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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

               EMPLOYMENT AGREEMENT (the "Agreement") dated as of October 6,
1997 by and between K-TRON INTERNATIONAL, INC., a New Jersey corporation ("K-
Tron"), and EDWARD B. CLOUES, II, a resident of Pennsylvania (the "Employee").

               WHEREAS, K-Tron and the Employee desire to enter into an
agreement to provide for the Employee's employment by K-Tron, upon the terms and
conditions hereinafter set forth;

               NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:

               1.     Employment. K-Tron agrees to employ the Employee, and the
Employee accepts such employment and agrees to perform his duties and
responsibilities hereunder, in accordance with the terms, conditions and other
provisions hereinafter set forth.

               1.1    Employment Term. The employment term of this Agreement
(the "Employment Term") shall commence on January 5, 1998 and shall continue
until terminated in accordance with Section 8 or 9 hereof.

               1.2    Duties and Responsibilities. During the Employment Term,
the Employee shall serve as the Chairman of the Board and Chief Executive
Officer of K-Tron, and he shall perform all duties and accept all
responsibilities incident to such positions.

               1.3    Extent of Service. During the Employment Term, the
Employee shall use his reasonable best efforts in the performance of his duties
and responsibilities hereunder, and he shall devote such time and attention
thereto as may be necessary to perform such duties and responsibilities, it
being understood that substantially all of his business time shall be devoted to
K-Tron and to other activities of a type that might typically be performed by
the chairman and chief executive officer of a company such as K-Tron. Without
limiting other activities in which the Employee may be or become involved, it is
recognized by K-Tron that the Employee shall continue as the non-executive
Chairman of the Board of AMREP Corporation; however, the Employee will resign
this position at any time after December 31, 1998 if so requested at that time
by the Board of Directors of K-Tron (the "K-Tron Board").

               1.4    Compensation and Benefits. For all the services rendered
during the Employment Term by the Employee hereunder, K-Tron shall pay the
Employee a base salary ("Base Salary"), commencing on January 5, 1998, at the
annual rate of $380,000, payable in installments at such times as K-Tron
customarily pays its other senior level executives (but in no event less often
than monthly). Such Base Salary may be increased from time to time during the
Employment Term in the sole discretion of the K-Tron Board or any duly
authorized committee thereof, and any such increased salary shall thereafter be
the Employee's new Base Salary for all purposes of this Agreement. The Employee
shall also be

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entitled to receive bonus payments in the sole discretion of the
K-Tron Board or any duly authorized committee thereof. In addition to said
annual salary and bonus payments (if any), the Employee shall be entitled to a
suitable car or car allowance, an annual physical examination by a physician
selected by the Employee and annual paid vacation of six weeks per year, and he
shall also be entitled to participate in such employee benefit plans of K-Tron
as may exist from time to time on the same basis as other senior level
executives of K-Tron. Notwithstanding the foregoing, and subject to the Employee
qualifying for coverage on a reasonable basis, the Employee shall be provided
with a term life insurance policy having a death benefit of $1,000,000 and
disability insurance providing coverage equal to $30,000 per month through age
65 (alternatively, the Employee may purchase such disability coverage himself,
with a waiting period of two years, and be reimbursed the cost thereof by K-Tron
plus the estimated income taxes to be incurred on such reimbursement). The
definition of disability shall be that the Employee is unable to perform his
duties as the chief executive officer of K-Tron. The other terms of any such
term life and disability insurance policies shall be reasonably satisfactory to
both K-Tron and the Employee.

               1.5    Stock Grant. On January 2, 1998, K-Tron shall issue to the
Employee 10,000 fully vested shares of its Common Stock, which shares shall be
unregistered and contain an appropriate securities law restrictive legend. On
October 7, 1998, K-Tron shall issue to the Employee 20,000 shares of its Common
Stock as a restricted stock grant under Section 6 of the K-Tron International,
Inc. 1996 Equity Compensation Plan, as amended (the "1996 Equity Compensation
Plan"), with the grant to provide that the restriction shall lapse as to 10,000
of such shares on January 5, 1999 and as to the other 10,000 shares on January
5, 2000, provided that the Employee is still employed by K-Tron on those dates;
provided, however, that the foregoing restrictions shall lapse immediately if
the Employment Term is terminated by (a) K-Tron for any reason other than
"cause" as defined in Section 8.4(b) hereof or (b) the Employee either pursuant
to Section 8.4(a) hereof or in connection with a Termination upon a Change of
Control as described in Section 9.1(c) hereof.

               1.6    Early Start Part-Time Employment. The Employee will be
employed by K-Tron on a part-time basis and in a non-officer capacity from
October 6, 1997 through January 4, 1998. His compensation for this three-month
period shall equal $10,000 per month, or $30,000, plus an amount equal to the
fees he would have received as a non-employee director of K-Tron for this
period, including any bonus for 1997. This compensation of $10,000 per month
(excluding the Board fee equivalent) for part-time services rendered by the
Employee during the last three months of 1997 is intended by the parties to
equate to, and was determined by reference to, the full-time annual compensation
to be paid to the Employee in 1998 (that is, the sum of (a) the Base Salary the
Employee will receive in 1998 when he is a full-time employee plus (b) the
estimated value of the 10,000 shares of K-Tron Common Stock to be received by
him on January 2, 1998). The Employee shall not be entitled to any fringe
benefits during this three-month period, and his sole duty and responsibility
shall be to work with Leo C. Beebe, the current Chairman and Chief Executive
Officer of K-Tron, to ensure a smooth transition of responsibilities on January
5, 1998, which is the beginning of the Employment Term.


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               1.7    Stock Option Grant. As of the date hereof, the Employee
was granted two ten-year stock options under the 1996 Equity Compensation Plan
to purchase a total of 100,000 shares of K-Tron Common Stock at the last
reported sale price on the Nasdaq Stock Market as of this date and on the other
terms and conditions set forth in two stock option agreements dated as of the
date hereof between K-Tron and the Employee.

               1.8    Location. Without his express written consent, the
Employee shall not be obligated to relocate outside of the greater Philadelphia
metropolitan area.

               2.     Reimbursement of Expenses. K-Tron shall reimburse the
Employee for all ordinary and necessary out-of-pocket business expenses incurred
by him in connection with the discharge of his duties and responsibilities
hereunder in accordance with K-Tron's expense approval procedures then in effect
and upon presentation by the Employee of an itemized account of such expenses.

               3.     Developments. The Employee shall disclose fully, promptly
and in writing to K-Tron any and all inventions, discoveries, improvements,
modifications and the like, whether patentable or not, which he conceives, makes
or develops, solely or jointly with others, while employed by K-Tron and which
(a) relate to the business, work or activities of K-Tron or any of its
subsidiaries (K-Tron and its subsidiaries as they may exist from time to time
are collectively referred to herein as the "K-Tron Group", and each is sometimes
individually referred to herein as a "member" of the K-Tron Group) or (b) result
from or are suggested by the carrying out of his duties hereunder, or from or by
any information which he may receive while employed by K-Tron. The Employee
hereby assigns, transfers and conveys to K-Tron or its designee all of his
right, title and interest in and to any and all such inventions, discoveries,
improvements, modifications and the like and agrees to take all such actions as
may be requested by K-Tron at any time with respect to any such invention,
discovery, improvement, modification or the like to confirm or evidence such
assignment, transfer and conveyance. Furthermore, at any time and from time to
time, upon the request of K-Tron, the Employee shall execute and deliver to
K-Tron, or to another member of the K-Tron Group designated by K-Tron, any and
all instruments, documents and papers, give evidence and do any and all other
acts which, in the opinion of counsel for K-Tron, are or may be necessary or
desirable to document such assignment, transfer and conveyance or to enable
K-Tron or such other member of the K-Tron Group to file and prosecute
applications for and to acquire, maintain and enforce any and all patents,
trademark registrations or copyrights under United States or foreign law with
respect to any such inventions, discoveries, improvements, modifications or the
like or to obtain any extension, validation, reissue, continuance or renewal of
any such patent, trademark or copyright. K-Tron or such other member of the
K-Tron Group shall be responsible for the preparation of any such instruments,
documents and papers and for the prosecution of any such proceedings and shall
reimburse the Employee for all reasonable expenses incurred by him in compliance
with the provisions of this Section 3.


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               4.     Confidential Information. The Employee acknowledges that,
by reason of his employment by K-Tron, he will have access to confidential
information of the K-Tron Group, including, without limitation, information and
knowledge pertaining to business strategies, financial performance, products,
inventions, discoveries, improvements, innovations, designs, ideas, trade
secrets, proprietary information, manufacturing, packaging, advertising,
distribution and sales methods, customer and client lists and relationships
between members of the K-Tron Group and dealers, distributors, sales
representatives, wholesalers, customers, clients, suppliers and others who have
business dealings with such members ("Confidential Information"). The Employee
acknowledges that such Confidential Information is a valuable and unique asset
of K-Tron and the other members of the K-Tron Group and covenants that, both
during and after the Employment Term, he will not disclose any such Confidential
Information to any person, except in connection with the performance of his
duties and responsibilities hereunder, without the prior written authorization
of the K-Tron Board. The obligation of confidentiality imposed by this Section 4
shall not apply to information which appears in issued patents or printed
publications, which otherwise becomes generally known in the industry through no
act of the Employee in breach of this Agreement or which is required to be
disclosed by court order or applicable law.

               5.     Non-Competition.

                      (a)    During (i) the Employment Term and (ii) for (A) two
years thereafter only in the event that such Employment Term is terminated under
Section 8.2 or 8.4(b) hereof or (B) one year thereafter if the Employee
terminates employment with K-Tron with or without giving the notice required by
Section 8.1 hereof (but excluding any termination by the Employee under Section
8.4(a) hereof or which is a Termination upon a Change of Control as defined in
Section 9.1(c) hereof) or if it is terminated under Section 8.5 hereof, the
Employee shall not, unless acting as an employee pursuant hereto or with the
prior written consent of the K-Tron Board, directly or indirectly, own, manage,
operate, finance, join, control or participate in the ownership, management,
operation, financing or control of, or be connected as an officer, director,
employee, partner, principal, agent, representative, consultant or otherwise
with, or use or permit his name to be used in connection with, any business or
enterprise engaged in the business of designing, engineering, manufacturing,
marketing or distributing feeding or blending equipment, or in any other
business then engaged in by K-Tron or any other member of the K-Tron Group,
within (i) any state of the United States or the District of Columbia or (ii)
any other country in which K-Tron or any member of the K-Tron Group has engaged
in any such business within the prior year; provided, however, that
notwithstanding the foregoing, the Employee shall not be prohibited from acting
in any capacity for or with respect to any such entity if the Employee is not
involved in any way with that part of the entity which is engaged in the
competitive activity; and further provided, that this provision shall not be
construed to prohibit the passive ownership by the Employee of not more than 1%
of the equity of any entity which is engaged in any of the foregoing businesses
having a class of securities registered pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). In the event that the provisions of
this Section 5(a) should ever be adjudicated to exceed the time, geographic,


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product or other limitations permitted by applicable law in any jurisdiction,
then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic, product or other limitations permitted by applicable
law.

                      (b) Nothing in Section 5(a) above shall be construed to
prohibit the Employee from being connected as a partner, principal, shareholder,
associate, special counsel, of counsel or otherwise with another lawyer or a law
firm, including Morgan, Lewis & Bockius LLP, which performs services for clients
engaged in any business or enterprise that is competitive with any business or
enterprise in which K-Tron or any member of the K-Tron Group is engaged,
provided that the Employee is not personally and knowingly involved in
performing services for any such clients during the period specified in Section
5(a) with respect to any part of their businesses that would be so competitive.
The parties further agree that, with respect to the confidentiality obligations
of Section 4 of this Agreement, the Employee's knowledge of such confidential
information shall not be imputed to any other lawyer or law firm with which the
Employee may be or become connected.

               6.     No Solicitation. During (a) the Employment Term and (b)
for (i) two years thereafter only in the event that such Employment Term is
terminated under Section 8.2 or 8.4(b) hereof or (ii) one year thereafter if the
Employee terminates employment with K-Tron with or without giving the notice
required by Section 8.1 hereof (but excluding any termination by the Employee
under Section 8.4(a) hereof or which is a Termination upon a Change of Control
as defined in Section 9.1(c) hereof) or if it is terminated under Section 8.5
hereof, the Employee shall not, unless acting as an employee pursuant hereto or
with the prior written consent of the K-Tron Board, (A) call on or solicit,
either directly or indirectly, any person, firm, corporation or other entity who
or which is, or within two years prior thereto had been, a customer of any
member of the K-Tron Group, with respect to any matters involving the designing,
engineering, manufacturing, marketing or distributing of feeding or blending
equipment or involving any other business then engaged in by any member of the
K-Tron Group, or (B) knowingly solicit for employment any person who is an
employee of any member of the K-Tron Group (or who was such an employee within
six months prior to any such termination).

               7.     Equitable Relief.

                      (a)    The Employee acknowledges that the restrictions
contained in Sections 3, 4, 5 and 6 hereof are, in view of the nature of the
business of K-Tron and the other members of the K-Tron Group, reasonable and
necessary to protect the legitimate interests of the K-Tron Group, that K-Tron
would not have entered into this Agreement in the absence of such restrictions,
that the business of the K-Tron Group is international in scope and that any
violation of any provision of those Sections could result in irreparable injury
to K-Tron and the other members of the K-Tron Group.

                      (b)    The Employee agrees that in the event of any
violation of the restrictions referred to in Section 7(a) above, K-Tron shall be
entitled to preliminary and


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permanent injunctive relief, without the necessity of posting a bond or proving
actual damages, and to an equitable accounting of all earnings, profits and
other benefits arising from any such violation, which rights shall be cumulative
and in addition to any other rights or remedies to which K-Tron may be entitled.

                      (c)    The Employee irrevocably and unconditionally agrees
that in the event of any violation of the restrictions referred to in Section
7(a) above, an action may be commenced for preliminary and permanent injunctive
relief and other equitable relief in any federal or state court of competent
jurisdiction sitting in Gloucester or Camden County, New Jersey or in any other
court of competent jurisdiction. The Employee hereby waives, to the fullest
extent permitted by law, any objection that he may now or hereafter have to such
jurisdiction or to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that such suit, action or
proceeding has been brought in an inconvenient forum. The Employee agrees that
effective service of process may be made upon him by mail under the notice
provisions contained in Section 14 hereof and that all pleadings, notices and
other papers may be served upon him in the same manner.

                      (d)    The non-competition and no solicitation provisions
of Sections 5(a) and 6 above shall be extended by any time period during which
the Employee is in violation of any of such provisions.

                      (e)    The Employee may provide, and any member of the
K-Tron Group may similarly provide, a copy of Sections 3, 4, 5 and 6 of this
Agreement to any business or enterprise (i) which the Employee may directly or
indirectly own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing or control of, or (ii) with which he
may be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise, or in connection with which he may use
or permit his name to be used; provided, however, that this provision shall not
apply in respect of Sections 5 and 6 of this Agreement after expiration of the
time periods set forth therein.

                      (f)    The Employee represents and acknowledges that (i)
he has been advised by K-Tron to consult his own legal counsel in respect of
this Agreement and (ii) he has had full opportunity to do so.

               8.     Termination.

               8.1    By Employee. The Employee may terminate the Employment
Term effective upon not less than 90 days prior written notice to K-Tron. Should
the Employee elect to terminate the Employment Term on this basis, K-Tron shall
not have any liability or obligation to the Employee hereunder after the date on
which the Employment Term ends except for unpaid salary, bonus and benefits
accrued to such date and any additional benefits or payments (excluding any
severance benefits or payments) payable to the Employee under


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any applicable formal policy or plan of K-Tron which covers the Employee at the
time of his termination.

               8.2    Partial or Total Disability. If in the good faith judgment
of the K-Tron Board, based upon the advice of two disinterested physicians, the
Employee is unable to perform his duties and responsibilities hereunder by
reason of illness, injury or incapacity for six consecutive months, or for six
months during any 12 month period, during which time K-Tron shall continue to
compensate the Employee hereunder, the Employment Term may be terminated by
K-Tron. In the event the Employee is terminated for disability as aforesaid, he
shall be entitled to receive two years of severance following the termination
date of the Employment Term at his then-annual Base Salary, payable in equal
monthly installments, plus the amount of any bonus that may have been previously
awarded to him but not yet paid. All severance payments payable to the Employee
under this Section 8.2 shall be reduced by the amount of any payments due the
Employee for this time period under any applicable disability benefit programs,
including Social Security disability, worker's compensation and disability
retirement benefits. Except as provided above and in Section 8.6 hereof, and
except for any other benefits or payments (excluding any other severance
benefits or payments) payable to the Employee under any applicable formal policy
or plan of K-Tron which covered the Employee at the termination date of the
Employment Term, K-Tron shall not have any other liability or obligation to the
Employee in the event of the termination of the Employment Term due to his
disability.

               8.3    Death. In the event that the Employee dies during the
Employment Term, K-Tron shall pay to his executors, administrators or personal
representatives, as appropriate, an amount equal to the installment of his
then-annual Base Salary payable for the month in which he dies and for three
months thereafter (and also the amount of any bonus that may have been
previously awarded to him but not yet paid). K-Tron shall not have any other
liability or obligation hereunder to the Employee's executors, administrators,
personal representatives, heirs, assigns or any other person claiming under or
through him, except for any benefits or other payments (excluding any severance
benefits or payments) payable to the Employee under any applicable formal policy
or plan of K-Tron which covered the Employee at the time of his death.

               8.4    For Cause. The Employment Term may be terminated at any
time either (a) by the Employee for the failure of K-Tron to observe or perform
any of the material terms or provisions hereof provided that the Employee has
given written notice of such failure to K-Tron and such failure has continued
for 30 days thereafter, or (b) by K-Tron, by action taken in good faith by the
K-Tron Board, for "cause." For purposes of this Agreement, "cause" shall mean
the failure of the Employee to observe or perform (other than by reason of
illness, injury or incapacity) any of the material terms or provisions of this
Agreement provided that the Employee has been given written notice of such
failure by the K-Tron Board and such failure has continued for 30 days
thereafter, conviction of a felony or other crime involving moral turpitude,
misappropriation of K-Tron funds, habitual insobriety,


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habitual substance abuse or the commission of an act of dishonesty by the
Employee resulting in or intended to result in wrongful personal gain or
enrichment at the expense of K-Tron.

               8.5    Without Cause.

                      (a)    K-Tron, by action of the K-Tron Board, may
terminate the Employment Term effective at any time after January 8, 2001
without cause upon not less than two years prior written notice to the Employee,
which notice may be given at any time after the date hereof. If the Employee is
given notice of the termination of the Employment Term on this basis, the
Employee may elect to terminate the Employment Term within 60 days after receipt
of such notice and to be paid, on the date of such termination, a lump sum
amount equal to 200% of the Employee's then-annual Base Salary, in which event
K-Tron shall not have any further liability or obligation to the Employee
hereunder after such date of termination except for (i) any unpaid salary and
benefits accrued to such date and the amount of any bonus that may have been
previously awarded to him but not yet paid, (ii) any additional or other
benefits or payments (excluding any other severance benefits or payments)
payable to the Employee under any applicable formal policy or plan of K-Tron
which covers the Employee at that time and (iii) the benefits provided under
Section 8.6 hereof.

                      (b)    After January 8, 2001, K-Tron, by action of the
K-Tron Board, may terminate the Employment Term without cause upon not less than
30 days prior written notice to the Employee accompanied by payment to the
Employee of a lump sum amount equal to 200% of the Employee's then-annual Base
Salary, in which event K-Tron shall not have any further liability or obligation
to the Employee hereunder after the date of termination of the Employment Term
except for (i) any unpaid salary and benefits accrued to such date and the
amount of any bonus that may have been previously awarded to him but not yet
paid, (ii) any additional or other benefits or payments (excluding any other
severance benefits or payments) payable to the Employee under any applicable
formal policy or plan of K-Tron which covers the Employee at that time and (iii)
the benefits provided under Section 8.6 hereof.

               8.6    Continuation of Health Coverage. Notwithstanding any other
provision of this Agreement, in the event of the termination of the Employment
Term for partial or total disability under Section 8.2 hereof or without cause
under Section 8.5 hereof, K-Tron shall continue until the second anniversary of
the termination date, on the same cost-sharing basis in effect immediately prior
to such termination, the medical and other health care benefits which were
provided to the Employee immediately prior to such termination.

               9.     Special Compensation Provisions.

               9.1    Definitions. For purposes hereof, the following terms
shall have the following meanings unless the context clearly otherwise requires:


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                      (a)    As used in this Section 9, a "Change of Control"
shall be deemed to have occurred if:

                             (i)    a liquidation or dissolution of K-Tron or
               the sale (excluding transfers to subsidiaries) of all or a
               substantial majority of the assets of K-Tron or the K-Tron Group
               occurs;

                             (ii)   as a result of a tender offer, exchange
                offer, stock purchase (excluding a redemption approved by the
                K-Tron Board which is not in connection with any of the other
                events mentioned in this clause (ii)), other stock acquisition,
                merger, consolidation, recapitalization, reverse stock split,
                sale or transfer of assets or other transaction, any person or
                group (as such terms are used in and under Section 13(d) of the
                Exchange Act) other than the Employee or a group which includes
                the Employee becomes the beneficial owner (as defined in Rule
                13-d under the Exchange Act), directly or indirectly, of
                securities of K-Tron representing more than 20% of the Common
                Stock of K-Tron or the combined voting power of K-Tron's then
                outstanding securities; or

                             (iii)  during any period of two consecutive years,
               individuals who, at the beginning of such period, constitute the
               K-Tron Board cease for any reason to constitute at least a
               majority thereof, unless the election, or the nomination for
               election by K-Tron's shareholders, of at least two-thirds of the
               directors who were not directors at the beginning of such period
               was approved by a vote of at least two-thirds of the directors
               then still in office who were either directors at the beginning
               of the period or who, in connection with their election or
               nomination, received the foregoing two-thirds approval.

                      (b)    "Termination of Employment" means the termination
of the Employee's actual employment relationship with K-Tron, and "Termination
Date" means the date of such termination.

                      (c)    "Termination upon a Change of Control" means a
Termination of Employment upon or within one year after a Change of Control
either:

                             (i)    initiated by K-Tron or any successor thereto
               for any reason other than a valid Termination of Employment
               permitted under any of Sections 8.2, 8.3 or 8.4(b) hereof; or

                             (ii)   initiated by the Employee in his sole
               discretion and without regard to the reason.

               9.2    Compensation upon Termination Involving a Change of
Control. In the event of the Employee's Termination upon a Change of Control,
K-Tron shall:

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<PAGE>   10

                      (a)    pay to the Employee, within five business days of
the Termination Date, the following sums in cash:

                             (i)    an amount equal to three times the
                Employee's annual Base Salary in effect either immediately prior
                to the Termination Date or immediately prior to the Change of
                Control, whichever is higher; and

                             (ii)   unless the Employee notifies K-Tron in
                writing that he intends to retain his options, an amount in
                redemption of such options equal to the amount, if any, by which
                the aggregate exercise price of all stock options held by the
                Employee under any K-Tron stock option or similar plan which
                have an exercise price below the fair market value of the shares
                subject to such options (whether or not such options are
                exercisable at the Termination Date) is less than the aggregate
                fair market value of the shares of stock subject to such
                options, with all computations based upon the average closing
                market price of a share of such stock for the five trading days
                immediately preceding the Termination Date (or, if higher, the
                highest cash amount per share paid by the acquiror in connection
                with any tender offer, stock purchase, other stock acquisition,
                merger, consolidation or other event which constituted the
                applicable Change of Control);

                      (b)    continue or cause to be continued for the benefit
of the Employee, and at no cost to the Employee, the coverage existing for his
benefit immediately prior to the Change of Control under all life, disability,
health and other welfare benefit plans provided to the Employee pursuant to
Section 1.4 hereof until the earlier of (i) 24 months after the Termination Date
and (ii) such time as the Employee has received, at no or nominal cost to him,
similar benefits from a subsequent employer; and

                      (c)    permit the Employee free use of his company car, if
any, for a period of 24 additional months. Thereafter, the Employee shall return
the car to K-Tron unless, in the case of a car owned by a member of the K-Tron
Group, the Employee elects to purchase the car at the net book value thereof at
the date of purchase or, in the case of a car leased by a member of the K-Tron
Group, the Employee pays to such member, as such amounts become due and payable,
all rental payments charged to such member for the use of such car.

               In the event of the Employee's Termination upon a Change of
Control, the Employee shall receive the benefits of this Section 9.2 in lieu of
any other post-termination severance payments to which he might otherwise be
entitled under this Agreement on account of the termination of his Employment
Term. In addition, the Employee shall be entitled to receive within five
business days of the Termination Date any unpaid salary and benefits accrued to
the date of such termination and the amount of any bonus that may have been
previously awarded to him but not yet paid, and thereafter the Employee shall
also be entitled to receive any additional or other benefits or payments
(excluding any other severance


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benefits or payments) payable to the Employee under any applicable formal policy
or plan of K-Tron which covered the Employee at the time of his termination.

               9.3    Enforcement. In the event that K-Tron shall fail or refuse
to make payment of any amount due the Employee under Section 9.2 above within
the time described therein or to provide the Employee any of the benefits
described in Sections 9.2(b) and (c) above, K-Tron shall pay to the Employee, in
addition to the payment of any other sums provided in this Agreement:

                      (a)    interest, compounded quarterly, on any amount
remaining unpaid from the date payment is required under such Section 9.2 until
paid to the Employee, at the rate from time to time announced by Citibank N.A.
(or any successor) as its "prime rate" plus 3%, each change in such rate to take
effect on the effective date of the change in such prime rate; and

                      (b)    on demand, the amount necessary to reimburse the
Employee in full for all expenses (including all attorneys' fees and expenses)
incurred by the Employee in enforcing any of the obligations of K-Tron under
such Section 9.2.

               9.4    Certain Increase in Payments.

                      (a)    Anything in this Agreement to the contrary
notwithstanding, in the event that it shall be determined that any payment or
distribution by K-Tron to or for the benefit of the Employee, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (the "Payment"), would constitute an "excess parachute payment"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), or any similar successor provision or statute, the
Employee shall be paid an additional amount (the "Gross-Up Payment") such that
the net amount retained by the Employee after deduction of (i) any excise tax
imposed under Section 4999 of the Code, or any similar or successor provision,
and (ii) all federal, state and local income, wage and employment taxes and
excise taxes imposed upon the Gross-Up Payment, shall be equal to the Payment.
For purposes of determining the amount of the Gross-Up Payment, the Employee
shall be deemed to pay federal income tax and employment taxes at the highest
marginal rate of federal income and employment taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local taxes at the
highest marginal rate of taxation in the state and locality of the Employee's
residence on the Termination Date, net of the maximum reduction in federal
income taxes that may be obtained from the deduction of such state and local
taxes.

                      (b)    All determinations to be made under this Section 9
shall be made by K-Tron's independent public accounting firm immediately prior
to the Change of Control (the "Accounting Firm"), which firm shall provide its
determinations and any supporting calculations to both K-Tron and the Employee
within 10 days of the Termination Date. Any such determination by the Accounting
Firm shall be binding upon K-Tron and the Employee. 


                                      -11-
<PAGE>   12

Within five days after the Accounting Firm's determination, K-Tron shall pay 
(or cause to be paid) or distribute (or cause to be distributed) to or for the 
benefit of the Employee such amounts as are then due to the Employee under 
this Agreement which exceed the amount already paid or distributed under 
Section 9.2(a) above.

                      (c)    In the event that upon any audit by the Internal
Revenue Service, or by any state or local taxing authority, of the Payment or
Gross-Up Payment, a change is finally determined to be required in the amount of
taxes paid by the Employee, appropriate adjustments shall be made under this
Agreement such that the net amount which is payable to the Employee after taking
into account the provisions of Section 4999 of the Code, or any similar or
successor provision, shall reflect the intent of the parties as expressed in
subsection (a) above, in the manner determined by the Accounting Firm.

                      (d)    All of the fees and expenses of the Accounting Firm
in performing the determinations referred to in subsections (b) and (c) above
shall be borne solely by K-Tron. K-Tron agrees to indemnify and hold harmless
the Accounting Firm of and from any and all claims, damages and expenses
resulting from or relating to its determinations pursuant to subsections (b) and
(c) above, except for claims, damages or expenses resulting from the gross
negligence or willful misconduct of the Accounting Firm.

               10.    Survivorship. The respective rights and obligations of the
parties under this Agreement shall survive any termination of the Employee's
employment to the extent necessary for the intended preservation of such rights
and obligations.

               11.    Mitigation. The Employee shall not be required to mitigate
the amount of any payment or benefit provided for in this Agreement by seeking
other employment or otherwise, and there shall be no offset against amounts due
the Employee under this Agreement on account of any remuneration attributable to
any subsequent or other employment that the Employee may have or obtain.

               12.    Arbitration; Expenses. In the event of any dispute under
the provisions of this Agreement other than a dispute in which the primary
relief sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Philadelphia, Pennsylvania in accordance with National Rules for the
Resolution of Employee Disputes then in effect of the American Arbitration
Association (the "AAA") (or, if no such rules be in effect, then under the
regular rules of the AAA), before a panel of three arbitrators, two of whom
shall be selected by K-Tron and the Employee, respectively, and the third of
whom shall be selected by the other two arbitrators. Any award entered by the
arbitrators shall be final, binding and nonappealable (except as provided by
applicable statutory law), and judgment may be entered thereon by either party
in accordance with applicable law in any court of competent jurisdiction. This
arbitration provision shall be specifically enforceable. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue


                                      -12-
<PAGE>   13

of the Agreement. If the Employee prevails on any material issue which is the
subject of such arbitration or lawsuit, K-Tron shall be responsible for all of
the fees of the AAA and the arbitrators and any expenses relating to the conduct
of the arbitration (including K-Tron's and the Employee's reasonable attorneys'
fees and expenses). Otherwise, each party shall be responsible for its or his
own expenses relating to the conduct of the arbitration (including reasonable
attorneys' fees and expenses) and shall share the fees of the AAA.

               13.    Withholding. K-Tron may withhold from any payments under
this Agreement all federal, state and local taxes as K-Tron is required to
withhold pursuant to any law or governmental rule or regulation. Except as
otherwise specifically provided herein, the Employee shall bear all expense of,
and be solely responsible for, all federal, state and local taxes due with
respect to any payment received under this Agreement.

               14.    Notices. All notices and other communications hereunder
shall be in writing and deemed to have been given when hand delivered, in person
or by a recognized courier or delivery service, or when mailed by registered or
certified mail, return receipt requested, as follows (provided that notice of
change of address shall be deemed given only when received):

                      If to K-Tron, to:

                      K-Tron International, Inc.
                      Routes 55 and 553
                      Pitman, NJ  08071

                      Attention:  Corporate Secretary

                      If to the Employee, to:

                      Edward B. Cloues, II
                      1133 Forest Hill Drive
                      Lower Gwynedd, PA  19002

or to such other name or address as any designated recipient shall specify by
notice to the other designated recipient in the manner specified in this Section
14. Any communication delivered in another manner shall be deemed given when
actually received by the intended recipient.

               15.    Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of New Jersey, without giving effect to
any conflict of laws provisions.



                                      -13-
<PAGE>   14

               16.    Contents of Agreement, Amendment and Assignment.

                      (a)    This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes any prior
employment agreement between the parties and shall not be changed, modified or
terminated except upon written amendment executed by a duly authorized officer
of K-Tron and the Employee.

                      (b)    Employee acknowledges that from time to time,
K-Tron and other members of the K-Tron Group may establish, maintain and
distribute employee manuals or handbooks or personnel policy manuals, and
officers or other representatives of K-Tron or other members of the K-Tron Group
may make written or oral statements relating to personnel policies and
procedures. Such manuals, handbooks and statements are intended only for general
guidance. No policies, procedures or statements of any nature by or on behalf of
any member of the K-Tron Group (whether written or oral, and whether or not
contained in any employee manual or handbook or personnel policy manual), and no
acts or practices of any nature, shall be construed to modify this Agreement.

                      (c)    All of the provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, personal representatives, successors and
assigns of the parties hereto, except that the duties and responsibilities of
the Employee hereunder are of a personal nature and shall not be assignable or
delegable in whole or in part by the Employee. K-Tron shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of K-Tron, by agreement in form and substance satisfactory to the
Employee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that K-Tron would be required to perform if no
such succession had taken place.

               17.    Severability. If any provision of this Agreement or the
application thereof to anyone or any circumstance is held invalid or
unenforceable in any jurisdiction, the remainder of this Agreement, and the
application of such provision to such person or entity or such circumstance in
any other jurisdiction or to other persons, entities or circumstances in any
jurisdiction, shall not be affected thereby, and to this end the provisions of
this Agreement are severable.

               18.    Remedies Cumulative; No Waiver. Except as expressly stated
herein, no remedy conferred upon any party by this Agreement is intended to be
exclusive of any other remedy, and each and every such remedy shall be
cumulative and in addition to any other remedy given hereunder or now or
hereafter existing at law or in equity. No delay or omission by any party in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, and any such right, remedy or power may
be exercised by such party from time to time and as often as may be deemed
expedient or necessary by such party in its or his sole discretion.


                                      -14-
<PAGE>   15

               19.    Beneficiaries/References. The Employee shall be entitled,
to the extent permitted under any applicable law, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit payable
under this Agreement following the Employee's death by giving K-Tron written
notice thereof. In the event of the Employee's death or a judicial determination
of the Employee's incompetence, reference in this Agreement to the Employee
shall be deemed, where appropriate, to refer to the Employee's beneficiary,
estate or other legal representative.

               20.    K-Tron Counsel. This Agreement has been negotiated on
K-Tron's behalf by the Compensation and Human Resources Committee of the K-Tron
Board, comprised solely of independent directors, which has been advised by the
law firm of Fox, Rothschild, O'Brien & Frankel LLP. The parties acknowledge that
Morgan, Lewis & Bockius LLP, where the Employee is currently a partner and which
regularly represents K-Tron, has not advised K-Tron in this matter.

               21.    Miscellaneous. The masculine pronoun whenever used shall
include the feminine and the singular shall be construed as the plural, where
applicable. All section headings are for convenience only. This Agreement may be
executed in several counterparts,










                   [Balance of Page Intentionally Left Blank]












                                      -15-
<PAGE>   16


each of which shall be an original. It shall not be necessary in making proof of
this Agreement or any counterpart hereof to produce or account for any of the
other counterparts.

               IN WITNESS WHEREOF, K-Tron and the Employee have executed this
Agreement as of the date first above written.


[Corporate Seal]                                   K-TRON INTERNATIONAL, INC.

Attest:


/s/ MARY E. VACCARA                                By: /s/ LEO C. BEEBE
--------------------------                            --------------------------
Mary E. Vaccara                                        Leo C. Beebe
As its Assistant Secretary                             As its Chairman and
                                                       Chief Executive Officer


                                                   EMPLOYEE




/s/ TIMOTHY MAXWELL                                /s/ EDWARD B. CLOUES, II
--------------------------                         -----------------------------
Witness                                            Edward B. Cloues, II


Approved as of the date first above
written by the Compensation and
Human Resources Committee of the
K-Tron Board of Directors:



By: /s/ NORMAN COHEN
--------------------------
    Norman Cohen
    As its Chairman

                                      -16-