NON-EMPLOYEE DIRECTOR
PHANTOM STOCK UNIT AGREEMENT

THIS PHANTOM STOCK UNIT AGREEMENT (the Agreement), dated as of this 1st day of April, 2003, by and between Arden Group, Inc., a Delaware corporation (the Company), and Steven Romick (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 April 1, 2008 (the Expiration Date).  Each Unit hereunder represents the right to receive an amount equal to the excess of (i) the Fair Market Value (as defined 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 Grantee exercises such Unit over (ii) $54.25 (the Base Price), representing the Fair Market Value of one share of the Class A Common Stock on the effective date hereof.

(b)  For purposes of this Agreement, Fair Market Value of one share of Class A Common Stock shall mean (i) if the Class A Common Stock is then listed on a national securities exchange, the closing sales price of the Class A Common Stock on the day such value is determined on the principal securities exchange on which such stock is then listed, or if there is no reported sale on that day, the average of the bid and asked quotations on such exchange on that day, or (ii) if the Class A Common Stock is then publicly traded in the NASDAQ National Market System, the closing sales price of the Class A Common Stock as reported by the NASDAQ National Market System on the day such value is determined, or if there is no reported sale on that day, the average of the bid and asked quotations on that day, or (iii) if the Class A Common Stock is then publicly traded in the over-the-counter market (other than the NASDAQ National Market System), the mean between the closing bid and asked prices of the Class A Common Stock in the over-the-counter market on the day such value is determined or, if no shares were traded that day, on the next preceding day on which there was such a trade, or (iv) if the Class A Common Stock is not then separately quoted or publicly traded, the fair market value on the date such value is to be determined, as determined in good faith by the Board of Directors of the Company (the Board).

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 Fair Market Value of one share of Common Stock on the date of exercise of such right and option 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.

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