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                        GALAXY NUTRITIONAL FOODS COMPANY

                      NON-QUALIFIED STOCK OPTION AGREEMENT

     GALAXY NUTRITIONAL  FOODS, a Delaware  corporation  (the"Company"),  hereby
grants as of the 17TH DAY OF DECEMBER,  2002 to JOHN RUGGIERI (the  "Optionee"),
an option to purchase a maximum of 100,000 shares of its Common Stock,  $.01 par
value,  at the price of $2.37 per share (the  "Option"),  on the following terms
and conditions:

     1. GRANT AS NON-QUALIFIED STOCK OPTION;  OTHER OPTIONS. The Option shall be
treated for federal income tax purposes as a non-qualified  stock option and NOT
as an incentive stock option under Section 422A of the Internal  Revenue Code of
1986,  as amended (the  "Code").  The option is in addition to any other options
heretofore or hereafter granted to the Optionee by the Company,  but a duplicate
original of this instrument shall not affect the grant of another option.

     2. EXTENT OF OPTION IF EMPLOYMENT CONTINUES.  If the Optionee has continued
to be employed by the Company on the following  dates, the Optionee may exercise
the Option for the number of shares set opposite the applicable date:

     50,000 vest immediately;

     16,666 vest when you achieve 62% plant efficiency and this efficiency level
     is maintained on average for one quarter;

     16,666 vest when you achieve 72% plant efficiency and this efficiency level
     is maintained on average for one quarter;

     the balance of 16,668 vest when you have achieved 82% plant  efficiency and
     this level is maintained on average for one quarter.

     For vesting eligibility purposes, plant efficiencies will be evaluated on a
     quarterly basis.

     Should Galaxy  Nutritional  Foods be sold to another  company prior to this
     Option  being fully  vested,  the  portion of the Option  which has not yet
     vested  as of the date of such  event  will  immediately  vest  and  become
     exercisable  simultaneously  with  the  consummation  of  the  sale  of the
     company.

<PAGE>

     The foregoing rights are cumulative and, while the Optionee continues to be
employed by the Company, all vested options may be exercised up to and including
the date which is ten years from the date hereof.  All of the  foregoing  rights
are subject to Articles 3 and 4, as  appropriate,  if the Optionee  ceases to be
employed by the Company or dies or becomes  disabled  while in the employ of the
Company.

     3. TERMINATION OF EMPLOYMENT.  If the Optionee ceases to be employed by the
Company, other than by reason of death or disability as defined in Article 4, no
further  installments  of the Option  shall  become  exercisable  and the vested
portion of the Option shall terminate at the earlier of sixty (60) days from the
date  employment  ceases or the scheduled  expiration  date.  In such case,  the
Optionee's  only rights  hereunder  shall be those which are properly  exercised
before the termination of the Option.

     4.  DEATH;  DISABILITY.  If the  Optionee  dies  while in the employ of the
Company,  the  Option  may be  exercised,  to the extent of the number of shares
vested as of the date of his death, by his estate,  personal  representative  or
beneficiary  to whom the Option has been assigned  pursuant to Article 8, at any
time within 180 days after the date of death,  but not later than the  scheduled
expiration  date. If the Optionee ceases to be employed by the Company by reason
of his disability,  the Option may be exercised to the extent exercisable on the
date of the  termination  of his  employment,  at any time within 180 days after
such  termination,  but not later than the  scheduled  expiration  date.  At the
expiration of such 180-day period or the scheduled expiration date, whichever is
the earlier, the Option shall terminate and be of no further force and effect.

     5. PARTIAL  EXERCISE.  Exercise of the Option up to the extent above stated
may be made in part at any time and from time to time  within the above  limits,
except that the Option may not be exercised for a fraction of a share.

     6. PAYMENT OF PRICE. The option price is payable,  upon exercise, in United
States  dollars and may be paid in cash or by check,  or any  combination of the
foregoing, equal in amount to the option price.

     7. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
Agreement,  the Option may be exercised by written notice to the Company, at the
principal  executive  office of the Company,  or to such  transfer  agent as the
Company  shall  designate.  Such notice shall state the election to exercise the
Option and the number of shares in  respect of which it is being  exercised  and
shall be signed by the person or persons so exercising  the Option.  Such notice
shall be accompanied  by payment of the full purchase price of such shares,  and
the Company shall deliver a certificate or certificates representing such shares
as soon as practicable  after the notice shall be received.  The  certificate or
certificates  for the shares as to which the Option shall have been so exercised
shall be  registered in the name of the person or person  exercising  the Option
(or, if the Option shall be exercised by the Optionee and

<PAGE>

another person jointly,  with right and  survivorship) and shall be delivered as
provided above to or upon the written order of the person or persons  exercising
the Option.  All shares that shall be purchased  upon the exercise of the Option
as provided herein shall be fully paid and non-assessable.

     8. OPTION NOT  TRANSFERABLE.  The Option is not  transferable or assignable
except by will or by the laws of descent and distribution. During the Optionee's
lifetime only the Optionee can exercise the Option.

     9. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of the Option
imposes no obligation on the Optionee to exercise it.

     10. NO  OBLIGATION  TO  CONTINUE  EMPLOYMENT.  The  Company and any Related
Corporations are not obligated to continue the Optionee in employment.

     11. NO RIGHTS AS  STOCKHOLDER  UNTIL  EXERCISE.  The Optionee shall have no
rights as a stockholder with respect to shares subject to this Agreement until a
stock  certificate  therefor  has been issued to the  Optionee and is fully paid
for.  Except  with  respect to  certain  changes  in the  capitalization  of the
Company,  no adjustment  shall be made for dividends or similar rights for which
the record date is prior to the date such stock certificate is issued.

     12.  CAPITAL  CHANGES AND  BUSINESS  SUCCESSIONS.  It is the purpose of the
Option to encourage  the Optionee to work for the best  interests of the Company
and its stockholders.  Since, for example,  that might require the issuance of a
stock dividend or a merger with another  corporation,  the purpose of the Option
would not be served if such stock dividend,  merger or similar  occurrence would
cause the  Optionee's  rights  hereunder to be diluted or terminated and thus be
contrary to the Optionee's interest. The 1996 Stock Plan of the Company contains
extensive  provisions  designed to preserve options at full value in a number of
contingencies  and although  this option is not governed by the 1996 Stock Plan,
provisions in the Plan for  adjustment  with respect to stock subject to options
and the related  provisions  with respect to  successors  to the business of the
Company,  are hereby made applicable  hereunder and are  incorporated  herein by
reference. In particular,  without affecting the generality of the foregoing, it
is  understood  that for the  purposes  of  Articles  2 through  4 hereof,  both
inclusive,   employment  by  the  Company  includes   employment  by  a  Related
Corporation as defined in the Plan.

     13. PROVISION OF DOCUMENTATION OF OPTIONEE. By signing this Agreement,  the
Optionee  acknowledges  receipt  of a copy of this  Agreement  and a copy of the
Company's 1996 Stock Plan.

     14. EARLY DISPOSITION. The Employee agrees to notify the Company in writing
immediately  after the Employee makes a Disqualifying  Disposition of any Common
Stock  received  pursuant  to the  exercise  of  this  option.  A  Disqualifying
Disposition is any disposition  (including any sale) of such Common Stock before
the later of (a) two

<PAGE>

years after the date the  Employee was granted this option or (b) one year after
the date the Employee  acquired Common Stock be exercising  this option.  If the
Employee has died before such stock is sold,  these holding period  requirements
do not apply and no Disqualifying Disposition can occur thereafter. The Employee
also agrees to provide the Company with any  information  which it shall request
concerning any such disposition.

     15. WITHHOLDING TAXES. If the Company in its discretion  determines that it
is obligated to withhold tax with  respect to a  Disqualifying  Disposition  (as
defined in Article 15) of Common  Stock  received by the Employee on exercise of
this option,  the Employee  hereby agrees that the Company may withhold from the
Employee's wages the appropriate amount of Federal,  state and local withholding
taxes attributable to such Disqualifying Disposition. The Employee hereby agrees
that the Company may withhold from the Employee's  wages the appropriate  amount
of Federal,  state and local  withholding  taxes  attributable to the Employee's
exercise of such Non-Qualified Option. At the Company's  discretion,  the amount
required  to be  withheld  may be  withheld  in cash from such  wages,  of (with
respect to compensation  income  attributable to the exercise of this option) in
kind from the Common Stock otherwise  deliverable to the Optionee on exercise of
this Option.  The Employee further agrees that, if the Company does not withhold
an  amount  from the  Employee's  wages  sufficient  to  satisfy  the  Company's
withholding  obligation,  the Employee will reimburse the Company on demand,  in
cash, for the amount underwithheld.

     16.  GOVERNING LAW. This Agreement  shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.

     17.  EXPIRATION.  This Option  shall  expire at 5:00 p.m.  Orlando  time on
December 17, 2012. Whether or not surrendered to the Company by the holder, this
Option shall be deemed cancelled upon expiration hereof.

     IN WITNESS WHEREOF the Company and the Optionee have caused this instrument
to be executed,  and the Optionee  whose  signature  appears below  acknowledges
receipt  of a copy  of the  Plan  and  acceptance  of an  original  copy of this
Agreement.

OPTIONEE                                GALAXY NUTRTIONAL FOODS

/s/ John Ruggieri                       By: /s/ Angelo S. Morini
-----------------                           ----------------------
John Ruggieri                           Angelo S. Morini, President[LOGO]

                        GALAXY NUTRITIONAL FOODS COMPANY

                      NON-QUALIFIED STOCK OPTION AGREEMENT

     Galaxy Nutritional  Foods, a Delaware  corporation  (the"Company"),  hereby
grants as of the 24TH DAY OF JANUARY, 2003 to JOHN RUGGIERI (the "Optionee"), an
option to  purchase a maximum of 105,000  shares of its Common  Stock,  $.01 par
value,  at the price of $1.82 per share (the  "Option"),  on the following terms
and conditions:

     1. GRANT AS NON-QUALIFIED STOCK OPTION;  OTHER OPTIONS. The Option shall be
treated for federal income tax purposes as a non-qualified  stock option and NOT
as an incentive stock option under Section 422A of the Internal  Revenue Code of
1986,  as amended (the  "Code").  The option is in addition to any other options
heretofore or hereafter granted to the Optionee by the Company,  but a duplicate
original of this instrument shall not affect the grant of another option.

     2. EXTENT OF OPTION.  If the Optionee  continues to provide services to the
Company on the  following  dates,  the  Optionee may exercise the Option for the
number of shares set opposite the applicable date:

              35,000 options - vesting January 24, 2004
              35,000 options - vesting January 24, 2005
              35,000 options - vesting January 24, 2006

     In the event the Optionee provides additional services to the Company,  and
without regard to the Optionee's employment status with the Company, the Company
can decide,  with the  approval of its Board of  Directors,  to  accelerate  the
vesting of any portion of the Option which has not yet vested and on the date of
such an event,  the  number  of  options  designated  by the  Company  will vest
immediately and become exercisable.

     The foregoing rights are cumulative and all vested options may be exercised
up to and including the date which is ten years from the date hereof. All of the
foregoing  rights  are  subject  to  Articles  3 and 4, as  appropriate,  if the
Optionee ceases to be employed by the Company or dies or becomes  disabled while
in the employ of the Company.

<PAGE>

     3. TERMINATION OF EMPLOYMENT.  Without regard to the Optionee's  employment
status  with the  Company  and other  than by reason of death or  disability  as
defined in article 4, the exercise period of the vested portion of the Option is
extended to its full term.

     4.  DEATH;  DISABILITY.  If the  Optionee  dies  while in the employ of the
Company,  the  Option  may be  exercised,  to the extent of the number of shares
vested as of the date of his death, by his estate,  personal  representative  or
beneficiary  to whom the Option has been assigned  pursuant to Article 8, at any
time within 180 days after the date of death,  but not later than the  scheduled
expiration  date. If the Optionee ceases to be employed by the Company by reason
of his disability,  the Option may be exercised to the extent exercisable on the
date of the  termination  of his  employment,  at any time within 180 days after
such  termination,  but not later than the  scheduled  expiration  date.  At the
expiration of such 180 day period or the scheduled expiration date, whichever is
the earlier, the Option shall terminate and be of no further force and effect.

     5. PARTIAL  EXERCISE.  Exercise of the Option up to the extent above stated
may be made in part at any time and from time to time  within the above  limits,
except that the Option may not be exercised for a fraction of a share.

     6. PAYMENT OF PRICE. The option price is payable,  upon exercise, in United
States  dollars and may be paid in cash or by check,  or any  combination of the
foregoing, equal in amount to the option price.

     7. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of this
Agreement,  the Option may be exercised by written notice to the Company, at the
principal  executive  office of the Company,  or to such  transfer  agent as the
Company  shall  designate.  Such notice shall state the election to exercise the
Option and the number of shares in  respect of which it is being  exercised  and
shall be signed by the person or persons so exercising  the Option.  Such notice
shall be accompanied  by payment of the full purchase price of such shares,  and
the Company shall deliver a certificate or certificates representing such shares
as soon as practicable  after the notice shall be received.  The  certificate or
certificates  for the shares as to which the Option shall have been so exercised
shall be  registered in the name of the person or person  exercising  the Option
(or,  if the Option  shall be  exercised  by the  Optionee  and  another  person
jointly,  with right and  survivorship) and shall be delivered as provided above
to or upon the written order of the person or persons exercising the Option. All
shares  that shall be  purchased  upon the  exercise  of the Option as  provided
herein shall be fully paid and non-assessable.

     8. OPTION NOT  TRANSFERABLE.  The Option is not  transferable or assignable
except by will or by the laws of descent and distribution. During the Optionee's
lifetime only the Optionee can exercise the Option.

<PAGE>

     9. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of the Option
imposes no obligation on the Optionee to exercise it.

     10. NO  OBLIGATION  TO  CONTINUE  EMPLOYMENT.  The  Company and any Related
Corporations are not obligated to continue the Optionee in employment.

     11. NO RIGHTS AS  STOCKHOLDER  UNTIL  EXERCISE.  The Optionee shall have no
rights as a stockholder with respect to shares subject to this Agreement until a
stock  certificate  therefor  has been issued to the  Optionee and is fully paid
for.  Except  with  respect to  certain  changes  in the  capitalization  of the
Company,  no adjustment  shall be made for dividends or similar rights for which
the record date is prior to the date such stock certificate is issued.

     12.  CAPITAL  CHANGES AND  BUSINESS  SUCCESSIONS.  It is the purpose of the
Option to encourage  the Optionee to work for the best  interests of the Company
and its stockholders.  Since, for example,  that might require the issuance of a
stock dividend or a merger with another  corporation,  the purpose of the Option
would not be served if such stock dividend,  merger or similar  occurrence would
cause the  Optionee's  rights  hereunder to be diluted or terminated and thus be
contrary to the Optionee's interest. The 1996 Stock Plan of the Company contains
extensive  provisions  designed to preserve options at full value in a number of
contingencies  and although  this option is not governed by the 1996 Stock Plan,
provisions in the Plan for  adjustment  with respect to stock subject to options
and the related  provisions  with respect to  successors  to the business of the
Company are hereby made  applicable  hereunder  and are  incorporated  herein by
reference. In particular,  without affecting the generality of the foregoing, it
is  understood  that for the  purposes  of  Articles  2 through  4 hereof,  both
inclusive,   employment  by  the  Company  includes   employment  by  a  Related
Corporation as defined in the Plan.

     13. PROVISION OF DOCUMENTATION OF OPTIONEE. By signing this Agreement,  the
Optionee  acknowledges  receipt  of a copy of this  Agreement  and a copy of the
Company's 1996 Stock Plan.

     14. EARLY DISPOSITION. The Employee agrees to notify the Company in writing
immediately  after the Employee makes a Disqualifying  Disposition of any Common
Stock  received  pursuant  to the  exercise  of  this  option.  A  Disqualifying
Disposition is any disposition  (including any sale) of such Common Stock before
the later of (a) two years after the date the  Employee  was granted this option
or (b) one year after the date the Employee  acquired Common Stock be exercising
this option.  If the Employee has died before such stock is sold,  these holding
period  requirements  do not apply and no  Disqualifying  Disposition  can occur
thereafter. The Employee also agrees to provide the Company with any information
it shall request concerning any such disposition.

     15. WITHHOLDING TAXES. If the Company in its discretion  determines that it
is obligated to withhold tax with  respect to a  Disqualifying  Disposition  (as
defined in Article

<PAGE>

15) of Common Stock  received by the  Employee on exercise of this  option,  the
Employee  hereby agrees that the Company may withhold from the Employee's  wages
the  appropriate   amount  of  Federal,   state  and  local   withholding  taxes
attributable to such Disqualifying Disposition.  The Employee hereby agrees that
the Company may withhold from the  Employee's  wages the  appropriate  amount of
Federal,  state and  local  withholding  taxes  attributable  to the  Employee's
exercise of such Non-Qualified Option. At the Company's  discretion,  the amount
required  to be  withheld  may be  withheld  in cash from such  wages,  of (with
respect to compensation  income  attributable to the exercise of this option) in
kind from the Common Stock otherwise  deliverable to the Optionee on exercise of
this Option.  The Employee further agrees that, if the Company does not withhold
an  amount  from the  Employee's  wages  sufficient  to  satisfy  the  Company's
withholding  obligation,  the Employee will reimburse the Company on demand,  in
cash, for the amount underwithheld.

     16.  GOVERNING LAW. This Agreement  shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.

     17.  EXPIRATION.  This Option  shall  expire at 5:00 p.m.  Orlando  time on
January 24, 2013. Whether or not surrendered to the Company by the holder,  this
Option shall be deemed cancelled upon expiration hereof.

     IN WITNESS WHEREOF the Company and the Optionee have caused this instrument
to be executed,  and the Optionee  whose  signature  appears below  acknowledges
receipt  of a copy  of the  Plan  and  acceptance  of an  original  copy of this
Agreement.

OPTIONEE                                GALAXY NUTRTIONAL FOODS

By: /s/ John Ruggieri                   By: /s/ Chris New
    ---------------------                   -----------------
John Ruggieri                           Title:  Chief Executive Officer

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