Exhibit 10.10


 


NON-EMPLOYEE DIRECTOR


 


PHANTOM STOCK UNIT
AGREEMENT


 


                THIS PHANTOM STOCK
UNIT AGREEMENT (the “Agreement”), dated as of the 6th day of December, 2007, by
and between Arden Group, Inc., a Delaware corporation (the “Company”), and
                              
(the “Unit Holder”), is made with reference to the following facts:


 


                A.            The Company is desirous of providing
additional incentives to the Unit Holder in rendering services as a
non-employee director of the Company and, in order to accomplish this result,
has determined to grant the Unit Holder phantom stock units representing the
right to receive a cash payment on the terms and conditions set forth herein.


 


                B.            The Unit Holder is desirous of
accepting said right on the terms and conditions set forth herein.


 


                NOW, THEREFORE, it
is agreed as follows:


                1.             Grant


 


                                (a)           Subject to the terms and conditions
set forth herein, the Company hereby grants to the Unit Holder Seven Thousand
(7,000) Units exercisable from time to time in accordance with the provisions
of this Agreement during a period commencing on the date hereof and expiring at
the close of business on December 5, 2014 (the “Expiration Date”).  Each Unit hereunder represents the right to
receive an amount equal to the excess of (i) the fair market value
(determined in accordance with Paragraph 1(b) below) of one share of the Class A
Common Stock, $.25 par value per share, of the Company (the “Class A
Common Stock”) based on the date upon which the Unit Holder exercises such Unit
(the “Exercise Date Price”) over (ii) $146.44 (the “Base Price”),
representing the fair market value of one share of the Class A Common
Stock on the effective date hereof determined on the basis of the closing sales
price of the Class A Common Stock on the date hereof as reported by the
NASDAQ Global Market.


 


                                (b)           The Exercise Date Price shall be determined as follows: (i) if
the Class A Common Stock is then listed on a national securities exchange,
the average of the closing sales prices of the Class A Common Stock for
the twenty Trading Days (as defined below) preceding the date of exercise of
such Units (the “Determination Date”) on the principal securities exchange on
which such stock is then listed, and, if there is no reported sale on any
Trading Day within such twenty day period, such Trading Day shall be counted
for purposes of determining such twenty day period but shall be disregarded for
purposes of determining such average, or (ii) if the Class A Common
Stock is then publicly traded in the over-the-counter market, the average of
the closing sales prices of the Class A Common Stock in the
over-the-counter market for the twenty Trading Days preceding the Determination
Date and, if there is no reported sale on any Trading Day within such twenty
day period, such Trading Day shall be counted for purposes of determining such
twenty day period but shall be disregarded for purposes of determining such
average, or (iii) if the Class A Common Stock is not then separately
quoted or publicly traded, the fair market value on the Determination Date, as
determined by the Board of Directors of the Company (the “Board”).  For purposes hereof, “Trading Day” shall mean
any day upon which the principal national securities exchange or
over-the-counter market upon which the Class A Common Stock is then traded
is open for the trading of securities.


 

















 


                2.             Exercise of Units


 


                                (a)           The Unit Holder may elect to be paid
for any then vested Unit by timely delivering or mailing to the Company (in
accordance with Paragraph 10 below), Attention: Chief Executive Officer and
Chief Financial Officer (or person acting as Chief Financial Officer), a notice
of exercise, in the form prescribed by the Company, stating therein that the
Unit Holder has elected to exercise his Units and specifying therein the date
of this Agreement and the number of vested Units for which he is electing to be
paid.  The exercise of any Units shall
not be deemed effective unless and until the Unit Holder has complied with all
of the provisions of this Paragraph 2(a). 
Upon an effective exercise of any one or more Units, the Company shall
thereafter pay the Unit Holder in complete satisfaction of each Unit with
respect to which such right and option has been exercised an amount equal
to:  (i) the Exercise Date Price
minus (ii) the Base Price.  Such
payment shall be made to the Unit Holder within 30 days after the exercise of
such right and option.


 


                                (b)           No Units shall vest or become
exercisable during the first, second or third year from the date of grant
hereof; thereafter Units shall vest and become exercisable in installments as
to (i) twenty-five percent (25%) of the total number of Units subject to
this Agreement on December 6, 2010, (ii) an additional twenty-five
percent (25%) of the total number of Units subject to this Agreement on December 6,
2011, (iii) an additional twenty-five percent (25%) of the total number of
Units subject to this Agreement on December 6, 2012, and (iv) the
remaining twenty-five percent (25%) of the total number of Units subject to this
Agreement on December 6, 2013. 
Notwithstanding the foregoing, if at any time prior to the vesting in
full of all Units the Unit Holder’s service as a member of the Board is
terminated due to the Unit Holder’s death or disability (as disability is defined
in Paragraph 4 below), then all unexercised Units covered hereby that have not
vested and become exercisable as of the effective date of the Unit Holder’s
termination of service due to death or disability shall be deemed to have
vested and become immediately exercisable in full effective on and as of such
date of termination of service.


 


                                (c)           In connection with the exercise of
any one or more Units and as a condition to delivery of any payment to which
the Unit Holder is entitled upon such exercise, the Company may withhold from
such payment an amount sufficient to satisfy all current or estimated future
federal, state and local withholding tax requirements (if any) and federal
social security or other taxes or other tax requirements relating thereto (if
any).


 


                3.             Termination.  All unexercised Units shall automatically and
without notice terminate and become null and void at the time of the earliest
to occur of the following:


 


                                (a)           the Expiration Date;


 


                                (b)           The expiration of 30 days from the
date of termination (other than a termination described in subparagraph (c) below
or on account of death or disability of the Unit Holder while a member of the
Board) of the Unit Holder’s service as a member of the Board, or, if the Unit
Holder shall die during such 30-day period, the expiration of one year
following the date of the Unit Holder’s death; provided that, except in the
case of death or disability as provided in Paragraph 4, no additional Units
shall vest or become exercisable during such 30-day or one year period, as the
case may be;


 


                                (c)           The date of termination of the Unit
Holder’s service as a member of the Board, if such termination of service is
due to the removal of the Unit Holder from the Board for cause (the Board shall
have the right to determine whether the Unit Holder has been removed for cause
and the date of such removal, such determination of the Board to be final and
conclusive); and


 

















 


                                (d)           Any of the events as described in
Paragraph 7 below.


 


                Nothing contained
in this Agreement shall obligate the Company or any of its subsidiary
corporations to continue to employ or engage the services of the Unit Holder in
any capacity, nor confer upon the Unit Holder any right to continue on the
Board or in any other capacity with the Company or its subsidiary corporations,
nor limit in any way the right of the Company or its subsidiary corporations to
amend, modify or terminate at any time the Unit Holder’s arrangements, if any,
with the Company.


 


                4.             Payment Upon Death or
Disability.  Upon the termination of
the service of the Unit Holder as a member of the Board due to the death of the
Unit Holder or disability of the Unit Holder within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the Board shall have the right
to determine whether the Unit Holder’s termination is attributable to a
disability of the Unit Holder within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended, such determination of the Board
to be final and conclusive), while serving in such capacity, all unexercised
Units covered hereby that have not vested and become exercisable as of the
effective date of the Unit Holder’s termination of service for death or
disability shall vest and become immediately exercisable in full effective as
of such date of termination of service, and the Company shall pay such Unit
Holder (or the legal representative of the estate of the deceased Unit Holder
or the person or persons who acquire the right to receive payment for a Unit by
bequest or inheritance or reason of the death of the Unit Holder; hereinafter “Successor”),
in complete satisfaction of all unexercised Units held by such Unit Holder on
the date of such termination of such service of the Unit Holder, an amount
determined in the manner set forth in Paragraph 2 above as if the Unit Holder
had exercised the right and option to be paid for all then unexercised Units
held by the Unit Holder on the date of such service termination.  Such payment shall be made by the Company to
the Unit Holder or the Unit Holder’s Successor, as the case may be, within 30
days after the date of such termination.


 


                5.             Non-Assignability.  The Unit Holder shall not transfer, assign,
pledge or hypothecate in any manner this Agreement or any of the rights and privileges
granted hereby other than by will or by the laws of descent and
distribution.  Units are exercisable
during the Unit Holder’s lifetime only by the Unit Holder.  Upon any attempt by the Unit Holder to
transfer this Agreement or any right or privilege granted hereby (including
without limitation any Units) other than by will or by the laws of descent and
distribution and contrary to the provisions hereof, this Agreement and said
rights and privileges shall immediately become null and void.


 


                6.             Anti-Dilution.  In the event that the shares of Class A
Common Stock subject to this Agreement shall be changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or if the number of such shares of Class A Common Stock shall
be increased solely through the payment of a stock dividend, then there shall
be made an appropriate adjustment (a) in the number of Units then covered
hereby, (b) to the Base Price and/or (c) to the other terms as may be
necessary to reflect the foregoing events. 
There may also be made similar adjustments as described in (a)-(c) of
the previous sentence in the event of any distribution of assets to the Company’s
stockholders other than a regular quarterly cash dividend.  Any determinations or interpretations under
this Section, including whether a distribution is other than a regular quarterly
cash dividend, shall be made by the Board, which determination shall be final,
binding and conclusive. In the event there shall be any other change in the
number or kind of the outstanding shares of stock of the Company subject to
this Agreement, then if the Board, in its sole discretion, determines that such
change equitably requires an adjustment in this Agreement, such adjustments
shall be made in accordance with such determination, and the Board’s
determination of the nature and amount of such adjustment, if any, shall be
final, binding and conclusive.  The
foregoing adjustments shall be made in a manner that will cause the
relationship 


 

















 


between the aggregate appreciation in a share of Class A Common
Stock and the increase in value of each Unit granted hereunder to remain
unchanged as a result of the applicable transaction.


 


                7.             Termination upon Merger.  In the event that (a) the Company merges
with or into any other corporation, consolidates with any other corporation, or
sells substantially all of its assets and business to another corporation and,
in any such case, stockholders of the Company immediately prior to the
consummation of the transaction own less than fifty percent (50%) of the
outstanding voting securities of the surviving or acquiring corporation
immediately after consummation of the transaction, or (b) the Class A
Common Stock (or any other capital stock into which the Class A Common
Stock is changed) is no longer listed on a national securities exchange or
publicly traded in the over-the-counter market, then (i) the Unit Holder
shall be paid the amount provided in Paragraph 2 above for all then fully
vested unexercised Units then held by him in the manner provided in said
Paragraph 2 as if such Unit Holder had exercised his right and option to be
paid for all of such then fully vested Units immediately prior to the
effectiveness of such merger or consolidation, consummation of such sale or the
occurrence of the Class A Common Stock no longer being listed on a
national securities exchange or publicly traded in the over-the-counter market
and (ii) all of the Units shall automatically and without notice terminate
and become null and void upon such effectiveness, consummation or occurrence.


 


                8.             Rights Unfunded.  The Unit Holder understands that the rights
provided for hereunder are unfunded and the Company has not made, and has no
obligation to make, any provision with respect to segregating assets of the
Company for payment of any benefits hereunder. 
The Unit Holder further understands that he has no interest in any
particular asset of the Company by reason of this Agreement but only the rights
of a general unsecured creditor with respect to his rights under this
Agreement.


 


                9.             No Rights as a Stockholder.  Neither the Unit Holder nor any other person
legally entitled to exercise any Units hereunder shall have any rights of a
stockholder by virtue of the grant, vesting or exercise of a Unit.


 


                10.           Notices.  Whenever under this Agreement notice is
required to be given in writing, it shall be deemed to have been duly given
upon personal delivery or upon receipt by the Company by fax (telecopy), one
business day following deposit with a nationally recognized air courier
guaranteeing overnight delivery, or three business days after deposit in the
United States mail if mailed by registered or certified mail, postage prepaid,
to the Company at the address set forth below or to the Unit Holder at the
address set forth on the last page hereof (or to such other address as
either party shall have indicated to the other party by notice in accordance
with this Paragraph):


 


	
   

  	
  Company:

  	
   

  	
  Arden Group, Inc.

  
	
   

  	
   

  	
   

  	
  2020 South Central Avenue

  
	
   

  	
   

  	
   

  	
  Compton, California 90220

  
	
   

  	
   

  	
   

  	
  Attention: Chief Executive Officer and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer (or person acting as Chief
  Financial Officer)

  



 


 


                For purposes
hereof, a “business day” is any day other than a Saturday, Sunday or a holiday
in the State of California.


 


                11.           Benefit.  Except as otherwise specifically provided
herein, this Agreement shall be binding upon and shall operate for the benefit
of the Company and the Unit Holder and his successors.


 

















 


                12.           Governing Law.  This Agreement and any rights and obligations
arising hereunder shall be governed and construed in accordance with the laws
of the State of California.


 


                13.           Entire Agreement.  This Agreement represents the entire
agreement between the parties hereto regarding Units based on the Class A
Common Stock and supersedes any and all prior or contemporaneous written or
oral agreements or discussions between the parties and any other person or
legal entity concerning the transactions contemplated herein.  Except as otherwise expressly provided
herein, this Agreement cannot be amended or modified except by a written instrument
executed by the parties hereto.


 


                14.           Construction.  The headings of the Paragraphs are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  If any
of the provisions of this Agreement shall be unlawful, void or for any reason
unenforceable, they shall be deemed separable from, and shall in no way affect
the validity or enforceability of, the remaining provisions of this Agreement.


 


                15.           Further Acts.  The parties hereto agree to execute and
deliver such further instruments as may be reasonably necessary to carry out
the intent of this Agreement.


 


                IN WITNESS
WHEREOF, the parties have executed this Agreement as of the day and year first
above written.


 


	
  ARDEN
  GROUP, INC. 

  	
  UNIT
  HOLDER: 

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notice: