Document:

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                                                                   EXHIBIT 10.22

                             EMPLOYMENT AGREEMENT
                             --------------------

          AGREEMENT made as of February 4, 2000, by and between New World Pasta
Company, a Delaware corporation (the "Company"), and John Denton (the
"Executive").

          WHEREAS, the Company desires that Executive serve as the Chairman of
the Board of Directors ("Chairman") and Chief Executive Officer ("CEO") of the
Company, and Executive desires to hold such positions under the terms and
conditions of this Agreement; and

          WHEREAS, the Board of Directors of the Company (the "Company Board")
has approved and authorized the Company to enter into this Agreement with
Executive.

          NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and intending to be legally bound hereby, the
parties agree as follows:

          1.   Employment. The Company hereby employs Executive, and Executive
               ----------
hereby accepts employment with the Company, upon the terms and subject to the
conditions set forth herein.

          2.   Term.
               ----

               (a)  Subject to Section 14 hereof, the term of the employment by
the Company of Executive pursuant to this Agreement (as the same may be
extended, the "Term") shall commence on February 28, 2000 (the "Effective
Date"), and terminate on the second anniversary thereof.

               (b)  Commencing on the first anniversary of the Effective Date
and on each subsequent anniversary thereof, the Term shall automatically be
extended for one (1) additional year unless, not later than ninety days (90)
prior to any such anniversary date, either party hereto shall have notified the
other party hereto in writing that such extension shall not take effect.
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          3.   Position. During the Term, Executive shall serve as the Chairman
               --------
and CEO of the Company, supervising the conduct of the business and affairs of
the Company and performing such other duties as the Company Board shall
determine.

          4.   Duties. During the Term, Executive shall devote his full time and
               ------
attention during normal business hours to the business and affairs of the
Company, except vacations in accordance with the Company's policies and for
illness or incapacity, in accordance with Section 8 hereof.

          5.   Salary and Bonus.
               ----------------

               (a) During the Term, the Company shall pay to Executive a base
salary at the rate of $400,000 per year (the "Base Salary"), subject to
adjustments pursuant to the terms of Section 5(b) hereof.

               (b) Commencing on the first anniversary hereof and on or prior to
each anniversary hereof during the Term, the Company Board or the Compensation
Committee of the Company Board (the "Compensation Committee") shall review the
Base Salary and may increase the Base Salary based upon performance and merit.
The Base Salary shall be payable to Executive in substantially equal
installments in accordance with the Company's normal payroll practices, but in
no event less often than semi-monthly.

               (c) For the Company's fiscal year ending December 31, 2000, and
for each fiscal year during the Term thereafter, Executive shall be eligible to
receive an annual cash bonus equal to up to one hundred percent (100%) of his
Base Salary subject to the terms of a Bonus Compensation Plan to be approved by
the Company Board or the Compensation Committee.

          6.   Stock Option. Pursuant to the New World Pasta Company 1999 Stock
               ------------
Option Plan (the "Plan") and subject to the terms of the stock option agreement
to be entered into between Executive and the Company, attached hereto as Exhibit
A, within 90 days following the date hereof (the "Grant Date"), the Company
shall grant Executive (i) options, with an exercise price of $10 per share, to
purchase an aggregate of three and one-half percent (3.5%) of the outstanding
shares of common stock of the Company on the Grant Date (assuming for such
purposes that all options with an exercise price of $10 per share are deemed to
be outstanding on such date) and (ii) options with an exercise price of $73.50
per share to purchase an

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aggregate of 1.75% of the outstanding shares of common stock of the Company on
the Grant Date (assuming for such purposes that all options are deemed to be
outstanding on such date).

          7.   Stock Grant.
               -----------

               (a) On or promptly following the date hereof, the Company shall
issue to Executive 29,286 shares of common stock (the "Common Grant Shares") and
792 shares of preferred stock of the Company (the "Preferred Grant Shares," and
together with the Common Grant Shares, the "Grant Shares"), subject to (i) the
terms of Articles IV and V of the Stockholders' Agreement, dated as of January
28, 1999 and (ii) the provisions of Section 7(b) hereof.

               (b) 11, 714 of the Common Grant Shares and 317 of the Preferred
Grant Shares shall be subject to forfeiture in accordance with the following
sentence. Commencing on the first anniversary hereof and on each subsequent
anniversary hereof during the Term, so long as Executive remains employed by the
Company on such anniversary, the forfeiture restrictions on 2,929 Common Grant
Shares and 80 Preferred Grant Shares shall lapse; provided, however, that in the
                                                  --------  -------
event of a Change of Control (as defined herein) of the Company, the forfeiture
restrictions on any of the Grant Shares which are then in existence shall
automatically lapse.

               (c) Executive shall possess all incidents of ownership of the
Grant Shares issued hereunder, including the right to receive dividends with
respect to such Grant Shares and the right to vote such Grant Shares; provided,
                                                                      --------
however, common stock distributed in connection with a stock split or stock
-------
dividend, and other property distributed as a dividend, shall be subject to
restrictions and risk of forfeiture to the same extent as the Grant Shares with
respect to which such capital stock or other property has been distributed.

               (d) In the event that the employment of the Executive pursuant to
this Agreement is terminated pursuant to Section 14(b), (c), (e) or (f) hereof,
for one hundred and twenty days following the applicable Date of Termination,
Executive or his heirs may require the Company to repurchase any Grant Shares
which are no longer subject to forfeiture for $10 per Common Grant Share and
$1000 per Preferred Grant Share.

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               (e) In the event that the employment of the Executive pursuant to
this Agreement is terminated pursuant to Section 14(d) or 14(g) hereof, for one
hundred and twenty days following the applicable Date of Termination, Executive
may require the Company to repurchase up to 17,572 Common Grant Shares and 475
Preferred Grant Shares for $10 per Common Grant Share and $1000 per Preferred
Grant Share.

          8.   Vacation, Holidays and Sick Leave. During the Term, Executive
               ---------------------------------
shall be entitled to paid vacation, paid holidays and sick leave in accordance
with the Company's standard policies for its senior executive officers, which
policies shall provide Executive with benefits no less favorable than those
provided to any other senior executive officer of the Company.

          9.   Business Expenses. Executive shall be reimbursed for all
               -----------------
reasonable and necessary business expenses incurred by him in connection with
his employment, including, without limitation, expenses for travel and
entertainment incurred in conducting or promoting business for the Company upon
timely submission by Executive of receipts and other documentation as required
by the Internal Revenue Code of 1986, as amended (the "Code"), and in accordance
with the Company's normal expense reimbursement policies.

          10.  Health, Welfare and Pension Benefits.
               ------------------------------------

               (a) During the Term, Executive and eligible members of his family
shall be eligible to participate fully in all (i) health and dental benefits and
insurance programs; (ii) life and short- and long-term disability benefits and
insurance programs and (iii) pension and retirement benefits, all as available
to senior executive officers of the Company generally. In addition to life
insurance provided to the Company's senior executive officers, Executive shall
be provided with supplemental (i) term life insurance coverage to the extent
necessary to provide Executive with aggregate death benefits equal to twice his
Base Salary and (ii) disability insurance coverage to the extent necessary to
provide Executive with aggregate disability benefits equal to his Base Salary.

               (b) During the Term, the Company shall reimburse Executive for
all reasonable expenses incurred by him in connection with an annual physical
examination by a licensed physician at a medical center of Executive's choice.

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          11.  Membership Dues and Car Allowance. During the Term, the Company
               ---------------------------------
shall reimburse Executive up to an aggregate of $20,000 per year for (i) annual
membership dues and assessments at one country club of Executive's choice and
(ii) an automobile to be used by Executive in conducting or promoting business
for the Company.

          12.  D&O Coverage. During the Term, the Company shall maintain
               ------------
directors and officers liability insurance for its directors and officers, in
such amounts as the Company Board believes is reasonably necessary.

          13.  Relocation Expenses. Executive shall be reimbursed for all
               -------------------
reasonable and necessary expenses incurred by him in connection with his commute
from Executive's residence to the Company, including reasonable costs for meals,
lodging and transportation during such trips. If Executive relocates his
personal residence to the Harrisburg, Pennsylvania area, the Company shall pay
the Executive $50,000 to cover all reasonable costs and expenses incurred by
Executive in connection therewith.

          14.  Termination of Agreement. The employment by the Company of
               ------------------------
Executive pursuant to this Agreement shall not be terminated prior to the end of
the Term, except as set forth in this Section 14.

               (a) By Mutual Consent. The employment by the Company of Executive
                   -----------------
pursuant to this Agreement may be terminated at any time by the mutual written
agreement of the Company and Executive.

               (b) Death. The employment by the Company of Executive pursuant to
                   -----
this Agreement shall be terminated upon the death of Executive, in which event
Executive's spouse or heirs shall receive the (i) Executive's Base Salary and
benefits to be paid or provided to Executive under this Agreement through the
Date of Termination and, (ii) the Base Salary and health and welfare benefits
pursuant to Section 10(a)(i) hereof to be paid or provided to Executive under
this Agreement for one (1) year after the Date of Termination.

               (c) Disability. The employment by the Company of Executive
                   ----------
pursuant to this Agreement may be terminated by written notice to Executive at
the option of the Company in the event that (i) Executive becomes unable to
perform his normal duties by reason of physical or mental illness or accident
for any six (6) consecutive month period, or (ii) the Company receives written
opinions from both a

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physician for the Company and a physician for Executive that Executive will be
so disabled. In the event the employment by the Company of Executive is
terminated pursuant to this Section 14(c), Executive shall be entitled to
receive (i) all Base Salary and benefits to be paid or provided to Executive
under this Agreement through the Date of Termination and (ii) the Base Salary
and health and welfare benefits pursuant to Section 10(a) hereof to be paid or
provided to Executive for one (1) year after the Date of Termination; provided,
                                                                      --------
however, that amounts payable to Executive under this Section 14(c) shall be
-------
reduced by the proceeds of any short- and/or long-term disability payments under
the Company plans referred to in Section 10(a) hereof to which Executive may be
entitled during such period.

               (d) By the Company for Cause. The employment of Executive
                   ------------------------
pursuant to this Agreement may be terminated by the Company by written notice to
Executive ("Notice of Termination") for Cause. In the event the employment by
the Company of Executive is terminated pursuant to this Section 14(d), Executive
shall be entitled to receive all Base Salary and benefits to be paid or provided
to Executive under this Agreement through the Date of Termination.

               (e) By the Company Without Cause. The employment by the Company
                   ----------------------------
of Executive pursuant to this Agreement may be terminated by the Company at any
time without Cause by delivery of a Notice of Termination to Executive. In the
event the employment by the Company of Executive is terminated pursuant to this
Section 14(e), Executive shall be entitled to receive (i) all Base Salary and
benefits to be paid or provided to Executive under this Agreement through the
Date of Termination, and (ii) the Base Salary and health and welfare benefits
pursuant to Section 10(a) and (b) hereof to be paid or provided to Executive
under this Agreement for the remainder of the Term; notwithstanding the
foregoing, in the event of the termination by the Executive pursuant to this
Section 14(e) prior to the second anniversary hereof, Executive shall be
entitled to receive Base Salary and health and welfare benefits pursuant to
Section 10(a) hereof to be paid or provided to Executive until two years from of
such Date of Termination.

               (f) By Executive for Good Reason. The employment by Executive
                   ----------------------------
pursuant to this Agreement may be terminated by Executive by written notice to
the Company of his resignation ("Notice of Resignation") for Good Reason (as
defined herein). In the event the employment by the Company of Executive is
terminated pursuant to this Section 14(f), Executive shall be entitled to
receive (i) all Base Salary and benefits to be paid or provided to Executive
under this Agreement through the Date of Termination, (ii) the Base Salary and
health and welfare benefits

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pursuant to Section 10(a) and (b) hereof to be paid or provided to Executive
under this Agreement for the remainder of the Term.

               (g) By Executive Without Good Reason. The employment of Executive
                   --------------------------------
by the Company pursuant to this Agreement may be terminated by Executive by
delivery of a Notice of Resignation at any time without Good Reason. In the
event the employment by the Company of Executive is terminated pursuant to this
Section 14(g), Executive shall be entitled to receive all Base Salary and
benefits to be paid or provided to Executive under this Agreement through the
Date of Termination.

               (h) Date of Termination. Executive's Date of Termination shall
                   -------------------
be: (i) if the parties hereto mutually agree to terminate this Agreement
pursuant to Section 14(a) hereof, the date designated by the parties in such
agreement; (ii) if Executive's employment by the Company is terminated pursuant
to Section 14(b), the date of Executive's death; (iii) if Executive's employment
by the Company is terminated pursuant to Section 14(c), the last day of the
applicable period referred to in Section 14(c)(i) hereof or the date upon which
the Company receives written opinions from both a physician for the Company and
a physician for Executive referred to in Section 14(c)(ii) hereof; (iv) if
Executive's employment by the Company is terminated pursuant to Section 14(d),
the date on which a Notice of Termination is given; (v) if Executive's
employment by the Company is terminated pursuant to Section 14(e) or 14(g), the
date the Notice of Termination or Notice of Resignation, as the case may be, is
given (provided, that the Company, in its sole discretion may waive all or any
part of such 60-day period); and (vi) if Executive's employment by the Company
is terminated pursuant to Section 14(f), the date on which a Notice of
Resignation is given. If, within thirty (30) days after any Notice of
Termination is given pursuant to Section 14(c), Executive notifies the Company
that a dispute exists concerning Executive's termination, the Date of
Termination shall be the date on which the dispute is finally determined in
favor of termination of Executive's employment by the Company hereunder, either
by mutual written agreement of the parties or by a binding and final arbitration
award; provided, however, that Executive's Date of Termination shall be extended
       --------  -------
by a notice of dispute only if such notice is given in good faith and Executive
pursues the resolution of such dispute with reasonable diligence.

          15   Representations.
               ---------------

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               (a) The Company represents and warrants that this Agreement has
been authorized by all necessary corporate action of the Company and is a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms.

               (b) Executive represents and warrants that he is not a party to
any agreement or instrument which would prevent him from entering into or
performing his duties in any way under this Agreement and that this Agreement is
a valid and binding agreement of Executive enforceable against Executive in
accordance with its terms.

          16   Successors. This Agreement is a personal contract and the rights
               ----------
and interests of Executive hereunder may not be sold, transferred, assigned,
pledged, encumbered, or hypothecated by him, except as otherwise expressly
permitted by the provisions of this Agreement. This Agreement shall inure to the
benefit of and be enforceable by Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amount would still be
payable to him hereunder had Executive continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to his devisee, legatee or other designee or, if there is no such
designee, to his estate.

          17   Non-Competition Covenants.
               -------------------------

               (a) Executive will not, during the Term and for any period during
which Executive is receiving payments from the Company pursuant to this
Agreement, engage in Competition (as defined herein) with the Company.

               (b) Without limiting the generality of foregoing, during the Term
and for any period during which Executive is receiving payments from the Company
pursuant to this Agreement, Executive will not, directly or indirectly, for his
benefit or for the benefit of any other person or entity, do any of the
following: (i) solicit Restricted Business from any customer doing business with
the Company, provided that, after the expiration of the Term, the restriction
             --------
set forth in this clause (i) shall be limited to such customers with which the
Company has done business during the twelve months immediately preceding the
expiration of the Term; (ii) solicit Restricted Business from any potential
customer of the business of the Company, which has been the subject of a written
or oral bid, offer or proposal by the Company, or of preparation by the Company
with a view to making such a bid,

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proposal or offer, provided that, after the Termination Date, the restriction
                   --------
set forth in this clause (ii) shall be limited to such bids, offers and
proposals by the Company, in any case, during the twelve months immediately
preceding the Date of Termination; (iii) solicit the employment or services of
any person who is employed by or is a consultant to the Company; or (iv)
otherwise wrongfully interfere with the business or accounts of the Company,
including through the making of any false statements or comments of a defamatory
or disparaging nature to third parties regarding the Company or any of its
officers, directors, personnel, stockholders, products or services.

               (c) Notwithstanding the provisions of Sections 17(a) and 17(b),
in the event that this Agreement is terminated pursuant to Section 14(d) or (g)
(whether automatically or by Executive), then the provisions of Sections 17(a)
and 17(b) shall remain in effect for a period of two (2) years thereafter.

               (d) Executive further acknowledges and agrees that due to the
uniqueness of his services and the confidential nature of the information he
will possess, the covenants set forth in this Section 17 are reasonable and
necessary for the protection of the business and goodwill of the Company; and it
is the intention of the parties hereto that this Section 17 shall be enforceable
to the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which such enforcement is sought. Accordingly, without
limiting the generality of Section 22 hereof, it is the intention of the parties
hereto that if, in the opinion of any court of competent jurisdiction, any
provision or clause set forth in this Section 17 is not reasonable in any
respect, including, without limitation, with respect to the scope of the time,
place or manner restrictions set forth herein, such court shall have the right,
power and authority to modify any and all such provisions and clauses as to such
court shall appear not unreasonable and to enforce the remainder of this Section
17 as so modified.

          18   Confidentiality Covenant.
               ------------------------

               (a) Executive will not, directly or indirectly, whether
individually, as a director, stockholder, owner, partner, member, officer,
employee, principal or agent of any business, or in any other capacity, make
known, disclose, furnish, make available or utilize any of the Company's
confidential information, other than in the proper performance of the duties
contemplated by the Agreement, or as required by law; provided that, prior to
                                                      --------
disclosing any of the confidential information required by law, Executive will
promptly notify the Company so that the Company

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may seek a protective order or other appropriate remedy. Executive will return
all confidential information, including all photocopies, extracts and summaries
thereof, and any such information stored electronically on tapes, computer disks
or in any other manner to the Company at any time upon request by the Company
and, in any event, promptly after the termination of his employment for any
reason; provided, however, that Executive may retain one copy of such
        --------  -------
information and may use such information in connection with (i) any dispute with
the Company or (ii) any action brought against Executive where such information
is relevant. Confidential information does not include any information available
to or already in the hands of the public, any information known to Executive
prior to the date hereof, any information disclosed to Executive by a third
party who is not under a duty of confidentiality with respect to such
information, any information independently developed by Executive without the
use of confidential information of the Company.

               (b) Company will not disclose any information concerning
Executive to any person including, but not limited to, the reason for any
termination of employment of Executive, provided however, that the Company may
                                        -------- -------
disclose such information to its insurers as and to the extent they have a need
to know such information, and provided further that the Company may disclose
                              -------- -------
such information as and to the extent necessary and relevant to any dispute
between the Company and Executive and as and to the extent such disclosure or
any other disclosure is required by law.

          19   Entire Agreement. This Agreement contains all the understandings
               ----------------
between the parties hereto pertaining to the matters referred to herein, and
supersedes any other undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto. Executive represents that,
in executing this Agreement, he does not rely and has not relied upon any
representation or statement made by the Company not set forth herein with regard
to the subject matter or effect of this Agreement or otherwise.

          20   Amendment or Modification; Waiver. No provision of this Agreement
               ---------------------------------
may be amended or waived unless such amendment or waiver is agreed to in
writing, signed by Executive and by a duly authorized officer of the Company. No
waiver by any party hereto of any breach by another party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.

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          21   Notices. All notices and other communications required or
               -------
permitted to be given hereunder shall be in writing and shall be (i) delivered
by hand, (ii) delivered by a nationally recognized commercial overnight delivery
service, (iii) mailed postage prepaid by first class mail or (iv) transmitted by
facsimile transmitted to the party concerned at the address or telecopier number
set forth below:

          To Executive at:

                   Mr. John Denton
                   850 Grantley Court
                   York, Pennsylvania  17403

          with copies to:

                   Bernard Frechtman, Esq.
                   8041 Knue Road
                   Indianapolis, Indiana  46235

          To the Company at:

                   New World Pasta Company
                   85 Shannon Road
                   Harrisburg, Pennsylvania  17112
                   Attention:  General Counsel

          with copies to:

                   Joseph Littlejohn & Levy
                   450 Lexington Avenue
                   New York, New York  10017
                   Facsimile (212) 286-8626
                   Attention: David Y. Ying

                   and

                   Skadden, Arps, Slate, Meagher & Flom LLP
                   One Rodney Square
                   P.O. Box 636
                   Wilmington, Delaware  19899
                   Facsimile (302) 651-3001

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                   Attention:  Robert B.  Pincus

          Such notices shall be effective: (i) in the case of hand deliveries
when received; (ii) in the case of an overnight delivery service, on the next
business day after being placed in the possession of such delivery service, with
delivery charges prepaid; (iii) in the case of mail, seven (7) days after
deposit in the postal system, first class mail, postage prepaid; and (iv) in the
case of facsimile notices, when electronic confirmation of receipt is received
by the sender. Any party may change its address and telecopy number by written
notice to the other given in accordance with this Section 21; provided, however,
                                                              --------  -------
that such change shall be effective when received.

          22   Severability. If any provision or clause of this Agreement or the
               ------------
application of any such provision or clause to any party or circumstances shall
be determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision or clause to such person or circumstances other than those to
which it is so determined to be invalid and unenforceable, shall not be affected
thereby, and each provision or clause hereof shall be validated and shall be
enforced to the fullest extent permitted by law.

          23   Survivorship. The respective rights and obligations of the
               ------------
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.

          24   Governing Law; Arbitration.
               --------------------------

               (a) This Agreement will be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
it conflicts of law principles.

               (b) In the event a dispute arises out of or pertaining to this
Agreement, either party may, by written notice to the other party, require that
such dispute be submitted to binding arbitration pursuant to the rules of the
American Arbitration Association in Harrisburg, Pennsylvania (including
reasonable discovery as determined by the arbitrator) and the order of such
arbitrator shall be conclusive, final and binding on all parties hereto and may
be entered as a judgment in any court having jurisdiction over the parties.

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          25   Headings. All descriptive headings of sections and paragraphs in
               --------
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.

          26   Withholding. All payments to Executive under this Agreement shall
               -----------
be reduced by all applicable withholding required by federal, state or local
law.

          27   Specific Performance. Each party hereto acknowledges that money
               --------------------
damages would be both incalculable and an insufficient remedy for any breach of
this Agreement by such party and that any such breach would cause the other
parties, irreparable harm. Accordingly, each party hereto also agrees that, in
the event of any breach or threatened breach of the provisions of this Agreement
by such party, the other parties shall be entitled to equitable relief without
the requirement of posting a bond or other security, including in the form of
injunctions and orders for specific performance, in addition to all other
remedies available to such other parties at law or in equity.

          28   Counterparts. This Agreement may be executed in counterparts,
               ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

          29   Definitions.
               -----------

               (a) "Cause" means the determination, in good faith, by the
Company Board, after notice to Executive and a reasonable opportunity to cure of
no less than 30 days, that one or more of the following events has occurred: (i)
any act of gross negligence, fraud or willful misconduct by Executive materially
injuring the interest, business or reputation of the Company, or any of its
parents, subsidiaries or affiliates; (ii) Executive's commission of any felony;
(iii) any misappropriation or embezzlement of the property of the Company, or
any of its parents, subsidiaries or affiliates; or (iv) any material breach by
Executive of this Agreement, including, without limitation, a material breach of
Sections 17 and 18 hereof, which breach remains uncorrected for a period of
thirty (30) days after receipt by Executive of written notice from the Company
setting forth such breach.

               (b) "Change of Control" includes the occurrence of any of the
following events: (i) any "Person" (within the meaning of Section 12(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than New World Pasta, LLC, a Delaware limited liability company,
or its

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affiliates, becomes a Beneficial Owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors; (ii) there is
consummated a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other Company, other than a merger or
consolidation that would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least fifty percent
(50%) of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation; (iii) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets; or (iv) the following individuals cease for any reason
to constitute a majority of the number of directors then serving: individuals
who, as of February 1, 2000, constitute the Company Board and any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Company Board or nomination for election by the
Company's stockholders was approved or recommended by a vote of at least a
majority of the directors then still in office who either were directors on
February 1, 2000 or whose appointment, election or nomination for election was
previously so approved or recommended.

               (c) "Competition" means engaging in, or otherwise directly or
indirectly being employed by or acting as a consultant or lender to, or being a
director, officer, employee, principal, licensor, trustee, broker, agent,
stockholder, member, owner, joint venturer or partner of, or permitting a name
to be used in connection with the activities of any other business or
organization which engages, directly or through affiliates it controls, in the
Restricted Business, provided that, it will not be a violation for Executive to
                     --------
(i) become the registered or beneficial owner of up to one percent (1%) of any
class or series of the capital stock of a publicly traded corporation that is
engaged in Competition or (ii) acquire up to one percent (1%) of any issue of
publicly traded debt securities of a corporation that is engaged in Competition,
it being understood that Executive may not actively participate in the business
of any such corporation, by reason of such ownership or acquisition or
otherwise, until such time as this covenant expires.

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               (d) "Good Reason" for termination includes the occurrence of any
of following events without the prior consent of Executive: (i) removal of
Executive from Executive's then current position; (ii) material reduction by the
Company of Executive's then current duties, responsibilities or authority or the
assignment to Executive of duties materially inconsistent with his then current
position; (iii) relocation of the Company's headquarters to a location more than
25 miles from the greater Harrisburg, Pennsylvania metropolitan area; (iv)
material breach by the Company of this Agreement, which breach remains uncured
for a period of thirty days after receipt by the Company of written notice from
Executive; or (v) failure to extend the Term pursuant to Section 2(b) hereof.

               (e) "Restricted Business" means the manufacturing, distribution,
marketing or sale of pasta or egg noodle products or any other business which
constitutes more than 10% of the consolidated revenues of the Company during the
fifty-two week period ending immediately prior to any such determination or the
Date of Termination, as the case may be.

                           [SIGNATURE PAGE FOLLOWS]

                                       15
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Employment Agreement as of the date first above written.

                                            NEW WORLD PASTA COMPANY

                                   By:  /s/ David Y. Ying
                                      -------------------------------
                                      Name:
                                      Title:

                                   EXECUTIVE

                                     /s/ John Denton
                                   ----------------------------------
                                   John Denton

                                       16Exhibit 10.1

                         PROGRESS FINANCIAL CORPORATION
                              AMENDED AND RESTATED
                            1993 STOCK INCENTIVE PLAN

                                    ARTICLE I
                            ESTABLISHMENT OF THE PLAN

         Progress Financial Corporation (the "Company") hereby establishes this
Amended and Restated 1993 Stock Incentive Plan (the "Plan") upon the terms and
conditions hereinafter stated.

                                   ARTICLE II
                               PURPOSE OF THE PLAN

         The purpose of this Plan is to improve the growth and profitability of
the Company and its Subsidiary Companies by attracting and retaining qualified
personnel, providing such Employees with a proprietary interest in the Company
as an incentive to contribute to the success of the Company and its Subsidiary
Companies, and rewarding those Employees for outstanding performance and the
attainment of targeted goals. All Incentive Stock Options issued under this Plan
are intended to comply with the requirements of Section 422 of the Code, and the
regulations thereunder, and all provisions hereunder shall be read, interpreted
and applied with that purpose in mind.

                                   ARTICLE III
                                   DEFINITIONS

         3.01 "Award" means an Option or Stock Appreciation Right granted
pursuant to the terms of this Plan.

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

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

         3.04 "Committee" means a committee of not less than two directors
appointed by the Board pursuant to Article IV hereof, each of whom shall be a
"non-employee director" as defined in Rule 16b-3(b)(3)(i) of the Exchange Act or
any successor thereto.

         3.05 "Common Stock" means shares of the common stock, $1.00 par value
per share, of the Company.

         3.06 "Director" means a member of the Board of Directors of the
Company.

                                       1
<PAGE>

         3.07 "Disability" means any physical or mental impairment which
qualifies an Employee for disability benefits under the applicable long-term
disability plan maintained by the Company or a Subsidiary Company, or, if no
such plan applies, which would qualify such Employee for disability benefits
under the long-term disability plan maintained by the Company, if such Employee
were covered by that plan.

         3.08 "Effective Date" means the date on which this Amended and Restated
Plan was adopted by the Board of Directors of the Company.

         3.09 "Employee" means any person who is employed by the Company or a
Subsidiary Company, including Officers, but not including Directors who are not
also Officers of or otherwise employed by the Company or a Subsidiary Company.

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

         3.11 "Fair Market Value" shall be equal to the fair market value per
share of the Company's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) in which such shares are then traded, or if no
such closing prices are reported, the mean between the high bid and low asked
prices that day on the principal market or national quotation system then in
use, or if no such quotations are available, the price furnished by a
professional securities dealer making a market in such shares selected by the
Committee.

         3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.

         3.13 "Non-Qualified Option" means any Option granted under this Plan
which is not an Incentive Stock Option.

         3.14 "Officer" means an Employee whose position in the Company or
Subsidiary Company is that of a corporate officer, as determined by the Board.

         3.15 "Option" means a right granted under this Plan to purchase Common
Stock.

         3.16 "Optionee" means an Employee or former Employee to whom an Option
is granted under the Plan.

         3.17 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Company or a Subsidiary Company, or if no such plan is applicable, which
would constitute "retirement" under any qualified

                                       2
<PAGE>

pension benefit plan maintained by the Company or a Subsidiary Company, if such
individual were a participant in such plan.

         3.18 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Company in cash and/or Common Stock, as
provided in the discretion of the Committee, in accordance with Section 8.10.

         3.19 "Subsidiary Companies" means those subsidiaries of the Company
which meet the definition of "subsidiary corporations" set forth in Section
425(f) of the Code, at the time of granting of the Option in question.

                                   ARTICLE IV
                           ADMINISTRATION OF THE PLAN

         4.01 Duties of the Committee. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its absolute
discretion to adopt, amend and rescind such rules, regulations and procedures
as, in its opinion, may be advisable in the administration of the Plan,
including, without limitation, rules, regulations and procedures which (i) deal
with satisfaction of an Employee's tax withholding obligation pursuant to
Section 12.02 hereof, (ii) include arrangements to facilitate the Employee's
ability to borrow funds for payment of the exercise or purchase price of an
Award, if applicable, from securities brokers and dealers, and (iii) include
arrangements which provide for the payment of some or all of such exercise or
purchase price by delivery of previously-owned shares of Common Stock or other
property and/or by withholding some of the shares of Common Stock which are
being acquired. The interpretation and construction by the Committee of any
provisions of the Plan, any rule, regulation or procedure adopted by it pursuant
thereto or of any Award shall be final and binding in the absence of action by
the Board of Directors.

         4.02 Appointment and Operation of the Committee. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a non-employee director as defined
in Rule 16b-3(b)(3)(i) of the Exchange Act or any successor thereto. The
Committee shall act by vote or written consent of a majority of its members.
Subject to the express provisions and limitations of the Plan, the Committee may
adopt such rules, regulations and procedures as it deems appropriate for the
conduct of its affairs. It may appoint one of its members to be chairman and any
person, whether or not a member, to be its secretary or agent. The Committee
shall report its actions and decisions to the Board at appropriate times but in
no event less than one time per calendar year.

         4.03 Revocation for Misconduct. The Board or the Committee may by
resolution immediately revoke, rescind and terminate any Option, or portion
thereof, to the extent not yet vested, or any Stock Appreciation Right, to the
extent not yet exercised, previously granted or awarded under this Plan to an
Employee who is discharged from the employ of the Company or a Subsidiary
Company for cause, which, for purposes hereof, shall mean termination for: (1)

                                       3
<PAGE>

conviction of a felony involving the misappropriation of the Company's or any
Subsidiary's assets or a conviction of a felony which results in a substantial,
demonstrable threat to the Company's or any Subsidiary's reputation, or (ii)
gross and willful failure to perform a substantial portion of employee's duties
and responsibilities as an employee, which failure continues for more than
thirty (30) days after written notice given to employee pursuant to a two-thirds
vote of all of the members of the Board of Directors of the Company or any
Subsidiary, as the case may be, then in office, such vote to set forth in
reasonable detail the nature of such failure.

         4.04 Limitation on Liability. Neither the members of the Board nor any
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan, any rule, regulation or procedure adopted
by it pursuant thereto or any Awards granted under it. If a member of the Board
or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Company
shall indemnify such member against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Company and its Subsidiary Companies and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.

         4.05 Compliance with Law and Regulations. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Company shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of or obtaining of consents or approvals with respect to such
shares under any federal or state law or any rule or regulation of any
government body, which the Company shall, in its sole discretion, determine to
be necessary or advisable. Moreover, no Option or Stock Appreciation Right may
be exercised if such exercise would be contrary to applicable laws and
regulations.

         4.06 Restrictions on Transfer. The Company may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.

                                    ARTICLE V
                                   ELIGIBILITY

         Awards may be granted to such Employees of the Company and its
Subsidiary Companies as may be designated from time to time by the Board or the
Committee.

                                       4
<PAGE>

                                   ARTICLE VI
                        COMMON STOCK COVERED BY THE PLAN

         6.01 Option Shares. The aggregate number of shares of Common Stock
which may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 575,507. None of such shares shall be the subject of more
than one Award at any time, but if an Option as to any shares is surrendered
before exercise (including surrender in connection with exercise of a Stock
Appreciation Right), or expires or terminates for any reason without having been
exercised in full, or for any other reason ceases to be exercisable, the number
of shares covered thereby shall again become available for grant under the Plan
as if no Awards had been previously granted with respect to such shares.

         6.02 Source of Shares. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Company on the open market or from private sources for use under the Plan.

                                   ARTICLE VII
                                DETERMINATION OF
                         AWARDS, NUMBER OF SHARES, ETC.

         The Board or the Committee shall, in its discretion, determine from
time to time which Employees will be granted Awards under the Plan, the number
of shares of Common Stock subject to each Award, whether each Option will be an
Incentive Stock Option or a Non-Qualified Option, and the exercise price of an
Option. In making all such determinations there shall be taken into account the
duties, responsibilities and performance of each respective individual, his
present and potential contributions to the growth and success of the Company,
his salary and such other factors as the Board or the Committee shall deem
relevant to accomplishing the purposes of the Plan.

                                  ARTICLE VIII
                      OPTIONS AND STOCK APPRECIATION RIGHTS

         Each Option granted hereunder shall be on the following terms and
conditions:

         8.01 Stock Option Agreement. The proper Officers of the Company and
each Optionee shall execute a Stock Option Agreement which shall set forth the
total number of shares of Common Stock to which it pertains, the exercise price,
whether it is a Non-Qualified Option or an Incentive Stock Option, and such
other terms, conditions, restrictions and privileges as the Committee in each
instance shall deem appropriate, provided they are not inconsistent with the
terms, conditions and provisions of this Plan. Each Optionee shall receive a
copy of his executed Stock Option Agreement.

                                       5
<PAGE>

         8.02 Option Exercise Price.

         (a) Incentive Stock Options. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option shall
be no less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock at the time such Incentive Stock Option is granted, except as
provided in Section 8.09(b).

         (b) Non-Qualified Options. The per share price at which the subject
Common Stock may be purchased upon exercise of a Non-Qualified Option shall be
no less than the greater of (i) the par value or (ii) eight-five percent (85%)
of the Fair Market Value of a share of Common Stock at the time such
Non-Qualified Option is granted.

         8.03 Vesting and Exercise of Options.

         (a) General Rules. Incentive Stock Options and Non-Qualified Options
shall become vested and exercisable at the rate, to the extent and subject to
such limitations as may be specified by the Board or the Committee.
Notwithstanding the foregoing, no vesting shall occur on or after an Optionee's
employment with the Company and all Subsidiary Companies is terminated for any
reason other than his death, Disability or Retirement. In determining the number
of shares of Common Stock with respect to which Options are vested and/or
exercisable, fractional shares will be rounded up to the nearest whole number if
the fraction is 0.5 or higher, and down if it is less.

         (b) Accelerated Vesting Upon Death, Disability or Retirement. Unless
the Board or the Committee shall specifically state otherwise at the time an
Option is granted, all Options granted under this Plan shall become vested and
exercisable in full on the date an Optionee terminates his employment with the
Company or a Subsidiary Company because of his death, Disability or Retirement.

         (c) Accelerated Vesting for Changes in Control. Notwithstanding the
general rule described in Section 8.03(a), all outstanding Options shall become
immediately vested and exercisable in the event there is an actual or threatened
change in control of the Company.

                  (1) Change in Control. A "change in control of the Company"
shall mean a change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act, whether or not the Company in fact is required to comply with
Regulation 14A thereunder; provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company's then outstanding
securities, or (ii) during any period of twenty-four consecutive months during
the term of an Option, individuals who at the beginning of such period
constitute the Board of the Company cease for any reason to constitute at least
a majority thereof, unless the election, or the nomination for election by the
Company's stockholders, of each director who was not a director

                                       6
<PAGE>

at the date of grant has been approved in advance by directors representing at
least two-thirds of the directors then in office who were directors at the
beginning of the period.

                  (2) Threatened Change in Control. A "threatened change in
control of the Company" shall mean any set of circumstances which in the opinion
of the Board, as expressed through a resolution, poses a real, substantial and
immediate possibility of leading to a change in control of the Company as
defined in clause (1) above.

         8.04 Duration of Options.

         (a) General. Except as provided in Sections 8.04(c) and 8.09, each
Option or portion thereof shall be exercisable at any time on or after it vests
and becomes exercisable until the earlier of (i) ten (10) years after its date
of grant or (ii) three (3) months after the date on which the Optionee ceases to
be employed by the Company and all Subsidiary Companies, unless the Board or the
Committee in its discretion decides at the time of grant or thereafter to extend
such period of exercise from three (3) months to a period not exceeding five (5)
years. However, failure to exercise Incentive Stock Options within three months
after the date on which the Optionee's employment terminates may result in
adverse tax consequences to the Optionee.

         (b) Exception for Termination Due to Death, Disability or Retirement.
If an Optionee dies while in the employ of the Company or a Subsidiary Company
or terminates employment with the Company or a Subsidiary Company as a result of
Disability or Retirement without having fully exercised his Options, the
Optionee or the executors, administrators, legatees or distributees of his
estate shall have the right, during the twelve-month period following the
earlier of his death, Disability or Retirement, to exercise such Options to the
extent vested on the date of such death, Disability or Retirement. In no event,
however, shall any Option be exercisable more than ten (10) years from the date
it was granted.

         8.05 Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative. Notwithstanding the foregoing, or any other provision
of this Plan, an Optionee who holds Non-Qualified Options may transfer such
Options to his or her spouse, lineal ascendants, lineal descendants, or to a
duly established trust for the benefit of one or more of these individuals.
Options so transferred may thereafter be transferred only to the Optionee who
originally received the grant or to an individual or trust to whom the Optionee
could have initially transferred the Option pursuant to this Section 8.05.
Options which are transferred pursuant to this Section 8.05 shall be exercisable
by the transferee according to the same terms and conditions as applied to the
Optionee.

         8.06 Manner of Exercise. Options may be exercised in part or in whole
and at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.

                                       7
<PAGE>

         8.07 Payment for Shares. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall be
made to the Company upon exercise of the Option. All shares sold under the Plan
shall be fully paid and nonassessable. Payment for shares may be made by the
Optionee in cash or, at the discretion of the Board or the Committee, by
delivering shares of Common Stock (including shares acquired pursuant to the
exercise of an Option) or other property equal in Fair Market Value to the
purchase price of the shares to be acquired pursuant to the Option, by
withholding some of the shares of Common Stock which are being purchased upon
exercise of an Option, or any combination of the foregoing.

         8.08 Voting and Dividend Rights. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Company's stockholder ledger as the holder of record of such shares acquired
pursuant to an exercise of an Option.

         8.09 Additional Terms Applicable to Incentive Stock Options. All
Options issued under the Plan as Incentive Stock Options will be subject, in
addition to the terms detailed in Sections 8.01 to 8.08 above, to those
contained in this Section 8.09.

         (a) Notwithstanding any contrary provisions contained elsewhere in this
Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Company (or any parent or
Subsidiary Company), shall not exceed $100,000.

         (b) Limitation on Ten Percent Stockholders. The price at which shares
of Common Stock may be purchased upon exercise of an Incentive Stock Option
granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Company or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Company at the time of grant, and such Incentive Stock Option shall by its terms
not be exercisable after the earlier of the date determined under Section 8.03
or the expiration of five (5) years from the date such Incentive Stock Option is
granted.

         (c) Notice of Disposition; Withholding; Escrow. An Optionee shall
immediately notify the Company in writing of any sale, transfer, assignment or
other disposition (or action constituting a disqualifying disposition within the
meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Company shall be entitled to withhold from any compensation or
other payments then or thereafter due to the Optionee such amounts as may be

                                       8
<PAGE>

necessary to satisfy any withholding requirements of federal or state law or
regulation and, further, to collect from the Optionee any additional amounts
which may be required for such purpose. The Committee may, in its discretion,
require shares of Common Stock acquired by an Optionee upon exercise of an
Incentive Stock Option to be held in an escrow arrangement for the purpose of
enabling compliance with the provisions of this Section 8.09(c).

         8.10 Stock Appreciation Rights.

         (a) General Terms and Conditions. The Board or the Committee may, but
shall not be obligated to, authorize the Company, on such terms and conditions
as it deems appropriate in each case, to grant rights to Optionees to surrender
an exercisable Option, or any portion thereof, in consideration for the payment
by the Company of an amount equal to the excess of the Fair Market Value of the
shares of Common Stock subject to the Option, or portion thereof, surrendered
over the exercise price of the Option with respect to such shares (any such
authorized surrender and payment being hereinafter referred to as a "Stock
Appreciation Right"). Such payment, at the discretion of the Board or the
Committee, may be made in shares of Common Stock valued at the then Fair Market
Value thereof, or in cash, or partly in cash and partly in shares of Common
Stock.

         The terms and conditions set with respect to a Stock Appreciation Right
may include (without limitation), subject to other provisions of this Section
8.10 and the Plan, the period during which, date by which or event upon which
the Stock Appreciation Right may be exercised; the method for valuing shares of
Common Stock for purposes of this Section 8.10; a ceiling on the amount of
consideration which the Company may pay in connection with exercise and
cancellation of the Stock Appreciation Right; and arrangements for income tax
withholding. The Board or the Committee shall have complete discretion to
determine whether, when and to whom Stock Appreciation Rights may be granted.

         (b) Time Limitations. If a holder of a Stock Appreciation Right
terminates service with the Company as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within which
the Option to which it relates may be exercised.

         (c) Effects of Exercise of Stock Appreciation Rights or Options. Upon
the exercise of a Stock Appreciation Right, the number of shares of Common Stock
available under the Option to which it relates shall decrease by a number equal
to the number of shares for which the Stock Appreciation Right was exercised.
Upon the exercise of an Option, any related Stock Appreciation Right shall
terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.

         (d) Time of Grant. A Stock Appreciation Right granted in connection
with an Incentive Stock Option must be granted concurrently with the Option to
which it relates while a Stock Appreciation Right granted in connection with a
Non-Qualified Option may be granted concurrently with the Option to which it
relates or at any time thereafter prior to the exercise or expiration of such
Option.

                                       9
<PAGE>

         (e) Non-Transferable. The holder of a Stock Appreciation Right may not
transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.

                                   ARTICLE IX
                         ADJUSTMENTS FOR CAPITAL CHANGES

         The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Award relates and the
exercise price per share of Common Stock under any Option shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the Effective Date of
this Plan resulting from a split, subdivision or consolidation of shares or any
other capital adjustment, the payment of a stock dividend, or other increase or
decrease in such shares effected without receipt or payment of consideration by
the Company. If, upon a merger, consolidation, reorganization, liquidation,
recapitalization or the like of the Company, the shares of the Company's Common
Stock shall be exchanged for other securities of the Company or of another
corporation, each recipient of an Award shall be entitled, subject to the
conditions herein stated, to purchase or acquire such number of shares of Common
Stock or amount of other securities of the Company or such other corporation as
were exchangeable for the number of shares of Common Stock of the Company which
such optionees would have been entitled to purchase or acquire except for such
action, and appropriate adjustments shall be made to the per share exercise
price of outstanding Options.

                                    ARTICLE X
                      AMENDMENT AND TERMINATION OF THE PLAN

         The Board may, by resolution, at any time terminate or amend the Plan
with respect to any shares of Common Stock as to which Awards have not been
granted, subject to any applicable regulatory requirements and any required
stockholder approval or any stockholder approval which the Board may deem to be
advisable for any reason, such as for the purpose of obtaining or retaining any
statutory or regulatory benefits under tax, securities or other laws or
satisfying any applicable stock exchange listing requirements. The Board may
not, without the consent of the holder of an Award, alter or impair any Award
previously granted or awarded under this Plan as specifically authorized herein.

                                   ARTICLE XI
                               CONTINUATION RIGHTS

         Neither the Plan nor the grant of any Awards hereunder nor any action
taken by the Committee or the Board in connection with the Plan shall create any
right on the part of any Employee of the Company or a Subsidiary Company to
continue as such.

                                       10
<PAGE>

                                   ARTICLE XII
                                   WITHHOLDING

         12.01 Tax Withholding. The Company may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Company may require the Optionee to pay to the Company the amount required to be
withheld as a condition to delivering the shares acquired pursuant to an Award.
The Company also may withhold or collect amounts with respect to a disqualifying
disposition of shares of Common Stock acquired pursuant to exercise of an
Incentive Stock Option, as provided in Section 8.09(c).

         12.02 Methods of Tax Withholding. The Board or the Committee is
authorized to adopt rules, regulations or procedures which provide for the
satisfaction of an Optionee's tax withholding obligation by the retention of
shares of Common Stock to which the Optionee would otherwise be entitled
pursuant to an Award and/or by the Optionee's delivery of previously-owned
shares of Common Stock or other property.

                                  ARTICLE XIII
                        EFFECTIVE DATE OF THE PLAN; TERM

         13.01 Effective Date of the Plan. This Plan initially became effective
upon adoption by the Board and stockholders of the Company in 1993. The
amendments to this Plan increasing the total number of shares of Common Stock
which may be issued under the Plan from 176,488 to 336,488 and otherwise
amending and restating this Plan became effective upon adoption by the Board in
March 1997, subject to approval of the Company's stockholders at or before the
next annual meeting of stockholders of the Company.

         13.02 Term of Plan. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.

                                   ARTICLE XIV
                                  MISCELLANEOUS

         14.01 Governing Law. This Plan shall be construed under the laws of the
State of Delaware.

         14.02 Pronouns. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.

                                       11

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