<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
ARDEN GROUP, INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
MILTON H. BARKER
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO] ARDEN GROUP, INC.
2020 SOUTH CENTRAL AVENUE
COMPTON, CALIFORNIA 90220
(310) 638-2842
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 28, 1994
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of Arden
Group, Inc. (the "Company") will be held at The Beverly Hilton Hotel, Wilshire
Room in the Executive Center, 9876 Wilshire Boulevard, Beverly Hills,
California, on June 28, 1994, at 10:00 a.m., Los Angeles Time, for the following
purposes:
1. To elect two directors for a term of three years each;
2. To approve the Bernard Briskin Bonus Plan;
3. To ratify the selection of independent certified public accountants for
the 1994 fiscal year; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The close of business on May 6, 1994, has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
meeting. A list of such stockholders will be available for examination by any
stockholder at the meeting and, for 10 days prior to the meeting, during
ordinary business hours at Arden Group, Inc., 9595 Wilshire Boulevard, Suite
411, Beverly Hills, California.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED, POSTAGE
PREPAID ENVELOPE. THE RETURN OF YOUR PROXY WILL NOT PRECLUDE YOU FROM VOTING IN
PERSON IF YOU CHOOSE TO ATTEND THE MEETING.
By Order of the Board of Directors
[SIG]
Assistant Secretary
June 6, 1994
PROMPT RETURN OF PROXIES WILL SAVE THE EXPENSE INVOLVED
IN FURTHER COMMUNICATION
<PAGE>
[LOGO] ARDEN GROUP, INC.
2020 SOUTH CENTRAL AVENUE
COMPTON, CALIFORNIA 90220
ANNUAL MEETING OF STOCKHOLDERS
ON JUNE 28, 1994
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished by the Board of Directors of Arden Group,
Inc. (the "Company") in connection with its solicitation for use at the Annual
Meeting of Stockholders (the "Meeting") to be held at The Beverly Hilton Hotel,
Wilshire Room in the Executive Center, 9876 Wilshire Boulevard, Beverly Hills,
California, on June 28, 1994, at 10:00 a.m. Los Angeles Time, and at any
adjournment thereof. The approximate date on which this Proxy Statement and the
accompanying forms of proxy will first be sent to stockholders is June 6, 1994.
All shares represented by each properly executed and unrevoked proxy
received in time for the Meeting will be voted as specified, or, if no
specification is made, for (i) the election as directors of management's
nominees; and (ii) the ratification of the selection of independent certified
public accountants. The Company does not know of any other business that will be
presented for action at the Meeting, but if any matter is properly presented,
the persons named in the accompanying proxies will vote thereon in accordance
with their judgment. A proxy may be revoked at any time prior to its exercise by
filing a written notice of revocation with an Assistant Secretary of the
Company, by timely delivery of a later proxy or by voting in person at the
Meeting contrary to the manner in which the proxy is to be voted.
The cost of soliciting proxies will be paid by the Company. Arrangements
will be made with brokerage houses and other custodians, nominees and
fiduciaries to forward proxy material to the beneficial owners of stock of the
Company and such persons will be reimbursed for their reasonable expenses.
Proxies may be solicited by directors, officers or employees of the Company and
its subsidiaries in person or by telephone or telegraph, for which such persons
will receive no special compensation. In addition, Beacon Hill Partners, Inc.
("Beacon Hill") has been retained by the Company to aid in the solicitation of
proxies from banks, brokers and nominees and will solicit such proxies by mail,
telephone, telegraph and personal interview, and request brokerage houses and
nominees to forward soliciting material to beneficial owners of the Company's
stock. For these services, Beacon Hill will be paid a fee of $2,500 plus
expenses.
RECORD DATE; SHARES ENTITLED TO VOTE; QUORUM
The Board has fixed the close of business on May 6, 1994, as the record date
for the determination of holders of Class A Common Stock and Class B Common
Stock entitled to notice of and to vote at the Meeting. Accordingly, only
holders of shares of Class A Common Stock and Class B Common Stock of record at
the close of business on such date will be entitled to vote such shares at the
Meeting. At the close of business on May 6, 1994, there were outstanding
1,269,405 shares of Class A Common Stock and 343,316 shares of Class B Common
Stock. Each share of Class A Common Stock will entitle the holder thereof to one
vote on all matters described in this Proxy Statement and all other matters
which could be properly brought before the Meeting. Each share of Class B Common
Stock will entitle the holder thereof to 10 votes on all matters described in
this Proxy Statement and most other matters which could be properly brought
before the Meeting. As of May 6, 1994, there were approximately 2,094 holders of
record of Class A Common Stock and 13 holders of record of Class B Common Stock.
The presence, either in person or by properly executed proxy, of both (i)
stockholders holding of record a number of shares of Class A Common Stock
entitling them to exercise a majority of the voting power of such class of stock
and (ii) stockholders holding of record a number of shares of Class B Common
Stock entitling them to exercise a majority of the voting power of such class of
stock is necessary to constitute a quorum at the Meeting.
1
<PAGE>
PRINCIPAL STOCKHOLDERS
As of May 16, 1994, the only persons known to the Company to own
beneficially more than 5% of the then outstanding shares of Class A Common Stock
or Class B Common Stock were the following:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS(1)
- - ------------------------------------ ----------------------------------------------- ------------ -----------
<S> <C> <C> <C>
Class A Common Stock City National Bank, as Trustee of the Company's 321,904(2) 25.4%
Stock Bonus Plan and Trust
(the "Stock Bonus Plan")
120 South Spalding Drive
Beverly Hills, CA 90213
Class A Common Stock Bernard Briskin 149,087(3) 11.7%
Arden Group, Inc.
9595 Wilshire Blvd.
Suite 411
Beverly Hills, CA 90212
Class A Common Stock Southeastern Asset Management, Inc. 165,229(4) 13.0%
860 Ridgelake Blvd., Suite 301
Memphis, TN 38120
Class A Common Stock Lazard Freres & Co. 83,400(5) 6.6%
One Rockefeller Plaza
New York, NY 10020
Class B Common Stock Bernard Briskin 340,624 99.2%
<FN>
- - ------------------------
(1) Unless otherwise indicated to the contrary, all beneficial owners have
sole investment and voting power. For purposes of this table, 339,300
shares of Company Class A Common Stock which are held by AMG Holdings,
Inc. an indirect wholly owned subsidiary of the Company, are not deemed to
be outstanding.
(2) This amount includes the shares stated in note (3) below to be held for
the account of Mr. Briskin in the Company Stock Bonus Plan, for which City
National Bank acts as Trustee. City National Bank ("CNB"), as trustee of
the Company Stock Bonus Plan, is required to take all action authorized or
permitted by a beneficial owner of all securities owned by the trust
created under such plan, including voting on or consenting (or withholding
consent) to all matters or actions requiring or permitting a vote of the
security holders. If, however, CNB has knowledge of any contested
solicitation of votes or consents, then CNB will vote or otherwise act
with respect to such contested matter pursuant to instructions from each
participant in such plan (or, if deceased, the beneficiary thereof) to
whom securities have been allocated. Any undirected allocated securities
and any unallocated securities shall be voted for and against the action
being voted or acted upon in the same ratio that responding participants
have directed CNB to vote or act on such action.
(3) This amount includes the following shares: (i) 54,199 shares owned by Mr.
Briskin's wife; (ii) 46,524 shares held in trust (of which Mr. Briskin is
a trustee) for the benefit of Mr. Briskin, his children and his mother;
and (iii) 16,364 shares held in the Company Stock Bonus Plan for the
account of Mr. Briskin. Mr. Briskin disclaims any beneficial ownership of
the shares set forth in clause (i) hereof. Mr. Briskin shares voting and
investment power with respect to the shares referred to in clause (ii),
shares voting power but has no investment power with respect to the shares
set forth in clause (iii), and denies that he has or shares investment
power with respect to the shares referred to in clause (i). Nothing herein
should be construed as an admission that Mr. Briskin is in fact the
beneficial owner of any of these shares.
(4) Based upon information contained in Amendment No. 3 to Schedule 13G dated
February 11, 1994 filed with the Securities and Exchange Commission by
Southeastern Asset Management, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(5) Based upon information contained in Amendment No. 4 to Schedule 13G dated
February 14, 1994 filed with the Securities and Exchange Commission by
Lazard Freres & Co. Includes 54,900 shares owned by Lazard Special Equity
Fund, Inc., an investment company registered under the Investment Company
Act of 1940.
</TABLE>
ELECTION OF DIRECTORS
As permitted under the General Corporation Law of the State of Delaware, the
state in which the Company is incorporated, the Company's Certificate of
Incorporation provides for a classified Board of Directors, with approximately
one-third of the total authorized number of directors elected each year for a
term of three years by straight (as distinguished from cumulative) voting.
At the Meeting, it is proposed to elect the two nominees shown below to hold
office as directors until the Company's Annual Meeting in 1997 or until such
directors' successors have been elected and qualified. Each nominee is now a
director of the Company.
Under Article Fourth of the Certificate of Incorporation of the Company, so
long as the total number of outstanding shares of Class B Common Stock is equal
to or greater than 12.5% of the total aggregate number of outstanding shares of
Class A Common Stock and Class B Common Stock, the holders of Class A Common
Stock are entitled to elect at any meeting therefor only such number of
directors as, when added to the number of continuing directors previously
elected by the holders of Class A Common Stock, equals 25% of the total number
of directors of the Company (rounded up to the nearest whole number); the
remaining directors are to be elected by the holders of the Class B Common
Stock. Since the total number of directors is seven, and the holders of Class A
Common Stock have previously elected two directors whose terms of office do not
expire at the Meeting, the holders of Class A Common Stock are not entitled to
elect any directors at the Meeting.
The holders of Class B Common Stock are entitled to elect two directors at
the Meeting and will have 10 votes per share for each director to be elected by
such stockholders. The election of the directors requires the affirmative vote
of the holders of a plurality of the shares of such class of stock present, in
person or by proxy, and entitled to vote at the Meeting. Any votes against a
nominee or withheld from voting (whether by abstention, broker non-votes or
otherwise) will not be counted and will have no effect on the vote with respect
to the election of directors.
The Board of Directors recommends a vote FOR the election of each of the two
nominees whose names are shown below.
Management is not aware of any circumstance that would render any nominee
unable to serve. However, if any nominee should unexpectedly become unavailable
for election, votes will be cast, pursuant to the accompanying proxies, for the
election of a substitute nominee or nominees who may be selected by the present
Board of Directors.
3
<PAGE>
Below is set forth certain information concerning each of the two nominees
and the five continuing directors as of May 16, 1994. Certain of this
information has been supplied by the persons named:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR TERM
NAME AGE AND OTHER DIRECTORSHIPS (1) SINCE EXPIRES
- - ---------------------------------------- --- ---------------------------------------- -------- -------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION BY CLASS B COMMON STOCKHOLDERS
FOR A THREE-YEAR TERM ENDING IN 1997:
Stuart A. Krieger 76 Business Consultant. Director of 1978 1994
American Rocket Co.
Ben Winters 73 Business Consultant. 1978 1994
CONTINUING DIRECTORS: (2)
Bernard Briskin 69 President and Chief Executive Officer of 1970 1995
the Company and Arden-Mayfair, Inc., a
subsidiary of the Company, and Chairman
of the Board of AMG Holdings, Inc.
(formerly known as Telautograph
Corporation), and Gelson's Markets, both
subsidiaries of Arden-Mayfair.
Robert A. Davidow 52 Director of Wheeling-Pittsburgh 1993 1996
Corporation since January 1991; private
investor; Senior Vice President and
Director of Research of the High Yield
and Convertible Bond Department of
Drexel, Burnham, Lambert, Incorporated
from January 1980 through January 1990.
Daniel Lembark 69 Financial consultant and Certified 1978 1995
Public Accountant.
Curtis H. Palmer 85 Chairman of the Board of Directors of 1974 1995
the Company and Arden-Mayfair since
1976. Director of International Aluminum
Corporation.
Frederick A. Schnell 83 President (retired), Western Operations, 1975 1996
The Prudential Insurance Company of
America.
<FN>
- - ------------------------
(1) Unless otherwise indicated, principal occupation or occupations shown have
been such for a period of at least five years in the aggregate.
(2) Date shown for term of service indicates commencement of service as a
director of the Company or Arden-Mayfair.
</TABLE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS.
The Company has audit, nominating, investment and compensation committees.
Current members of the audit committee are Mr. Schnell, chairman, and Messrs.
Lembark and Winters. This committee, which monitors significant accounting
policies, approves services rendered by the auditors, reviews audit and
management reports and makes recommendations regarding the appointment of
independent auditors and the fees payable for their services, met 3 times in
1993. Current members of the compensation committee are Mr. Lembark, chairman,
and Messrs. Davidow, Schnell and Winters. This committee, which considers and
make recommendations as to salary and incentive compensation awards to senior
executive officers, met 5 times in 1993. Current members of the investment
committee are Mr. Davidow, chairman, and
4
<PAGE>
Messrs. Briskin and Winters. This committee defines the short term investment
strategy for the Company and met 2 times in 1993. Current members of the
nominating committee are Mr. Winters, chairman, and Messrs. Briskin, Krieger and
Schnell. This committee, which was established to select candidates for
nomination and election as directors, met once in 1993. The nominating committee
will consider qualified nominees recommended by stockholders. Stockholders who
wish to recommend qualified nominees should write to an Assistant Secretary of
the Company at 2020 South Central Avenue, Compton, California 90220, and should
state the qualifications of persons proposed by them.
During the 1993 fiscal year, the Board of Directors held 16 meetings. Except
for Mr. Palmer, each of the directors attended over 75% of the aggregate of all
of the meetings of the Board of Directors and meetings held by all committees of
the Board on which he served during such period.
COMPENSATION OF DIRECTORS
During 1993, each non-employee director of the Company was compensated for
all services as a director at an annual rate of $12,000 plus $750 for each Board
meeting attended and $750 for attendance at each committee meeting. Non-employee
directors who serve as committee chairmen are entitled to an additional $3,000
per year. Messrs. Palmer and Briskin are employees of the Company and do not
receive the compensation otherwise payable to directors.
BENEFICIAL OWNERSHIP OF THE COMPANY'S STOCK BY MANAGEMENT
The following table shows, as of May 16, 1994, the beneficial ownership of
the Company's equity securities by each director or nominee, the Named Executive
Officer, and by all directors and officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OF
NAME OF COMPANY'S STOCK OWNERSHIP(1) CLASS(1)
- - ---------------------------------------- -------------------- ------------- --------
<S> <C> <C> <C>
Bernard Briskin......................... Class A Common Stock 149,087(2)(3) 13.0%
Class B Common Stock 340,624 99.2%
Robert A. Davidow....................... Class A Common Stock --
Stuart A. Krieger....................... Class A Common Stock --
Daniel Lembark.......................... Class A Common Stock --
Curtis H. Palmer........................ Class A Common Stock 243(3)(4)
Frederick A. Schnell.................... Class A Common Stock --
Ben Winters............................. Class A Common Stock 100(2)(4)
Ernest T. Klinger....................... Class A Common Stock 428(3)(4)
All directors and executive officers as
a group (9 persons).................... Class A Common Stock 161,445(3) 14.0%
Class B Common Stock 340,624 99.2%
<FN>
- - ------------------------
(1) Unless otherwise indicated to the contrary, all beneficial owners have
sole investment and voting power. The number of outstanding shares of
Company Class A Common Stock on which the percentages shown in this table
are based does not include 339,300 shares of Company Class A Common Stock
held by AMG Holdings, Inc.
(2) See notes (2) and (3) to the table under "Principal Stockholders" set
forth above.
(3) Includes shares held in the Company Stock Bonus Plan for the accounts of
the named individuals.
(4) Did not exceed 1% of the outstanding shares of the class.
</TABLE>
5
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information regarding the persons who presently
serve as executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITIONS AT THE COMPANY(1)
- - -------------------- --- ----------------------------------------
<S> <C> <C>
Curtis H. Palmer 85 Director and Chairman of the Board of
the Company.
Bernard Briskin 69 Director, President and Chief Executive
Officer of the Company.
Ernest T. Klinger 58 Vice President Finance and
Administration and Chief Financial
Officer of the Company.
Milton H. Barker 77 Vice President of the Company.
<FN>
- - ------------------------
(1) Unless otherwise indicated, principal occupation or occupations shown have
been such for a period of least five years in the aggregate.
</TABLE>
Executive officers of the Company are elected annually by the Company Board
and serve at the discretion of the Company Board, with the exception of Mr.
Briskin, who has an employment agreement. See "Employment Agreement -- Bernard
Briskin."
EXECUTIVE COMPENSATION AND RELATED INFORMATION
GENERAL. The following table sets forth the total annual and long-term
compensation paid or accrued by the Company and its subsidiaries in connection
with all businesses of the Company and its subsidiaries to or for the account of
the Chief Executive Officer of the Company and each other executive officer of
the Company whose total annual salary and bonus for the fiscal year ended
January 1, 1994 exceeded in the aggregate $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
AWARDS
------------------------
ANNUAL COMPENSATION SECURITIES- PAYOUTS
------------------------------------------------ RESTRICTED UNDERLYING ----------
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S)(4) SARS(4) PAYOUTS(4) COMPENSATION(7)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) ($) ($) ($)
- - ------------------------- ---- ----------- ------------- ------------ ----------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bernard Briskin, 1993 $ 350,000 $ 2,248,019(2) $ 994,609(3) -0-
President, Chief 1992 350,000 193,804 43,611(3) 376
Executive Officer 1991 350,000 -0- 53,682(3) 383(6)
Ernest T. Klinger, 1993 190,000(1) -0- --(8) 9,450(5)
Chief Financial 1992 193,654(1) -0- --(8) 329
Officer, Vice President 1991 190,000(1) -0- --(8) 332
Administration and
Finance
<FN>
- - ------------------------------
(1) Salary covers compensation for 52 weeks in both 1993 and 1991 and 53 weeks
in 1992.
(2) Includes a one time bonus to Mr. Briskin of $1,911,827.
(3) Includes for fiscal 1993 a payment of $941,676 to Mr. Briskin under a
deferred compensation arrangement. Also includes payments to Mr. Briskin
of $42,085, $34,035 and $39,990 for fiscal years 1993, 1992 and 1991,
respectively, for the purpose of enabling him to purchase life insurance.
(4) The Company did not grant to Mr. Briskin or Mr. Klinger any restricted
stock, stock options or stock appreciation rights ("SARs") and made no
payout to them on any long-term incentive plan in fiscal years 1993, 1992
or 1991.
(5) In 1993, the amount of the Company contribution to the Arden Group, Inc.
401(k) Retirement Savings Plan allocated to the named executive officer.
(6) Does not include net proceeds of $2,537,500 realized by Mr. Briskin as a
result of his exercise on January 3, 1991 of an option to purchase 100,000
shares of Company Class A Common Stock granted to him pursuant to a Stock
Option Agreement dated as of July 30, 1984.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(7) Does not include retirement benefits from the Telautograph Pension Plan or
benefits allocable under the Company Stock Bonus Plan.
(8) Did not exceed the lesser of $50,000 or 10% of the compensation reported
to Mr. Klinger in any of the years to which compensation information is
reported.
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee. At the end of fiscal
1993 the Compensation Committee consisted of the following directors:
Daniel Lembark, Chairman
Robert A. Davidow
Frederick A. Schnell
Ben Winters
In addition, during fiscal 1993, Curtis H. Palmer and Chester I. Lappen
served as members of the Compensation Committee. Mr. Palmer is also the Chairman
of the Board of the Company and Mr. Lappen, a former director, is a partner
through a professional corporation in the law firm of Mitchell, Silberberg &
Knupp, which renders legal services to the Company on a limited basis in
connection with various matters.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee") is
composed of four outside directors and is responsible for developing and making
recommendations to the Company Board with respect to the Company's executive
compensation policies. The objective of the Committee is to support the
achievement of the Company goals by providing compensation which will attract
and retain superior talent and reward performance.
COMPENSATION FOR BERNARD BRISKIN
The compensation of Mr. Bernard Briskin, the Chief Executive Officer of the
Company, is established under an Employment Agreement dated May 13, 1988 (the
"Employment Agreement") which was approved by the Company Board. In addition to
his salary and certain perquisites, Mr. Briskin is entitled to receive
thereunder an annual bonus calculated at a fixed percentage of Pre-Tax Profits.
The Employment Agreement was, by its terms, scheduled to expire on January 1,
1995. In April, 1994, Mr. Briskin and the Company agreed upon an amendment to
the Employment Agreement effective January 1, 1994 (the "Amended Employment
Agreement"). The amendments were the result of several months of discussions
between Mr. Briskin and the Committee. The Amended Employment Agreement
provides, in pertinent part, that Mr. Briskin would retain the same functions
but would also become Chairman of the Board of the Company not later than
January 1, 1995. The term of the Amended Employment Agreement expires January 1,
2001. Effective January 1, 1994, his base salary was increased to $440,000 per
year from $350,000 per year. The base salary will be increased effective January
1, 1995 and on January 1 of succeeding years during the term of the Amended
Employment Agreement based upon increases in the Consumer Price Index subject,
however, to a maximum annual increase. His annual bonus would equal 2 1/2% of
the Company's first $2,000,000 of Pre-Tax Profits (as defined in the Amended
Employment Agreement) plus 3 1/2% of Pre-Tax Profits in excess of $2,000,000. If
his employment is terminated prior to January 1, 2001, the unpaid portion of two
notes from Mr. Briskin to the Company in the amounts $212,500 and $303,750
respectively, would be forgiven. In addition, the maturity dates of the two
notes hereinbefore referred to were extended to December 31, 2000 with
approximately equal repayment of principal annually prior thereto with interest
fixed at 6% per annum also payable annually.
In considering the terms and provisions of the Amended Employment Agreement,
the Committee took into account a number of factors, including (a) some
comparative salaries of other chief executive officers, (b) the fact that no
increase in Mr. Briskin's base salary had occurred since 1988, (c) the
elimination of the Telautograph Retirement Income Plan benefits and the
expiration of other benefits under the Employment Agreement, and (d) the
additional responsibilities for overseeing the long-term use of the cash derived
from the sale of substantially all of the assets of Telautograph Corporation
(the "Telautograph Assets").
7
<PAGE>
In December, 1993, the Committee awarded Mr. Briskin a special bonus for
1993 in the amount of $1,911,826.56. The Committee reviewed Mr. Briskin's
performance as Chief Executive Officer of the Company during 1993, the Company's
anticipated earnings for 1993, the estimated amount of his compensation for 1993
and, in particular and most importantly for purposes of considering a special
bonus, his efforts in negotiating the sale of the Telautograph Assets. In
considering whether to award Mr. Briskin a special bonus and, if so, the amount
thereof, the Committee took into account his extraordinary energy, efforts,
time, determination, and success in markedly improving the terms of the
Telautograph Assets sale for the benefit of the Company. The amount of the bonus
was determined by the Committee, after review of other companies' chief
executive officer's salaries, bonus and total compensation and after substantial
discussions with Mr. Briskin and among themselves, to be an amount which, after
an approximation of income taxes and other required deductions therefrom, would
equal approximately $1,000,000, which would enable him to discharge $1,000,000
payable under a note which he owed to the Company. The bonus payment was paid to
Mr. Briskin on March 14, 1994, and he paid the $1,000,000 note in full on March
15, 1994.
OTHER COMPENSATION
As to other executive officers, the program of executive compensation
implemented by the Committee is intended to provide an overall level of
compensation that is competitive within the grocery business and, as to 1993 and
prior fiscal years, telecommunications industries, as well as within the broader
group of companies of comparable size and complexity. In this regard, the
Committee had available to it and relied upon independent compensation data
derived from outside sources. Actual compensation levels may be greater or less
than average competitive levels in surveyed companies based upon annual and
long-term performance of the Company, as well as the individual performance of
the executive officer. Accordingly, the Committee uses its discretion to set
executive compensation based on internal, external and individual factors. For
the 1993 fiscal year, executive compensation levels were unchanged in light of
the lack of profitability of the Company in fiscal year 1992.
The Committee does not expect that any executive officer's compensation for
the 1994 fiscal year will exceed the $1,000,000 IRS deduction cap. The Company
has agreed to submit Mr. Briskin's annual bonus arrangement to the Company's
shareholders for approval, and the payment of such annual bonus for 1995 and
thereafter is subject to such approval being obtained. Such shareholder approval
was deemed desirable by the Committee in the event that the amount of Mr.
Briskin's base salary (as it may increase because of increases in the Consumer
Price Index), benefits and bonus should exceed the $1,000,000 IRS deduction cap.
If the annual bonus arrangement is approved by the shareholders, the amount
thereof should be excludable from the $1,000,000 deduction cap.
The Arden Group, Inc. Stock Bonus Plan is included as a component of
executive compensation and thus ties a portion of executive compensation to the
profitability of the Company.
Certain executive officers of the Company, including Mr. Briskin, were also
participants in the Telautograph Retirement Income Plan until its termination.
The Telautograph Retirement Income Plan was terminated during the 1993 fiscal
year.
Daniel Lembark, Chairman
Robert Davidow
Frederick A. Schnell
Ben Winters
Members of the Compensation Committee.
8
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company Common Stock against the cumulative total return of the
Standard & Poor's 500 Stock Index, the Standard & Poor's Food Retailers Index
and the Dow Jones Food Retailers Index for the period of five years commencing
December 31, 1988 and ending December 31, 1993. The graph assumes that $100 was
invested on December 31, 1988 in the Company Stock and in each of the
above-mentioned indices that all dividends were reinvested.
The Dow Jones Office Equipment Index previously included in the performance
graph has been eliminated by reason of the sale of the communications business
by Telautograph in fiscal 1993. The Dow Jones Food Retailers Index will be
eliminated from the next performance graph and superseded solely by the Standard
& Poor's Food Retailers Index for ease of comparison with the broad based
Standard & Poor's 500 Stock Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C>
Arden Group S&P 500 DJ Food S&P Food
1988 100 100 100 100
1989 134.04 131.69 126.01 135.66
1990 91.49 127.6 134.07 143.39
1991 97.87 166.47 168.5 151.25
1992 74.47 179.15 170 197.78
1993 108.51 197.21 159.64 191.84
</TABLE>
TELAUTOGRAPH PENSION PLAN
Due to the sale of the communications business in fiscal 1993, the Company
terminated the Telautograph Defined Benefit Retirement Income Plan ("the Plan"),
which covered certain eligible nonunion former employees of Telautograph, and
distributed all of the assets of the Plan to the participants. The Plan's
participants were given their choice of receiving their distribution in the form
of a lump sum payment with a rollover option or an annuity to begin at
retirement age (as defined by the Plan). The plan was fully funded at the
termination date. The only executive officers of the Company who were entitled
to participate in the Plan were Messrs. Briskin and Klinger. As a result of the
termination of the Plan, Mr. Briskin elected to receive a joint survivor annuity
of $178,092 per year and Mr. Klinger elected a lump sum payment of $172,630.
STOCK BONUS PLAN
The Company has a non-contributory trusteed stock bonus plan which is
qualified under Section 401 of the Internal Revenue Code of 1986, as amended.
All non-union employees over 18 years of age who complete 1,000 hours of service
are eligible to become participating employees in the plan. Contributions to
9
<PAGE>
the plan for any fiscal year, as determined by the Board of Directors, are
discretionary, but in no event to exceed 15% of the annual aggregate salaries of
those employees eligible for participation in the plan. Contributions must be
invested in the Company's Class A Common Stock with excess cash being invested
in certain government backed securities. Contributions to the plan are allocated
among eligible participants in the proportions of their salaries to the salaries
of all participants. No contribution was accrued for the plan in 1993. In lieu
thereof, a contribution was made to the 401(k) Retirement Savings Plan. See
Arden Group, Inc. 401(k) Retirement Savings Plan.
ARDEN GROUP, INC. 401(K) RETIREMENT SAVINGS PLAN
Effective January 1, 1992, the Company's Board adopted the Arden Group, Inc.
401(k) Retirement Savings Plan (the "Company Savings Plan"). All non-union
employees of the Company and its subsidiaries (except employees of Telautograph)
who have attained the age of 18 and have completed at least one year of service
with any of such companies are entitled to participate in the Company Savings
Plan. The Company Savings Plan provides that, with certain limitations, a
participating employee may elect to contribute up to 15% of such employee's
annual compensation to the Company Savings Plan on a tax-deferred basis, subject
to a limitation that the annual elective contribution may not exceed an annual
indexed dollar limit determined pursuant to the Internal Revenue Code ($8,994 in
1993). Annual contributions are made by the Company, in a discretionary amount
as determined by the Company each year. In lieu of a contribution to the Stock
Bonus Plan $339,000 was accrued in 1993 and contributed to the Company Savings
Plan.
EMPLOYMENT AGREEMENT -- BERNARD BRISKIN
Mr. Briskin is employed as the President and Chief Executive Officer of the
Company and Arden-Mayfair and the Chairman of the Board and Chief Executive
Officer of AMG Holdings and Gelson's Markets pursuant to an employment agreement
which was entered into as of May 1988 (such agreement is hereinafter referred to
as the "Agreement"). The Agreement was amended in April, 1994 retroactive to
January 1, 1994 (the Agreement as amended is hereinafter referred to as the
Amended Agreement.) The Amended Agreement has a term ending at the close of the
Company's 2000 fiscal year and provides that the term thereof is subject to
automatic extension thereafter for periods of one fiscal year each unless either
his employers or Mr. Briskin gives notice of termination not less than 15 months
nor more than 18 months prior to the date upon which the term of the Amended
Agreement will expire. If at any time the employers decide not to extend the
Amended Agreement for another year Mr. Briskin is entitled to receive the sum of
$600,000 as severance pay.
The Amended Agreement provides for an annual base salary of $440,000 and a
bonus based upon the "pre-tax profits" (as defined) of the Company for each
fiscal year to the extent of 2 1/2% of the first $2,000,000 of pre-tax profits
and 3 1/2% of pre-tax profits in excess of $2,000,000. "Pre-tax Profits" for a
particular fiscal year is the amount shown on the audited Consolidated Statement
of Operations of the Company for such fiscal year as "Income Before Income Taxes
and Extraordinary Items," adjusted so as to exclude any charge, accrual or
deduction for any bonus paid or payable to Mr. Briskin. The annual base salary
is subject to a cost of living adjustment effective as of January 1, 1995 and as
of January 1 of each year thereafter (the Adjustment Date.) The base salary is
adjusted for increases in the Consumer Price Index for All Urban Wage Earners
and Clerical Workers Los Angeles-Anaheim-Riverside Metropolitan Area
(1982-1984=100) published by the Bureau of Labor Statistics of the United States
Department of Labor (the Index). The base salary is adjusted for 100% of any
increase in the Index up to 3% and 50% for any increase in the Index in excess
of 3% up to 5% with no adjustment for any increase in the Index in excess of 5%.
The amount of the increase in the Index is calculated by dividing the Index for
the month of October immediately preceding the applicable Adjustment Date by the
Index for the month of October of the immediately preceding calendar year.
The Amended Agreement also provides for certain expense reimbursement and
personal benefits, including payment or reimbursement for uninsured medical
expenses of Mr. Briskin and his immediate family up to a maximum of $100,000
during any calendar year. In addition, in the event that Mr. Briskin
10
<PAGE>
becomes permanently disabled, dies or his employment is terminated without cause
during the term of the Amended Agreement, then all amounts of principal and
accrued interest outstanding under the Promissory Notes of $212,500 and $303,750
respectively (see Certain Other Transactions) are forgiven.
Under the Agreement, Mr. Briskin was paid $941,676 in 1993 as deferred
compensation, an amount equal to the difference between (i) the present value of
the total amount which he will receive from the Plan and (ii) the present value
of the total amount which he would have received from the Plan if amendments had
not been made to the Plan to comply with the provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 amending Section 415 of the Internal Revenue
Code of 1986 to enable the Plan to maintain its status as a "qualified" Plan
under such section (after taking into account any further amendments to the
Plan).
The Amended Agreement provides that its terms will be subject to review
during the 1997 fiscal year by the compensation committee of the Board of
Directors. Pursuant to this provision, the terms of the Amended Agreement may be
modified.
CERTAIN OTHER TRANSACTIONS
In connection with the purchase by Mr. Briskin of shares of the Company's
Class A Common Stock in 1979 and 1980, the Company loaned Mr. Briskin $212,500
and $303,750, respectively. Under his Amended Employment Agreement the interest
rates payable under the notes reflecting such loans and the maturity dates of
such notes were modified. Interest on the unpaid principal of such loans is
payable at the rate of 6% per annum payable annually on or before December 31 of
each year. Principal on the $212,500 note is payable in annual installments of
$30,357.14 commencing December 31, 1994 and continuing each December 31
thereafter until December 31, 2000 at which time the entire unpaid principal
balance of that note with all accrued and unpaid interest is due and payable.
Principal on the $303,750 note is payable in annual installments of $43,392.86
commencing on December 31, 1994 and continuing each December 31 thereafter until
December 31, 2000 at which time the entire unpaid principal balance of that note
with all accrued and unpaid interest is due and payable. The foregoing notes are
collateralized by 100,000 shares of the Company's Class B Common Stock.
In 1992, the Company loaned Mr. Briskin $1,000,000 in connection with his
exercise in 1991 of 100,000 shares of the Company's Class A Common Stock which
were granted to him under a stock option. All loans are collateralized by
180,000 shares of Class B Common Stock. In December 1993, the Board of Directors
awarded a special bonus to Mr. Briskin related to the sale of the Company's
communication equipment business in the amount of $1,912,000. The net proceeds
of this bonus were used by Mr. Briskin to immediately repay the $1,000,000 loan.
In connection with the sale of the Company's communication business in 1993,
the purchaser paid severance payments to various employees of Telautograph.
Included among these payments was a payment of $100,000 to Ernest T. Klinger,
Vice President Finance and Administration and Chief Financial Officer of the
Company, on account of his past services to Telautograph.
APPROVAL OF BERNARD BRISKIN BONUS PLAN
As described under "Employment Agreement -- Bernard Briskin," the Board of
Directors of the Company, following approval by the Compensation Committee of
the Board of Directors, approved the Amendment to the Employment Agreement
between the Company and Bernard Briskin, President and Chief Executive Officer
of the Company. The Amended Agreement is effective as of January 1, 1994, and
has a term ending at the close of the Company's 2000 fiscal year, subject to
automatic extension thereafter for periods of one fiscal year each unless either
the Company or Mr. Briskin gives notice of termination not less than 15 nor more
than 18 months prior to the date upon which the term of the amended agreement
will expire. The Amended Agreement provides for a base salary of $440,000 per
year and an annual bonus (the "Annual Bonus") commencing with the 1994 fiscal
year in an amount equal to certain specified percentages of the pre-tax profits
of the Company for each fiscal year. Pre-tax profits is defined as the amount
shown on the audited Consolidated Statement of Operations of the Company for the
fiscal year under the caption "Income Before Income Taxes and Extraordinary
Items", adjusted so as to exclude any charge, accrual or
11
<PAGE>
deduction for any bonus paid or payable to Mr. Briskin. The percentage of
pre-tax profits is 2.5% of the first $2,000,000 of pre-tax profits for each
fiscal year and 3.5% of all pre-tax profits in excess of $2,000,000 for each
fiscal year. For years prior to 1994, Mr. Briskin's bonus under his then
employment agreement was 2 1/2% of all pre-tax profits. If the Amended Agreement
had been in effect during the 1993 fiscal year, Mr. Briskin would have received
an Annual Bonus of $450,669.02 with respect to such fiscal year.
The payment of the Annual Bonus for the 1995 fiscal year and thereafter is
contingent upon approval by the stockholders of the Company of the material
terms of the Annual Bonus in accordance with the regulations promulgated under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). In
general, that section of the Code disallows deductions by a publicly traded
corporation for compensation in excess of $1,000,000 to its chief executive
officer or any of its four other highest paid officers. Under that section,
certain performance based compensation is exempt from the $1,000,000 cap if the
material terms of the arrangement under which it is paid are approved by the
stockholders of the Company prior to payment. Although the Company does not
necessarily believe that the amount of compensation payable to Mr. Briskin,
including the Annual Bonus described herein, will exceed $1,000,000 in 1995 or
thereafter, this Annual Bonus arrangement is being presented to the stockholders
for approval so as to exclude payment of such Annual Bonus from the computation
to determine whether Mr. Briskin's compensation exceeds $1,000,000 in any one
year and, therefore, is to that extent not deductible by the Company for federal
income tax purposes.
The affirmative vote of a majority in voting interest of stockholders
present, in person or by proxy, and entitled to vote at the Annual Meeting of
Stockholders is required to approve the Annual Bonus arrangement. Abstentions
and broker non-votes will not be voted for or against the proposal to approve
this Annual Bonus arrangement but will have the effect of a negative vote
because the affirmative vote of a majority in interest of the shares represented
at the Annual Meeting is required to pass the proposal. The number of votes
represented by shares beneficially owned by Mr. Briskin are sufficient to
approve the Annual Bonus arrangement.
The Board of Directors recommends a vote FOR approval of this Annual Bonus
arrangement.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Board of Directors, upon recommendation of its audit
committee, has selected Coopers & Lybrand, independent certified public
accountants, to audit the books, records and accounts of the Company and its
consolidated subsidiaries for the 1994 fiscal year. Coopers & Lybrand has
audited the books, records and accounts of the Company and its subsidiaries for
a number of years. If the stockholders do not ratify the appointment of Coopers
& Lybrand, other certified public accountants will be appointed by the Board on
recommendation of the audit committee.
It is anticipated that representatives of Coopers & Lybrand will attend the
Meeting with the opportunity to make any statement they may desire to make, and
will be available to respond to appropriate questions from stockholders.
Ratification of the selection of independent public accountants for the
Company requires the affirmative vote of a majority in voting interest of the
stockholders present, in person or by proxy, and entitled to vote at the
Meeting. Abstentions and broker non-votes will not be voted for or against this
proposal, but will have the effect of negative votes since an affirmative vote
of a majority in voting interest of stockholders present and eligible to vote is
required to ratify the selection.
The Board of Directors recommends a vote FOR ratification of the selection
of Coopers & Lybrand.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
In the event that a stockholder wishes to submit a proposal for
consideration by the stockholders of the Company at the next Annual Meeting of
Stockholders in conformity with current Securities and Exchange
12
<PAGE>
Commission proxy regulations and any such proposal must be received by any
Assistant Secretary of the Company no later than January 27, 1995 in order for
it to be includable in the proxy statement for such Annual Meeting.
By Order of the Board of Directors
[SIG]
Assistant Secretary
June 6, 1994
13
<PAGE>
PROXY CLASS A COMMON
ARDEN GROUP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF ARDEN GROUP, INC.
Bernard Briskin, Daniel Lembark and Ben Winters are hereby appointed proxies
(each with power to act alone and with power of substitution) to vote all shares
which the undersigned would be entitled to vote at the Annual Meeting of
Stockholders of Arden Group, Inc., at The Beverly Hilton Hotel, Beverly Hills,
California at 10:00 a.m. on June 28, 1994 and all adjournments thereof, on the
matters set forth below, and in their discretion upon any other matters brought
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS NO. 1 AND 2.
1. FOR / / AGAINST / / ABSTAIN / / the proposal to approve the Bernard
Briskin Bonus Plan.
2. FOR / / AGAINST / / ABSTAIN / / the proposal to ratify the selection of
Coopers & Lybrand as independent public accountants of the Company.
(Continued and to be signed on other side)
<PAGE>
(continued from other side)
THIS PROXY WILL BE VOTED AS SPECIFIED, BUT IF NO SPECIFICATION IS MADE, IT WILL
BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
The undersigned hereby revokes all prior proxies.
PLEASE SIGN, DATE, AND MAIL
THIS PROXY TODAY
Dated ______________________
Signature __________________
Signature __________________
/ / I/WE PLAN TO ATTEND THE
MEETING.
Please be sure to date this
Proxy and to sign exactly as
your name appears hereon; joint
owners should each sign, if by
a corporation, in the manner
usually employed by it; if by a
fiduciary, the fiduciary's
title should be shown.
YOUR VOTE IS IMPORTANT.
<PAGE>
PROXY CLASS B COMMON
ARDEN GROUP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF ARDEN GROUP, INC.
Bernard Briskin, Daniel Lembark and Ben Winters are hereby appointed proxies
(each with power to act alone and with power of substitution) to vote all shares
which the undersigned would be entitled to vote at the Annual Meeting of
Stockholders of Arden Group, Inc., at The Beverly Hilton Hotel, Beverly Hills,
California at 10:00 a.m. on June 28, 1994 and all adjournments thereof, on the
matters set forth below, and in their discretion upon any other matters brought
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS NO. 1, 2 AND 3.
1. ELECTION OF DIRECTORS
FOR / / the nominees listed below (except as marked to the contrary
below)
(a) Stuart A. Krieger (b) Ben Winters
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE
THROUGH THAT NOMINEE'S NAME ABOVE).
WITHHOLD AUTHORITY / / to vote the nominee listed above
2. FOR / / AGAINST / / ABSTAIN / / the proposal to approve the Bernard
Briskin Bonus Plan.
3. FOR / / AGAINST / / ABSTAIN / / the proposal to ratify the selection of
Coopers & Lybrand as independent public accountants of the Company.
(Continued and to be signed on other side)
<PAGE>
(continued from other side)
THIS PROXY WILL BE VOTED AS SPECIFIED, BUT IF NO SPECIFICATION IS MADE, IT WILL
BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
The undersigned hereby revokes all prior proxies.
PLEASE SIGN, DATE, AND MAIL
THIS PROXY TODAY
Dated ______________________
Signature __________________
Signature __________________
/ / I/WE PLAN TO ATTEND THE
MEETING.
Please be sure to date this
Proxy and to sign exactly as
your name appears hereon; joint
owners should each sign, if by
a corporation, in the manner
usually employed by it; if by a
fiduciary, the fiduciary's
title should be shown.
YOUR VOTE IS IMPORTANT.
