Non-employee Director Stock Option Plan

AMENDED AND RESTATED
DIVERSIFIED FOOD GROUP, INC
INDEPENDENT DIRECTOR STOCK OPTION PLAN


ARTICLE I
GENERAL


1.1 PURPOSE:


Diversified Food Group, Inc., a Delaware corporation (the "Corporation"), hereby adopts this Independent Director Stock Option Plan (the "Plan"). The purpose of the Plan is to foster and promote the long-term financial success of the Corporation by attracting and retaining outstanding non-employee directors by enabling them to participate in the Corporation's growth through the granting of Options (as defined in Article II) which entitle them to purchase shares of the Company's common stock, par value $.001 per share ("Common Stock").


1.2 PARTICIPATION:


Only directors of the Corporation who at the time an Option is granted meet the following criteria ("Directors") shall receive an Option under the Plan: (a) the director is not, and has not been for at least two years, an employee or officer of the Corporation or any subsidiary of the Corporation; and (b) the director is a "disinterested person" as such term is defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") or any similar rule which may subsequently be in effect ("Rule 16b-3").


1.3 SHARES SUBJECT TO THE PLAN:


Shares of Common Stock to be issued upon exercise of Options granted under the Plan may be in whole or in part from authorized but unissued shares or treasury shares of the Corporation's Common Stock. A maximum of ______ shares of Common Stock (the "Plan Maximum") may be issued for all purposes under the Plan (subject to adjustment pursuant to Section 3.2). Any shares of Common Stock reserved for issuance under Options which for any reason are canceled or terminated without having been exercised shall not be counted in determining whether the Plan Maximum has been reached. Options for fractional shares shall not be granted.


1.4 GENDER AND NUMBER:


Except when otherwise indicated by the context, words in the masculine gender when used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular.


ARTICLE II
STOCK OPTION AWARDS


2.1 AWARD OF STOCK OPTIONS:


Effective on the date on which a Director becomes a member of the Board of Directors with the Company, each Director who satisfies the conditions set forth in Section 1.2 will automatically be awarded a stock option (an "Initial Option" or the "Initial Options") under the Plan to purchase _____ (subject to adjustment pursuant to Section 3.2) shares of Common Stock. Effective on the date of each Annual Meeting, commencing with the Annual Meeting in 1998, each Director then in office who satisfies the conditions set forth in Section 1.2 will automatically be awarded a stock option (a "Subsequent Option" or the "Subsequent Options", collectively with the "Initial Options" referred to herein as an "Option" or "Options") to purchase ___ (subject to adjustment pursuant to Section 3.2) shares of Common Stock. The Options are not intended to qualify as "incentive stock options" as defined in Section 422A of the Internal Revenue Code of 1986, as amended (the "Code").


2.2 STOCK OPTION CERTIFICATES:


The award of an Option shall be evidenced by a certificate executed by an officer of the Corporation.


2.3 OPTION PRICE:


The purchase price of Common Stock (the "Option Price") under each Initial Option granted shall be the Fair Market Value (as defined in Section 3.5) of the Common Stock on the date of the grant.


2.4 EXERCISE AND TERM OF OPTIONS:


(a) Options may be exercised by the delivery of written notice of exercise and payment of the aggregate Option Price for the shares to be purchased to the Corporate Secretary of the Corporation. The Option Price may be paid in cash (including check, bank draft or money order) or, unless in the opinion of counsel to the Corporation to do so may result in a possible violation of law, by delivery of Common Stock already owned by the Director, valued at Fair Market Value on the date of the exercise. As soon as practicable after receipt of each notice and full payment, the Corporation shall deliver to the Director a certificate or certificates representing the acquired shares of Common Stock.


(b) Each certificate for Shares issued upon exercise of an Option, unless at the time of exercise such Shares are registered with the Securities and Exchange Commission (the "Commission"), under the Securities Act of 1933, as amended (the "Act"), shall bear the following legend:


NO SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THESE SHARES SHALL BE
MADE EXCEPT PURSUANT TO REGISTRATION UNDER THE


2


SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED.


Any certificate issued at any time in exchange or substitution for any certificate bearing such legend (except a new certificate issued upon completion of a public distribution pursuant to a registration statement under the Act of the securities represented thereby) shall also bear the above legend unless, in the opinion of such counsel as shall be reasonably approved by the Company, the securities rep ...