<PAGE>
RIDGEWOOD HOTELS, INC.
2859 Paces Ferry Road, Suite 700
Atlanta, Georgia 30339
INFORMATION STATEMENT
Pursuant to Section 14(f) of the
Securities Exchange Act of 1934
and Rule 14f-1 Thereunder
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS
REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
NO PROXIES ARE BEING SOLICITED AND YOU ARE NOT REQUESTED
TO SEND THE COMPANY A PROXY
___________________
January 24, 2000
___________________
Introduction
This Information Statement is being mailed on or about January 24, 2000
(the "Statement Date") to holders of record at the close of business on January
14, 2000 (the "Record Date") of shares of common stock, par value $.01 per share
("Common Stock"), of Ridgewood Hotels, Inc., a Delaware corporation (the
"Company") and to the holder of record at the close of business on the Record
Date of the shares of Series A Convertible Preferred Stock, par value $1.00 per
share ("Preferred Stock"), of the Company. This Information Statement is being
furnished in connection with the appointment to the Company's Board of
Directors, other than at a meeting of the Company's stockholders, of four new
directors (the "Buyer Designees"), each designated by Fountainhead Development
Corp., Inc., a Georgia corporation ("Buyer" or "Fountainhead"). Fountainhead is
engaged principally in the business of owning and operating hotel, resort and
other real estate properties. Fountainhead's principal executive offices are
located at 1394 Broadway Avenue, Braselton, Georgia 30517.
As more fully described below, pursuant to an Agreement, dated January 10,
2000, and a Management Agreement, dated January 10, 2000, each between Buyer and
the Company (together, the "Management Agreement"), the Company issued to Buyer
1,000,000 shares of Common Stock. In connection with the Management Agreement,
the number of directors constituting the full Board of Directors of the Company
was increased from three to seven, and the four Buyer Designees were appointed
by the directors of the Company to fill the vacancies on the Company's Board of
Directors, such appointments to be effective on February 3, 2000 (the
"Appointment Effective Date"), ten days after this Information Statement is
delivered to stockholders of the Company and filed with the Securities and
Exchange Commission (the
<PAGE>
"Commission").
Following the execution of the Management Agreement, one of the principal
stockholders of the Company, N. Russell Walden, entered into a Common Stock
Purchase Agreement (the "Walden Agreement") and another of the principal
stockholders of the Company, ADT Security Services, Inc. ("ADT"), entered into a
Stock Purchase Agreement (the "ADT Agreement"), respectively, each dated as of
January 11, 2000, with Buyer. Pursuant to the terms of the Walden Agreement, Mr.
Walden sold to Buyer, subject to certain terms and conditions, 650,000 shares of
Common Stock (the "Walden Shares"), and pursuant to the ADT Agreement, ADT sold
to Buyer, subject to certain terms and conditions, 450,000 shares of Preferred
Stock, of the Company (the "ADT Shares"). Through the issuance of the Common
Stock pursuant to the Management Agreement and the acquisitions of the Walden
Shares and the ADT Shares, Buyer has obtained beneficial ownership of
approximately 79% of the Common Stock. As of the Record Date, the Company had
2,513,480 shares of Common Stock issued and outstanding that were held of record
by approximately 190 persons. Each share of Common Stock is entitled to one
vote.
As of the Record Date, the Company had 450,000 shares of Preferred Stock
issued and outstanding, and Buyer owned of record all such issued and
outstanding shares of Preferred Stock. Shares of Preferred Stock of the Company
are entitled to vote only as permitted by the Certificate of Designations,
Preferences and Rights of Series A Convertible Preferred Stock of Ridgewood
Properties, Inc. ("Certificate of Designations") and as required by the Delaware
General Corporation Law ("DGCL"). Pursuant to the Certificate of Designations,
shares of Preferred Stock, voting as a single class, are entitled to elect one
director to serve on the Board of Directors of the Company for so long as a
minimum of 50,000 shares of preferred stock are outstanding. Shares of Preferred
Stock become entitled to vote on all matters presented to stockholders of the
Company, together with and not separate from the shares of Common Stock, in the
event that, and for so long as, the Company has failed to pay, in full, two
quarterly dividends, whether or not consecutive, payable on the Preferred Stock.
Due to the failure of the Company to pay dividends for the quarters ended April
30, 1999, July 31, 1999 and October 31, 1999, Buyer, as the holder of all the
issued and outstanding Preferred Stock, has and will have for so long as the
Company fails to cure two of such dividend defaults, the right to vote on all
matters presented to the stockholders of the Company for consideration. The ADT
Shares are subject to certain rights of ADT to require Buyer to return the
Preferred Stock to ADT in the event that ADT is required by a court order, in
litigation pending in the Court of Chancery in Delaware involving ADT, the
Company and the directors of the Company, to return the Preferred Stock to the
Company. In such case, Buyer has the obligation to purchase any Common Stock
that may be issued to ADT as a result of such a court order.
The purpose of this Information Statement is to provide certain information
concerning the Buyer, the Company's Board of Directors and the appointment of
the Buyer Designees.
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<PAGE>
CHANGE OF CONTROL OF THE COMPANY
Management Agreement
On January 10, 2000, the Company entered into the Management Agreement with
Buyer, pursuant to which Buyer retained the Company to perform management
services at Chateau Elan Winery and Resort, one of Buyer's properties, for a
period of five years. In consideration of Buyer's agreement to enter into the
Management Agreement and a payment of $10,000 by Buyer to the Company, the
Company issued to Buyer 1,000,000 shares of Common Stock. In the Management
Agreement, Buyer agreed to pay the Company a base management fee equal to 2% of
the gross revenues of the properties being managed, plus an annual incentive
management fee to be determined each year based on the profitability of the
properties being managed during that year.
The Management Agreement has a term of five years but is terminable upon
the transfer by Buyer of all or a material portion of the properties covered by
the Management Agreement. If the Management Agreement is terminated upon such a
transfer or upon the occurrence of an event of default by Buyer, Buyer shall pay
to the Company a portion of the projected fees owed to the Company under the
Agreement, with adjustments based on the term of the Management Agreement
remaining. In such event, Buyer may elect to surrender to the Company shares of
Common Stock in lieu of a cash payment.
In connection with the Management Agreement, the number of directors
constituting the full Board of Directors of the Company was increased from three
to seven members, effective on January 6, 2000. Further, the four Buyer
Designees were appointed by the directors of the Company to fill the resulting
vacancies on the Company's Board of Directors, effective as of the Appointment
Effective Date. The four Buyer Designees are Donald E. Panoz, Nancy C. Panoz,
Sheldon E. Misher and Henk H. Evers. N. Russell Walden, Luther A. Henderson and
Michael M. Earley, currently directors of the Company, are presently continuing
to serve in that capacity (the "Continuing Directors").
Upon the Appointment Effective Date, the Buyer Designees will constitute a
majority of the Company's directors. The Continuing Directors and the Buyer
Designees will hold office as directors for a term of one year or until their
successors are elected and qualified.
Stock Acquisitions
Walden Agreement. Pursuant to the Walden Agreement, Buyer purchased from
Mr. Walden 650,000 shares of Common Stock. The consideration paid by Buyer for
the Walden Shares was $1,300,000, or $2.00 per share. To fund the acquisition of
the Walden Shares, Buyer used its own funds for an initial cash payment of
$780,000 and issued two promissory notes to Walden, each in the principal amount
of $260,000, representing the balance of the purchase price of the Walden
Shares. These notes become due and payable in full on January 11, 2001 and
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<PAGE>
January 11, 2002, respectively. Each note bears interest at a rate of 6% per
year, which interest is payable quarterly, commencing March 31, 2000. Pursuant
to the Walden Agreement, Buyer has an option to purchase up to 65,000 additional
shares of Common Stock from Mr. Walden, which option remains in effect for 15
months from the date of the Walden Agreement. In the event Mr. Walden wishes to
sell any of the Common Stock owned by him and subject to Buyer's option, Buyer
has a right of first refusal to purchase such shares at a purchase price of
$2.00 per share.
ADT Agreement. Pursuant to the ADT Agreement, Buyer purchased from ADT
450,000 shares of Preferred Stock. The consideration paid by Buyer for the ADT
Shares was approximately $1,650,000. Each share of Preferred Stock is
convertible into three shares of Common Stock. To fund the acquisition of the
ADT Shares, Buyer used working capital and paid the purchase price in cash. The
ADT Shares are subject to certain rights of ADT to require Buyer to return the
ADT Shares to ADT in the event ADT is required by a court order, in litigation
pending in the Court of Chancery in Delaware involving ADT, the Company and the
directors of the Company, to return the ADT Shares to the Company. In such case,
Buyer would receive a return of all consideration paid to ADT pursuant to the
ADT Agreement and would be obligated to purchase any Common Stock issued to ADT
as a result of such court order.
Change in Management
Effective as of January 11, 2000, Mr. Walden was replaced as President and
Chief Executive Officer of the Company. Donald E. Panoz was appointed to serve
as Chairman of the Board and Chief Executive Officer of the Company, Nancy C.
Panoz was appointed to serve as Vice Chairman and Henk H. Evers was appointed to
serve as President and Chief Operating Officer, in each case effective January
11, 2000, except that the prospective directors shall take office as of the
Appointment Effective Date. Mr. and Mrs. Panoz are directors and executive
officers of Buyer and collectively may be deemed to be the beneficial owners of
all of the voting stock of Fountainhead Holdings, Ltd. ("Holdings"), the owner
of all of the voting stock of Buyer. Although Mr. and Mrs. Panoz may be deemed
to beneficially own such voting shares of Holdings, they do not have any
economic benefit in such shares. Mr. Evers serves as Chief Executive Officer and
President of Buyer.
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<PAGE>
MANAGEMENT
Directors and Executive Officers
The following table sets forth information about the individuals who
currently serve as directors and executive officers of the Company, as well as
those individuals who will serve as directors of the Company pursuant to the
management changes described above.
<TABLE>
<CAPTION>
Name Age Position
- ------------------------- ------ -------------------------------------------------
<S> <C> <C>
Donald E. Panoz+ 64 Chairman of the Board and Chief Executive Officer
Nancy C. Panoz+ 63 Vice Chairman of the Board
Henk H. Evers+ 40 President, Chief Operating Officer and Director
Karen S. Hughes 45 Vice President and Chief Financial Officer
Byron T. Cooper 49 Vice President, Planning and Development
Sheldon E. Misher+ 58 Secretary and Director
Michael M. Earley 44 Director
Luther A. Henderson 79 Director
N. Russell Walden 61 Director
</TABLE>
______________________
+ Each of these individuals was elected to the Board of Directors on
January 6, 2000, but shall not take office as a director of the Company
until the Appointment Effective Date.
Donald E. Panoz was elected as Chairman of the Board and Chief Executive
Officer of the Company on January 11, 2000 and will take office as Chairman of
the Board on the Appointment Effective Date. In 1986, Mr. Panoz founded
Fountainhead and has served as its Chairman since inception. Since July 1999,
Mr. Panoz has served as the Chairman of Elan Motor Sports Technologies, Inc., an
auto racing design, development and manufacturing company located in Braselton,
Georgia. Since 1997, Mr. Panoz has served as the Chairman of Panoz Motor Sports,
a race car manufacturer and competitor that he founded. Since 1996, Mr. Panoz
has served as the Chairman and Chief Executive Officer of L'Auberge
International Hospitality Company, a hotel and resort management company that he
co-founded with his wife. From 1969 until 1996, Mr. Panoz served as the Chairman
and Chief Executive Officer of Elan Corporation plc, a leading worldwide
pharmaceutical research and development company located near Dublin, Ireland
that he co-founded with his wife. Since 1992, Mr. Panoz has been a director of
Warner Chilcott plc, a publicly traded pharmaceutical company headquartered in
Dublin, Ireland, and served as its Chairman from 1996 to 1998. Since 1981, Mr.
Panoz has served as the Chairman and Chief Executive Officer of Chateau Elan
Winery and Resort, a 422 bedroom inn, conference center and winery located
approximately 40 miles northeast of Atlanta, Georgia. Mr. Panoz also serves on
the Board of Directors of the Georgia Chamber of Commerce. Mr. Panoz is married
to Nancy C. Panoz.
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<PAGE>
Nancy C. Panoz was elected as Vice Chairman of the Board of Directors of
the Company on January 11, 2000 and will take office in such capacity as of the
Appointment Effective Date. Since 1996, Ms. Panoz has also served as the Vice
Chairman of L'Auberge International Hospitality Company in 1996, a company that
she co-founded with her husband. In 1989, Mrs. Panoz became President of the
Chateau Elan Winery and Resort, which she founded with her husband in 1981. In
1985, Mrs. Panoz founded Elan Natural Waters, Inc., a company that owns and
operates a mineral water bottling plant in Blairsville, Georgia, and has served
as its President and Chairman since inception. In 1985, Mrs. Panoz founded Nanco
Holdings, Inc., an investment and real estate holding company. In 1969, Ms.
Panoz co-founded Elan Corporation with her husband, Donald E. Panoz and served
as Elan's Managing Director from 1977 to 1983 and its Vice Chairman from 1983 to
1995. Mrs. Panoz currently serves on the board of directors of numerous non-
profit organizations, including the Atlanta Convention and Visitors Bureau, the
Georgia Chamber of Commerce and Gwinnett Foundation, Inc.
Henk H. Evers was elected as President, Chief Operating Officer and a
director of the Company on January 11, 2000 and will take office as a director
of the Company on the Appointment Effective Date. Since January 1999, Mr. Evers
has been the Chief Executive Officer of Fountainhead. From November 1994 until
January 1999, Mr. Evers was the General Manager of the Chateau Elan Winery and
Resort, where he was in charge of developing the Chateau Elan brand name and
properties in Georgia, California, Florida and Scotland. Prior to that, Mr.
Evers was a member of the executive committee for various Marriott International
properties for approximately 13 years.
Karen S. Hughes has served as Vice President and Chief Financial Officer of
the Company since the Company was formed in October 1985. Ms. Hughes also served
as the Secretary of the Company from October 1985 until January 2000.
Byron T. Cooper has served as the Vice President, Planning and Development
of the Company since its formation.
Sheldon E. Misher was elected as Secretary and a director of the Company on
January 11, 2000 and will take office as a director on the Appointment Effective
Date. Since May 1999, Mr. Misher has been associated with Commonwealth
Associates, a broker-dealer located in New York, New York. From 1969 to 1999,
Mr. Misher practiced law with the firm of Bacher, Tally, Polevoy & Misher,
located in New York, New York, where he was most recently a Senior Partner.
Michael M. Earley has been a director of the Company since June 1993. Mr.
Earley is a director of ADT and principal of Triton Group Management, Inc., a
company that provides management and consulting services. He was President of
Triton Group Ltd. ("Triton") from July 1994 until April 1997 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.
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<PAGE>
Luther A. Henderson has been a director of the Company since its formation
in 1985. From 1983 to 1985, he served as a director of CMEI, Inc. ("CMEI"), the
Company's predecessor. From 1980 to 1993, Mr. Henderson served as a director of
Pier 1 Imports, Inc., a commercial retailer. Mr. Henderson is also a member of
the Board of Directors of Beeba's Creations, Inc. and is President of Pirvest,
Inc.
N. Russell Walden was President and Chief Executive Officer of the Company
from its formation in 1985 until January 2000. Mr. Walden has also been a
director of the Company since 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.
Meetings and Committees of the Board
For fiscal year 1999, the Board established an Audit Committee, a
Compensation Committee and a Stock Option Committee, but does not have a
nominating committee.
During fiscal year 1999, the Board held a total of five meetings. Each of
the directors attended all of these meetings. Each director also attended each
of the meetings of the committees on which he served that were held during the
periods that he served as a member of such committee.
Committees of the Board
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.
During fiscal year 1999, the Audit Committee was comprised of Messrs. Earley and
Henderson. The Audit Committee met once during fiscal year 1999.
The Compensation Committee, which did not meet separately during the 1999
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. During fiscal year 1999, the Compensation
Committee was comprised of Messrs. Earley and Henderson.
The Stock Option Committee, which did not meet during the 1999 fiscal year,
is responsible for administering the Company's Stock Option Plan. During fiscal
year 1999, the sole member of the Stock Option Committee was Mr. Earley.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Director Compensation
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<PAGE>
During fiscal year 1999, directors who are not employees of the Company
received a retainer of $13,200 per year plus $800 for each Board meeting
attended. All directors were reimbursed for expenses incurred in connection with
attending Board and committee meetings.
Executive Compensation
The following Summary Compensation Table sets forth the compensation of the
Company's Chief Executive Officer for the Company's past three fiscal years. The
cash compensation of the Company's other executive officers did not exceed
$100,000 for the last fiscal year.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
Fiscal ------------------------- All Other
Name and Principal Position Year Salary Bonus Compensation(1)
- ------------------------------ ------- ---------- ---------- ---------------
<S> <C> <C> <C> <C>
N. Russell Walden(2)......... 1999 $200,000 $ 0 $1,186
President and Chief 1998 200,000 41,000 4,500
Executive Officer 1997 200,000 0 2,535
</TABLE>
___________________________
(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.
(2) As of January 11, 2000, Mr. Walden was no longer an executive officer of
the Company.
Stock Option Plan
In September 1993, the Board of Directors adopted the Ridgewood Hotels,
Inc. 1993 Stock Option Plan (the "Plan"). Under the Plan, the Company may grant
to key employees and eligible directors of the Company and its subsidiaries
incentive and non-qualified stock options. The Plan is administered by a
committee of two or more members of the Board of Directors, which interprets the
Plan and is authorized to determine the type of options to be granted, option
exercise prices, the persons eligible to receive awards, the number of shares
subject to each option and the other terms, conditions and limitations
applicable to each such grant of options.
Incentive stock options must comply with all of the requirements imposed by
the Internal Revenue Code of 1986, as amended, with respect to such options.
Incentive stock options granted under the Plan will have an exercise price of
not less than 100% of the fair market value of the shares of Common Stock on the
date on which the option is granted. With respect to an incentive stock option
granted to a participant who owns more than 10% of the combined voting stock of
the Company or any parent or subsidiary of the Company, the exercise price must
be at least 110% of the fair market value of the shares subject to the option on
the date of grant. The exercise price of a non-qualified stock option granted
under the Plan shall also be determined by the committee, but such exercise
price must be at least the par value of the Common Stock.
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<PAGE>
There are 1,200,000 shares authorized for possible issuance under the Plan.
As of the Record Date, options to purchase 678,000 of such reserved shares of
Common Stock have been granted under the Plan and not otherwise cancelled or
terminated, and options to purchase 228,000 shares remain outstanding.
Option Grants in Last Fiscal Year
There were no stock options granted during fiscal year 1999 to the
executive officer named in the Summary Compensation Table.
Aggregated Stock Option Exercises in Fiscal Year 1999 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, 1999.
<TABLE>
<CAPTION>
Shares
Acquired Number of Securities Value of Unexercised In-the-
on Value Underlying Unexercised Money Options at
Exercise Realized Options at Fiscal Year End Fiscal Year-End
(#) ($) (1)
------------------------------ -------------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ----------- ---------- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
N. Russell Walden..... 0 $ 0 150,000 0 $ 0 $ 0
- ---------------------- ----------- ---------- ------------ ------------- ------------ --------------
</TABLE>
_________________
(1) The 150,000 shares were not considered in-the-money since the exercise
price of the options ($1.83 per share) was greater than the average of the
bid and ask prices ($0.84 per share) of the Common Stock on
August 31, 1999.
Employment and Termination Agreements
Mr. Walden was a party to a Post-Employment Consulting Agreement with the
Company, dated September 4, 1991, and amended as of August 13, 1998 (the
"Employment Agreement"), until such agreement was terminated effective January
11, 2000. Under the terms of the Employment Agreement, in the event Mr. Walden's
employment was terminated by the Company without cause or Mr. Walden terminated
his employment with cause (defined as (1) removal from his present position or
title by the Company, (2) a decrease in his salary or (3) forcing him to
relocate), Mr. Walden was permitted to remain with the Company as a consultant
for a period of 12 months. In exchange for such consulting services, the Company
was obligated to pay Mr. Walden an amount equal to his annual salary immediately
prior to the event of termination and to provide him with certain other
benefits.
On January 11, 2000, Mr. Walden entered into a Consulting Agreement with
the Company (the "Consulting Agreement"). According to the terms of the
Consulting Agreement, Mr. Walden will serve as a consultant to the Company for a
period of six months, for which he will receive a payment of $50,000. The
Company also agreed to provide Mr. Walden with health insurance
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<PAGE>
benefits substantially similar to those offered to employees of the Company for
a period of three years. In the Consulting Agreement, Mr. Walden released all
claims against the Company except with respect to such health insurance benefits
and compensation and terminated his Employment Agreement and participation in
the Company's Supplemental Retirement and Death Benefit Plan. Mr. Walden also
agreed to the cancellation of 150,000 options to purchase Common Stock of the
Company, for which the Company agreed to pay him $25,000.
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. As of August 31,
1999, only one employee of the Company was a participant in the SERP. However,
there are currently no employees of the Company participating in the SERP.
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 was the sole participant in the SERP until January 11, 2000,
when he was replaced as an officer of the Company. He subsequently entered into
a Consulting Agreement with the Company in which he agreed to a full termination
of his rights and benefits under the SERP. However, the Company agreed to pay
Mr. Walden $55,000 per year for a period of 15 years in accordance with the
terms and conditions of the SERP. Such annual payment represented a decrease in
the amount of benefit to which Mr. Walden would otherwise have been entitled
under the SERP.
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<PAGE>
Compensation Committee Interlocks and Insider Participation
During fiscal year 1999, the Company's Compensation Committee consisted of
Michael M. Earley and Luther A. Henderson. Mr. Walden, the then President and
Chief Executive Officer of the Company, participated in deliberations concerning
executive officer compensation during fiscal year 1999 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.
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 person
who is currently a director of the Company; (b) each person who will be a
director of the Company as of the Appointment Effective Date, (c) each executive
officer of the Company named in the Summary Compensation Table, (d) each
beneficial owner of more than 5% of the Common Stock and Preferred Stock of the
Company, and (e) all directors and executive officers as a group, including
those directors who will serve as directors of the Company as of the Appointment
Effective Date.
Except as otherwise indicated, each individual or group named has sole
investment and voting power with respect to the securities shown. The share
amounts in the table below include shares of capital stock deemed to be
outstanding for those persons who have the right to acquire beneficial ownership
of such shares within 60 days of the date of this Information Statement through
the exercise of stock options, convertible securities or otherwise. Shares of
capital stock underlying such options, convertible securities or other
securities 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 owned by any other person.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of Class of Shares Beneficially Percentage
Beneficial Owner (1) Beneficially Owned Owned of Class
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fountainhead Development Common Stock 3,065,000(2) 79.3%
Corp., Inc.
1394 Broadway Avenue
Braselton, GA 30517 Series A Preferred
Stock 450,000(3) 100.0%
Donald E. Panoz Common Stock 3,065,000(4)(5) 79.3%
Series A Preferred
Stock 450,000(3)(5) 100.0%
Nancy C. Panoz Common Stock 3,065,000(4)(5) 79.3%
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C>
Series A Preferred
Stock 450,000(3)(5) 100.0%
Sheldon E. Misher Common Stock 0 0%
Henk H. Evers Common Stock 0 0%
Karen S. Hughes Common Stock 135,440(6) 5.3%
Michael M. Earley Common Stock 0 0%
500 West Harbor Drive #1115
San Diego, CA 92101
Luther A. Henderson Common Stock 58,800(7) 2.3%
5608 Malvey Avenue, Suite 104-A
Fort Worth, TX 76107
N. Russell Walden(8) Common Stock 130,000 5.2%
3190 Ridgewood Road
Atlanta, GA 30327
All executive officers and Common Stock 3,457,160(5)(9) 86.4%
directors as a group (9 persons)
Series A Preferred
Stock 450,000(3)(5) 100.0%
</TABLE>
_________________
(1) Unless otherwise indicated, the address of each beneficial owner is 2859
Paces Ferry Road, Suite 700, Atlanta, Georgia 30339.
(2) Includes (i) 1,350,000 shares of Common Stock that may be received upon the
conversion of the ADT Shares and (ii) 65,000 shares of Common Stock
underlying an option granted to Fountainhead by N. Russell Walden that is
immediately exercisable.
(3) Pursuant to the terms and conditions of the ADT Stock Purchase Agreement,
Fountainhead may be required to return all of these shares of Preferred
Stock to ADT in certain circumstances. See "Change of Control--Stock
Acquisitions--ADT Agreement."
(4) Includes (i) 1,350,000 shares of Common Stock that may be received upon the
conversion of the ADT Shares held by Fountainhead, (ii) 1,650,000 shares of
Common Stock held by Fountainhead, and (iii) 65,000 shares of Common Stock
underlying an option granted to Fountainhead by Mr. Walden that is
immediately exercisable.
(5) Mr. and Mrs. Panoz, who are husband and wife, are directors and
collectively may be deemed to beneficially own all of the voting stock of
Holdings, which in turn owns all of the voting stock of Fountainhead.
Although they may be deemed to meet the definition of beneficial ownership
with respect to the voting stock of Holdings, they have no economic
interest in such voting stock. Because these shares of the Company are held
of record by Fountainhead, each of Mr. and Mrs. Panoz may be deemed to be a
beneficial owner of all of such shares.
(6) Includes 60,000 shares of Common Stock underlying options that are
immediately exercisable.
(7) Includes 18,000 shares of Common Stock underlying options that are
immediately exercisable.
(8) As of January 11, 2000, Mr. Walden was no longer an executive officer of
the Company.
(9) Includes (i) 1,350,000 shares of Common Stock that may be received upon the
conversion of
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the ADT Shares held by Fountainhead (ii) 7,920 shares of Common Stock held
by persons not listed in the table above and (iii) 203,000 shares of Common
Stock underlying options that are immediately exercisable, including 60,000
shares of Common Stock underlying options granted to persons not listed in
the table above.
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires directors,
executive officers and persons who own more than 10% of the Common Stock to file
reports of beneficial ownership and changes in beneficial ownership with the
Company and the Securities and Exchange Commission with respect to all classes
of the Company's capital stock. Based solely on its review of the copies of such
reports furnished by such reporting persons to the Company, the Company believes
that during the fiscal year ended August 31, 1999, all filing requirements
applicable to its officers, directors and greater than 10% stockholders were
satisfied.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 10, 2000, the Company entered into the Management Agreement with
Buyer, in which Buyer retained the Company to perform management services at
Chateau Elan, one of Buyer's properties, for a period of five years. In
consideration of Buyer's agreement to enter into the Management Agreement and in
consideration of a payment of $10,000 by Buyer to the Company, the Company
issued to Buyer 1,000,000 shares of Common Stock.
The Management Agreement has a term of five years but is terminable upon
the transfer by Buyer of all or a material portion of the properties covered by
the Management Agreement. If the Management Agreement is terminated upon such a
transfer or upon the occurrence of an event of default by Buyer, Buyer shall pay
to the Company the projected fees owed to the Company under the Agreement, with
adjustments based on the term of the Management Agreement remaining. In such
event, Buyer may elect to surrender to the Company shares of Common Stock in
lieu of making a cash payment to the Company.
By order of the Board of Directors of
RIDGEWOOD HOTELS, INC.
By: /s/ Henk H.Evers
-------------------------------
Henk H. Evers
President and Chief Operating Officer
Atlanta, Georgia
January 24, 2000
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