<PAGE>

                                                             EXHIBIT 10.11



                                  PHANTOM STOCK PLAN

                                          OF

                                  ARDEN GROUP, INC.

     1.   PURPOSE

          The purpose of this Phantom Stock Plan (the "Plan") of Arden Group,
Inc. (the "Company") is to provide to selected employees of the Company and its
subsidiary corporations, who hold the title of Vice-President or any superior
title of the Company and who are important to the success and the growth of the
business of the Company, with certain benefits and to help retain the services
of such persons.  The Plan will provide a means whereby such persons will be
given an opportunity to share in the appreciation of the Common Stock of the
Company.

     2.   DEFINITIONS

          "Act" means the Securities Act of 1933, as amended.

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

          "Committee" means the Compensation Committee of the

Board.

          "Company" shall have the meaning set forth in Section 1 hereof.

          "Common Stock" means shares of the Company's Class A Common Stock,
$.25 par value.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                                     -1-
<PAGE>

          "Fair Market Value" means (i) if the Common Stock is then listed on a
national securities exchange, the closing sales price of the 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
Common Stock is then publicly traded in the National Market System of the NASDAQ
Stock Market, the closing sales price of the Common Stock as reported in the
National Market System of the NASDAQ Stock Market 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 Common Stock is then publicly
traded in the over-the-counter market (other than in the National Market System
of the NASDAQ Stock Market), the mean between the closing bid and asked prices
of the 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 Common Stock is not then separately
quoted or publicly traded, the fair market value on the date such value is to be
determined, as determined in good faith by the Committee.

          "Grantee" means an employee of the Company or its subsidiary
corporations to whom a Unit is granted.


                                     -2-
<PAGE>

          "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.

          "Plan" shall have the meaning set forth in Section 1 hereof.

          "Subsidiary corporation" shall have the definition of a subsidiary
corporation contained in section 424 of the Internal Revenue Code.

          "Successor" means the legal representative of the estate of a deceased
Grantee or the person or persons who shall acquire the right to receive payment
for a Unit by bequest or inheritance or by reason of the death of the Grantee.

          "Term" means the period during which a particular Unit may be
exercised.

          "Unit" means the right to receive, on the terms set forth in the Plan
and during the Term and subject to such other limitations and restrictions as
the Committee may set forth in the related Unit Agreement, an amount equal to
the excess of the Fair Market Value of a share of the Common Stock on the date
upon which the Grantee exercises his or her right to receive such payment over
the Fair Market Value of a share of the Common Stock on the date specified by
the Committee at the time of grant of the Unit (the "Base Value").


                                     -3-
<PAGE>

          "Unit Agreement" means a written agreement in a form approved by the
Committee to be entered into by the Company and the Grantee.

     3.   ADMINISTRATION OF THE PLAN

          (a)  The Plan shall be administered by the Committee.

          (b)  The Committee shall adopt such rules of procedure as it may deem
proper; provided, however, that it may only take action upon the agreement of a
majority of the whole Committee.  Any action which the Committee shall take
through a written instrument signed by all of its members shall be as effective
as though taken at a meeting duly called and held.

          (c)  The powers of the Committee shall include plenary authority to
interpret the Plan, and, subject to the provisions hereof, to determine when and
to whom Units shall be granted, at the time of grant of a Unit the date upon
which the Base Value is to be determined, the number of Units to be granted
under a Unit Agreement to a specified person and the Term thereof.

          (d)  The Committee's determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or are eligible to
receive, grants under the Plan (whether or not such persons are similarly
situated).  Without limiting the generality of the foregoing, the 


                                     -4-
<PAGE>

Committee shall be entitled, among other things, to make non-uniform and 
selective determinations, and to enter into non-uniform and selective Unit 
Agreements as to the persons to receive Units under the Plan.
     
4.   GRANT OF UNITS; NUMBER SUBJECT TO THE PLAN; TERM

          (a)   The Committee may from time to time grant up to 35,000 Units
under the Plan (subject to adjustment as provided in Section 12 hereof).

          (b)  The date of grant of any Unit shall be the date specified by the
Committee which date shall not be earlier than the date the Committee action is
final.

          (c)  Any outstanding Units which shall for any reason be terminated
without exercise shall be restored to the total number of Units available under
the Plan.

          (d)  No Unit granted hereunder shall be for a Term exceeding five (5)
years.

     5.   PERSONS ELIGIBLE TO RECEIVE UNITS

          Units may be granted under the Plan to selected employees of the
Company who are vice presidents (or a superior officer) of the Company. 
Eligibility shall be determined by the Committee and such determination shall be
final and conclusive upon all persons.  For purposes of the Plan, the term "vice
president (or superior officer)" includes executive officers of the Company as
defined under the Act or 


                                     -5-
<PAGE>

the Exchange Act and vice presidents (or superior officers) of the Company 
who are not deemed to be executive officers of the Company under the Act or 
the Exchange Act.
     
     6.   VESTING OF UNITS

          (a)  No Units granted under a Unit Agreement pursuant to the Plan
shall vest during the first year from the date the Units were granted;
thereafter Units shall vest as to (i) no more than twenty-five percent (25%) of
the total number of Units subject to the applicable Unit Agreement during the
second year from the date the Units were granted, (ii) no more than fifty
percent (50%) of the total number of Units subject to the applicable Unit
Agreement during the third year from the date the Units were granted, (iii) no
more than seventy-five percent (75%) of the total number of Units subject to the
applicable Unit Agreement during the fourth year from the date the Units were
granted and (iv) all Units subject to the applicable Unit Agreement from and
after the fourth anniversary of the date the Units were granted.

          (b)  Subsequent to the grant of any Unit, the Committee may
accelerate, at any time before such Unit becomes fully vested, the time or times
at which such Unit may be exercised.

          (c)  Unless the Committee, in its sole discretion, permits otherwise,
Units granted under the Plan shall be 


                                     -6-
<PAGE>

nontransferable other than by will or by the laws of descent and distribution 
and a Unit may be exercised during the lifetime of the Grantee only by the 
Grantee.

          (d)  A Unit Agreement may contain such other terms, provisions and
conditions not inconsistent with the Plan as may be determined by the Committee.

     7.   TERMINATION OF A UNIT

          Any Unit granted under the Plan which has not been exercised 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 of five (5) years from the date on which such Unit
was granted;

          (b)  The expiration of thirty (30) days from the date of termination
(other than a termination described in Section 7(c) or on account of death or
disability, as hereinafter defined, of Grantee while employed by the Company) of
the Grantee's employment with the Company or its subsidiary corporations (or
such shorter period as may be determined by the Committee upon the granting
thereof) or if the Grantee shall die during such thirty-day (or shorter) period,
the expiration of one (1) year (or such shorter period as may be determined by
the Committee upon the granting thereof) following the date of the Grantee's
death; provided that, 


                                     -7-
<PAGE>

unless otherwise determined by the Committee upon the granting of such Units, 
no additional Units shall vest or become exercisable during the thirty (30) 
day (or shorter) or one (1) year (or shorter) period, as the case may be;

          (c)  Unless otherwise determined by the Committee upon the granting
thereof, the date of termination of the Grantee's employment with the Company or
its subsidiary corporations, if such termination constitutes or is attributable
to a breach by the Grantee of an employment agreement with the Company or its
subsidiary corporations or if the Grantee is discharged for cause (the Committee
shall have the right to determine whether the Grantee has been discharged for
cause and the date of such discharge, such determination of the Committee to be
final and conclusive); and

          (d)  The expiration of such period of time or the occurrence of such
event as the Committee in its sole discretion may provide upon the granting
thereof.

     8.   RIGHT TO TERMINATE EMPLOYMENT OR OTHER RELATIONSHIP

          Nothing contained in the Plan or in any Unit Agreement shall obligate
the Company or its subsidiary corporations to continue to employ or engage any
employee in such or in any other capacity with the Company or its subsidiary
corporations, nor confer upon any employee, any 



                                     -8-
<PAGE>

right to continue in the employ of 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 any person's 
compensation or employment agreement, if any, at any time.

     9.   EXERCISE OF UNITS

          A Grantee shall have the right and option to elect to be paid for any
then vested Units at any time or from time to time prior to the termination
thereof by the Grantee timely delivering a written notice signed by the Grantee
to the Company at the Company's principal executive office stating therein that
he or she has elected to exercise such right and option and the number of vested
Units for which the Grantee is electing to be paid.  The date of exercise shall
be the date the written notice is received by the Company.  The Company shall
thereafter pay such Grantee in complete satisfaction of each Unit with respect
to which such right and option has been exercised an amount equal to:  (a) the
Fair Market Value of a share of Common Stock on the date of exercise of such
right and option minus (b) the Base Value.  Such payment shall be made to the
Grantee within 30 days after the exercise of such right and option.


                                     -9-
<PAGE>

     10.  PAYMENT OF UNITS

          Upon the termination of the employment of a Grantee due to the death
or disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code) of such Grantee while employed by the Company, (a) the Company shall pay
such Grantee or his or her Successor, as the case may be, in complete
satisfaction of all fully vested and unexercised Units held by such Grantee on
the date of termination of his or her employment, an amount determined in the
manner set forth in Section 9 as if the Grantee had exercised the right and
option to be paid for all then fully vested and unexercised Units held by such
Grantee on the date of such termination of the employment of such Grantee, and
(b) all other Units held by the Grantee on the date of such termination of
employment of the Grantee shall terminate and shall become null and void.  Such
payment shall be made by the Company to the Grantee or his or her Successor, as
the case may be, within thirty (30) days after the date of such termination of
employment.  The Committee shall have the right to determine whether the
Grantee's termination is attributable to a disability of the Grantee within the
meaning of Section 22(e)(3) of the Internal Revenue Code, such determination of
the Committee to be final and conclusive.


                                    -10-
<PAGE>

     11.  STOCKHOLDERS' RIGHTS

          No person shall have any rights of a stockholder by virtue of the
grant, vesting or exercise of a Unit.

     12.  ADJUSTMENTS

          In the event that the shares of Common Stock 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 stock shall be
increased solely through the payment of a stock dividend, then there shall be
made an appropriate adjustment in the number of Units then available under the
Plan, in the number of Units then held by each Grantee under the Plan, in the
Base Value (for purposes of Section 9 and Section 10 of all then outstanding
Units) and to the other terms under the Plan or outstanding Unit Agreements 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 Common Stock
of the Company, then if the Committee, in its sole discretion, determines that
such change equitably requires an adjustment in any Unit theretofore granted or
which may be granted under the Plan or the terms, such adjustments shall be made
in accordance with such 


                                    -11-
<PAGE>

determination.  The foregoing adjustments shall be made in a manner that will 
cause the relationship between the aggregate appreciation in a share of 
Common Stock and the increase in value of each Unit granted hereunder to 
remain unchanged as a result of the applicable transaction.

          The Committee shall have the power, in the event of any merger or
consolidation of the Company with or into any other corporation, the merger or
consolidation of any other corporation into the Company, or the sale of all or
substantially all of the assets and business of the Company to another
corporation, to amend all outstanding Units so as to provide that (i) all Units
not then fully vested and exercisable shall become fully vested and exercisable
immediately prior to the effectiveness of any such merger, consolidation or sale
of assets and to terminate all Units upon the effectiveness of any such merger,
consolidation or sale of assets, and (ii) upon the effectiveness of any such
merger, consolidation or sale of assets, each Grantee shall be paid the amount
provided in Section 9 above for all unexercised Units then held by him or her in
the manner provided in said Section 9 as if such Grantee had exercised his or
her right and option to be paid for all of such Units on the date of such
effectiveness.  In such event, the Company shall give written notice of such
amendment and termination to 


                                     -12-
<PAGE>

the Grantees of such Units prior to the effectiveness of any such merger, 
consolidation or sale of assets.  If the Committee shall exercise such power 
and such merger, consolidation or sale of assets is consummated, all Units 
then outstanding and subject to such requirement shall be deemed to have been 
amended to provide for the vesting thereof prior to the effectiveness of such 
merger, consolidation or sale of assets and such Units shall be deemed to be 
exercised in full and shall terminate as of such date.

     13.  WITHHOLDING.  The Company shall have the right to deduct from all
amounts payable pursuant to the Plan any taxes required by law to be withheld
with respect to such payment.

     14.  PLAN UNFUNDED.  The Plan at all times shall be entirely unfunded and
no provision shall at any time be made with respect to segregating assets of the
Company for payment of any benefits hereunder.  No Grantee or other person shall
have any interest in any particular asset of the Company by reason of the right
to receive a benefit under the Plan and any such Grantee or other person shall
have only the rights of a general unsecured creditor of the Company with respect
to rights under the Plan.

     15.  TERMINATION, SUSPENSION OR MODIFICATION OF PLAN

          The Board may at any time terminate, suspend, or modify the Plan.  No
termination, suspension, or modification 


                                    -13-
<PAGE>

of the Plan shall adversely affect any right acquired by any Grantee or any 
Successor under the terms of a Unit granted before the date of such 
termination, suspension, or modification, unless such Grantee or Successor 
shall consent; but it shall be conclusively presumed that any adjustment for 
changes in capitalization as provided in Section 11 shall not adversely 
affect any such right.


                                    -14-