<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 Section240.14a-11(c) or
Section240.14a-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 1, 1999
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 1, 1999, 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 1999 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 April 26, 1999 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
/s/ Patricia S. Betance
Assistant Secretary
May 7, 1999
PROMPT RETURN OF PROXIES WILL SAVE THE EXPENSE INVOLVED IN FURTHER COMMUNICATION
<PAGE>
ARDEN GROUP, INC.
[LOGO]
2020 SOUTH CENTRAL AVENUE
COMPTON, CALIFORNIA 90220
------------------------
ANNUAL MEETING OF STOCKHOLDERS
ON JUNE 1, 1999
---------------------
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 1, 1999, at 10:00 a.m. local time in Los Angeles, 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 7, 1999.
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 director of management's nominee
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 the 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 electronically, 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, electronically 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 $3,000
plus expenses.
RECORD DATE; SHARES ENTITLED TO VOTE; QUORUM
The Board has fixed the close of business on April 26, 1999, 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 April 26, 1999, there were outstanding
3,573,688 shares of Class A Common Stock and 1,368,984 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
1
<PAGE>
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 April 26,
1999, there were approximately 1,337 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.
PRINCIPAL STOCKHOLDERS
As of May 7, 1999, 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 OF PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(1) TOTAL VOTE
- -------------------- ---------------------------------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
Class A Common Stock City National Bank, as Trustee of the 257,026 11.6% 1.6%
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 620,949(2) 30.1% 3.9%
Arden Group, Inc.
9595 Wilshire Blvd., Suite 411
Beverly Hills, CA 90212
Class B Common Stock Bernard Briskin 1,362,496 99.5% 85.7%
</TABLE>
- ------------------------
(1) Unless otherwise indicated to the contrary, all beneficial owners have sole
investment and voting power. For purposes of this table, 1,357,200 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) 186,096 shares held in trust
(of which Mr. Briskin is a trustee) for the benefit of Mr. Briskin, his
children and his mother; and (ii) 98,012 shares held in an Individual
Retirement Account by Mr. Briskin's wife. Mr. Briskin disclaims any
beneficial ownership of the shares set forth in clause (ii) hereof. Mr.
Briskin shares voting and investment power with respect to the shares
referred to in clause (i), and he has no voting or 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.
If Mr. Briskin converted all of the Class B Common Stock to Class A Common
Stock (convertible on a share for share basis) his and his spouse's beneficial
ownership of Class A Common Stock would be increased to 1,983,445 shares or
55.3% of total shares outstanding.
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 Restated 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.
2
<PAGE>
At the Meeting, it is proposed to elect Robert A. Davidow to hold office as
director until the Company's Annual Meeting in 2002 or until such director's
successor has been elected and qualified. He is now a director of the Company.
Under Article Fourth of the Restated 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 elected by the holders of the Class B
Common Stock. Pursuant to the terms of the Company's Restated Certificate of
Incorporation, the holders of Class A Common Stock are entitled to elect one
director at the Meeting and will have one vote per share for the election of
such director. Since the total number of directors is six, and the holders of
Class B Common Stock have previously elected four directors whose terms of
office do not expire at the Meeting, the holders of Class B Common Stock are not
entitled to elect any directors at the Meeting. The election of the director
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 the director.
The Board of Directors recommends a vote FOR the election of Robert A.
Davidow.
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. At
present there is one vacancy on the Board of Directors in the directors to be
elected by the holders of Class B Common Stock, which director's term would
expire in 1999. The Board of Directors has not completed its search for a
qualified person to fill such vacancy.
Below is set forth certain information concerning the nominee and the five
continuing directors as of April 26, 1999. 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 2002:
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS(1) SINCE(2) EXPIRES
- --------------------------- --- ----------------------------------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
Robert A. Davidow.......... 57 Director, Vice Chairman of WHX Corporation; private 1993 1999
investor.
</TABLE>
CONTINUING DIRECTORS:
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS(1) SINCE(2) EXPIRES
- --------------------------- --- ----------------------------------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
Bernard Briskin............ 75 Chairman of the Board of Directors, President and Chief 1970 2001
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.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS(1) SINCE(2) EXPIRES
- --------------------------- --- ----------------------------------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
John G. Danhakl............ 43 Partner of Leonard Green & Partners from March 1995 to 1995 2001
present. Managing Director of Donaldson Lufkin Jenrette
Securities Corporation from March 1990 to February 1995.
Director of Big 5 Sporting Goods, Inc., Communications and
Power Industries, Inc., Twin Laboratories Corporation,
Hechinger/BSQ, Diamond Auto Glass Works, Liberty Group
Publishing and Leslie's Poolmart, Inc.
Stuart Krieger............. 81 Business Consultant. 1978 2000
Daniel Lembark............. 74 Financial Consultant and Certified Public Accountant. 1978 2001
Ben Winters................ 78 Business Consultant. 1978 2000
</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, compensation, investment and nominating 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 twice in 1998.
Current members of the compensation committee are Mr. Danhakl, chairman, and
Messrs. Davidow and Lembark. This committee, which considers and makes
recommendations as to salary and incentive compensation awards to senior
executive officers, met once in 1998. 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 1998. 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
once in 1998. The nominating committee will consider qualified nominees
recommended by stockholders. Stockholders who wish to recommend qualified
nominees should write to the 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 1998 fiscal year, the Board of Directors held four 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
they served during such period.
COMPENSATION OF DIRECTORS
During 1998, each non-employee director of the Company was compensated for
all services as a director at an annual rate of $22,800 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 was payable in three installments of $8,000, $24,000 and
$18,000 in September 1996, January 1997 and January 1998 respectively.
4
<PAGE>
BENEFICIAL OWNERSHIP OF THE COMPANY'S STOCK BY MANAGEMENT
The following table shows, as of April 26, 1999, the beneficial ownership of
the Company's equity securities by each director or nominee, Ernest T. Klinger,
Chief Financial Officer, Vice President Finance and Administration, and by all
directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
TITLE OF CLASS BENEFICIAL PERCENT OF PERCENT OF
NAME OF COMPANY'S STOCK OWNERSHIP(1) CLASS(1) TOTAL VOTE
- ---------------------------------------- -------------------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Bernard Briskin......................... Class A Common Stock 620,949(2) 28.0% 3.9%
Class B Common Stock 1,362,496 99.5% 85.7%
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 500 (4) (5)
Ernest T. Klinger....................... Class A Common Stock 1,372(3) (4) (5)
All directors and executive officers as
a group (7 persons)................... Class A Common Stock 622,821(2)(3) 28.1% 3.9%
Class B Common Stock 1,362,496 99.5% 85.7%
</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 1,357,000 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 Stock Bonus Plan for their accounts.
(4) Did not exceed 1% of the outstanding shares of the class.
(5) Did not exceed 1% of the total vote.
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>
Bernard Briskin............... 75 Chairman of the Board, President and Chief Executive
Officer of the Company.
Ernest T. Klinger............. 63 Chief Financial Officer, Vice President Finance and
Administration of the Company.
</TABLE>
- ------------------------
(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's
Board of Directors and serve at the discretion of the Board, with the exception
of Mr. Briskin, who has an employment agreement. See "Employment
Agreement--Bernard Briskin."
5
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING 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 January 2, 1999, 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
January 2, 1999 exceeded in the aggregate $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------
-------------------- SECURITIES-UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS(1) COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)(2)(3)
- ---------------------------------------------- --------- --------- --------- --------------------- -------------
<S> <C> <C> <C> <C> <C>
Bernard Briskin,.............................. 1998 507,000 599,297 12,800
Chief Executive Officer 1997 500,000 496,780 12,800
1996 450,177 191,632 9,000
Ernest T. Klinger, ........................... 1998 190,000 40,000 7,000 12,800
CFO, VP Finance and Administration 1997 190,000 40,000 12,800
1996 190,000 40,000 9,000
</TABLE>
- ------------------------
(1) The Company did not grant to Mr. Briskin or Mr. Klinger any restricted stock
or stock options and made no payout to them on any long-term incentive plan
in fiscal years 1998, 1997 or 1996. The Company granted units for stock
appreciation rights ("SAR") covering 7,000 shares of Class A Common Stock
under the Phantom Stock Plan to Mr. Klinger in 1998.
(2) Includes the Company contribution to the Arden Group, Inc. 401(k) Retirement
Savings Plan and the Arden Group, Inc. Stock Bonus Plan. In 1998, Messrs.
Briskin and Klinger were each allocated $12,800 to their 401(k) account.
(3) Perquisites and other personal benefits did not exceed the lesser of $50,000
or 10% of the compensation received by the named officers in any of the
years for which compensation information is reported.
6
<PAGE>
The following table sets forth certain information on SAR grants in fiscal
1998 to the named executive officers:
SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE AT
SECURITIES TOTAL SARS ASSUMED ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE OR PRICE APPRECIATION FOR SAR TERM
SARS GRANTED EMPLOYEES IN BASE PRICE EXPIRATION --------------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 0%($) 5%($) 10%($)
- ---------------------------- ------------- --------------- ----------- ------------ --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Bernard Briskin............. 0 0% $ 0 N/A $ 0 $ 0 $ 0
Ernest T. Klinger........... 7,000 41.2% $ 40 11/17/2003 $ 7,000 $ 86,000 $ 182,000
</TABLE>
The following table provides information on the exercise of SARs by the
named executive officers in fiscal 1998 and the number of each officers' SARs
that were unexercised at January 2, 1999 (none of which were then in-the-money):
AGGREGATED SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END UNEXERCISED SARS
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
SARS AT FISCAL YEAR-END
SHARES ACQUIRED (#)
NAME ON EXERCISE (#) VALUE REALIZED (#) EXERCISABLE/UNEXERCISABLE
- --------------------------------- --------------------- ------------------- --------------------------
<S> <C> <C> <C>
Bernard Briskin.................. 0 0 0/0
Ernest T. Klinger................ 0 0 0/7,000
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee. In 1998, the
Compensation Committee consisted of the following directors, none of whom are or
have been officers or employees of the Company:
John G. 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, as
amended by amendment dated April 27, 1994 and an amendment dated January 1998,
effective January 1, 1997 (the "Employment Agreement"). Pursuant to the terms of
the Employment Agreement, Mr. Briskin's base salary is increased annually based
upon increases in the Consumer Price Index subject, however, to a maximum annual
increase of 4%. His annual bonus is equal to 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. Since Mr. Briskin's bonus is
determined on the basis of the Pre-Tax Profits of the Company, a portion of his
compensation is directly
7
<PAGE>
related to the performance of the Company. Mr. Briskin's bonus arrangement for
1997 and years following was approved by stockholders in 1998. Under the
Employment Agreement, for 1998 Mr. Briskin's annual base salary was $507,000 and
his bonus was $599,297. On January 1, 1999, his annual base salary was
increased, in accordance with the terms of the Employment Agreement, to
$511,563.
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 and Phantom Stock Plan are 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 1999 fiscal year will exceed the $1,000,000 IRS deduction
cap since 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 G. Danhakl, Chairman
Robert A. Davidow
Daniel Lembark
Members of the Compensation Committee.
8
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on the Class A Common Stock against the cumulative total return of the
Standard & Poor's 500 Stock Index and the Standard & Poor's Food Retailers Index
for the period of five years commencing December 31, 1993 and ending December
31, 1998. The graph assumes that $100 was invested on December 31, 1993 in the
Class A Common Stock and in each of the above-mentioned indices that all
dividends were reinvested.
TOTAL SHAREHOLDERS RETURN
ARDEN GROUP, INC.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ARDEN GROUP, INC. S&P 500 INDEX S&P FOOD RETAILERS INDEX
<S> <C> <C> <C>
1993 100.00 100.00 100.00
1994 89.25 101.32 107.04
1995 116.71 139.40 137.11
1996 113.49 171.40 159.17
1997 188.47 228.59 207.83
1998 313.73 293.91 301.70
</TABLE>
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 (the "Code"). All non-union employees over 18 years of age who complete
1,000 hours of service are eligible to become participating employees in the
Stock Bonus Plan. Contributions to the Stock Bonus Plan for any fiscal year, as
determined by the Board of Directors, are discretionary, but in no event are to
exceed 15% of the annual aggregate salaries of those employees eligible for
participation in the Stock Bonus Plan. Any assets of the Stock Bonus Plan which
are not invested in the Company's Class A Common Stock may be invested in
certain government backed securities. Contributions to the Stock Bonus Plan are
allocated among eligible participants in the proportions of their salaries to
the salaries of all participants.
PHANTOM STOCK PLAN
In 1998, the Company adopted a Phantom Stock Plan (the "Phantom Plan") which
provides for the granting of units covering up to 35,000 shares of the Company's
Class A Common Stock to persons who are the vice president or higher level of
the Company. Each unit entitles the holder to receive upon exercise thereof the
excess of the fair market value of a share of Class A Common Stock on the date
of
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exercise over the fair market value of such share on the date specified by the
committee administrating the Phantom Plan at the time of grant. All of the units
vest after the first year at 25% each year over a four year period and expire
five years from the date of grant. During 1998, the Company granted units
covering 17,000 shares of Class A Common Stock to certain officers of the
Company exercisable at $40 per share.
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 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 Code ($10,000 in 1998). Annual contributions are made by the
Company in a discretionary amount as determined by the Company each year.
Contributions accrued for the Company Savings Plan in 1998 and contributed in
early 1999 were $538,512.
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, amended in April 1994 retroactive to January 1, 1994 and further
amended in January 1998, effective in January 1997 (the Agreement as amended is
hereinafter referred to as the "Second Amendment"). The Second Amendment has a
term ending at January 1, 2004 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 Second
Amendment will expire.
The Second Amendment provides for an annual base salary of $500,000 and a
bonus based upon the Pre-Tax Profits of the Company. The annual base salary is
subject to increases on January 1 of each year commencing January 1, 1998 based
upon increases in the Consumer Price Index subject, however, to a maximum annual
increase of 4%. The annual bonus is equal to 2 1/2% of the Company's first
$2,000,000 of Pre-Tax Profits (as defined in the Second Amendment) plus 3 1/2%
of Pre-Tax Profits in excess of $2,000,000.
The Second Amendment 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 $200,000
during any calendar year, and annual retirement compensation equal to
twenty-five percent of Mr. Briskin's average base salary and bonus earned in the
last three fiscal years prior to his retirement and continuation of health
insurance benefits and automobile allowance. In addition, if he becomes
permanently disabled, dies or his employment is terminated prior to January 1,
2004, the cumulative unpaid portion of two notes from Mr. Briskin to the
Company, in the amount of $215,000 as of March 5, 1999, will be forgiven. The
maturity dates of the two notes was extended to December 31, 2003 with equal
annual principal payments of $40,000 plus interest at 6% per annum.
The Second Amendment provides that its terms will be subject to review
during the 2002 fiscal year by the Compensation Committee of the Board of
Directors. Pursuant to this provision, the terms of the Second Amendment may be
modified.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Board of Directors, upon recommendation of its Audit
Committee, has selected PricewaterhouseCoopers L.L.P.
("PricewaterhouseCoopers"), independent certified public accountants, to
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<PAGE>
audit the books, records and accounts of the Company and its consolidated
subsidiaries for the 1999 fiscal year. PricewaterhouseCoopers 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
PricewaterhouseCoopers, other certified public accountants will be appointed by
the Board on recommendation of the Audit Committee.
It is anticipated that representatives of PricewaterhouseCoopers 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 PricewaterhouseCoopers.
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. The maturity dates of such notes were modified
effective January 1, 1997. 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 at a
rate of $16,464.89 commencing December 31, 1997 and continuing each December 31
thereafter until December 31, 2003 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 at a rate of
$23,535.11 commencing on December 31, 1997 and continuing each December 31
thereafter until December 31, 2003 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, 1998 was $215,000.
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 the Assistant Secretary of
the Company no later than January 7, 2000 in order for it to be includable in
the proxy statement for such Annual Meeting. If a stockholder intends to present
a proposal at the next Annual Meeting but does not seek inclusion of that
proposal in the proxy statement for that meeting, the holders of proxies for
that meeting will be entitled to exercise their discretionary authority on that
proposal if the Company does not have notice of the proposal by March 23, 2000.
By Order of the Board of Directors
/s/ Patricia S. Betance
Assistant Secretary
May 7, 1999
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<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 1, 1999 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
WITHHOLD AUTHORITY / / to vote for the nominee listed below
Robert Davidow
2. FOR / / AGAINST / / ABSTAIN / / the proposal to ratify the selection of
PricewaterhouseCoopers 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 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 1, 1999 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
PricewaterhouseCoopers 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.
