Document:

EXHIBIT 10.1

NON-EMPLOYEE DIRECTOR

PHANTOM STOCK UNIT AGREEMENT

THIS PHANTOM STOCK UNIT AGREEMENT (the “Agreement”), dated as of this
13th day of March, 2007, by and between Arden Group, Inc., a Delaware
corporation (the “Company”), and M. Mark Albert (the “Unit Holder”), is made
with reference to the following facts:

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

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

NOW, THEREFORE, it is agreed as follows:

1.             Grant.

(a)  Subject
to the terms and conditions set forth herein, the Company hereby grants to the
Unit Holder Ten Thousand (10,000) Units exercisable from time to time in
accordance with the provisions of this Agreement during a period commencing on
the date hereof and expiring at the close of business on March 13, 2012 (the “Expiration
Date”).  Each Unit hereunder represents
the right to receive an amount equal to the excess of (i) the fair market value
(determined in accordance with Paragraph 1(b) below) of one share of the Class
A Common Stock, $.25 par value per share, of the Company (the “Class A Common
Stock”) on the date upon which the Unit Holder exercises such Unit (the “Exercise
Date Price”) over (ii) $121.03 (the “Base Price”), representing the fair market
value of one share of the Class A Common Stock on the effective date hereof
determined on the basis of the closing sales price of the Class A Common Stock
on the date hereof as reported by the NASDAQ Stock Market.

(b)  The Exercise Date Price
shall be determined as follows: (i) if the Class A Common Stock is then listed
on a national securities exchange, the average of the closing sales prices of
the Class A Common Stock for the twenty Trading Days (as defined below)
preceding the date of exercise of such Units (the “Determination Date”) on the
principal securities exchange on which such stock is then listed, and, if there
is no reported sale on any Trading Day within such twenty day period, such
Trading Day shall be counted for purposes of determining such twenty day period
but shall be disregarded for purposes of determining such average, or (ii) if
the Class A Common Stock is then publicly traded in the over-the-counter
market, the average of the closing sales prices of the Class A Common Stock in
the over-the-counter market for the twenty Trading Days preceding the
Determination Date and, if there is no reported sale on any Trading Day within
such twenty day period, such Trading Day shall be counted for purposes of
determining such twenty day period but shall be disregarded for purposes of
determining such average, or (iii) if the Class A Common Stock is not then
separately quoted or publicly traded, the fair market value on the
Determination Date, as determined in good faith by the Board of Directors of
the Company (the “Board”).  For purposes
hereof, “Trading Day” shall mean any

day
upon which the principal national securities exchange or over-the-counter
market upon which the Class A Common Stock is then traded is open for the
trading of securities.

2.             Exercise of
Units.

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

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

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

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

(a)           the Expiration Date;

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

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

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

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

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

5.             Non-Assignability.  The Unit Holder shall not transfer, assign,
pledge or hypothecate in any manner this Agreement or any of the rights and
privileges granted hereby other than by will or by the laws of descent and
distribution.  Units are exercisable
during the Unit Holder’s lifetime only by the Unit Holder.  Upon any attempt by the Unit Holder to
transfer this Agreement or any right or privilege granted hereby (including
without limitation any Units) other than by will or by the laws of descent and
distribution and contrary to the provisions hereof, this Agreement and said
rights and privileges shall immediately become null and void.

6.             Anti-Dilution.  In the event that the shares of Class A
Common Stock subject to this Agreement shall be changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or if the number of such shares of Class A Common Stock shall be
increased solely through the payment of a stock dividend, then there shall be
made an appropriate adjustment (a) in the number of Units then covered hereby,
(b) to the Base Price and (c) to the other terms as may be necessary to reflect
the foregoing events.  In the event there
shall be any other change in the number or kind of the outstanding shares of
stock of the Company subject to this Agreement, then if the Board, in its sole discretion,
determines that such change equitably requires an

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

7.             Termination upon
Merger.  In the event that (a) the
Company merges with or into any other corporation, consolidates with any other
corporation, or sells substantially all of its assets and business to another
corporation and, in any such case, stockholders of the Company immediately
prior to the consummation of the transaction own less than fifty percent (50%)
of the outstanding voting securities of the surviving or acquiring corporation
immediately after consummation of the transaction, or (b) the Class A Common
Stock (or any other capital stock into which the Class A Common Stock is
changed) is no longer listed on a national securities exchange or publicly
traded in the over-the-counter market, then (i) the Unit Holder shall be paid
the amount provided in Paragraph 2 above for all then fully vested unexercised
Units then held by him in the manner provided in said Paragraph 2 as if such
Unit Holder had exercised his right and option to be paid for all of such then
fully vested Units immediately prior to the effectiveness of such merger or
consolidation, consummation of such sale or the occurrence of the Class A Common
Stock no longer being listed on a national securities exchange or publicly
traded in the over-the-counter market and (ii) all of the Units shall terminate
upon such effectiveness, consummation or occurrence.

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

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

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

	
  Company:

  	
  Arden Group, Inc.

  
	
   

  	
  2020 South
  Central Avenue

  
	
   

  	
  Compton,
  California 90220

  
	
   

  	
  Attention:

  	
  Chief Executive
  Officer and

  
	
   

  	
   

  	
  Chief Financial
  Officer

  

 

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

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

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

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

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

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

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

	
  ARDEN GROUP, INC.

  	
  UNIT HOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/BERNARD
  BRISKIN

  	
   

  	
  /s/M. MARK ALBERT

  
	
   

  	
  M. Mark Albert

  
	
   

  	
   

  
	
   

  	
  Address for Notice:Exhibit 10.1

March 13, 2007

2007 Bonus and Incentive Share Award For:

«Name»

	
  Grant Date:

  	
   

  	
  February 27, 2007

  	
   

  	
   

  
	
  Restricted
  Shares Vesting Date:

  	
   

  	
  February 27, 2011

  	
   

  	
   

  
	
  Unrestricted
  Shares Awarded:

  	
   

  	
  «Bonus_Shares»

  	
   

  	
  (“Bonus Shares”)

  
	
  Restricted
  Shares Awarded:

  	
   

  	
  «Incentive_Shares» 

  	
   

  	
  (“Incentive Shares”)

  

 

I am pleased to confirm the award made to you on
February 27, 2007 by the Compensation Committee of the Board of Directors of
«Bonus_Shares»  Bonus Shares and «Incentive_Shares»
Incentive Shares of the Company’s common stock.

The grant of Incentive Shares awarded to you is
subject to four-year cliff-vesting if you retain all of your Bonus Shares
during that time.  The entire award of
Bonus and Incentive Shares are subject to the other terms and conditions
specified in the West Pharmaceutical Services, Inc. 2004 Stock-Based
Compensation Plan.  Attached with this
award letter are a summary of important 
Terms and Conditions and a Participant Information Statement.  Both documents should be reviewed carefully.

This Award is governed by all of the terms and
conditions contained in this award letter and the Plan.  In the event of a conflict between this award
letter and the Plan, the provisions of the Plan shall control for any and all
purposes.  If you wish to sell or
withdraw any of the shares in your account, you should contact the Company’s
stock plan administrator, Computershare Trust Company at 1-888-472-3073.  A Sale or Withdrawal of Shares form is
enclosed for your convenience.

Please review the attached documentation
carefully.  I would be happy to answer any questions about the terms and
conditions of your awards.

	
  

  	
  Very truly yours,

  
	
   

  	
  

  
	
   

  	
  Richard D. Luzzi

  Vice President Human Resources

  

 

RDL/rmm

Attachments

2007
Bonus and Incentive Stock Award

 

Terms
and Conditions for

Employee Bonus and Incentive Stock Awards

 

1.               Bonus Shares are
shares of Company stock awarded to you and are considered “Bonus Stock” under
the Company’s 2004 Stock-Based Compensation Plan.  Incentive Shares are shares of stock that are
subject to risk of forfeiture as explained below and are considered “Restricted
Stock” under the Plan.

2.               Upon grant, the
number of Bonus and Incentive shares shown on the accompanying grant letter
will be held in an account on your behalf. 
Recipients will be permitted to indirectly vote their allocated shares
through the plan administrator and to receive dividends and other distributions
with respect thereto, except that: dividends on Bonus and Incentive shares will
be reinvested in additional shares of stock. 
If the Incentive Shares are forfeited, recipient shall have no right to
receive shares purchased through dividends paid on the restricted shares.

3.               All of the
Incentive shares will vest 100% on the fourth anniversary of the grant date,
subject to the following circumstances:

	
  Event

  	
   

  	
  Effect
  on Incentive Shares

  
	
  Before the vesting date,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  . . . recipient sells, assigns, exchanges, pledges,
  hypothecates or otherwise encumbers any of the Bonus Shares

  	
   

  	
  . . . all of the Incentive Shares are immediately
  forfeited.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  . . . recipient tenders Bonus Shares as full or
  partial payment of the exercise price of a stock option granted under a
  Company plan

  	
   

  	
  . . . the Incentive Shares continue to vest
  according to the original schedule.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  . . . recipient tenders Bonus Shares to satisfy
  applicable tax withholding requirements as permitted by the Plan

  	
   

  	
  . . . the Incentive Shares continue to vest
  according to the original schedule.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Termination of Employment

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  . . . due to death, disability or retirement under a
  qualified pension plan maintained by the Company

  	
   

  	
  . . . the following percentage of the Incentive
  Shares will vest:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  25%, if at least 1 but less than 2 years has elapsed
  since the Grant Date;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  50%, if at least 2 but less than 3 years has elapsed
  since the Grant Date; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  75%, if at least 3 years has elapsed since the Grant
  Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  . . . for any reason other than death, disability or
  retirement

  	
   

  	
  . . . all of the Incentive Shares are immediately
  forfeited.

  

 

 1
 

4.               This Award granted
hereunder is subject to the applicable terms and conditions of the Plan, which
are incorporated herein by reference, and in the event of any contradiction,
distinction or differences between this award letter and its summary and the
terms of the Plan, the terms of the Plan will control.

5.               If recipient has
elected to defer some or all of the Bonus and Incentive shares under the
Company’s Deferred Compensation Plan, additional restrictions apply to these
shares.

6.               The Company may condition delivery of certificates
for shares upon the prior receipt from Employee of any undertakings which it
may determine are required to assure that the certificates are being issued in
compliance with federal and state securities laws.

 2

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