EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this Agreement) is made, entered into, and is effective as of August 4, 2003 (hereinafter referred to as the Effective Date), by and between SMART & FINAL INC., a Delaware corporation (hereinafter referred to as the Company), and ETIENNE SNOLLAERTS, an individual (hereinafter referred to as the Executive).

RECITALS

WHEREAS, Executive is presently a member of the Board of Directors of the Company; and

WHEREAS, Executive possesses considerable experience and an intimate knowledge of the business and affairs of the Company, its policies, methods, personnel and operations; and

WHEREAS, the Company recognizes that Executive has demonstrated unique qualifications to act in an executive capacity for and on behalf of the Company; and

WHEREAS, the Company is desirous of employing Executive in the manner described in this Agreement and Executive is desirous of being employed by the Company in such manner.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

AGREEMENT

Section 1. Term of Employment

1.1. The Company hereby agrees to employ Executive and Executive hereby agrees to serve the Company, in accordance with the terms and conditions set forth herein, from the Effective Date of this Agreement until December 31, 2005 (unless extended pursuant to Section 1.2 below); subject, however, to earlier termination as expressly provided in Section 6 herein (the Term).

1.2. Commencing on December 31, 2004, and, thereafter, on or before December 31^st of each year, the Company may, in its sole discretion, give notice to Executive of the Companys election to extend this Agreement for a two (2) year period from December 31^st of the year in which such notice is given. Failure by the Company to give any such notice of election to extend this Agreement shall be deemed an election by the Company not to extend the Term hereof and, in such case, this Agreement shall terminate as otherwise provided herein.

Section 2. Positions and Responsibilities

2.1. From the Effective Date of this Agreement through and including such date in 2004 (the Promotion Date) that the Board of Directors (the Board) of the Company may appoint Executive to serve in such other capacity, the Executive shall serve as the Chief Operating Officer of the Company, and shall have and perform the duties and responsibilities customarily performed by a chief operating officer of a company. Executive shall report to Ross E. Roeder so long as Executive may serve as the Chief Operating Officer of the Company.

Section 3. Standard of Care and Performance

3.1. During the Term of this Agreement, Executive agrees to devote substantially his full time, attention and energies to the Companys business.

3.2. Nothing in this Section 3 shall be construed as preventing Executive from investing his personal assets in such form or manner as will not require his services in the daily operations of the affairs of the companies in which such investments are made.

3.3. Executive shall perform his duties and responsibilities under this Agreement in the City of Commerce, Los Angeles County, California, or such other location(s) as may be required by the Company from time to time, which other location(s) shall not exceed a      mile radius reasonably calculated from the Companys executive offices in the City of Commerce, Los Angeles County, California.

Section 4. Compensation and Benefits

The Compensation Committee of the Board of the Company shall be solely responsible for setting Executives pay, as remuneration for all services to be rendered by Executive during the Term of this Agreement, and as consideration for complying with the covenants herein. The compensation and benefits provided to Executive shall be as follows:

4.1. Base Salary. During the period of time that Executive serves as the Companys Chief Operating Officer, the Company shall pay to Executive an annual salary (a Base Salary) in the amount of Five Hundred Fifty Thousand Dollars ($550,000) per annum.

(a) Executives Base Salary shall be paid to Executive in equal installments, throughout the year, consistent with the normal payroll practices of the Company.

(b) Executives Base Salary shall be reviewed annually in accordance with the Companys executive merit pay policy, as amended from time to time, and at the sole discretion of the Compensation Committee the Base Salary may be increased, but in no event shall the Base Salary be decreased to an amount less than Five Hundred Fifty Thousand Dollars ($550,000) per annum.

4.2. Initial Bonus. On the Effective Date, the Company shall pay to Executive an initial bonus (the Initial Bonus) of One Hundred Thousand Dollars ($100,000).

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4.3. Initial Option Grant. On the Effective Date, the Company shall grant to Executive a non-qualified stock option to purchase One Hundred Thousand (100,000) shares of the Companys common stock (Common Stock), at an exercise price per share equal to the fair market value of a share of Common Stock on such date as the Board may determine. Such option grant shall be evidenced by a written option award agreement in the form attached hereto as Exhibit A, and specifying the terms and conditions (including vesting terms) of such option.

4.4. Annual Bonus. Executive shall be eligible to earn an annual bonus (Annual Bonus), at a level that, in the sole and absolute discretion of the Compensation Committee of the Board of the Company, is commensurate with the bonuses offered to executives having the same or similar duties and responsibilities as those of Executive at companies of similar size, scope, business and financial condition as that of the Company, as more fully described below.

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