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 20, 2001
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Shareholders of
AMREP CORPORATION (the "Company") will be held at New York Marriott Eastside
Hotel, 525 Lexington Avenue, New York, New York on September 20, 2001 at 9:00
A.M. for the following purposes:
(1) To elect two 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 August 6, 2001 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, 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: August 20, 2001
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 20, 2001
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 20,
2001, 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, the accompanying Notice of Annual
Meeting and proxy form have been first sent to shareholders on or about August
22, 2001.
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 2001 Annual Report of the Company for the fiscal year ended
April 30, 2001, 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 August 6, 2001, the
date fixed by the Board of Directors in accordance with the By-Laws, are
entitled to vote at the Annual Meeting. As of August 6, 2001, the Company had
issued and outstanding 6,573,586 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
August 6, 2001 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 2,819,393(1) 42.9%
P.O. Box 736
Fort Washington, PA 19034
Albert Russo 1,067,220(2)(3) 16.2%
Lena Russo
Clifton Russo
Lawrence Russo
c/o American Simlex Company
401 Broadway
Suite 1712
New York, New York 10013
Dimensional Fund Advisors Inc. 449,636(4) 6.8%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
2
Other Directors and Amount Owned % of
Executive Officers Beneficially Class
------------------- ------------ -----
Jerome Belson 46,000(5) *
Edward B. Cloues II 4,500(1) *
Lonnie A. Coombs 1,000 *
Michael P. Duloc 5,000 *
Peter M. Pizza 0 -
Samuel N. Seidman 2,500(1) *
Mohan Vachani 500 *
James Wall 8,057(6) *
Directors and
Executive Officers
as a Group
(10 persons) 3,954,170(1)-(3)(5)-(6) 60.2%
------------------------------
* Indicates less than 1%
(1) Includes 2,500 shares which the individual has the right to acquire
pursuant to currently exercisable options.
(2) Includes 2,500 shares which Mr. Albert Russo has the right to acquire
pursuant to currently exercisable options.
(3) In a Schedule 13D under the Securities Exchange Act of 1934 filed
jointly by Albert Russo, Lena Russo, Clifton Russo and Lawrence Russo, the
filing persons reported that they share voting power as to 1,064,720 shares,
representing 16.2% of the outstanding Common Stock of the Company, and that
Albert Russo, Lena Russo, Clifton Russo and Lawrence Russo have sole dispositive
power as to 480,241, 58,740, 270,617, and 255,122 shares, respectively, of that
Common Stock representing 7.3%, 0.9%, 4.1%, and 3.9% of the outstanding Common
Stock.
(4) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 449,636 shares of Common
Stock of the Company, all of which shares are held in portfolios of four
registered investment companies or other investment vehicles, including
commingled group trusts, all of which Dimensional serves as investment manager
or investment advisor. Dimensional disclaims beneficial ownership of all such
shares.
(5) Includes 2,000 shares which Mr. Belson has the right to acquire
pursuant to currently exercisable options.
(6) Includes 287 shares held in the Company's Savings and Salary Deferral
Plan allocated to the account of Mr. Wall.
3
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, two Class II directors
will be elected to serve until the 2004 Annual Meeting and until their
successors are elected and qualified. Although the Board of Directors does not
expect that either of the persons named will be unable to serve as a director,
should either 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 2004 ANNUAL MEETING (CLASS II)
Samuel N. Seidman 67 1977 President of Seidman & Co., Inc.,
investment bankers.
Lonnie A. Coombs 54 2001 Proprietor, Lonnie A. Coombs,
Certified Public Accountant,
accounting, tax and business
consulting services.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2002 ANNUAL MEETING (CLASS III)
Jerome Belson 75 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.; Director,
Waterhouse National Bank.
------------------------------
* See "Compensation Committee Interlocks and Insider Participation" section for
information concerning agreement to nominate Mr. Karabots.
4
Nicholas G. Karabots* 68 1993 Chairman of the Board and Chief
Executive Officer of Spartan
Organization, Inc., Kappa Printing
Group, L.P., Kappa Publishing Group,
Inc., Geopedior Associates, LP and
Jericho National Golf Club, Inc., as
well as other affiliated entities,
which companies are engaged
primarily in the fields of printing,
publishing, recreational sports and
real estate.
Albert Russo 47 1996 Managing Partner, Russo Associates,
Pioneer Realty, 401 Broadway Company
and related real estate entities;
Partner, American Simlex Co.,
textile exports.
NOMINEES CONTINUING IN OFFICE UNTIL THE 2003 ANNUAL MEETING (CLASS I)
Edward B. Cloues II 53 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 1996 to December
1997.
James Wall 64 1991 Chief Executive Officer of AMREP
Southwest Inc., a wholly-owned
subsidiary of the Company; Senior
Vice President of the Company.
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 eight 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 five 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, a Human Resources
Committee and a Stock Option Committee. The Human Resources Committee acts as a
compensation committee. The Board does not have a nominating committee. The
members of the Audit and Examining Committee receive $750 for each committee
5
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 Code of Conduct and (v) investigating where necessary matters relating
to the audit functions. 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 the
Committee are Messrs. Cloues, Karabots (Chairman) and Russo. The Committee held
two meetings during the last fiscal year.
The Stock Option Committee grants options under, and administers, the 1992
Stock Option Plan. The current members of the Committee are Messrs. Cloues,
Karabots (Chairman) and Russo. The Committee did not meet 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, each
non-employee director receives on the first business day following the Company's
Annual Meeting of Shareholders 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 2000 Annual
Meeting, the exercise price is $5.88 per share. Each option becomes exercisable
as to all or any portion of the shares covered thereby one year after the date
of grant and expires five years after the date of grant.
The various directors and nominees hold other directorships of public
companies as follows:
Name Director of
---- -----------
Edward B. Cloues II AmeriQuest Technologies, Inc.
K-Tron International, Inc.
Samuel N. Seidman Productivity Technologies Corp.
6
EXECUTIVE COMPENSATION
The Summary Compensation Table below sets forth individual compensation
information for each of the Company's last three fiscal years of its four most
highly paid executive officers.*
SUMMARY COMPENSATION TABLE
Annual Long Term
Compensation Awards
------------ -------
Securities
Name and Underlying
Principal Options/ All Other
Position Year Salary($) Bonus($) SAR's (#) Compensation($)(1)(2)
-------- ---- -------- -------- ---------- ---------------------
Mohan Vachani(3) 2001 268,177 -0- -0- 3,316
Senior Vice 2000 262,225 -0- -0- 4,107
President-Chief 1999 260,204 -0- -0- 2,860
Financial
Officer
James Wall 2001 268,648 -0- -0- 3,552
Senior Vice 2000 255,046 -0- -0- 3,500
President and 1999 236,430 -0- -0- 3,147
CEO of AMREP
Southwest Inc.
Daniel Friedman(4) 2001 140,870 -0- -0- 306,813
Senior Vice 2000 281,740 -0- -0- 3,333
President and 1999 279,598 -0- -0- 3,367
CEO of Kable
News Company,
Inc.
Peter M. Pizza 2001 135,465 -0- -0- -0-
Vice President 2000 131,044 -0- -0- -0-
and Secretary 1999 128,261 -0- -0- 1,381
(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. Vachani resigned effective April 30, 2001 and was replaced as Chief
Financial Officer by Peter M. Pizza.
(4) Mr. Friedman resigned effective October 31, 2000. The amount of "All Other
Compensation" includes a payment to him of $305,191.47 pursuant to an
agreement with him in connection with the termination of his employment.
See "Certain Transactions".
------------------------------
*Since January 1996, the Company has not had a CEO.
7
OPTIONS
No stock options were granted to or exercised by any of the executive
officers named in the Summary Compensation Table during the fiscal year ended
April 30, 2001. No stock options were held by such executive officers at April
30, 2001.
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 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.
Arthur Andersen LLP, the Company's independent auditors for 2001, 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 Arthur Andersen LLP the matters that are required
to be discussed by Statement on Auditing Standards No. 61 (Communication With
Audit Committees). Arthur Andersen LLP have provided to the Committee the
written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the
Committee discussed with Arthur Andersen LLP that firm's independence. The
Committee also considered whether Arthur Andersen LLP's provision of non-audit
services to the Company is compatible with Arthur Andersen LLP's independence.
Based on the considerations referred to above, the Committee recommended to
the Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for 2001. The foregoing report is provided
by the following independent directors who constitute the Committee:
Samuel N. Seidman, Chairman
Jerome Belson
July 20, 2001 Lonnie A. Coombs
HUMAN RESOURCES COMMITTEE EXECUTIVE COMPENSATION REPORT
The Human Resources Committee ("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 other than stock option grants must be approved by the
Board of Directors or its Executive Committee. The Stock Option Committee, also
consisting of non-employee directors, has sole authority to award stock options.
8
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 2001 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, and the
salaries of Messrs. Friedman and Vachani for the Company's last fiscal year
were, in amounts recommended by the former CEO in fiscal year 1994, except that
they were 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 $25,000 on October 1, 1999 and by an additional 3% on
October 1, 2000, in accordance with a recommendation made by the HRC. The basis
of the 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
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.
The Stock Option Committee has granted no options to Executive Officers
since fiscal 1995.
Payments during fiscal year 2001 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 20, 2001 Human Resources Committee
9
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,
2001, Kable purchased magazines from such companies for a total of $26,928,000
and resold them at higher prices.* Kable continues as a distributor for such
companies. Since 1997 Kable has performed fulfillment services for publishing
companies owned or controlled by Mr. Karabots, and during the fiscal year ended
April 30, 2001 was paid by these companies $332,500 for its services. Kable
continues to perform fulfillment services for such companies.
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 and Stock Option
Committee.
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 similar capitalizations to that of the
Company ("Similar Cap Issuers"), for the five years beginning April 30, 1996 and
ending April 30, 2001 (assuming the investment of $100 in the Company's stock,
the S&P 500 and the Similar Cap Issuers on April 30, 1996, 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 for purposes of comparison the Similar Cap
Issuers. The Similar Cap Issuers are: Acmat Corp.-Cl A, Aerovox Inc., American
Bancorp/OH, APA Optics Inc., Breakwater Resources Ltd., BRT Realty Trust, Camco
------------------------------
* 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 $26,928,000 paid Mr. Karabots' companies represents approximately
23.2% of the approximately $115,900,000 Kable paid all publishers in fiscal
2001.
10
Financial Corp., Cantel Medical Corp. - Cl B, Ceres Group Inc., Compare Generiks
Inc., DIY Home Warehouse 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.
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
AMREP CORP 100 74.36 176.92 117.95 102.56 80.00
S&P 500 INDEX 100 125.13 176.52 215.04 236.82 206.10
SIMILAR CAP ISSUERS 100 88.62 118.39 92.98 118.57 120.42
11
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 amount of earnings which can be taken into account in calculating
benefits; that maximum currently is $170,000, increasing to $200,000 for years
after December 31, 2001.
Messrs. Friedman and Wall have thirty years of credited service, Mr.
Vachani has seven years of credited service, Mr. Pizza has five years of
credited service, and Mr. Duloc has eight years of credited service. Assuming,
with respect to Messrs. Wall, Pizza and Duloc, that (i) they continue to be
employed until age 65, (ii) their annual salaries continue to be at least at
current level, (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 Company's Plan, and, with respect to all five
individuals, (iv) they elect the life annuity form of pension, their annual
retirement benefits would be as set forth below:
Estimated
Benefit
Daniel Friedman* $65,027
Mohan Vachani 9,275
James Wall 54,291
Peter M. Pizza 11,778
Michael P. Duloc 26,888
CERTAIN TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation" for
information concerning transactions with Nicholas G. Karabots.
The Company entered into an agreement with Daniel Friedman pursuant to
which (i) on October 31, 2000 he ceased to be a director and officer of the
------------------------------
* The benefit to Mr. Friedman is the amount he is currently receiving, which
includes amounts "grandfathered" under the law.
12
Company and its subsidiaries, (ii) he has been and will continue to be a
consultant to the Company from November 1, 2000 until December 31, 2001, (iii)
the Company paid him $305,191.47 and is providing him with certain medical
insurance benefits, and (iv) the Company purchased from him 38,610 shares of the
Company's Common Stock at a price of $7.00 per share.
The Company entered into an agreement with Mohan Vachani pursuant to which
(i) as of April 30, 2001, his employment by the Company terminated and he ceased
to be a director and officer of the Company and all of its subsidiaries, (ii) he
has been since April 30, 2001 and will continue to be until April 30, 2002 a
consultant to the Company, for a fee of $100,000 (subject to increase if he
provides more than 600 hours of consulting services) plus certain medical
insurance benefits, and (iii) he received a severance payment in the amount of
$22,518.
In August, 1999, Mr. Wall purchased a house in Rio Rancho, New Mexico from
a subsidiary of the Company for a purchase price of $220,000. The house had been
used as a model home for three years and the price paid was approximately the
amount for which it would have been listed for sale to a third party.
AUDITORS
The consolidated financial statements of the Company and its subsidiaries
included in the Annual Report to Shareholders for the fiscal years ended April
30, 2001 and 2000 have been examined by Arthur Andersen LLP, independent public
accountants. No representative of Arthur Andersen 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 2002.
Audit Fees
----------
The aggregate fees billed for professional services rendered for the audit
of the Company's annual financial statements for its fiscal year ended April 30,
2001 and the reviews of the financial statements included in the Company's Forms
10-Q for that fiscal year amounted to $125,000.
Financial Information Systems Design and Implementation Fees
------------------------------------------------------------
No fees were billed to the Company, nor were services rendered to the
Company, by Arthur Andersen LLP for financial information systems design and
implementation for the Company's fiscal year ended April 30, 2001.
All Other Fees
--------------
The aggregate fees billed for all services other than audit services
rendered by Arthur Andersen LLP for the year ended April 30, 2001 amounted to
$91,400. These fees were all for tax and tax-related services.
13
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 2002 Annual Meeting
and who wish to have such proposals included in the Company's Proxy Statement
for the 2002 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 April 22, 2002. 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
2002 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 July 8, 2002 and a specific statement to that effect is
made in the Proxy Statement or form of proxy.
By Order of the Board of Directors
Peter M. Pizza, Secretary
Dated: August 20, 2001
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 2001, including the financial statements and the schedules thereto,
filed with the Securities and Exchange Commission. Any request should be
14
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 2001 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.
15
Appendix A
CHARTER
OF THE AUDIT AND EXAMINING COMMITTEE
OF THE BOARD OF DIRECTORS OF
AMREP CORPORATION
Adopted by Board of Directors on March 14, 2000
====================================================
1. Purpose.
-------
The function of the Audit and Examining Committee ("Committee") is to
assist the Board of Directors in fulfilling its oversight responsibilities by
reviewing: the financial reports and other financial information provided by the
Corporation to the public; the Corporation's systems of internal controls
relating to finance, accounting and ethics; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Committee should encourage continuous improvement of, and should
foster adherence to, the Corporation's financial and accounting policies,
procedures and practices.
The Committee's primary duties and responsibilities are to:
(i) Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system;
(ii) Review and appraise the audit efforts of the Corporation's
independent auditors and internal auditor; and
(iii) Provide an open avenue of communication among the independent
auditors, senior management, the internal auditor and the Board of
Directors.
The Committee will fulfill these responsibilities by carrying out the activities
enumerated in this Charter.
2. Membership Requirements.
-----------------------
(a) The Committee shall consist of two (2) members, but not later than June
14, 2001 it shall consist of three (3) members. Committee members shall be
elected by the Board at the annual organizational meeting of the Board, and the
Chairman shall be designated by the Board.
(b) Each member of the Committee shall be "Independent" within the meaning
of Section 303.01 of the Corporate Governance Standards of the New York Stock
Exchange.
A-1
(c) Each member of the Committee shall be "financially literate", as this
qualification is interpreted by the Board of Directors in its business judgment,
or must become financially literate within a reasonable period of time after his
or her appointment to the Committee.
(d) At least one member of the Committee must have accounting or related
financial management expertise, as the Board of Directors interprets this
qualification in its business judgment.
3. Meetings.
--------
All actions of the Committee shall be taken, and each review by the
Committee shall be conducted, at a meeting. Meetings shall be held at the
principal office of the Corporation or at such other place as the Committee
members may agree at a date and time to be determined by the Chairman in
consultation with the other members. A majority of the members of the Committee
shall constitute a quorum at meetings. A member not at the designated place of a
meeting may participate in the meeting by conference telephone and a member who
so participates shall be deemed to be present at the meeting.
4. Responsibilities of the Committee.
---------------------------------
The Committee shall
(i) Recommend to the Board the engagement, retention, or discharge of the
independent auditors;
(ii) Prior to the commencement of each annual audit, review the engagement
of the independent auditors, the scope and timing of the audit, any services
other than audit services to be rendered, and the compensation to be paid;
(iii) Review and discuss with the independent auditors upon completion of
their annual audit:
(a) the audited financial statements;
(b) their proposed report;
(c) their perception of the Corporation's financial and accounting
personnel;
(d) the cooperation the independent auditors received from the
Corporation's personnel during the audit;
(e) the extent to which the Corporation's resources were and should be
used to minimize the time spent by the independent auditors;
(f) any significant transactions which are not a normal part of the
Corporation's business;
A-2
(g) the choice of accounting principles and any changes in accounting
principles and practices utilized by the Corporation;
(h) all significant adjustments;
(i) the adequacy of the internal financial controls and management
reporting systems; and
(j) any recommendations the independent accountants may have with
respect to any matters;
(iv) Prior to the filing with the Securities and Exchange Commission of a
Quarterly Report on Form 10-Q, review with the independent auditors the interim
financial statements contained in such Report;
(v) Annually review with the independent auditors and with the
Corporation's chief financial officer (and other appropriate personnel) the
Corporation's policies and procedures with respect to internal auditing,
accounting and financial controls;
(vi) Discuss with the independent auditors the matters required to be
discussed by Statements on Auditing Standards No. 61;
(vii) Review and discuss the audited financial statements with management;
(viii) Make recommendations to the Board of Directors whether the audited
financial statements for a fiscal year should be included in the Corporation's
Annual Report for that year;
(ix) Prepare the report required by the Rules of the Securities and
Exchange Commission to be included in the Corporation's annual proxy statement;
(x) Review with management at least annually the internal accounting and
audit procedures, all recommendations made by the internal staff, the internal
auditor or the independent auditors, and the extent to which such
recommendations have been implemented;
(xi) At least annually meet separately with management, the internal
auditor and the independent auditors to discuss any matters each believes should
be discussed privately;
(xii) Direct the independent auditors to perform such supplemental reviews
and audits as the Committee deems appropriate;
(xiii) Direct and supervise investigations into matters within the scope of
its duties which are brought to its attention;
A-3
(xiv ) Annually, review the Corporation's Code of Conduct and inquire of
the appropriate corporate personnel and independent accountants concerning
deviations from such code;
(xv) Report at least quarterly to the Board as to its activities and
findings and make such recommendations as it deems appropriate; and
(xvi) Annually, following its review of the annual financial statements,
review and reassess the adequacy of this Charter and recommend any changes it
deems appropriate.
5. Accountability of Independent Auditor.
-------------------------------------
The independent auditors are ultimately accountable to the Board of
Directors and the Committee.
6. Authority of the Committee and the Board of Directors.
-----------------------------------------------------
The Committee and the Board of Directors have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace, the
independent auditors.
7. Concerning the Independence of the Independent Auditors.
-------------------------------------------------------
(a) The Committee shall require the independent auditors to submit to it on
a periodic basis, but not less than annually, a formal written statement
delineating all relationships between the independent auditors and the
Corporation.
(b) The Committee shall actively engage in a dialogue with the independent
auditors with respect to any disclosed relationships or services that may impact
the objectivity and independence of the independent auditors and shall recommend
to the Board of Directors that it take appropriate action in response to the
independent auditors' report to satisfy itself of the independent auditors'
independence.
(c) Annually, prior to the commencement of the audit of the annual
financial statements, the Committee shall receive from the indep endent auditors
the written disclosures required by the Independence Standards Board Standard
No. 1 and discuss with the independent auditors the independent auditors'
independence.
A-4
PROXY AMREP CORPORATION PROXY
SOLICITED BY BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS
New York Marriott Eastside Hotel,
525 Lexington Avenue, New York, NY 10017
September 20, 2001, 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 2001 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 August 20,
2001, 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.)
A vote FOR ITEM 1 is recommended
by the Board of Directors.
1. FOR ELECTION OF FOR all |_| WITHHOLD |_| *EXCEPTIONS: |_|
TWO (2) nominees AUTHORITY to
DIRECTORS AS listed vote for all
DESCRIBED IN THE below: nominees listed
PROXY STATEMENT OF below:
THE BOARD OF
DIRECTORS.
Nominees: Samuel N. Seidman, Lonnie A. Coombs
(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 ____________________________________________________________________
Change of Address
Mark Here |_|
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.
Dated: ________________________, 2001
_____________________________________
(Signature)
_____________________________________
(Signature)
Votes MUST be indicated
(x) in Black or Blue ink.
PLEASE MARK, DATE, SIGN AND MAIL YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED.