Exhibit 10.1


 


The form of Non-Employee
Director Phantom Stock Unit Agreement with each of M. Mark Albert, John G.
Danhakl, Robert A. Davidow, Kenneth A. Goldman and Steven Romick dated January 15,
2010 follows this page.  The executed
agreements are identical except for the number of units granted in Paragraph 1(a) of
each agreement.  The agreement with Mr. Albert
covers 14,500 units and each of the agreements with Messrs. Danhakl,
Davidow, Goldman and Romick covers 7,000 units.


 

















 


NON-EMPLOYEE DIRECTOR


 


PHANTOM STOCK UNIT AGREEMENT


 


THIS PHANTOM STOCK UNIT
AGREEMENT (the “Agreement”), dated as of the 15th day of January, 2010, 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                 
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 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 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) $110.00 (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 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.  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


 


2

















 


(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 


 


3

















 


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.


 


4

















 


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:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				






 


 


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


 


 




	
  Dated:

  	
   

  	
  , 

  	
   

  	
   

  	
   

  






 


5