Exhibit 10.2


 


EMPLOYEE


 


PHANTOM STOCK UNIT AGREEMENT


 


THIS PHANTOM STOCK UNIT AGREEMENT (the “Agreement”),
dated as of the 15th day of January, 2010, by and between Arden-Mayfair, Inc.,
a Delaware corporation (the “Company”), and Laura J. Neumann (the “Unit Holder”),
is made with reference to the following facts:


 


A.            The Company is
a wholly owned subsidiary of Arden Group, Inc., a Delaware corporation (“Arden
Group”).


 


B.            The Company is
desirous of providing additional incentives to the Unit Holder in rendering
services as an employee of the Company and, in order to accomplish this result,
has determined to grant the Unit Holder phantom stock units (based on the Class A
Common Stock of Arden Group) representing the right to receive a cash payment
on the terms and conditions set forth herein.


 


C.            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 Three Thousand Five
Hundred (3,500) Units exercisable from time to time in accordance with the
provisions of this Agreement during a period commencing as provided in this
Agreement and expiring at the close of business on January 15, 2017 (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 Arden Group (the “Class A
Common Stock”) based on the date upon which the Unit Holder exercises such Unit
(the “Exercise Date Price”) over (ii) $110.00 (the “Base Price”).


 


(b)           The Exercise Date Price shall be
determined as follows:  The Exercise Date
Price shall be (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 (20) 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 sales 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 Arden Group (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 Units by timely delivering or mailing to the Company (in
accordance with Paragraph 10 below), Attention: 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 or her vested Units and specifying
therein the date of this Agreement and the number of vested Units for which he
or she 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
vested Units, the Company shall thereafter pay the Unit Holder in complete satisfaction
of each vested 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 thirty (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 January 15,
2013, (ii) an additional twenty-five percent (25%) of the total number of
Units subject to this Agreement on January 15, 2014, (iii) an
additional twenty-five percent (25%) of the total number of Units subject to
this Agreement on January 15, 2015, and (iv) the remaining
twenty-five percent (25%) of the total number of Units subject to this
Agreement on January 15, 2016.


 


(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 and federal social
security or other taxes or other tax requirements relating thereto.


 


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; or


 


(b)           The date of termination of the Unit
Holder’s employment with the Company and its parent and subsidiary
corporations; or


 


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


 


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


 


4.             Payment Upon Death.  Upon the
termination of the employment of the Unit Holder due to the death of the Unit
Holder while employed by the Company (or its parent or subsidiary
corporations), (a) the Company shall pay 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(s)”), in complete
satisfaction of all fully vested  and
unexercised Units held by the 


 


2

















 


Unit Holder on the
date of such termination of his or her employment, 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 fully vested and unexercised Units
held by the Unit Holder on the date of such termination of his or her
employment, and (b) all other Units held by the Unit Holder on the date of
such termination of his or her employment shall terminate and shall become null
and void.  Such payment shall be made by
the Company to the Successor(s) within thirty (30) days after the date of
such termination of employment.


 


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 Arden Group 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 stockholders of Arden Group other than a dividend
payable in cash or property (other than stock). 
Any determinations or interpretations under this Section shall be
made by the Board, whose 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
Arden Group 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.


 


7.             Termination upon Merger.  In the event
that Arden Group 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 Arden Group
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, then (a) the
Unit Holder shall be paid the amount provided in Paragraph 2 above for all then
fully vested and unexercised Units then held by him or her in the manner
provided in said Paragraph 2 as if such Unit Holder had exercised his or her
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 (b) 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 or she 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 or her rights under this Agreement.


 


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9.             No Rights as a Stockholder. 
Neither the Unit Holder nor any other person legally entitled to
exercise any Units hereunder shall have any voting or other 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 to the fax number set forth below); or 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-Mayfair, Inc.

  2020 South Central Avenue

  Compton, California 90220

  Attention:  Chief Financial Officer

  Fax Number:  (310) 632-5326

  



 


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 or
her 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 specific
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.  This Agreement supersedes in its entirety
that certain Employee Phantom Stock Unit Agreement between Company and Unit
Holder dated December 6, 2007, which superseded agreement is terminated
and of no further force or effect.


 


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.


 


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


 




	
  ARDEN-MAYFAIR,
  INC.

  	
   

  	
  UNIT
  HOLDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Laura
  J. Neumann

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address
  for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  Arden-Mayfair, Inc.

  
	
   

  	
   

  	
  2020
  S. Central Avenue

  
	
   

  	
   

  	
  Compton,
  CA 90220

  
				






 


 


The undersigned, the spouse of the Unit Holder, does
hereby agree to be bound by the terms of the foregoing Phantom Stock Unit
Agreement.


 


 




	
  Date:

  	
   

  	
  , 

  	
   

  	
   

  	
   

  






 


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