EXHIBIT 10.11

NON-EMPLOYEE DIRECTOR
PHANTOM STOCK UNIT AGREEMENT

     THIS PHANTOM STOCK UNIT AGREEMENT (the “Agreement”), dated as of this 20th
day of January, 2004, by and between Arden Group, Inc., a Delaware corporation
(the “Company”), and ___ (the “Unit Holder”), is made with reference to the
following facts:

     A. The Company is desirous of providing additional incentives to the Unit
Holder in rendering services as a non-employee director of the Company and, in
order to accomplish this result, has determined to grant the Unit Holder phantom
stock units representing the right to receive a cash payment on the terms and
conditions set forth herein.

     B. The Unit Holder is desirous of accepting said right on the terms and
conditions set forth herein.

     NOW, THEREFORE, it is agreed as follows:

     1. Grant.

          (a) Subject to the terms and conditions set forth herein, the Company
hereby grants to the Unit Holder Ten Thousand (10,000) Units exercisable from
time to time in accordance with the provisions of this Agreement during a period
commencing on the date hereof and expiring at the close of business on
January 20, 2009 (the “Expiration Date”). Each Unit hereunder represents the
right to receive an amount equal to the excess of (i) the Fair Market Value (as
defined below) of one share of the Class A Common Stock, $.25 par value per
share, of the Company (the “Class A Common Stock”) on the date upon which the
Unit Holder exercises such Unit over (ii) $77.50 (the “Base Price”),
representing the Fair Market Value of one share of the Class A Common Stock on
the effective date hereof.

          (b) For purposes of this Agreement, “Fair Market Value of one share of
Class A Common Stock” shall mean (i) if the Class A Common Stock is then listed
on a national securities exchange, the closing sales price of the Class A Common
Stock on the day such value is determined on the principal securities exchange
on which such stock is then listed, or if there is no reported sale on that day,
the average of the bid and asked quotations on such exchange on that day, or
(ii) if the Class A Common Stock is then publicly traded in the NASDAQ National
Market System, the closing sales price of the Class A Common Stock as reported
by the NASDAQ National Market System on the day such value is determined, or if
there is no reported sale on that day, the average of the bid and asked
quotations on that day, or (iii) if the Class A Common Stock is then publicly
traded in the over-the-counter market (other than the NASDAQ National Market
System), the mean between the closing bid and asked prices of the Class A Common
Stock in the over-the-counter market on the day such value is determined or, if
no shares were traded that day, on the next preceding day on which there was
such a trade, or (iv) if the Class A Common Stock is not then separately quoted
or publicly

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traded, the fair market value on the date such value is to be determined, as
determined in good faith by the Board of Directors of the Company (the “Board”).

     2. Exercise of Units.

          (a) The Unit Holder may elect to be paid for any then vested Unit by
timely delivering or mailing to the Company (in accordance with Paragraph 10
below), Attention: Chief Executive Officer and Chief Financial Officer, a notice
of exercise, in the form prescribed by the Company, stating therein that the
Unit Holder has elected to exercise his Units and specifying therein the number
of vested Units for which he is electing to be paid. The exercise of any Units
shall not be deemed effective unless and until the Unit Holder has complied with
all of the provisions of this Paragraph 2(a). Upon an effective exercise of any
one or more Units, the Company shall thereafter pay the Unit Holder in complete
satisfaction of each Unit with respect to which such right and option has been
exercised an amount equal to: (i) the Fair Market Value of one share of Common
Stock on the date of exercise of such right and option minus (ii) the Base
Price. Such payment shall be made to the Unit Holder within 30 days after the
exercise of such right and option.

          (b) No Units shall vest or become exercisable during the first year
from the date of grant hereof; thereafter Units shall vest and become
exercisable in installments as to (i) no more than twenty-five percent (25%) of
the total number of Units subject to this Agreement during the second year from
the date hereof, (ii) no more than fifty percent (50%) of the total number of
Units subject to this Agreement during the third year from the date hereof,
(iii) no more than seventy-five percent (75%) of the total number of Units
subject to this Agreement during the fourth year from the date hereof, and
(iv) all Units subject to this Agreement from and after the fourth anniversary
of the date hereof. Notwithstanding the foregoing, if at any time prior to the
vesting in full of all Units the Unit Holder’s service as a member of the Board
is terminated due to the Unit Holder’s death or disability (as disability is
defined Paragraph 4 below), then all unexercised Units covered hereby that have
not vested and become exercisable as of the effective date of the Unit Holder’s
termination of service due to death or disability shall be deemed to have vested
and become immediately exercisable in full effective on and as of such date of
termination of service.

          (c) In connection with the exercise of any one or more Units and as a
condition to delivery of any payment to which the Unit Holder is entitled upon
such exercise, the Company may withhold from such payment an amount sufficient
to satisfy all current or estimated future federal, state and local withholding
tax requirements (if any) and federal social security or other taxes or other
tax requirements relating thereto (if any).

          3. Termination. All unexercised Units shall automatically and without
notice terminate and become null and void at the time of the earliest to occur
of the following:

          (a) the Expiration Date;

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          (b) The expiration of 30 days from the date of termination (other than
a termination described in subparagraph (c) below or on account of death or
disability, as defined in Paragraph 4 below, of the Unit Holder while a member
of the Board) of the Unit Holder’s service as a member of the Board, or, if the
Unit Holder shall die during such 30-day period, the expiration of one year
following the date of the Unit Holder’s death; provided that no additional Units
shall vest or become exercisable during such 30-day or one year period, as the
case may be;

          (c) The date of termination of the Unit Holder’s service as a member
of the Board, if such termination of service is due to the removal of the Unit
Holder from the Board for cause (the Board shall have the right to determine
whether the Unit Holder has been removed for cause and the date of such removal,
such determination of the Board to be final and conclusive); and

          (d) Any of the events as described in Paragraph 7 below.

     Nothing contained in this Agreement shall obligate the Company or any of
its subsidiary corporations to continue to employ or engage the services of the
Unit Holder in any capacity, nor confer upon the Unit Holder any right to
continue on the Board or in any other capacity with the Company or its
subsidiary corporations, nor limit in any way the right of the Company or its
subsidiary corporations to amend, modify or terminate at any time the Unit
Holder’s arrangements, if any, with the Company.

     4. Payment Upon Death or Disability. Upon the termination of the service of
the Unit Holder as a member of the Board due to the death of the Unit Holder or
disability of the Unit Holder within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the Board shall have the right to
determine whether the Unit Holder’s termination is attributable to a disability
of the Unit Holder within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended, such determination of the Board to be final
and conclusive), while serving in such capacity, all unexercised Units covered
hereby that have not vested and become exercisable as of the effective date of
the Unit Holder’s termination of service for death or disability shall vest and
become immediately exercisable in full effective as of such date of termination
of service and the Company shall pay such Unit Holder (or the legal
representative of the estate of the deceased Unit Holder or the person or
persons who acquire the right to receive payment for a Unit by bequest or
inheritance or reason of the death of the Unit Holder; hereinafter “Successor”),
in complete satisfaction of all unexercised Units held by such Unit Holder on
the date of such termination of such service of the Unit Holder, an amount
determined in the manner set forth in Paragraph 2 above as if the Unit Holder
had exercised the right and option to be paid for all then unexercised Units
held by the Unit Holder on the date of such service termination. Such payment
shall be made by the Company to the Unit Holder or the Unit Holder’s Successor,
as the case may be, within 30 days after the date of such termination.

     5. Non-Assignability. The Unit Holder shall not transfer, assign, pledge or
hypothecate in any manner this Agreement or any of the rights and privileges
granted hereby other than by will or by the laws of descent and distribution.
Units are exercisable during the Unit Holder’s lifetime only by the Unit Holder.
Upon any attempt

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by the Unit Holder to transfer this Agreement or any right or privilege granted
hereby (including without limitation any Units) other than by will or by the
laws of descent and distribution and contrary to the provisions hereof, this
Agreement and said rights and privileges shall immediately become null and void.

     6. Anti-Dilution. In the event that the shares of Class A Common Stock
subject to this Agreement shall be changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company or of
another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or if the number of such shares of Class A Common Stock shall be
increased solely through the payment of a stock dividend, then there shall be
made an appropriate adjustment (a) in the number of Units then covered hereby,
(b) to the Base Price and (c) to the other terms as may be necessary to reflect
the foregoing events. In the event there shall be any other change in the number
or kind of the outstanding shares of stock of the Company subject to this
Agreement, then if the Board, in its sole discretion, determines that such
change equitably requires an adjustment in this Agreement, such adjustments
shall be made in accordance with such determination. The foregoing adjustments
shall be made in a manner that will cause the relationship between the aggregate
appreciation in a share of Class A Common Stock and the increase in value of
each Unit granted hereunder to remain unchanged as a result of the applicable
transaction.

     7. Termination upon Merger. In the event that (a) the Company merges with
or into any other corporation, consolidates with any other corporation, or sells
substantially all of its assets and business to another corporation and, in any
such case, stockholders of the Company immediately prior to the consummation of
the transaction own less than fifty percent (50%) of the outstanding voting
securities of the surviving or acquiring corporation immediately after
consummation of the transaction, or (b) the inclusion of the Company’s Class A
Common Stock (or any other capital stock into which the Class A Common Stock is
changed) in the Nasdaq Stock Market is terminated, the Unit Holder shall be paid
the amount provided in Paragraph 2 above for all then fully vested unexercised
Units then held by him in the manner provided in said Paragraph 2 as if such
Unit Holder had exercised his right and option to be paid for all of such then
fully vested Units immediately prior to the effectiveness of such merger or
consolidation, consummation of such sale or such termination of inclusion in the
Nasdaq Stock Market and all of the Units shall terminate upon such
effectiveness, consummation or termination.

     8. Rights Unfunded. The Unit Holder understands that the rights provided
for hereunder are unfunded and the Company has not made, and has no obligation
to make, any provision with respect to segregating assets of the Company for
payment of any benefits hereunder. The Unit Holder further understands that he
has no interest in any particular asset of the Company by reason of this
Agreement but only the rights of a general unsecured creditor with respect to
his rights under this Agreement.

     9. No Rights as a Stockholder. Neither the Unit Holder nor any other person
legally entitled to exercise any Units hereunder shall have any rights of a
stockholder by virtue of the grant, vesting or exercise of a Unit.

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     10. Notices. Whenever under this Agreement notice is required to be given
in writing, it shall be deemed to have been duly given upon personal delivery,
one business day following deposit with a nationally recognized air courier
guaranteeing overnight delivery, or three business days after deposit in the
United States mail if mailed by registered or certified mail, postage prepaid,
to the Company at the address set forth below or to the Unit Holder at the
address set forth on the last page hereof (or to such other address as either
party shall have indicated to the other party by notice in accordance with this
Paragraph):

                  Company:   Arden Group, Inc.         2020 South Central Avenue
        Compton, California 90220         Attention: Chief Executive Officer and

              Chief Financial Officer

For purposes hereof, a “business day” is any day other than a Saturday, Sunday
or a holiday in the State of California.

     11. Benefit. Except as otherwise specifically provided herein, this
Agreement shall be binding upon and shall operate for the benefit of the Company
and the Unit Holder and his successors.

     12. Governing Law. This Agreement and any rights and obligations arising
hereunder shall be governed and construed in accordance with the laws of the
State of California.

     13. Entire Agreement. This Agreement represents the entire agreement
between the parties hereto regarding Units based on the Company’s Class A Common
Stock and supersedes any and all prior or contemporaneous written or oral
agreements or discussions between the parties and any other person or legal
entity concerning the transactions contemplated herein. Except as otherwise
expressly provided herein, this Agreement cannot be amended or modified except
by a written instrument executed by the parties hereto.

     14. Construction. The headings of the Paragraphs are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. If any of the provisions of this Agreement shall be unlawful, void or
for any reason unenforceable, they shall be deemed separable from, and shall in
no way affect the validity or enforceability of, the remaining provisions of
this Agreement.

     15. Further Acts. The parties hereto agree to execute and deliver such
further instruments as may be reasonably necessary to carry out the intent of
this Agreement.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

     
ARDEN GROUP, INC.
  UNIT HOLDER:
 
   
By:
   

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  Address for Notice:
 
   

 

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