<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
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/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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.
[LOGO] 2020 SOUTH CENTRAL AVENUE
COMPTON, CALIFORNIA 90220
(310) 638-2842
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 25, 1997
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
June 25, 1997, at 10:00 a.m., Los Angeles Time, for the following purposes:
1. To elect two directors for a term of three years;
2. To ratify the selection of independent certified public accountants
for the 1997 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 1, 1997, 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
B.D. DONNAN
-----------------------------------
Assistant Secretary
May 16, 1997
PROMPT RETURN OF PROXIES WILL SAVE THE EXPENSE INVOLVED
IN FURTHER COMMUNICATION
<PAGE>
ARDEN GROUP, INC.
[LOGO] 2020 SOUTH CENTRAL AVENUE
COMPTON, CALIFORNIA 90220
(310) 638-2842
ANNUAL MEETING OF STOCKHOLDERS
ON JUNE 25, 1997
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 June 25, 1997, 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 May 16, 1997.
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 $2,750 plus expenses.
RECORD DATE; SHARES ENTITLED TO VOTE; QUORUM
The Board has fixed the close of business on May 1, 1997, 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 1, 1997, there were
outstanding 766,753 shares of Class A Common Stock and 342,246 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 1, 1997, there
were approximately 1,690 holders of record of Class A Common Stock and 11
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 1, 1997, 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 PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP (1) OF CLASS (1) TOTAL VOTE
-------------- ------------------------------------ ------------- ------------ ----------
<S> <C> <C> <C> <C>
Class A Common Stock City National Bank, as Trustee 209,459(1) 27.3% 5.0%
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 169,516(2) 22.1% 4.0%
Arden Group, Inc.
9595 Wilshire Blvd., Suite 411
Beverly Hills, CA 90212
Class B Common Stock Bernard Briskin 340,624 99.5% 81.3%
</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) 60,341 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), shares voting power but denies that he has
or shares investment power with respect to the shares referred to in
clauses (i) and (iii). Nothing herein should be construed as an
admission that Mr. Briskin is in fact the beneficial owner of any of
these shares.
If Mr. Briskin converted all of his Class B Common Stock to Class A
Common Stock (convertible on a share for share basis) his beneficial
ownership of Class A Common Stock would be increased to 510,140 shares or 46%.
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 2000 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 six, 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.
2
<PAGE>
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.
Below is set forth certain information concerning the nominees and the
four continuing directors as of May 1, 1997. Certain of this information has
been supplied by the persons named:
NOMINEES FOR ELECTION BY CLASS B COMMON STOCKHOLDERS
FOR A THREE-YEAR TERM ENDING IN 2000:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR TERM
NAME AGE AND OTHER DIRECTORSHIPS (1) SINCE EXPIRES
------- ----- --------------------------- -------- -------
<S> <C> <C> <C> <C>
Stuart Krieger 79 Business Consultant 1978 1997
Director of American Rocket Co.
Ben Winters 76 Business Consultant 1978 1997
CONTINUING DIRECTORS: (2)
Bernard Briskin 73 Chairman of the Board of 1970 1998
Directors, President and Chief
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 41 Partner of Leonard Green & 1995 1998
Partners from March 1995 to
present. Director of
Communications and Power
Industries, Inc. and Twin
Laboratories Corporation.
Managing Director of Donaldson
Lufkin Jenrette Securities
Corporation from March 1990 to
February 1995.
Daniel Lembark 72 Financial Consultant and 1978 1998
Certified Public Accountant.
Robert A. Davidow 55 Director of WHX Corporation since 1993 1999
January 1991; private investor.
</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.
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. Lembark, chairman,
and Messrs. Krieger 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 two times in 1996. Current members of the compensation committee are Mr.
Danhakl, chairman, and Messrs. Davidow and Lembark. This
3
<PAGE>
committee, which considers and makes recommendations as to salary and
incentive compensation awards to senior executive officers, met once in 1996.
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 four times in 1996. Current
members of the nominating committee are Mr. Winters, chairman, and Messrs.
Briskin and Krieger. This committee, which was established to select
candidates for nomination and election as directors, met three times in 1996.
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 1996 fiscal year, the Board of Directors held five 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, 1996, 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. In 1996, the Company awarded
Frederick A. Schnell, who had served as a Director of the Company through
June 19, 1996, payment of $50,000 in recognition of his over 20 years of
service as a Director of the Company. Such sum is payable in three
installments of $8,000, $24,000 and $18,000 on September 1996, January 1997
and January 1998, respectively. 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 1, 1997, 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 PERCENT OF
NAME OF COMPANY'S STOCK OWNERSHIP(1) OF CLASS(1) TOTAL VOTE
------ ------------------ ------------ ----------- ----------
<S> <C> <C> <C> <C>
Bernard Briskin.................. Class A Common Stock 169,516(2) 22.1% 4.0%
Class B Common Stock 340,624 99.5% 80.9%
Robert A. Davidow................ Class A Common Stock 0
John G. Danhakl.................. Class A Common Stock 0
Stuart A. Krieger................ Class A Common Stock 0
Daniel Lembark................... Class A Common Stock 0
Ben Winters...................... Class A Common Stock 100 (4) (5)
Ernest T. Klinger................ Class A Common Stock 342(3) (4) (5)
All directors and executive
officers as a group (7 persons).. Class A Common Stock 169,958(3) 21.6% 4.0%
Class B Common Stock 340,624 99.5% 81.3%
</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.
(5) Did not exceed 1% of the total vote.
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 73 Chairman of the Board, President and Chief Executive
Officer of the Company.
Ernest T. Klinger 61 Vice President Finance and Administration and Chief
Financial Officer 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) BENEFICIAL OWNERSHIP COMPLIANCE
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
28, 1996, 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.
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 28, 1996 exceeded in the aggregate $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
AWARDS PAYOUTS
------------------------- --------
ANNUAL COMPENSATION SECURITIES-
---------------------------------------- RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS(1) PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (4) (1) ($) (1) ($)(2)(3)
- ------------------ ----- ------ ------ ------------ ---------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bernard Briskin, 1996 450,177 191,632 9,000
Chief Executive 1995 444,400 407,624 10,500
Officer 1994 440,000 273,068 40,742
Ernest T. Klinger, 1996 190,000 40,000 9,000
CFO, VP Finance 1995 190,000 40,000 10,500
and Administration 1994 190,000 -0- 10,500
</TABLE>
(1) 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
1996, 1995, or 1994.
(2) Includes the Company contribution to the Arden Group, Inc. 401(k)
Retirement Savings Plan and the Arden Group, Inc. Stock Bonus Plan.
In 1996, Messrs. Briskin and Klinger were each allocated $6,000 to
their 401(k) account and $3,000 to their Stock Bonus Plan account.
Mr. Briskin's 1994 balance includes $30,242 for the purpose of
purchasing life insurance.
(3) Does not include retirement benefits from the Telautograph Pension Plan
(terminated in December 1993).
(4) Perquisites and other personal benefits did not exceed the lesser or
$50,000 or 10% of the compensation received by the named officers
in any of the years for which compensation information is reported.
5
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee. At the end of
fiscal 1996 the Compensation Committee consisted of the following directors:
John Danhakl, Chairman Robert A. Davidow Daniel Lembark
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee") is
composed of three 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.
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, 1997 to $460,081 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 1996, the amount of the
bonus was $191,632.
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
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.
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 1997 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.
John Danhakl, Chairman
Robert A. Davidow
Daniel Lembark
Members of the Compensation Committee.
6
<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, 1991 and ending December 31, 1996. The graph
assumes that $100 was invested on December 31, 1991 in the Company Stock and
in each of the above-mentioned indices that all dividends were reinvested.
[GRAPH]
Base
Period Return Return Return Return Return
Company/Index Name 1991 1992 1993 1994 1995 1996
------------------ ------ ------ ------ ------ ------ ------
Arden Group, Inc. 100 76.09 110.87 98.91 129.35 125.82
S&P 500 Index 100 107.62 118.60 120.03 165.13 203.05
S&P Food Retailers Index 100 130.76 126.84 135.76 173.91 201.90
7
<PAGE>
STOCK BONUS PLAN
The Stock Bonus Plan is a non-contributory trusteed profit sharing 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 1996 were $133,100.
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 ($9,500 in 1996). Annual contributions
are made by the Company, in a discretionary amount as determined by the
Company each year. Contributions accrued for the Plan in 1996 and
contributed in early 1997 were $262,800.
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, 1996 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 $460,081
as of January 1, 1997.
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 are forgiven (see
Certain Other Transactions).
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
principal balance of the two notes as of December 31, 1996 was $295,000.
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 1997 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 15, 1998 in order for it to be
includable in the proxy statement for such Annual Meeting.
By Order of the Board of Directors
B.D. DONNAN
--------------------------
Assistant Secretary
May 16, 1997
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 June 25, 1997 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.
<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 25, 1997 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 ratify the selection of
Coopers & Lybrand as independent public accountants of the Company.
2. ELECTION OF DIRECTORS
FOR / / The nominees listed below
WITHHOLD AUTHORITY / / to vote for the nominees listed 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).
(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.
