SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
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240.14a-12
AMREP CORPORATION
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AMREP CORPORATION
(An Oklahoma corporation)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
September 19, 2002
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Shareholders of
AMREP CORPORATION (the "Company") will be held at the offices of the Company,
641 Lexington Avenue, Sixth Floor, New York, New York on September 19, 2002 at
9:00 A.M. for the following purposes:
(1) To elect three directors; and
(2) To consider and act upon such other business as may properly come
before the meeting.
In accordance with the By-Laws, the Board of Directors has fixed the close
of business on July 24, 2002 as the record date for the determination of
shareholders of the Company entitled to notice of and to vote at the meeting and
any adjournment thereof. The list of such shareholders will be available for
inspection by shareholders during the ten days prior to the meeting at the
offices of the Company, 641 Lexington Avenue, Sixth Floor, New York, New York
10022.
Whether or not you expect to be present at the meeting, please mark, date
and sign the enclosed proxy and return it to the Company in the self-addressed
envelope enclosed for that purpose. The proxy is revocable and will not affect
your right to vote in person in the event you attend the meeting.
By Order of the Board of Directors
Peter M. Pizza, Secretary
Dated: July 24, 2002
New York, New York
AMREP CORPORATION
641 Lexington Avenue
New York, New York 10022
__________________________
PROXY STATEMENT
__________________________
ANNUAL MEETING OF SHAREHOLDERS
To be Held at 9:00 A.M. on September 19, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of AMREP Corporation (the "Company") for use
at the Annual Meeting of Shareholders of the Company to be held on September 19,
2002, and at any continuation or adjournment thereof (the "Annual Meeting").
Anyone giving a proxy may revoke it at any time before it is exercised by giving
the Secretary of the Company written notice of the revocation, by submitting a
proxy bearing a later date or by attending the Annual Meeting and voting. This
Proxy Statement of the Board of Directors and the accompanying Notice of Annual
Meeting and proxy form have been first sent to shareholders on or about August
5, 2002.
All properly executed, unrevoked proxies in the enclosed form which are
received in time will be voted in accordance with the shareholder's directions
and, unless contrary directions are given, will be voted for the election as
directors of the nominees named below. The presence, in person or by proxy, of
the holders of a majority of the outstanding shares of Common Stock authorized
to vote will constitute a quorum for the transaction of business at the Annual
Meeting. Abstentions will be counted in determining whether a quorum is present
at the Annual Meeting. Directors are elected by a plurality of the votes of the
shares present in person or represented by proxy at the Annual Meeting and
entitled to vote on the election of directors, and abstentions have no effect.
A copy of the 2002 Annual Report of the Company for the fiscal year ended
April 30, 2002, including financial statements, accompanies this Proxy
Statement. Such Annual Report does not constitute a part of the proxy
solicitation material.
COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Only shareholders of record at the close of business on July 24, 2002, the
date fixed by the Board of Directors in accordance with the By-Laws, are
entitled to vote at the Annual Meeting. As of July 24, 2002, the Company had
issued and outstanding 6,577,612 shares of Common Stock, par value $.10 per
share. Each share of Common Stock is entitled to one vote on matters to come
before the Annual Meeting.
Set forth in the table below is information concerning the ownership as of
July 24, 2002 of the Common Stock of the Company by the persons who, to the
knowledge of the Board of Directors, own beneficially more than 5% of the
outstanding shares. The table also sets forth information concerning the
beneficial ownership by all directors and executive officers. Unless otherwise
indicated, the beneficial owners have sole voting and investment power with
respect to the shares beneficially owned:
Name and Address of Amount Owned % of
Beneficial Owner Beneficially Class
------------------- ------------ -----
Nicholas G. Karabots (Director) 3,377,333 51.3
P.O. Box 736
Fort Washington, PA 19034
Albert Russo (Director) 1,256,720 (1),(2) 19.1
Lena Russo, Clifton Russo,
Lawrence Russo
American Simlex Company
401 Broadway
New York, NY 10013
Dimensional Fund Advisors Inc. 485,436 (3) 7.4
1299 Ocean Avenue
Santa Monica, CA 90401
Other Directors and
Executive Officers
------------------
Jerome Belson 2,000 *
Edward B. Cloues II 4,000 (4) *
Lonnie A. Coombs 1,000 *
Michael P. Duloc 5,000 (5) *
Peter M. Pizza -0- -
Samuel N. Seidman 2,000 (4) *
James Wall 8,057 (6) *
Directors and Executive Officers as a Group
(9 persons) 4,656,110 (1),(2),(4),(5),(6) 70.7
______________________________
* Indicates less than 1%.
(1) Includes 2,000 shares which Mr. Albert Russo has the right to acquire
pursuant to currently exercisable options.
(2) Albert Russo, Lena Russo, Clifton Russo and Lawrence Russo have
reported that they share voting power as to these shares and that each of them
has sole dispositive power as to the following numbers of such shares
representing the indicated percentages` of the outstanding Common Stock: Albert
Russo - 672,241 (10.2%); Lena Russo - 58,740 (.9%); Clifton Russo - 270,617
(4.1%); and Lawrence Russo - 255,122 (3.9%).
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of these shares, all of which
are held in portfolios of four registered investment companies or other
investment vehicles, including commingled group trusts, for which Dimensional
serves as investment manager or investment advisor. Dimensional disclaims
beneficial ownership of all such shares.
2
(4) Includes 2,000 shares which the individual has the right to acquire
pursuant to currently exercisable options.
(5) Held jointly with Mr. Duloc's spouse.
(6) Includes 287 shares held in the Company's Savings and Salary Deferral
Plan allocated to the account of Mr. Wall.
ELECTION OF DIRECTORS
The Board of Directors of the Company is a classified board divided into
three classes - Class I consisting of two directors, Class II consisting of two
directors and Class III consisting of three directors. Each class of directors
serves for a term of three years. At this Annual Meeting, three Class III
directors will be elected to serve until the 2005 Annual Meeting and until their
successors are elected and qualified. Although the Board of Directors does not
expect that any of the persons named will be unable to serve as a director,
should any of them become unavailable for election it is intended that the
shares represented by proxies in the accompanying form will be voted for the
election of a substitute nominee or nominees selected by the Board.
The following table sets forth information regarding the nominees of the
Board of Directors for election and the directors whose terms of office do not
expire this year.
Year First
Elected As Principal Occupation
Name Age A Director For Past Five Years
---- --- ---------- -------------------
Nominees to serve until the 2005 Annual Meeting (Class III)
Jerome Belson 76 1967 Chairman of the Board of WE Media,
Inc.(magazine on lifestyle of people
with disabilities);President of
Associated Builders and Owners of
Greater New York, Inc.
Nicholas G. Karabots* 69 1993 Chairman of the Board and Chief
Executive Officer of Kappa Media
Group, Inc., Spartan Organization,
Inc., Jericho National Golf Club,
Inc. and other private companies,
which companies are engaged
primarily in the publishing,
printing, recreational sports and
real estate businesses.
Albert Russo 48 1996 Managing Partner, Russo Associates,
Pioneer Realty, 401 Broadway Company
and related real estate entities;
Partner, American Simlex Co.,
textile exports.
______________________________
* See "Compensation Committee Interlocks and Insider Participation" section for
information concerning agreement to nominate Mr. Karabots.
3
Year First
Elected As Principal Occupation
Name Age A Director For Past Five Years
---- --- ---------- -------------------
Directors continuing in office until the 2003 Annual Meeting (Class I)
Edward B. Cloues II 54 1994 Chairman and Chief Executive Officer
of K-Tron International, Inc.,
a process equipment manufacturer,
since January 1998; Partner in the
law firm of Morgan, Lewis & Bockius
LLP from prior to 1997 to January
1998.
James Wall 65 1991 Chief Executive Officer of AMREP
Southwest Inc., a wholly-owned
subsidiary of the Company; Senior
Vice President of the Company.
Directors continuing in office until the 2004 Annual Meeting (Class II)
Samuel N. Seidman 68 1977 President of Seidman & Co., Inc.,
economic consultants and investment
bankers; Chairman of the Board and
Chief Executive Officer of
Productivity Technologies Corp.,
manufacturer of metal forming and
handling automation equipment and a
wirer of control panels.
Lonnie A. Coombs 54 2001 Proprietor, Lonnie A. Coombs,
Certified Public Accountant,
accounting, tax and business
consulting services.
Each of the directors has served continuously since the year in which he
was first elected.
The Board of Directors and its Committees
The Board held five meetings during the last fiscal year.
The Board has an Executive Committee which generally has the power of the
Board and acts as needed between meetings of the Board. Also, in the absence of
a Chief Executive Officer it is charged with the oversight of the Company's
business. The current members of the Committee are Messrs. Cloues, Karabots and
Russo with Mr. Cloues as Chairman. Mr. Cloues is compensated for his services as
Chairman of the Board and as Committee Chairman at the rate of $135,000 per
year, such amount being in addition to the fees paid him as a director and
member of other Committees. The Committee met seven times during the last fiscal
year on a formal basis and several more times on an informal basis.
The Board also has an Audit and Examining Committee and a Human Resources
Committee. The Human Resources Committee acts as a compensation committee. The
Board does not have a nominating committee. The members of the Audit and
4
Examining Committee receive $750 for each committee meeting attended. The
members of the Human Resources Committee receive $500 for each committee meeting
attended.
The duties of the Audit and Examining Committee include (i) recommending to
the Board the engagement of the independent auditors, (ii) reviewing the scope
and results of the yearly audit by the independent auditors, (iii) reviewing the
Company's system of internal controls and procedures, (iv) reviewing the
Company's financial reporting and accounting standards and principles, and (v)
reviewing and investigating matters pertaining to the integrity of management.
It reports regularly to the Board concerning its activities. The current members
of this Committee are Messrs. Belson, Coombs and Seidman (Chairman). The
Committee held four meetings during the last fiscal year.
The Human Resources Committee makes recommendations to the Board concerning
compensation and other matters relating to employees. The current members of
this Committee are Messrs. Cloues, Karabots (Chairman) and Russo. The Committee
held one meeting during the last fiscal year.
Each non-employee director of the Company is paid a fee of $23,000 per
annum in addition to fees paid to such director as a member of one or more Board
Committees. In addition, under the Non-Employee Directors Option Plan, on the
first business day following the Company's Annual Meeting of Shareholders each
non-employee director is granted an option covering 500 shares of Common Stock
of the Company. The price per share payable upon exercise of such option is
either (i) the mean between the highest and lowest reported sale price of the
Common Stock on the date of grant on the New York Stock Exchange, or (ii) the
price of the last sale of Common Stock on that date as quoted on the New York
Stock Exchange, whichever is higher. For the options granted following the 2001
Annual Meeting, the exercise price is $3.95 per share. Each option becomes
exercisable as to all or any portion of the shares covered thereby one year
after the date of grant and expires five years after the date of grant.
The various directors and nominees hold other directorships of public
companies as follows:
Name Director of
---- -----------
Edward B. Cloues II K-Tron International, Inc.
Penn Virginia Corporation
Samuel N. Seidman Productivity Technologies Corp.
5
EXECUTIVE COMPENSATION
The Summary Compensation Table below sets forth certain information
concerning the compensation of the Company's executive officers.*
SUMMARY COMPENSATION TABLE
Annual
Compensation
------------
Name and Principal All Other
Position Year Salary($) Compensation($)(1)(2)
------------------ ---- --------- ---------------------
James Wall 2002 271,281 3,500
Senior Vice President and 2001 268,648 3,552
CEO of the Company's AMREP 2000 255,046 3,500
Southwest Inc.subsidiary
Peter M. Pizza 2002 160,000 -0-
Vice President and 2001 135,465 -0-
Secretary - Chief 2000 131,044 -0-
Financial Officer
Michael P. Duloc(3) 2002 200,000 2,496
President and COO of the
Company's Kable News Company,
Inc. subsidiary
_________________________
(1) Includes amounts contributed by the Company to the Company's Savings and
Salary Deferral Plan.
(2) Other compensation in the form of personal benefits to the named persons
has been omitted because it does not exceed the lesser of $50,000 or 10% of
the total annual salary and bonus as to each.
(3) Mr. Duloc became an executive officer in July 2001.
Options
No stock options were granted to or exercised by any of the officers named
in the Summary Compensation Table during the fiscal year ended April 30, 2002.
No stock options were held by such officers at April 30, 2002.
Audit and Examining Committee Report
Each member of the Audit and Examining Committee (the "Committee") is an
independent director as defined by New York Stock Exchange rules. The Committee
has adopted a revised written charter, which has been approved by the Board of
Directors, and which is set forth in Appendix A to this Proxy Statement. The
Committee has reviewed and discussed the Company's audited financial statements
with management, which has primary responsibility for the financial statements.
McGladrey & Pullen, LLP, the Company's independent auditors for 2002, are
responsible for expressing an opinion on the conformity of the Company's audited
financial statements with generally accepted accounting principles. The
Committee has discussed with McGladrey & Pullen, LLP the matters that are
required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committees). McGladrey & Pullen, LLP have provided to
_________________________
* Since January 1996, the Company has not had a CEO.
6
the Committee the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and the Committee has discussed with McGladrey & Pullen, LLP that firm's
independence.
Based on the considerations referred to above, the Committee recommended to
the Board of Directors that the consolidated financial statements audited by
McGladrey & Pullen, LLP be included in the Company's Annual Report on Form 10-K
for 2002.
The foregoing report is provided by the following independent directors who
constitute the Committee:
Samuel N. Seidman, Chairman
Jerome Belson
July 19, 2002 Lonnie A. Coombs
Human Resources Committee Executive Compensation Report
The Human Resources Committee (the "HRC"), consisting entirely of
non-employee directors, is the Company's Compensation Committee. Its current
members are Messrs. Cloues, Karabots and Russo. The HRC's recommendations
regarding executive compensation must be approved by the Board of Directors or
its Executive Committee.
Compensation Policy for Executive Officers
------------------------------------------
The HRC's compensation policy for executive officers is to pay
competitively while balancing pay versus performance and otherwise to be fair
and equitable in the administration of compensation. The HRC seeks to balance
the salary paid to a particular individual using the above criteria while using
its best judgment of compensation applicable to other executives holding
comparable positions both within the Company and at other companies.
With respect to salaries, bonuses and other compensation and benefits, the
decisions and recommendations of the HRC are subjective and are not based on any
list of specific criteria. We believe that the compensation received by each of
the executive officers for fiscal year 2002 was reasonable. The Company has not
had a Chief Executive Officer since January 1996 when the employment of the then
CEO was terminated due to disability, and senior management now operates under
the supervision of the Executive Committee of the Board and its Chairman, who is
also Chairman of the Board. The current salary of Mr. Wall is in the amount
recommended by the former CEO in fiscal year 1994, except that it was increased
annually through fiscal year 1997 by cost of living adjustments and by an
additional 2% on October 1, 1998. In addition, the salary of Mr. Wall was
increased by $25,000 on October 1, 1999 and by an additional 3% on October 1,
2000, in each case in accordance with a recommendation made by the HRC. The
basis of each recommendation was a review of his performance and then existing
salary level.
Mr. Pizza became an executive officer in September 2000 and at that time
his annual salary was $137,155. On May 1, 2001 it was increased to $160,000 in
accordance with a recommendation by the HRC. The basis of that recommendation
was the fact that he had been assigned additional duties as the new Chief
7
Financial Officer of the Company. Mr. Duloc became an executive officer in July
2001, and his annual salary, which was not then changed, is $200,000.
There have been no stock options granted to executive officers since fiscal
1995.
Payments during fiscal year 2002 to the Company's executives as discussed
above were made with regard to the provisions of Section 162(m) of the Internal
Revenue Code. Section 162(m) limits the deduction that may be claimed by a
"public company" for compensation paid to certain individuals to $1 million
except to the extent that any excess compensation is "performance-based
compensation". It is the HRC's intention that compensation will not be awarded
which exceeds the deductibility limits of Section 162(m).
Bases for Chief Executive Officer's Compensation
------------------------------------------------
Since January 1996, the Company has not had a CEO.
Nicholas G. Karabots, Chairman
Edward B. Cloues II
Albert Russo
July 24, 2002 Human Resources Committee
Compensation Committee Interlocks and Insider Participation
On August 4, 1993, pursuant to an agreement with Nicholas G. Karabots and
two corporations he then owned, the Company acquired for its Kable News Company
subsidiary ("Kable") various rights to distribute magazines, and in payment
issued a total of 575,593 shares of the Company's Common Stock. The distribution
rights covered various magazines published by unaffiliated publishers as well as
magazines published by publishers controlled by Mr. Karabots. In the case of the
publishers controlled by Mr. Karabots, the distribution arrangements generally
were for terms of seven years with provision for extension for a further three
years. As distributor under these and other distribution agreements, Kable
purchases magazines from publishing companies owned or controlled by Mr.
Karabots and resells them to wholesalers. During the fiscal year ended April 30,
2002, Kable purchased magazines from such companies for a total of $32,157,000
and resold them at higher prices. Kable continues as a distributor for such
companies. Kable reports as revenues only the spread between the prices it pays
publishers and the prices it receives for copies sold to its wholesaler
customers. The amount paid to Mr. Karabots' companies represents approximately
21% of the approximately $150,629,000 Kable paid all publishers in fiscal 2002.
Consistent with industry practice, Kable makes advance payments to publishers,
including Mr. Karabots' companies, based upon its estimates of the amounts that
will be due them from the sales of their publications to the buying public. If
the actual sales are less than estimated, overadvances will result which the
publishers are obligated to repay promptly, without interest. The overadvances
to Mr. Karabots companies at June 30, 2002 were approximately $130,000 which was
their highest level between May 1, 2001 and that date.
Since 1997, Kable has also performed fulfillment services for publishing
companies owned or controlled by Mr. Karabots, and during the fiscal year ended
April 30, 2002 was paid by these companies $270,000 for its services. Kable
continues to perform fulfillment services for such companies.
8
As part of its agreement with Mr. Karabots, the Company proposed him for
election to the Board of Directors at the 1993 Annual Meeting and agreed,
subject to certain exceptions, that so long as he owns at least one-half of the
Common Stock issued in the transaction the Company would propose him for
election at each shareholders meeting for the election of directors until July
2003, unless he is already in a Class of the Board whose term continues beyond
such meeting.
Mr. Karabots is Chairman of the Human Resources Committee. He is the father
in law of Michael P. Duloc, one of the executive officers of the Company listed
in the Summary Compensation Table above.
Performance Graph
The following graph compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total return of the Standard & Poor's
500 Index and 27 companies with market capitalizations most close to that of the
Company ("Similar Cap Issuers"), for the five years ending April 30, 2002
(assuming the investment of $100 in the Company's stock, the S&P 500 and the
Similar Cap Issuers on April 30, 1997, and the reinvestment of all dividends).
The Company cannot identify an index of issuers engaged in operations similar to
those currently engaged in by the Company and therefore has determined to use
the Similar Cap Issuers for purposes of comparison.
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
AMREP CORP 100 237.93 158.62 137.93 107.59 220.69
S&P 500 INDEX 100 141.07 171.85 189.25 164.70 143.91
SIMILAR CAP ISSUERS 100 137.93 110.10 133.01 100.48 116.12
9
The Similar Cap Issuers are: Axcess Inc., Cabletel Communications Corp.,
Chai Na Ta Corp., Cray Inc., Dataram Corp., Decorator Industries, Inc., DIY Home
Warehouse, Inc., Electrosource, Inc., Finger Lakes Bancorp, Inc., First Keystone
Financial, Inc., Frontier Airlines, Inc., Global Payment Technologies, Inc.,
Herley Industries, Inc., HPSC, Inc., KMG Chemicals, Inc., Mid-States PLC,
Neomedia Technologies, Inc., Neoware Systems, Inc., Nexus Telocation System
Ltd., Paravant Inc., PLM Equipment Growth Fund II, Powerbrief Inc., Earl Scheib,
Inc., Sel-Leb Marketing, Inc., Shells Seafood Restaurants, Inc. and Spherix,
Incorporated.
As a result of changes in market capitalizations from year to year, all of
the companies except DIY Home Warehouse, Inc. comprising the Similar Cap Issuer
index in the Company's 2001 Proxy Statement did not meet the criteria for
inclusion in the Similar Cap Issuer index in this Proxy Statement. The excluded
companies are: Acmat Corp.-Cl A, Aerovox Inc., American Bancorp/OH, APA Optics
Inc., Breakwater Resources Ltd., BRT Realty Trust, Camco Financial Corp., Cantel
Medical Corp. - Cl B, Ceres Group Inc., Compare Generiks Inc., Environmental
Technologies CP, Eresource Capital Group Inc., Evergreen Resources, FMS
Financial Corp., Health Power Inc., Hycor Biomedical Inc., Liferate Systems
Inc., Logic Devices Inc., Monarch Casino & Resort Inc., Peoples BK NC, SJNB Finl
Corp., Sonics & Materials Inc., Techdyne Inc., Thermogenesis Corp., Universal
Display Corp. and VSE Corp.
Retirement Benefits
The Company's executive officers participate in a Retirement Plan which was
amended effective January 1, 1998 (the "Plan"). Prior to the amendment, the Plan
provided a monthly benefit payable at age 65 to employees with five or more
years of service in an amount equal to 1.125% of the employee's highest
consecutive 60-month average monthly earnings up to a specified amount related
to the social security wage base plus 1.5% of such earnings in excess of such
specified amount, multiplied by years of service not to exceed 35. From and
after January 1, 1998, a participant's benefits will be the amount of the
monthly benefit accrued for that participant as of December 31, 1997 under the
terms of the Plan prior to its amendment plus an additional benefit to be
determined by establishing a cash balance account for each participant, to which
will be allocated annually 2% of such participant's earnings plus an annual
interest credit of 5% of the amount in such account. The cash balance account
can be converted to a life annuity or can be taken in a lump sum. The law limits
the maximum annual amount of earnings which may be taken into account in
calculating benefits; that maximum currently is $200,000 and is to be adjusted
annually for cost of living increases.
Mr. Wall has thirty-one years of credited service and has passed the normal
retirement age of 65 under the Plan. His annual retirement benefit under the
Plan had he elected to receive the life annuity pension at normal retirement age
would have been $54,290. Mr. Pizza has six years of credited service and Mr.
Duloc has nine years of credited service. Assuming that (i) they continue to be
employed until age 65, (ii) their annual salaries continue to be at the current
levels, (iii) there are annual increases of 5% in the maximum earnings permitted
to be taken into account under applicable law in calculating retirement benefits
under the Plan, and (iv) they elect the life annuity form of pension, their
annual retirement benefits are estimated to be: Mr. Pizza - $12,399 and Mr.
Duloc - $27,639.
10
Certain Transactions
See "Compensation Committee Interlocks and Insider Participation" for
information concerning transactions involving Nicholas G. Karabots.
AUDITORS
The consolidated financial statements of the Company and its subsidiaries
included in the Annual Report to Shareholders for the fiscal year ended April
30, 2002 have been examined by McGladrey & Pullen, LLP, independent public
accountants. No representative of McGladrey & Pullen, LLP is expected to attend
the Annual Meeting. The Board of Directors has not yet acted with respect to the
selection of auditors for fiscal 2003.
On March 7, 2002, the Company notified Arthur Andersen LLP that the Company
would change its external auditors to McGladrey & Pullen, LLP for its fiscal
year ending April 30, 2002. Arthur Andersen LLP and its predecessor partnership
had been the independent auditor for the Company since 1981.
Prior to such notification, the Company did not consult with McGladrey &
Pullen, LLP regarding the application of accounting principles to a specific
completed or contemplated transaction or any matter that was either the subject
of a disagreement or a reportable event. The Company also did not consult with
McGladrey & Pullen, LLP regarding the type of audit opinion that might be
rendered on the Company's consolidated financial statements.
The reports of Arthur Andersen LLP on the Company's consolidated financial
statements for the fiscal years ended April 30, 2001 and 2000 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. In connection with the
audits for the fiscal years ended April 30, 2001 and 2000 and the subsequent
interim period preceding the Company's notification to Arthur Andersen LLP of
its intention to dismiss such firm, there were no disagreements with Arthur
Andersen LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure that, if not resolved to
the satisfaction of Arthur Andersen LLP, would have caused such firm to make
reference to the subject matter of the disagreement(s) in connection with its
report.
The Company's Audit and Examining Committee participated in the decision to
change the Company's external auditors and recommended the appointment of
McGladrey & Pullen, LLP as the Company's auditors to the Board of Directors
which made the appointment.
Audit Fees
----------
The aggregate fees billed by McGladrey & Pullen, LLP for professional
services rendered for the audit of the Company's annual financial statements for
its fiscal year ended April 30, 2002 amounted to $80,000. That firm did not
conduct reviews of the financial statements included in the Company's Forms 10-Q
for that fiscal year.
11
Financial Information Systems Design and Implementation Fees
------------------------------------------------------------
No fees were billed to the Company, nor were services rendered to the
Company, by McGladrey & Pullen, LLP for financial information systems design and
implementation for the Company's fiscal year ended April 30, 2002.
All Other Fees
--------------
McGladrey & Pullen, LLP did not render services to the Company other than
audit services for the year ended April 30, 2002.
OTHER MATTERS
The Board of Directors knows of no matters which will be presented for
consideration at the Annual Meeting other than the matters referred to in this
Proxy Statement. Should any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to
vote such proxy in accordance with their best judgment.
SOLICITATION OF PROXIES
The Company will bear the cost of this solicitation of proxies. In addition
to solicitation of proxies by mail, the Company may reimburse brokers and other
nominees for the expense of forwarding proxy materials to the beneficial owners
of stock held in their names. Directors, officers and employees of the Company
may solicit proxies on behalf of the Board of Directors but will not receive any
additional compensation therefor.
SHAREHOLDER PROPOSALS
From time to time shareholders present proposals which may be proper
subjects for inclusion in the Proxy Statement and for consideration at an annual
meeting. Shareholders who intend to present proposals at the 2003 Annual Meeting
and who wish to have such proposals included in the Company's Proxy Statement
for the 2003 Annual Meeting must be certain that such proposals are received by
the Company's Secretary at the Company's executive offices, 641 Lexington
Avenue, New York, New York 10022, not later than March 26, 2003. Such proposals
must meet the requirements set forth in the rules and regulations of the
Securities and Exchange Commission in order to be eligible for inclusion in the
Proxy Statement. For any proposal that is not submitted for inclusion in next
year's Proxy Statement, but is instead sought to be presented directly at the
2003 Annual Meeting, SEC rules permit management to vote proxies in its
discretion if the Company does not receive notice of the proposal prior to the
close of business on June 21, 2003.
By Order of the Board of Directors
Peter M. Pizza, Secretary
Dated: July 24, 2002
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Upon the written request of any shareholder of the Company, the Company
will provide to such shareholder a copy of the Company's Annual Report on Form
10-K for 2002, including the financial statements and the schedules thereto,
filed with the Securities and Exchange Commission. Any request should be
directed to Peter M. Pizza, Secretary, AMREP Corporation, 641 Lexington Avenue,
New York, New York 10022. There will be no charge for such report unless one or
more exhibits thereto are requested, in which case the Company's reasonable
expenses of furnishing exhibits may be charged.
Only one 2002 Annual Report and one Proxy Statement are being delivered to
multiple security holders sharing an address unless the Company has received
contrary instructions from one or more security holders. The Company will
promptly deliver separate copies of the Annual Report and Proxy Statement to a
security holder at a shared address to which a single set of the documents was
delivered upon request of the security holder. The request should be made by
mail to Peter M. Pizza, Secretary, AMREP Corporation, 641 Lexington Avenue, New
York, New York 10022, or by telephone to Mr. Pizza at (212) 705-4700. Security
holders can also notify Mr. Pizza at this address or telephone number if they
wish to receive separate copies of proxy statements and annual reports in the
future or, if they are receiving multiple copies, that they wish to receive only
single copies.
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Appendix A
CHARTER
OF THE AUDIT AND EXAMINING COMMITTEE
OF THE BOARD OF DIRECTORS OF
AMREP CORPORATION
Adopted by Board of Directors on March 6, 2002
==============================================================
The Audit and Examining Committee ("Committee") shall consist of a minimum
of three directors. As determined by the Board of Directors in accordance with
applicable requirements, all members of the Committee shall be independent
directors having no relationship that may interfere with the exercise of their
objective judgment in discharging the responsibilities set forth below. As also
determined by the Board of Directors, all members of the Committee shall have
sufficient financial experience and ability to enable them to discharge such
responsibilities, and at least one member shall have accounting or related
financial management expertise. The Committee shall have the following
responsibilities:
1. To recommend to the Board of Directors the independent auditors
to examine the Company's accounts, controls and financial statements. The
independent auditors are ultimately accountable to the Board of Directors and to
the Committee, and the Board of Directors and the Committee have the ultimate
authority and responsibility to select, evaluate and, where appropriate, replace
the independent auditors.
2. To review and approve the scope of the examination to be
conducted by the independent auditors. In addition, the Committee shall (a) at
least annually obtain from the independent auditors a formal written statement
delineating all relationships between the independent auditors and the Company,
(b) at least annually discuss with the independent auditors any relationship or
services which may impact the independent auditors' objectivity or independence
and take or recommend that the Board take appropriate actions to ensure such
independence, and (c) annually, prior to the commencement of the audit of the
annual financial statements, receive from the independent auditors the written
disclosures required by the Independence Standards Board Standard No. 1 and
discuss with the independent auditors the independent auditors' independence.
3. To review results of the examinations of the financial
statements of the Company by the independent auditors, their evaluation of the
Company's internal system of audit and financial controls, and their annual
report on the Company's financial statements.
4. To review, with the Chief Financial Officer or such other
officers as the Committee deems appropriate, the Company's internal system of
audit and financial controls and the results of internal audits.
A-1
5. To review the Company's financial reporting, the accounting
standards and principles followed by the Company and significant changes in such
standards or principles or in their application.
6. To review and investigate any matters pertaining to the
integrity of management, including conflicts of interest, or adherence to
standards of business conduct as required in the policies of the Company. In
connection therewith, the Committee will meet, as deemed appropriate, with the
General Counsel and other Company officers or employees.
In discharging its responsibilities, the Committee will periodically meet
with the Company's auditors without the presence of any Company officer or
employee.
A-2
PROXY AMREP CORPORATION PROXY
SOLICITED BY BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS
AMREP Corporation
641 Lexington Avenue, 6th Floor, New York, New York
September 19, 2002, 9:00 AM Local Time
The undersigned hereby appoints Edward B. Cloues II and Peter M. Pizza, and
each of them acting alone, with full power of substitution, proxies to vote the
Common Stock of the undersigned at the 2002 Annual Meeting of Shareholders of
AMREP Corporation, and any adjournment thereof, for the election of directors as
set forth in the Proxy Statement of the Board of Directors dated July 24, 2002,
and upon all other matters which come before said meeting or any continuation or
adjournment thereof.
Receipt of the Notice of Annual Meeting of Shareholders and accompanying
Proxy Statement of the Board of Directors is acknowledged.
Unless otherwise specified, this proxy will be voted FOR the election of
directors as set forth in the Proxy Statement.
(Continued and to be dated and signed on reverse side.)
PLEASE MARK, DATE SIGN
AND MAIL YOUR PROXY |X|
PROMPTLY IN THE ENVELOPE Votes MUST be indicated
PROVIDED. (x) in Black or Blue ink.
A vote FOR ITEM 1 is recommended by the Board of Directors.
1. FOR ELECTION OF THREE (3) DIRECTORS AS DESCRIBED IN THE PROXY STATEMENT OF
THE BOARD OF DIRECTORS.
_ _ _
FOR all nominees|_| WITHHOLD AUTHORITY to vote|_| * Exceptions|_|
listed below for all nominees listed below
_
To change your address, please|_|
mark this box.
Nominees: Jerome Belson, Nicholas G. Karabots, Albert Russo
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"Exceptions" box and write that nominee's name in the space provided below.)
*Exceptions ____________________________________________________________________
If stock is held in the name of more than one person, all holders
should sign. Sign exactly as name or names appear at left. Persons
signing in a fiduciary capacity should include their title as such.
Date Share owner sign here Co-Owner sign here
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