provisions of the awards in substitution for which
they are granted.

     8.10 Procedure for Adoption. Any Affiliate of the Company may by resolution
of such Affiliate's board of directors, with the consent of the Board of
Directors and subject to such conditions as may be imposed by the Board of
Directors, adopt the Plan for the benefit of its employees as of the date
specified in the board resolution.

     8.11 Procedure for Withdrawal. Any Affiliate which has adopted the Plan
may, by resolution of the board of directors of such Affiliate, with the consent
of the Board of Directors and subject to such conditions as may be imposed by
the Board of Directors, terminate its adoption of the Plan.

     8.12 Delay. If at the time a Participant accrues a right under the Plan,
the Participant is subject to "short-swing" liability under Section 16 of the
Exchange Act, any time period provided for under the Plan or an Agreement to the
extent necessary to avoid the imposition of liability shall be suspended and
delayed during the period the Participant would be subject to such liability,
but not more than six (6) months and one (1) day and not to exceed the Option
Period, or the period for exercise of a Stock Appreciation Right as provided in
the Agreement, whichever is shorter. The Company shall have the right to suspend
or delay any time period described in the

                                       18

<PAGE>

Plan or an Agreement if the Committee shall determine that the action may
constitute a violation of any law or result in liability under any law to the
Company, an Affiliate or a stockholder of the Company until such time as the
action required or permitted shall not constitute a violation of law or result
in liability to the Company, an Affiliate or a stockholder of the Company. The
Committee shall have the discretion to suspend the application of the provisions
of the Plan required solely to comply with Rule 16b-3 if the Committee shall
determine that Rule 16b-3 does not apply to the Plan or any Participant.

     8.13 Headings. The headings contained in this Plan are for reference
purposes only and shall not affect the meaning or interpretation of this Plan.

     8.14 Severability. If any provision of this Plan shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not effect any other provision hereby, and this Plan shall be construed as if
such invalid or unenforceable provision were omitted.

     8.15 Successors and Assigns. This Plan shall inure to the benefit of and be
binding upon each successor and assign of the Company. All obligations imposed
upon a Participant, and all rights granted to the Company hereunder, shall be
binding upon the Participant's heirs, legal representatives and successors.

     8.16 Entire Agreement. This Plan and the Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the terms
and conditions of this Plan shall control.

Executed effective as of May 1, 2003.

                                          ALLTECH INTERNATIONAL HOLDINGS. INC.

                                          By:    _____________________________

                                          Title: _____________________________

                                       19Dennis L. Chiavelli Severance and Consulting Agreement dated 5/14/03

 EXHIBIT 10.25 
  
 SEVERANCE AND CONSULTING 
 SERVICES AGREEMENT 
  
 This
Severance and Consulting Services Agreement (“Agreement”) between Smart & Final Inc. and its subsidiaries and affiliates (collectively “S&F”) and Dennis L. Chiavelli (“Chiavelli”), is made with reference to the
following facts and objectives: 
  
 WHEREAS, 
  
 1. Chiavelli has been employed by S&F and related entities since December
1985 in a variety of executive officer capacities; and, 
  
 2.
Chiavelli has announced his intention to retire from active service and resign from all executive officer and director positions with S&F; and, 
  
 3. S&F desires to retain the benefit of Chiavelli’s expertise and to secure Chiavelli’s continued assistance in the orderly transition of
his former duties and responsibilities; and, 
  
 4. It is in the
best interest of S&F to secure continued access to Chiavelli’s services, following his retirement from active executive management, as may be desirable on a consulting basis; 
  
 NOW, THEREFORE, the parties agree as follows, in consideration of the mutual promises and representations contained herein:

  
 5. In recognition of Chiavelli’s contributions to
executive transition during 2002 and achievement of certain performance objectives, Chiavelli has received an incentive compensation payment for fiscal 2002 (“2002 Bonus”) of $177,840.00. S&F and Chiavelli agree that no additional
Bonus payments are due for fiscal 2002. 
  
 6. Chiavelli shall
resign from all executive officer and director positions with S&F as of July 1, 2003 (“the Effective Date”). 
  
 7. Until the Effective Date, Chiavelli shall continue to receive his regular salary, benefits and perquisites (collectively his “Base Pay”) at
the rate and in the customary manner existing prior to the Effective Date. In recognition of his service during 2003 prior to the Effective Date, Chiavelli shall receive an incentive compensation payment for fiscal 2003 (“2003 Bonus”) of
$88,920.00, payable prior to March 31, 2004. At Chiavelli’s option, this sum may be deferred and converted into an actuarially equivalent increase in 
  

 retirement benefits as provided in Paragraph 16 below. S&F and Chiavelli agree that no additional Bonus payments are
due for fiscal 2003. For his service after the Effective Date, Chiavelli will no longer be eligible to earn annual incentive compensation. 
  
 8. When paid to Chiavelli, the 2002 Bonus and 2003 Bonus shall be subject to income and payroll tax withholding consistent with S&F’s general
policy for incentive payments. 
  
 9. As soon as administratively
practicable after the Effective Date, Chiavelli shall receive payment of all accrued but unused vacation through that date. After the Effective Date, Chiavelli shall not be eligible to accrue any paid vacation or other compensable personal time.

  
 10. Beginning on the Effective Date, and continuing for 24
months thereafter (“the Consulting Period”), Chiavelli agrees, as provided below, to perform consulting services for S&F and to not compete with S&F. During the Consulting Period, Chiavelli shall receive compensation equal to his
Base Pay as set forth above (except for Annual Incentive Compensation) without material adjustment or modification; provided, however, that in the event any benefit or perquisite offered to any other executive officer is increased during the
Consulting Period, Chiavelli shall receive the benefit of such increase as well. In no case shall the Base Pay be reduced during the Consulting Period. Payment during the Consulting Period shall occur consistent with the Company’s standard
payroll practices and will continue in the event Chiavelli is incapacitated or dies during the Consulting Period. 
  
 11. During the Consulting Period, Chiavelli shall continue to be eligible to participate in the Supplemental Deferred Compensation Plan (“SDCP”)
and the Supplemental Executive Retirement Plan (“SERP”), with the status of an active employee of S&F. 
  
 12. During the Consulting Period, Chiavelli shall remain reasonably available for consultation electronically, by telephone and/or written correspondence.
It is expressly understood that while Chiavelli may be away from his residence for extended periods, he will endeavor to remain available by telephone and electronic means. Unless otherwise agreed by Chiavelli, the maximum consulting services
required in one calendar month shall be ten (10) hours. In the event during the Consulting Period that Chiavelli’s services are requested for a specific project, Chiavelli shall be entitled to a per diem in an amount to be mutually agreed upon
between him and the Company based upon the duration and complexity of the specific work assignment. 
  
 13. During the Consulting Period, Chiavelli shall have use of a cellular telephone and personal computer together with Internet access at S&F expense.
Should Chiavelli’s services be required at S&F’s Commerce, California office or any other location, the Company agrees to provide reasonable notice of such request and if such request cannot be reasonably accommodated by Chiavelli, he
may decline such request without prejudice to any right to payment for any sums due herein. Chiavelli’s expenses reasonably incurred in 
  

 the performance of his assigned duties during the Consulting Period, including but not limited to travel and lodging
expenses, shall be promptly reimbursed by S&F. 
  
 14. During
the Consulting Period, Chiavelli will not, without prior consent of the Chief Executive Officer of S&F, directly or indirectly render any material services to any other person, business, or entity that is in a materially competitive position
with S&F or its businesses (as described in the Company’s Reports on Form 10-K and 10-Q for the Consulting Period). In the event that the Chief Executive Officer does not grant such consent, Chiavelli shall have the right to appeal such
decision to the Compensation Committee of the Board of Directors, whose majority decision shall be binding upon all parties. This provision shall in no way limit Chiavelli’s right to provide services for compensation or otherwise to persons or
firms that do not compete with the Company. 
  
 15. It is the
express intention of the parties that Chiavelli shall retire from S&F as of July 1, 2005 (“Retirement Date”). Chiavelli shall be fully vested in the SERP and other retirement benefits, including retiree medical benefits, as of that
date. 
  
 16. Chiavelli’s benefit payable under the SERP,
prior to offset for payments made under the Smart & Final Pension Plan as provided for in Section 1.29 of the SERP, shall be $203,000.00 annually without regard to the formula terms of the SERP. This amount may be increased at Chiavelli’s
option by the deferral and conversion of the 2003 Bonus referenced in Paragraph 7 above, on an actuarially equivalent basis using the factors as provided in Section 1.1 of the SERP. 
  
 17. Unless sooner vested, the Company shall cause all of Chiavelli’s stock options, restricted stock and other equity
benefits (collectively “Equity Benefits”) to fully vest on the Retirement Date. As measured from the Retirement Date, stock options will remain exercisable for the shorter of (a) their remaining term or (b) a three-year period thereafter.
Until the Retirement Date, Chiavelli will receive the benefit of any modifications or adjustments to any such Equity Benefits offered generally to other executive officers of the Company, but is expressly understood that he will not be eligible to
participate in any new equity benefits which may be granted subsequent to December 31, 2002. 
  
 18. The consulting services listed hereunder may be assigned by Chiavelli to a professional service organization in which he owns a controlling interest, provided that the consulting services will be performed by
Chiavelli personally. Notwithstanding any such assignment, Chiavelli agrees that a failure of a professional service organization to perform such services shall have the same legal effect as if Chiavelli had failed to personally perform such
service. 
  
 19. During the Consulting Period, and for a period of
one year thereafter, Chiavelli agrees to retain in confidence any and all material trade secrets, confidential information or other data, which is not readily available to the public. Following this period Chiavelli shall return to S&F any
remaining material non-public information. 
  

 20. This Agreement shall supercede and replace any prior agreements, whether written or oral or other,
regarding the subject matter herein in whole or in part. 
  
 21.
This Agreement, and any disputes arising hereunder, shall be governed and interpreted according to California law. Any disputes shall be resolved through binding arbitration according to the rules of the American Arbitration Association in Los
Angeles with the prevailing party entitled to costs and reasonable attorneys’ fees. 
  
 22. Except as required by any federal or state statute, discovery request or lawful subpoena, the parties agree to maintain in confidence, the fact of, subject matter and terms of this agreement, provided however,
that either party may disclose the financial terms to an accountant, accounting firm or financial planning or services firm for purposes of tax or estate planning. 
  

	SMART & FINAL INC	 	 	 	DENNIS L. CHIAVELLI
			
	 /s/    Ross E. Roeder

	 	 	 	 /s/    Dennis L. Chiavelli

 By: Ross E. Roeder 
 Title: Chairman & CEO 
  

			
	 5/14/03

	 	 	 	 5/14/03

	 Date
	 	 	 	 Date

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