Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant (X)
Filed by a party other than the registrant ( )
Check the appropriate box:
( ) Preliminary proxy statement
(X) Definitive proxy statement
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
Ridgewood Hotels, Inc.
-----------------------------------------------
(Name of Registrant as Specified in Its Charter)
Karen S. Hughes
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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>
Ridgewood Hotels, Inc.
2859 Paces Ferry Road
Suite 700
Atlanta, Georgia 30339
December 22, 1997
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Ridgewood Hotels, Inc. on Tuesday, January 20, 1998
at 10:00 a.m. at the offices of Ridgewood Hotels, Inc., 2859 Paces
Ferry Road, Suite 700, Atlanta, Georgia 30339. The formal Notice of
the Annual Meeting of Stockholders and the proxy statement are
attached. Please read them carefully.
It is important that your shares be voted at the meeting. If
you do not plan to attend, please complete the enclosed proxy card
by indicating your vote on the issues presented and sign, date and
return the proxy in the prepaid envelope provided. If you are able
to attend the meeting and wish to vote in person, you may withdraw
your proxy at that time.
Sincerely,
N. Russell Walden
President
<PAGE>
RIDGEWOOD HOTELS, INC.
2859 Paces Ferry Road, Suite 700
Atlanta, Georgia 30339
(770) 434-3670
________________________________
Notice of Annual Meeting of Stockholders
January 20, 1998
__________________________
To the Stockholders of Ridgewood Hotels, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
(together with any adjournments or postponements thereof, the
"Meeting") of Ridgewood Hotels, Inc. (the "Company") will be held at
10:00 a.m., Eastern Standard Time on Tuesday, January 20, 1998, at
the offices of the Company, 2859 Paces Ferry Road, Suite 700,
Atlanta, Georgia 30339, for the following purposes:
1. To elect three directors of the Company to hold office until the
next Annual Meeting of Stockholders or until the election and
qualification of their successors; and
2. To transact such other business as may properly come before the
Meeting.
Please complete the proxy card which is enclosed and return it
promptly. If you are able to attend the Meeting and wish to vote in
person, you may withdraw your proxy at that time.
The record date for determining shareholders entitled to notice
of, and to vote at, the Meeting has been fixed as the close of
business on December 19, 1997. A list of such shareholders will be
open for the examination of any shareholder, for any purpose germane
to the Meeting, for a period of at least 10 days prior to the
Meeting, during ordinary business hours, at 2859 Paces Ferry Road,
Suite 700, Atlanta, Georgia 30339, and will be available at the
Meeting. A copy of our Annual Report for the fiscal year ended
August 31, 1997 is enclosed. The Annual Report is not a part of the
proxy soliciting material enclosed with this Notice.
By Order of the Board of Directors
Karen S. Hughes, Secretary
Atlanta, Georgia
December 22, 1997
YOUR ATTENTION IS DIRECTED TO THE ACCOMPANYING PROXY STATEMENT.
IMPORTANT
Whether or not you expect to be present at the Meeting, please mark,
date and sign the enclosed proxy and return it in the envelope which
has been provided. In the event you are able to attend the Meeting,
you may revoke your proxy and vote your shares in person.
<PAGE>
RIDGEWOOD HOTELS, INC.
2859 Paces Ferry Road, Suite 700
Atlanta, Georgia 30339
_______________________________
PROXY STATEMENT For ANNUAL MEETING OF SHAREHOLDERS
To Be Held January 20, 1998
______________________________________________________
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement (the "Proxy Statement") and the
accompanying form of proxy are being furnished to the shareholders
of Ridgewood Hotels, Inc. ("Ridgewood" or the "Company") in
connection with the solicitation of proxies by the Board of
Directors of the Company (the "Board") from holders of its
outstanding common stock, par value $.01 per share (the "Common
Stock"), for use at the Annual Meeting of Stockholders of the
Company (the "Meeting") to be held on January 20, 1998 at 10:00 a.m.
at the offices of the Company, 2859 Paces Ferry Road, Suite 700,
Atlanta, Georgia 30339, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. This Proxy
Statement is first being mailed to shareholders of the Company on or
about December 22, 1997.
Shares of Common Stock represented by properly executed
proxies, unless such proxies previously have been revoked, will be
voted in accordance with the instructions indicated in the proxies.
If no instructions are indicated, such shares will be voted in favor
of (FOR) the proposal specified herein, and in the discretion of the
proxy holder as to any other matters that may properly come before
the Meeting. A shareholder who has given a proxy may revoke it at
any time prior to the voting thereof at the Meeting by filing with
the Secretary of the Company, at or prior to the Meeting, a written
revocation or a duly executed proxy bearing a later date. In
addition, a proxy may be revoked in person by any shareholder
present at the Meeting prior to the voting of such proxy.
Attendance at the Meeting, however, will not in itself constitute
the revocation of a proxy.
The cost of soliciting proxies will be borne by the Company.
In addition to solicitations by mail, officers and regular employees
of the Company may solicit proxies personally and by telephone,
telegraph or other means for which they will receive no compensation
in addition to their normal compensation. Arrangements may also be
made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the
beneficial owners of stock held of record by such persons, and the
Company shall reimburse them for their reasonable out-of-pocket and
clerical expenses.
RECORD DATE AND VOTING SECURITIES
The Board has fixed the close of business on December 19, 1997
as the record date (the "Record Date") for the determination of
shareholders entitled to notice of and to vote at the Meeting. On
that date, 1,538,480 shares of the Common Stock were outstanding and
entitled to vote at the Meeting. Each share of Common Stock is
entitled to one vote. On the Record Date, the Company also had
450,000 shares of Series A Convertible Preferred Stock ("Preferred
Stock") (see "Certain Relationships and Related Transactions")
outstanding. The Preferred Stock is held by Alarmguard Holdings,
Inc. ("Alarmguard"), and so long as a minimum of 50,000 shares of
Preferred Stock is outstanding, Alarmguard shall be entitled to
elect one additional director to serve on the Board. The Company
has no other outstanding voting securities.
The presence at the Meeting, in person or by proxy, of the
holders of a majority of the issued and outstanding shares of Common
Stock is necessary to constitute a quorum. Subject to the rights of
the holders of the Preferred Stock, a quorum being present, the
affirmative vote of a plurality of the holders of the shares of
Common Stock present, in person or by proxy, at the Meeting, is
required for the election of a nominee as a director as set forth in
Proposal I hereof. If a broker indicates on the proxy that it does
not have discretionary authority as to certain shares of Common
Stock to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that
matter. Under Delaware law, the aggregate number of votes entitled
to be cast by all shareholders present in person or represented by
proxy at the Meeting, whether those shareholders vote "for",
"against" or abstain from voting, will be counted for purposes of
determining the minimum number of affirmative votes required for
approval of a proposal. The total number of votes cast "for" a
proposal will be counted for purposes of determining whether
sufficient affirmative votes have been cast. Abstentions from
voting on a proposal by a shareholder present in person or
represented by proxy at the Meeting are treated as votes against a
proposal.
PROPOSAL 1: ELECTION OF DIRECTORS
Three directors of the Company are to be elected at the Meeting
to serve until the next annual meeting of shareholders or until
their respective successors shall have been elected and qualified.
Unless authority to vote for one or more directors is withheld, it
is intended that shares of Common Stock represented by proxies in
the accompanying form will be voted for the election of the persons
listed below or, if any such person shall unexpectedly become unable
or unwilling to accept nomination or election, for the election of
such other person(s) as the Board may recommend in his place. All
of the persons listed below are currently directors of the Company
and are nominees for re-election.
The Board unanimously recommends that the Company shareholders
vote FOR each of the nominees listed below.
Nominees for Director
MICHAEL M. EARLEY
Mr. Earley, age 42, has been a director of the Company since
June 1993. Mr. Earley is a director of Alarmguard and principal of
Triton Group Management, Inc. which is currently providing
management and consulting services to Alarmguard. See "Certain
Relationships and Related Transactions." He was President of Triton
Group Ltd. ("Triton"), Alarmguard's predecessor, from July 1994 and
its Chief Executive Officer from January 1996 until April 1997.
Prior to that time, Mr. Earley held various senior management
positions including that of Chief Financial Officer with Triton
and related entities since 1986.
LUTHER A. HENDERSON
Mr. Henderson, age 77, has been a director of the Company since
its formation in 1985. He served as a director of CMEI, Inc.
("CMEI"), the Company's predecessor, from September 1983 to December
1985. He served as a director of Pier 1 Imports Inc., a commercial
retailer, from February 1980 to June 1993. Mr. Henderson is a
member of the Board of Directors of Beeba's Creations, Inc. and is
President of Pirvest, Inc.
N. RUSSELL WALDEN
Mr. Walden, age 59, is President and Chief Executive Officer of
the Company and has been a director of the Company since its
formation in 1985. Mr. Walden was a director of Sunbelt Nursery
Group, Inc. from 1983 until 1990. He is the former President, Chief
Executive Officer and Director of CMEI and a former director of Pier
1 Imports Inc.
ADDITIONAL INFORMATION
Beneficial Ownership of the Company's Securities
The following table sets forth information as of the Record
Date regarding the beneficial ownership of the capital stock of the
Company by (a) each director, director nominee and executive officer
named in the Summary Compensation Table (elsewhere herein) of the
Company, (b) each beneficial owner of more than 5% of the Common
Stock of the Company, and (c) all directors and executive officers
as a group. Except as otherwise indicated, each individual or group
named has sole investment and voting power with respect to the
securities shown. No other individual or entity is known to own
more than 5% of the Company's voting securities.
<TABLE>
<CAPTION
Amount Percent
Name and Address of Title of Beneficially of Class
Beneficial Owner Class Owned
<S> <C> <C> <C>
N. Russell Walden Common Stock 930,000 (1) 55.1%
Ridgewood Hotels, Inc.
2859 Paces Ferry Road
Suite 700
Atlanta, GA 30339
Karen S. Hughes Common Stock 160,440 (1) 10.0%
Ridgewood Hotels, Inc.
2859 Paces Ferry Road
Suite 700
Atlanta, GA 30339
Wayne W. McAteer Common Stock 100,000 6.5%
Ridgewood Hotels, Inc.
2859 Paces Ferry Road
Suite 700
Atlanta, GA 30339
Luther A. Henderson Common Stock 58,800(1) 3.8%
5608 Malvey Avenue
Suite 104-A
Fort Worth, TX 76107
All executive officers, Common Stock 1,223,520 63.8%
directors and beneficial
owners of more than 5%
of the Common Stock as a
group (5 persons)
Alarmguard Holdings, Inc. Series A 450,000(2) 100%
125 Frontage Road Convertible
Orange, CT 06477 Preferred Stock
Michael M. Earley Series A 450,000(2) 100%
Convertible
Preferred Stock
All executive officers Series A 450,000(2) 100%
and directors as a Convertible
group (1 person) Preferred Stock
<FN>
_________________
(1) Includes shares deemed to be outstanding for those persons
who have the right to acquire beneficial ownership of
such shares within sixty days of the Record Date through the
exercise of stock options. Any shares not outstanding which
are subject to such options are deemed to be outstanding
for the purpose of computing the percentage of outstanding
shares of the class owned by such person but are not deemed to
be outstanding for the purpose of computing the percentage of
the class by any other person. Of the shares deemed to be
beneficially owned by the directors and officers as shown
above, the following were the shares deemed to be outstanding
for those persons who have the right to acquire beneficial
ownership through the exercise of stock options: N. Russell
Walden - 150,000 shares; Karen S. Hughes - 60,000 shares;
Luther A. Henderson - 18,000 shares; all executive officers
and directors as a group - 288,000 shares.
(2) Alarmguard holds 450,000 shares of the Company's Series A
Convertible Preferred Stock, $1.00 par value per share, (the
"Preferred Stock"), which were issued in connection with the
purchase by the Company of the 4,380,000 shares of Common Stock
held by Alarmguard. The Preferred Stock is redeemable by the
Company at $8.00 per share. The Preferred Stock accrues
dividends at $0.40 per share annually for the first two years
and at a rate of $0.80 per share annually thereafter.
Dividends are payable quarterly commencing on November 1, 1994.
Each share of Preferred Stock is convertible into three shares
of the Company's Common Stock effective August 16, 1996 and is
subject to certain antidilution adjustments. In the event of
any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of the shares of
Preferred Stock shall be entitled to receive $8.00 per share of
Preferred Stock plus all dividends accrued and unpaid thereon.
So long as a minimum of 50,000 shares of Preferred Stock is
outstanding, Alarmguard shall be entitled to elect one
additional director to serve on the Board. Following
Alarmguard's sale of the Common Stock, but without
consideration of the prospective effect, if any, of the
conversion or retirement of the Preferred Stock, N. Russell
Walden, President of the Company, was the beneficial owner of
60.3% of the outstanding Common Stock (including shares that
may be acquired upon the exercise of stock options). Mr.
Walden may be said to have acquired control of the Company as a
result of Alarmguard's sale of Common Stock. Alarmguard has
beneficial ownership of 1,350,000 shares of the Company's
Common Stock since it may elect to convert the Preferred Stock
at any time. Mr. Earley's holdings consist of the 450,000
shares of Preferred Stock (and the 1,350,000 shares of Common
Stock into which such Preferred Stock may be converted) owned
by Alarmguard, with respect to which he may be deemed to have
voting and investment control because of his position as a
Director of Alarmguard. See "Certain Relationships and Related
Transactions."
</FN>
</TABLE>
Meetings and Committees of the Board
The Board has established an Audit Committee, a Compensation
Committee and a Stock Option Committee, but does not have a
nominating committee.
During fiscal year 1997 the Board met on three occasions.
Each of the directors attended all of these meetings and attended
each of the meetings of the committees on which he served which were
held during the periods that he served as a member of such
committee.
Committees
The Audit Committee reviews the professional services and
independence of the Company's certified public accountants, the
results of the Company's internal audits, and the Company's
accounts, procedures and internal controls. The Audit Committee is
comprised of Michael M. Earley and Luther A. Henderson. The Audit
Committee met once during fiscal year 1997.
The Compensation Committee, which did not meet during the 1997
fiscal year, is responsible for reviewing matters relating to
compensation and making recommendations to the Board concerning
compensation of the Company's officers, directors and employees.
The present members of the Compensation Committee are Michael M.
Earley and Luther A. Henderson.
The Stock Option Committee, which did not meet during the 1997
fiscal year, is responsible for administering the Company's Stock
Option Plan. The sole member of the Stock Option Committee is
Michael M. Earley.
CERTAIN LEGAL PROCEEDINGS
On May 2, 1995 a complaint was filed in the Court of Chancery
of the State of Delaware (New Castle County) entitled William N.
Strassburger v. Michael M. Early, Luther A. Henderson, John C.
Stiska, N. Russell Walden, and Triton Group, Ltd., defendants, and
Ridgewood Hotels, Inc., nominal defendant, C.A. No. 14267 (the
"Complaint"). The plaintiff is an individual shareholder of the
Company who purports to file the Complaint individually,
representatively on behalf of all similarly situated shareholders,
and derivatively on behalf of the Company. The Complaint challenges
the actions of the Company and its directors in consummating the
Company's August 1994 repurchases of its common stock held by Triton
Group, Ltd. and Hesperus Partners Ltd. in five counts, denominated
Waste of Corporate Assets, Breach of Duty of Loyalty to Ridgewood,
Breach of Duty of Good Faith, Intentional Misconduct, and Breach of
Duty of Loyalty and Good Faith to Class. On July 5, 1995, the
Company filed a timely answer generally denying the material
allegations of the complaint and asserting several affirmative
defenses. This case is in the concluding stages of discovery. No
trial date has been set, but the court has certified a class of
shareholders as plaintiffs for the non-derivative claims but has
not certified the suit as a class action suit. The Company intends
to vigorously contest this matter.
On August 23, 1996, Great American Resorts filed a complaint in
the Superior Court of Cobb County, State of Georgia, entitled Great
American Resorts, Inc. and Great American Casinos, Inc. v. Charles
Taylor, Deborah Lynn Cannon, Walter D. Hrab and Ridgewood Hotels,
Inc., Civil Action File No. 9616398-05, alleging that the Company
and the other defendants are liable for breach of contract and
breach of fiduciary duty stemming from a contract between Great
American and one of the Company's subsidiaries. The complaint seeks
damages, attorneys' fees and pre-judgment interest. It also seeks
an order requiring that certain books and records be turned over to
the plaintiffs. On September 27, 1996, the Company filed a timely
answer generally denying the material allegations of the complaint
and asserting several affirmative defenses. While the discovery
deadline has passed, no trial date has been set, nor have the
plaintiffs actively pursued the matter. The Company intends to
vigorously contest this matter.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Directors' Compensation
Directors who are not employees of the Company receive a
retainer of $13,200 per year plus $800 for each Board meeting
attended. All directors are reimbursed for expenses incurred in
connection with attending Board and committee meetings.
Executive Compensation
The following Summary Compensation Table sets forth the
compensation for the past three years of the Company's Chief
Executive Officer. The cash compensation of the Company's other
executive officers did not exceed $100,000 for the last fiscal year.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Awards
Annual Compensation Securities
Name and Fiscal Underlying All Other
Principal Position Year Salary Bonus Options(#) Compensation(1)
<S> <C> <C> <C> <C> <C>
N. Russell 1997 $200,000 $ 0 0 $ 2,535
Walden . . .
President & 1996 200,000 0 0 3,383
Chief
Executive 1995 200,000 0 0 4,500
Officer
<FN>
_______________
(1) The amounts shown in this column consist of Company
matching contributions on behalf of the named person under
the Ridgewood Hotels Employee Savings Plan.
</FN>
</TABLE>
Option Grants in Last Fiscal Year
There were no stock options granted during fiscal year 1997 to
the executive officer named in the Summary Compensation Table.
Aggregated Stock Option Exercises in Fiscal Year 1997 and
Fiscal Year-End Option Values
The following table sets forth information concerning the
number and value of unexercised options held by the officer named in
the Summary Compensation Table as of August 31, 1997.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Options at Fiscal Options at Fiscal
on Value Year-End (#) Year-End ($)(2)
Name Exercise (#) Realized($)(1) Exer- Unexer- Exer- Unexer-
cisable cisable cisable cisable
<S> <C> <C> <C> <C> <C> <C>
N. Russell 375,000 -0- 150,000 -0- $63,000 $-0-
Walden
<FN>
(1) The value determined herein was calculated based on 375,000
shares with an average of the bid and ask price of $1.00 of the
Common Stock on the exercise date (January 31, 1997).
(2) The value determined herein was calculated based on 150,000
shares considered in-the-money since the average of the bid and
ask prices ($2.25) of the Common Stock on August 31, 1997 was
greater than the options exercise price of $1.83 per share.
</FN>
</TABLE>
Employment and Termination Agreements
Pursuant to an Employment Agreement entered into between N.
Russell Walden and the Company (the "Employment Agreement"), Mr.
Walden receives a salary which is subject to annual review by the
Board, and may be adjusted by the Board in its sole discretion. Mr.
Walden currently receives an annual base salary of $200,000. The
Employment Agreement contains terms upon which Mr. Walden may be
entitled to a bonus. The bonus calculation is based upon pre-tax
profits and pre-tax gains from real estate transactions and
operations of the Company during the fiscal year. Mr. Walden was
entitled to approximately a $33,000 bonus for fiscal year 1997, but
elected to forego the bonus in light of the poor economic
performance of the Company. The Employment Agreement also provides
for certain fringe benefits, as well as benefits under employee
benefit plans maintained by the Company. The Employment Agreement
may be terminated upon notice by either the Company or Mr. Walden.
In August 1991, Mr. Walden entered into a post-employment
consulting agreement (the "Consulting Agreement") which provides
that in the event of the termination of his employment (other than
termination for cause or voluntary resignation for other than good
reason), he will be retained by the Company for a period of one year
as a consultant. In exchange for consulting services, Mr. Walden
will receive an annual fee equal to his annual base salary at the
time of termination, payable in equal monthly installments during
the term of the Consulting Agreement. The Consulting Agreement also
provides for the continuation of certain medical and other employee
benefits. In the event Mr. Walden obtains a new job during the term
of the Consulting Agreement, the agreement provides a formula by
which the payments to Mr. Walden may be reduced.
Supplemental Retirement and Death Benefit Plan
The Ridgewood Hotels, Inc. Supplemental Retirement and Death
Benefit Plan (the "SERP") was adopted, effective January 1, 1987, to
provide supplemental retirement benefits for selected employees of
the Company. Currently, only one employee of the Company is a
participant in the SERP. Although the SERP is an unfunded plan, the
Company has acquired cash-value life insurance on the life of the
participant and, if mortality, interest and policy dividend
assumptions are correct, the Company will recover from the life
insurance the cost of the premiums paid thereunder and the cost of
the SERP benefits.
Estimated annual benefits payable upon separation from
employment, determined using the SERP formula, are equal to 50% of
the participant's "final three-year average compensation," defined
under the SERP as salary plus bonus, commissions and any amounts
deferred under any deferred compensation plan, less the total of the
participant's (i) Primary Social Security benefit for the period
during which benefits are to be paid and (ii) certain benefits
provided under the qualified retirement plans of the Company or
Triton. Benefits vest at the rate of 10% for each year of credited
service for the Company or Triton, with up to five years of credited
service permitted at the time the SERP was adopted. Benefits are
paid monthly over a 15-year period, and commence within 45 days of a
participant's retirement. If the participant's employment terminates
before scheduled retirement, benefit payments commence within 30
days of the participant reaching age 65. The form of benefit
payment under the SERP may be modified at the discretion of the
Pension Committee, which administers the SERP.
The SERP also provides for payment of a pre-retirement lump sum
death benefit to the participant's beneficiary equal to 600% of the
participant's final annual compensation if the participant is in the
Company's employ or is less than age 65 and totally and permanently
disabled as of his date of death, and a post-retirement lump sum
death benefit to the participant's beneficiary equal to 200% of the
participant's final annual compensation if death occurs after the
participant has retired from the Company or has attained age 65
after becoming totally and permanently disabled.
Mr. Walden, the sole participant, is 100% vested in the SERP,
and the amount of his remuneration covered by the SERP for 1997 is
$200,000. This amount represents actual cash paid during 1997,
regardless of when the amounts were earned.
BOARD REPORT ON EXECUTIVE COMPENSATION
Executive Compensation Program
The annual compensation for executive officers consists of a
base salary and an annual bonus that may be awarded at the
discretion of the Board. The Board uses both individual
performance, performance of the operations for which the executive
is responsible and the overall Company performance when awarding any
discretionary bonuses. There were no discretionary bonuses awarded
relating to fiscal year 1997.
Salaries are based upon a subjective determination of the
responsibilities and performance of the executives and are reviewed
on an annual basis.
Chief Executive Officer Compensation
Pursuant to the Employment Agreement, the Chief Executive
Officer's base salary for fiscal year 1997 was subjectively
determined based upon his responsibilities and performance, and is
reviewed on an annual basis by the Compensation Committee. Because
of the lack of overall profits for the Company, the Compensation
Committee determined that, while the Chief Executive Officer's
performance remained excellent through the difficult economic times
the Company is experiencing, no increase in salary from the prior
fiscal year was warranted.
The Chief Executive Officer is subject to an Employment
Agreement which specifies how bonuses, if any, are calculated.
Bonuses are based on pre-tax profits of the Company and pre-tax
gains from real estate sales during the fiscal year. There was
approximately a $33,000 bonus earned for fiscal year 1997 under this
agreement, but the Chief Executive Officer elected to forego the
bonus in light of the poor economic performance of the Company.
The foregoing report is submitted by the members of the Board
of Directors: Michael M. Earley, Luther A. Henderson and N. Russell
Walden.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee consists of Michael M.
Earley and Luther A. Henderson. Mr. Walden, the President and Chief
Executive Officer of the Company, participated in deliberations
concerning executive officer compensation during fiscal year 1997 in
his capacity as a member of the Board. He did not, however,
participate in any decisions regarding his own compensation as an
executive officer of the Company.
PERFORMANCE GRAPH
Comparison of Shareholder Return on Investment
The following graph compares the percentage change in the
cumulative total shareholder return on the Common Stock for the 1993
through 1997 fiscal years, as of each fiscal year end, with (i) the
cumulative total return (assuming reinvestment of dividends) of the
Russell 2000 Index, a broad equity market index, and (ii) the
cumulative total return (assuming reinvestment of dividends) of a
peer group of real estate companies as provided by Dow Jones ("Dow
Jones Peer Group"). The returns of each company in the Dow Jones
Peer Group has been weighted to reflect relative stock market
capitalization as of the beginning of the measurement period. The
Dow Jones Peer Group consists of Catellus Development, Federal
Realty Investment Trust, Host Marriott Corp., Meditrust, Newhall
Land, New Plan Realty Trust, Rockefeller Center Properties, Rouse
Co., and Weingarten. The Company believes that the Dow Jones Peer
Group represented similar businesses to the Company at the beginning
of the five-year period.
<PAGE>
Comparison of Five-Year Cumulative Total Return Among
Ridgewood Hotels, The Russell 2000 Index, and Peer Group
(Graph Appears Here)
<TABLE>
<CAPTION>
Measurement
Period Dow Jones Ridgewood Russell 2000
<S> <C> <C> <C>
1992 100 100
109 115
120 119
110 121
1993 123 130
127 133
126 130
129 126
1994 126 100 133
121 89 131
131 82 136
135 80 145
1995 144 77 155
150 57 157
157 59 162
163 41 167
1996 171 27 168
201 27 173
205 32 168
216 91 184
1997 238 64 199
</TABLE>
The Company's Common Stock was deleted from the NASDAQ National
Market System in June 1989 due to the lack of two required market
makers. Due to an absence of an established public trading market
in the stock, the Company's yearly percentage change in the
cumulative total shareholder return on the Common Stock subsequent
to June 1989 cannot be determined accurately. However, beginning in
fiscal year 1994 the Company was listed in the NASDAQ
over-the-counter bulletin board service and has been able to compile
data with respect to the bid and ask price of the Common Stock,
which data the Company believes is reasonably reliable. The
Company's cumulative total shareholder return on the Common Stock
represents the average of the bid and ask price for those periods
presented.
The stock price performance graph shall not be deemed
incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities
Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended (together, the "Acts"), except to the extent that
the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Each of the Company's directors has or has had business
relationships with Alarmguard and its current or former affiliates.
See "PROPOSAL 1: ELECTION OF DIRECTORS -- Nominees for Director."
Filings Under Section 16(a) of the Securities Exchange Act
of 1934
Section 16(a) of the Securities Exchange Act of 1934 ("1934
Act") requires that the Company's officers and directors and persons
who own more than 10% of the Common Stock file reports of ownership
and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than 10% shareholders
are required by SEC regulation to furnish the Company with copies of
all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received
by it or written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes
that during the fiscal year ended August 31, 1997, all filing
requirements applicable to its officers, directors and greater than
10% beneficial owners with respect to Section 16(a) of the 1934 Act
were satisfied.
Relationship with Independent Auditors
The Board annually selects independent public accountants to
serve as auditors for the upcoming fiscal year. The Board plans to
select auditors for fiscal year 1998 at its annual meeting following
the Meeting.
The Board appointed Price Waterhouse LLP as auditors for the
Company and its wholly-owned subsidiaries for fiscal year 1997. A
representative of Price Waterhouse LLP is expected to be present at
the Meeting and will be given the opportunity to make a statement if
he so desires and to respond to appropriate questions from
shareholders.
Stockholders' Proposals for 1999 Annual Meeting
Stockholders may submit proposals on matters appropriate for
shareholder action at subsequent annual meetings of the Company
consistent with Rule 14a-8 promulgated under the 1934 Act. For such
proposals to be considered at the 1999 Annual Meeting of
Stockholders, such proposals must be received by the Company not
later than August 1, 1998. Such proposals should be directed to Ms.
Karen Hughes, Secretary, Ridgewood Properties, Inc., 2859 Paces
Ferry Road, Suite 700, Atlanta, Georgia 30339. The Company reserves
the right to decline to include in the Company's proxy statement any
shareholder's proposal which does not comply with the rules of the
SEC for inclusion therein.
OTHER BUSINESS
The Board does not know of any matters to be presented for
action at the Meeting other than as set forth in this Proxy
Statement. If any other business should properly come before the
Meeting, the persons named in the proxy intend to vote thereon in
accordance with their best judgment.
Each shareholder is urged to complete, date and sign the proxy
and return it promptly in the enclosed return envelope.
By Order of the Board of Directors
s/ Karen S. Hughes
Karen S. Hughes, Secretary
<PAGE>
Proxy Card
(Front)
RIDGEWOOD HOTELS, INC.
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR 1998
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Luther A. Henderson, N. Russell
Walden and Karen S. Hughes, each with the power to act without
the other and with full power of substitution, as Proxies to vote,
as designated below, all common stock of Ridgewood Properties,
Inc. (the "Company") owned by the undersigned at the Annual
Meeting of Stockholders to be held at the offices of the Company,
2859 Paces Ferry Road, Suite 700, Atlanta, Georgia 30339, on
Tuesday, January 20, 1998, at 10:00 a.m. (together with any
adjournment or postponement thereof (the "Meeting") upon such
business as may properly come before the Meeting, including the
following:
1. Election of Directors
( ) FOR all nominees listed below (except as indicated to
the contrary below):
Michael M. Earley, Luther A. Henderson,
N. Russell Walden
( ) WITHHOLD AUTHORITY to vote for all the nominees
(Instruction: To withhold authority to
vote for any individual nominee, write the name of such
nominee(s) in the space
provided below.)
____________________________________________________________
2. In their discretion on any other matter that may properly
come before the Meeting.
<PAGE>
(back)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO SPECIFIC
DIRECTION IS GIVEN, THE PROXY WILL BE VOTED "FOR" EACH OF THE
DIRECTOR NOMINEES IN PROPOSAL 1.
Dated: ___________________________________
________________________________________
Signature
________________________________________
(Signature if held jointly)
Please date, sign and mail promptly this proxy in the
enclosed envelope. Where there is more than one owner, each
should sign. When signing as an attorney, administrator, executor,
guardian, or trustee, please add your title as such.
If executed by a corporation, the proxy should be signed by a
duly authorized officer. If executed by a partnership, please
sign in the partnership name by an authorized person.
This proxy may be revoked prior to the exercise of the powers
conferred by the proxy.
THIS PROXY IS SOLICITED ON
BEHALF OF
THE BOARD OF DIRECTORS.
