<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ARDEN GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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>
ARDEN GROUP, INC.
2020 SOUTH CENTRAL AVENUE
COMPTON, CALIFORNIA 90220
(310) 638-2842
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 9, 1996
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, Rodeo
Room in the Executive Center, 9876 Wilshire Boulevard, Beverly Hills,
California, on July 9, 1996, at 10:00 a.m., Los Angeles Time, for the
following purposes:
1. To elect one director for a term of three years;
2. To ratify the selection of independent certified public accountants
for the 1996 fiscal year; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on May 22, 1996, 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
Assistant Secretary
June 3, 1996
PROMPT RETURN OF PROXIES WILL SAVE THE EXPENSE INVOLVED
IN FURTHER COMMUNICATION
<PAGE>
ARDEN GROUP, INC.
2020 SOUTH CENTRAL AVENUE
COMPTON, CALIFORNIA 90220
ANNUAL MEETING OF STOCKHOLDERS
ON JULY 9, 1996
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, Rodeo Room in the Executive Center, 9876 Wilshire Boulevard, Beverly
Hills, California, on July 9, 1996, 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 3, 1996.
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 of management's nominee as a
director; 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 22, 1996, 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 22, 1996, there were outstanding
765,753 shares of Class A Common Stock and 343,246 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 22, 1996, there were approximately 1,750
holders of record of Class A Common Stock and 12 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 22, 1996, 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 211,736(1) 27.7%
of the Company's Stock Bonus Plan and Trust
(the "Stock Bonus Plan")
400 North Roxbury Drive, Suite 500
Beverly Hills, CA 90210
Class A Common Stock Bernard Briskin 169,510(2) 22.1%
Arden Group, Inc.
9595 Wilshire Blvd., Suite 411
Beverly Hills, CA 90212
Class B Common Stock Bernard Briskin 340,624 99.2%
</TABLE>
____________________________
(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 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) 24,503 shares held in an Individual Retirement Account by Mr.
Briskin's wife. Mr. Briskin disclaims any beneficial ownership of the
shares set forth in clauses (i) and (iii) hereof. Mr. Briskin shares
voting and investment power with respect to the shares referred to in
clause (ii). Nothing herein should be construed as an admission that Mr.
Briskin is in fact the beneficial owner of any of these shares.
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.
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.
The holders of Class A Common Stock will have one vote per share for the
election of a director. The election of the director requires the affirmative
vote of the holders of a plurality of the shares of Class A Common 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 the director.
The present number of authorized directors of the Company is seven, two of
whom are elected by the holders of Class A Common Stock and five of whom are
elected by the holders of Class B Common Stock. The term of one director
elected by the holders of Class A Common Stock and one director elected by the
holders of Class B Common Stock expires with the Meeting. Mr. Frederick A.
Schnell who presently is serving as a director of the Company elected by the
holders of Class A Common Stock and whose term expires at the Meeting has
informed the Company that for personal reasons he will not be standing for
reelection. The Board of Directors has nominated Mr. Robert A. Davidow, who is
2
<PAGE>
presently serving as a director of the Company elected by the holders of Class B
Common Stock and whose term of office as a director expires at the Meeting, for
election as a director by the holders of Class A Common Stock to succeed Mr.
Schnell and to hold office as director until the Company's Annual Meeting in
1999 or until his successor has been elected and qualified. Since the Board of
Directors has not completed its search for a qualified person to succeed Mr.
Davidow as a director elected by the holders of Class B Common Stock, the Board
of Directors will not nominate a person to be elected a director at the Meeting
by the holders of Class B Common Stock. Mr. Davidow will resign as a director
of the Company elected by the holders of Class B Common Stock effective with the
Meeting, thereby creating a vacancy on the Board of Directors, which it is
anticipated will be filled by a qualified person at a later date, following the
Meeting by, as required by Delaware law, a vote of the directors elected by the
holders of Class B Common Stock.
The Board of Directors recommends a vote FOR the election of the nominee
shown below.
Management is not aware of any circumstance that would render him unable to
serve. However, if he should unexpectedly become unavailable for election,
votes will be cast, pursuant to the accompanying proxies, for the election of a
substitute nominee who may be selected by the present Board of Directors.
Below is set forth certain information concerning the nominee and the five
continuing directors as of May 22, 1996. Certain of this information has been
supplied by the persons named:
NOMINEE FOR ELECTION BY CLASS A COMMON STOCKHOLDERS
FOR A THREE-YEAR TERM ENDING IN 1999:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR TERM
AND OTHER DIRECTORSHIPS (1) SINCE EXPIRES
<S> <C>
Robert A. Davidow 54 Director of WHX Corporation since January 1991;. 1993 1996
private investor
CONTINUING DIRECTORS: (2)
Bernard Briskin 72 Chairman of the Board of Directors, President and Chief 1970 1998
Executive Officer of the Company and Arden-Mayfair, Inc.,
a subsidiary of the Company, and Chairman of the Board of
AMG Holdings, Inc. and Gelson's Markets, both subsidiaries
of Arden-Mayfair.
John G. Danhakl 40 Managing Director of Donaldson Lufkin Jenrette Securities 1995 1998
Corporation from March 1990 to February 1995. Partner of
Leonard Green & Partners from March 1995 to present. Director
of Kash'N Karry Food Stores Inc.
Stuart Krieger 78 Business Consultant 1978 1997
Director of American Rocket Co.
Daniel Lembark 71 Financial Consultant and Certified Public Accountant. 1978 1998
Ben Winters 75 Business Consultant. 1978 1997
</TABLE>
_________________________
(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.
3
<PAGE>
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 independent auditors, reviews audit
and management reports and makes recommendations regarding the appointment of
independent auditors and the fees payable for their services, met 2 times in
1995. Current members of the Compensation Committee are Mr. Lembark, chairman,
and Messrs. Davidow, Schnell and Winters. This committee, which considers and
makes recommendations as to salary and incentive compensation awards to senior
executive officers, met 2 times in 1995. Current members of the investment
committee are Mr. Davidow, chairman, and Messrs. Briskin, Danhakl and Winters.
This committee defines the short term investment strategy for the Company and
met 5 times in 1995. 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 1995. 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 1995 fiscal year, the Board of Directors held 7 meetings. 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
Effective February 1, 1995, each non-employee director of the Company was
compensated for all services as a director at an annual rate of $18,000 plus
$1,000 for each Board meeting attended and $1,000 for attendance at each
committee meeting. Non-employee directors who serve as committee chairmen are
entitled to an additional $4,200 per year. Mr. Briskin is an employee of the
Company and does not receive the compensation otherwise payable to directors.
BENEFICIAL OWNERSHIP OF THE COMPANY'S STOCK BY MANAGEMENT
The following table shows, as of May 22, 1996, the beneficial ownership of
the Company's equity securities by each director or nominee, Ernest T. Klinger,
CFO, VP Finance and Administration, and by all directors and officers as a
group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
TITLE OF CLASS BENEFICIAL PERCENT
NAME OF COMPANY'S STOCK OWNERSHIP(1) OF CLASS(1)
-------- ------------------- ------------- ------------
<S> <C> <C> <C>
Bernard Briskin Class A Common Stock 169,510 21.1%
Class B Common Stock 340,624 99.2%
Robert A. Davidow Class A Common Stock
John G. Danhakl Class A Common Stock
Stuart A. Krieger Class A Common Stock
Daniel Lembark Class A Common Stock
Frederick A. Schnell Class A Common Stock
Ben Winters Class A Common Stock 100 (4)
Ernest T. Klinger Class A Common Stock 326(3) (4)
All directors and executive Class A Common Stock 180,904(3) 23.6%
officers as a group Class B Common Stock 340,624 99.2%
(9 persons)
</TABLE>
(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 note (2) to the table under "Principal Stockholders" set forth above.
(3) Includes shares held in the Company Stock Bonus Plan for the accounts of
those individuals.
(4) Did not exceed 1% of the outstanding shares of the class.
4
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information regarding the persons who presently
serve as executive officers of the Company.
NAME AGE POSITIONS AT THE COMPANY(1)
---- --- ---------------------------
Bernard Briskin 72 Chairman of the Board, President
and Chief Executive Officer of the
Company.
Ernest T. Klinger 60 Vice President Finance and
Administration and Chief Financial
Officer of the
Company.
Milton H. Barker 79 Vice President of the Company.
_________________________
(1) Unless otherwise indicated, principal occupation or occupations shown have
been such for a period of least five years in the aggregate.
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."
Section 16(a) of the Securities Exchange Act of 1934 requires that directors and
executive officers of the Company, as well as persons holding more than ten
percent (10%) of a registered class of the Company's equity securities, file
with the Securities and Exchange Commission initial reports of the ownership and
reports of changes of ownership of Class A Common Stock and other equity
securities of the Company. Based solely on review of copies of such reports
furnished to the Company and written representations that no other reports were
required to be filed during the fiscal year ended December 30, 1995, all Section
16(a) filing requirements applicable to the Company's executive officers,
directors and greater than ten percent (10%) beneficial owners were complied
with other than Bernard Briskin who had inadvertently failed to include in his
reports ownership of and changes in the holdings of Class A Common Stock by a
pension plan trust of which his spouse was a beneficiary and which are now held
in an Individual Retirement Account for her benefit. After discovering this
omission, Mr. Briskin corrected this deficiency by filing a report reflecting
these holdings and disclosing four late reports consisting of a report in 1988
to reflect initially these holdings, two reports reflecting a sale of shares of
Class A Common Stock by the trust in 1989 and 1990, respectively, and one report
reflecting an acquisition of shares of Class A Common Stock by the trust in
1995.
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
December 30, 1995 exceeded in the aggregate $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------------------
OTHER
NAME AND SALARY BONUS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)
- --------------------- ---- --------- -------------- --------------
<S> <C> <C> <C> <C>
BERNARD BRISKIN, 1995 444,400 407,624 20,416
CHIEF EXECUTIVE 1994 440,000 273,068 41,791(2)
OFFICER 1993 350,000 2,248,019(1) 994,609(2)
ERNEST T. KLINGER, 1995 190,000 40,000
CFO, VP FINANCE 1994 190,000 -0-
AND ADMINISTRATION 1993 190,000 -0-
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------------------
AWARDS PAYOUTS
------------------------------ --------
SECURITIES-
RESTRICTED UNDERLYING
STOCK OPTIONS/ LTIP ALL OTHER
NAME AND AWARD(S) SARS(3) PAYOUTS COMPENSATION
(5)(6)
PRINCIPAL POSITION (3) ($) (3) ($)
- --------------------- ---------- ------------- --------- ----------------
<S> <C> <C> <C> <C>
BERNARD BRISKIN, 7,500(4)
CHIEF EXECUTIVE 3,000(4)
OFFICER -0-
ERNEST T. KLINGER, 7,500(4)
CFO, VP FINANCE 3,000(4)
AND ADMINISTRATION 9,450(4)
</TABLE>
(1) INCLUDES A ONE TIME BONUS TO MR. BRISKIN OF $1,911,827 RELATED TO THE
SALE OF THE COMPANY'S COMMUNICATION EQUIPMENT BUSINESS.
5
<PAGE>
(2) INCLUDES FOR FISCAL 1993 A PAYMENT OF $941,676 TO MR. BRISKIN UNDER A
DEFERRED COMPENSATION ARRANGEMENT. ALSO INCLUDES PAYMENTS TO MR. BRISKIN OF
$30,242, AND $42,085 FOR FISCAL YEARS 1994 AND 1993, RESPECTIVELY, FOR THE
PURPOSE OF ENABLING HIM TO PURCHASE LIFE INSURANCE.
(3) 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 1995, 1994,
OR 1993.
(4) THE AMOUNT OF THE COMPANY CONTRIBUTION TO THE ARDEN GROUP, INC. 401(K)
RETIREMENT SAVINGS PLAN ALLOCATED TO THE NAMED EXECUTIVE OFFICER.
(5) DOES NOT INCLUDE RETIREMENT BENEFITS FROM THE TELAUTOGRAPH PENSION PLAN,
WHICH WAS TERMINATED IN 1993, OR BENEFITS ALLOCABLE UNDER THE COMPANY STOCK
BONUS PLAN.
(6) PERQUISITES AND OTHER PERSONAL BENEFITS DID NOT EXCEED THE LESSER OR
$50,000 OR 10% OF THE COMPENSATION RECEIVED BY MR. KLINGER IN ANY OF THE
YEARS FOR WHICH COMPENSATION INFORMATION IS REPORTED.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee. At the end of fiscal
1995 the Compensation Committee consisted of the following directors:
Daniel Lembark, Chairman
Robert A. Davidow
Frederick A. Schnell
Ben Winters
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 the development of
Company policies relating to executive compensation. The Committee's principal
objective is to aid the Company in achieving its goals by the establishment of
compensation policies which will attract and retain superior talent and also
reward performance. In general, Section 162(m) of the Internal Revenue Code of
1986, as amended, 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. The Committee does not expect that any
executive officer's compensation for the 1995 fiscal year will exceed the
$1,000,000 IRS deduction cap. In any event, since Mr. Briskin's bonus
arrangement was approved by stockholders, the amount of Mr. Briskin's annual
bonus arrangement should be excluded from the computation to determine whether
his compensation exceeds the $1,000,000 deduction cap.
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 which
was amended effective January 1, 1994 (the "Employment Agreement"). The term of
the Employment Agreement expires January 1, 2001. Pursuant to the Employment
Agreement, Mr. Briskin's base salary was increased effective January 1, 1995
and 1996,to $444,400 and $450,177, respectively, per year based upon the
increase in the Consumer Price Index and will be increased on January 1 of
succeeding years during the term of the Employment Agreement based upon further
increases in the Consumer Price Index subject, however, to a maximum annual
increase. The annual bonus arrangement provided for Mr. Briskin in the
Employment Agreement was approved by the stockholders at the 1994 Annual Meeting
of Stockholders. The amount of the bonus is equal 2 1/2% of the Company's first
$2,000,000 of Pre-Tax Profits (as defined in the Employment Agreement) plus 3
1/2% of Pre-Tax Profits in excess of $2,000,000. For fiscal year 1995, the
amount of the bonus was $407,624.
In general, Section 162(m) of the Internal Revenue Code of 1986, as amended,
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. The Committee does not expect that any executive officer's
compensation for the 1995 fiscal year will exceed the $1,000,000 IRS deduction
cap. In any event, since Mr. Briskin's bonus arrangement was approved by
stockholders, the amount of Mr. Briskin's annual bonus arrangement should be
excluded from the computation to determine whether his compensation exceeds the
$1,000,000 deduction cap.
As to executives other than Mr. Briskin, the Committee recommends compensation
for them to the Board of Directors. Such compensation is designed to achieve an
overall level of compensation which is competitive with other companies in the
supermarket business in Southern California. By taking into account the
individual performance, responsibility and
6
<PAGE>
achievement level of the executives involved and the annual and long term
performance of the Company, the actual compensation level for such executives
recommended by the Committee may be greater or less than the average of
competitive levels in such other companies. Accordingly, the Committee
exercises its best judgment in setting executive compensation based upon a
number of internal, external and individual factors In general, Section 162(m)
of the Internal Revenue Code of 1986, as amended, 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. The
Committee does not expect that any executive officer's compensation for the 1995
fiscal year will exceed the $1,000,000 IRS deduction cap. In any event, since
Mr. Briskin's bonus arrangement was approved by stockholders, the amount of Mr.
Briskin's annual bonus arrangement should be excluded from the computation to
determine whether his compensation exceeds the $1,000,000 deduction cap.
The Company's Stock Bonus Plan is included as a component of executive
compensation and this, as well as the other factors, operates to link a portion
of executive compensation to Company profitability. In general, Section 162(m)
of the Internal Revenue Code of 1986, as amended, 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. The
Committee does not expect that any executive officer's compensation for the 1995
fiscal year will exceed the $1,000,000 IRS deduction cap. In any event, since
Mr. Briskin's bonus arrangement was approved by stockholders, the amount of Mr.
Briskin's annual bonus arrangement should be excluded from the computation to
determine whether his compensation exceeds the $1,000,000 deduction cap.
Daniel Lembark, Chairman Robert A. Davidow
Frederick A. Schnell Ben Winters
Members of the Compensation Committee.
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 30, 1990 and ending December 30, 1995. The graph assumes that $100 was
invested on December 30, 1990 in the Company Stock and in each of the above-
mentioned indices that all dividends were reinvested.
<TABLE>
<CAPTION>
[GRAPH]
BASE
PERIOD RETURN RETURN RETURN RETURN RETURN
COMPANY/INDEX NAME 1990 1991 1992 1993 1994 1995
- ------------------ ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
ARDEN GROUP, INC. 100 106.98 81.60 118.60 105.81 138.37
S&P 500 INDEX 100 130.47 140.41 154.56 156.60 215.45
S&P FOOD RETAILERS INDEX 100 105.51 137.96 133.82 143.24 183.48
</TABLE>
7
<PAGE>
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
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. Any assets of the Plan
which are not invested in the Company's Class A Common Stock may be 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. Contributions accrued for the Plan in 1995 were $130,000.
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 AMG Holdings)
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 ($9,240 in
1995). Annual contributions are made by the Company, in a discretionary amount
as determined by the Company each year. Contributions accrued for the Plan in
1995, to be contributed in early 1996, were $317,000.
EMPLOYMENT AGREEMENT - BERNARD BRISKIN
Mr. Briskin is employed as the Chairman of the Board of Directors,
President and Chief Executive Officer of the Company and Arden-Mayfair, Inc. and
the Chairman of the Board and Chief Executive Officer of AMG Holdings, Inc. 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 January 1, 2001 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.
As a result of the cost of living adjustment, the base salary was increased to
$450,177 as of January 1, 1996.
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 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 in
original principal amounts, respectively, (see Certain Other Transactions) are
forgiven.
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.
8
<PAGE>
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 180,000 shares of the Company's Class B Common Stock. The
outstanding balance of the two notes as of December 30, 1995 was $368,750.
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 1996 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 Commission proxy
regulations and any such proposal must be received by any Assistant Secretary of
the Company no later than January 31, 1997 in order for it to be includable in
the proxy statement for such Annual Meeting.
By Order of the Board of Directors
Assistant Secretary
June 3, 1996
9
<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 July 9, 1996 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. ELECTION OF DIRECTORS
FOR / / the nominee listed below (except as marked to the contrary
below)
Robert A. Davidow
(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 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 July 9, 1996 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" PROPOSAL NO. 1.
1. 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.
