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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to paragraph 240.14a-12
AMREP CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
AMREP CORPORATION
(An Oklahoma corporation)
NOTICE OF 2007 ANNUAL MEETING OF SHAREHOLDERS
October 2, 2007
NOTICE IS HEREBY GIVEN that the 2007 Annual Meeting of Shareholders of
AMREP Corporation (the "Company") will be held at the Conference Center at
Normandy Farm, Route 202 and Morris Road, Blue Bell, Pennsylvania on October 2,
2007 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 10, 2007 as the record date for the determination of
shareholders of the Company entitled to notice of and to vote at the meeting and
any continuation or 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, 300 Alexander Park, Suite 204, Princeton,
New Jersey.
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
Irving Needleman, Secretary
Dated: August 22, 2007
Princeton, New Jersey
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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 fiscal 2007, including the financial statements and the schedules thereto,
filed with the Securities and Exchange Commission. Any request should be
directed to Irving Needleman, Secretary, AMREP Corporation, 300 Alexander Park,
Suite 204, Princeton, New Jersey 08540. 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.
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AMREP CORPORATION
300 Alexander Park, Suite 204
Princeton, New Jersey 08540
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
To be Held at 9:00 A.M. on October 2, 2007
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of AMREP Corporation (the
"Company") for use at the Annual Meeting of Shareholders of the Company to be
held on October 2, 2007 and at any continuation or adjournment thereof (the
"Annual Meeting"). The Annual Meeting will be held at the Conference Center at
Normandy Farm located at Route 202 and Morris Road, Blue Bell, Pennsylvania.
A copy of the 2007 Annual Report of the Company for the fiscal year ended
April 30, 2007, including financial statements, accompanies this Proxy
Statement. Such Annual Report does not constitute a part of the proxy
solicitation material. This Proxy Statement and the accompanying Notice of
Annual Meeting and proxy form are first being sent to shareholders on or about
August 29, 2007.
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Information Concerning the Annual Meeting
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What will be voted on at the Annual Meeting?
At the Annual Meeting, shareholders will vote on the election of two
nominees to serve on the Board.
How does the Board recommend I vote on the proposal?
The Board recommends that you vote FOR each of the two nominees named in
this Proxy Statement.
Who is entitled to vote at the Annual Meeting?
Only shareholders of record as of the close of business on August 10, 2007,
the date fixed by the Board in accordance with the Company's By-Laws, are
entitled to notice of and to vote at the Annual Meeting.
If I have given a proxy, how do I revoke that proxy?
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.
How will my proxy be voted?
All properly executed, unrevoked proxies in the enclosed form that are
received in time will be voted in accordance with the shareholders'
directions and, unless contrary directions are given, will be voted for the
election as directors of the nominees named in this Proxy Statement.
How many votes are needed to elect directors?
The two nominees receiving the highest number of "FOR" votes will be
elected as directors. This is referred to as a plurality.
What if a nominee is unwilling or unable to serve?
This is not expected to occur but, in the event that it does, proxies will
be voted for a substitute nominee designated by the Board.
How will abstentions and broker non-votes affect the voting?
Abstentions and broker non-votes have no effect on the voting for election
of directors.
How many shares can be voted at the Annual Meeting?
As of August 10, 2007, the Company had issued and outstanding 6,650,012
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.
How many votes will I be entitled to cast at the Annual Meeting?
You will be entitled to cast one vote for each share of Common Stock you
held at the close of business on August 10, 2007, the record date for the
Annual Meeting, as shown on the list of shareholders at that date prepared
by the Company's transfer agent for the Common Stock.
What is a "quorum?"
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock of the Company authorized to vote will
constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker non-votes will be counted in determining whether a
quorum is present at the Annual Meeting.
Who may attend the Annual Meeting?
All shareholders of the Company who owned shares of record at the close of
business on August 10, 2007 may attend the Annual Meeting. If you want to
vote in person and you hold Common Stock in street name (i.e., your shares
are held in the name of a brokerage firm, bank or other nominee), you must
obtain a proxy card issued in your name from the firm that holds your
shares and bring that proxy card to the Annual Meeting, together with a
copy of a statement from that firm reflecting your share ownership as of
the record date and valid identification. If you hold your shares in street
name and want to attend the Annual Meeting but not vote in person at the
Annual Meeting, you must bring a copy of a statement from the firm that
holds your shares reflecting your share ownership as of the record date and
valid identification.
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COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth in the following table is information concerning the ownership of
the Common Stock of the Company by the persons who, to the knowledge of the
Company, own beneficially more than 5% of the outstanding shares. The table also
sets forth the same information concerning beneficial ownership for each
director of the Company, the current executive officers named in the Summary
Compensation Table on page 11 and all directors and current executive officers
of the Company as a group. Unless otherwise indicated, reported ownership is as
of August 10, 2007, and the Company understands that the beneficial owners have
sole voting and investment power with respect to the shares beneficially owned
by them. In the case of directors and executive officers, the information below
has been provided by such persons at the request of the Company.
Shares Owned % of
Beneficial Owner Beneficially(1) Class
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Nicholas G. Karabots (Director) 3,592,043(2) 54.0
P.O. Box 736
Fort Washington, PA 19034
Albert V. Russo (Director) 1,117,540(3) 16.8
Lena Russo, Clifton Russo,
Lawrence Russo
American Simlex Company
401 Broadway
New York, NY 10013
Goldman Sachs Asset Management, L.P. 460,106 (4) 6.9
32 Old Slip, 17th Floor
New York, NY 10005
Other Directors and Current Executive Officers
Edward B. Cloues, II 2,500 *
Lonnie A. Coombs 4,000 *
Michael P. Duloc 2,500 (5) *
John F. Meneough - -
Irving Needleman - -
Peter M. Pizza - -
Samuel N. Seidman 14,500 *
James Wall 3,057 (6) *
Jonathan B. Weller - -
Directors and Current Executive Officers
as a Group (11 persons) 4,736,140 (2),(3),(5),(6) 71.2
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* Indicates less than 1%.
(1) The shareholdings include 500 shares for Mr. Karabots, 1,500 shares for
each of Messrs. Coombs and Russo and 1,000 shares for Mr. Seidman, which
such persons have the right to acquire pursuant to presently exercisable
options issued under the Company's Non-Employee Directors Option Plan.
(2) Includes 580,165 shares owned by The Karabots Foundation, a private
non-profit corporation founded by Mr. Karabots and of which he is the
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President, Foundation Manager and one of two directors. Mr. Karabots
disclaims beneficial ownership of the shares owned by The Karabots
Foundation.
(3) Albert V. 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 V. Russo - 664,741 (10.0%); Lena Russo - 33,740 (0.5%); Clifton
Russo - 237,617 (3.6%); and Lawrence Russo - 181,442 (2.7%).
(4) Goldman Sachs Asset Management, L.P. ("GSAM"), a registered investment
advisor, has sole voting power over 441,568 shares of the Company's Common
Stock and sole dispositive power over 460,106 shares. The foregoing is
based solely on information set forth in an amendment to a Schedule 13G
filed by GSAM with the Securities and Exchange Commission on August 10,
2007.
(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 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 2010 Annual Meeting and until their successors are elected and
qualified.
The Board is nominating Samuel N. Seidman and Lonnie A. Coombs, who are
incumbent Class II directors, for election at the Annual Meeting. Although the
Board does not expect that either of the persons nominated 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 Board unanimously recommends a vote "for" the two Class II nominees.
The following information relates to the nominees of the Board for election
and the directors whose terms of office do not expire this year.
Nominees to serve until the 2010 Annual Meeting (Class II):
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SAMUEL N. SEIDMAN, age 73, has been a director of the Company since 1977. Mr.
Seidman is the President of Seidman & Co., Inc. an economic consulting and
investment banking firm that he founded and also serves as director, Chairman of
the Board of Directors, President and Chief Executive Officer of Productivity
Technologies Corp., a manufacturer of metal forming and materials handling
automation equipment and a wirer of control panels. He has held these positions
for more than the past five years. He also serves as a director of InkSure
Technologies Inc.
LONNIE A. COOMBS, age 59, has been a director of the Company since 2001. Mr.
Coombs is a certified public accountant and provides accounting, tax and
business consulting services, and has been engaged in this occupation for more
than the past five years.
Directors continuing in office until the 2009 Annual Meeting (Class I):
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EDWARD B. CLOUES, II, age 59, has been a director of the Company since 1994 and
currently serves as the Chairman of the Board. Mr. Cloues is the Chairman and
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Chief Executive Officer of K-Tron International, Inc., a material handling
equipment manufacturer, and has held these positions for more than the past five
years. Mr. Cloues serves as a director of K-Tron International, Inc., Penn
Virginia Corporation and Penn Virginia Resource GP, LLC, the General Partner of
Penn Virginia Resource Partners, L.P.
JAMES WALL, age 70, has been a director of the Company since 1991. Mr. Wall is
Senior Vice President of the Company and Chairman of the Board of Directors,
President and Chief Executive Officer of AMREP Southwest Inc., a wholly-owned
subsidiary of the Company, and has held these positions for more than the past
five years.
Directors continuing in office until the 2008 Annual Meeting (Class III):
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NICHOLAS G. KARABOTS, age 74, has been a director of the Company since 1993 and
currently serves as the Vice Chairman of the Board. Mr. Karabots is the Chairman
of the Board of Directors and Chief Executive Officer of Kappa Media Group,
Inc., Spartan Organization, Inc., Jericho National Golf Club, Inc. and other
private companies that are primarily engaged in the publishing, printing,
recreational sports and real estate businesses, and has held these positions for
more than the past five years.
ALBERT V. RUSSO, age 53, has been a director of the Company since 1996. Mr.
Russo is the Managing Partner of real estate entities Russo Associates and
Pioneer Realty and is a Partner of American Simlex Company, a textile exporter,
and has held these positions for more than the past five years. Mr. Russo is
also the Managing Partner of 401 Broadway Building, a real estate company that
acquired its principal asset in 2006 from a Court appointed receiver for 401
Broadway Realty Company, of which he was a general partner, in connection with
the resolution of a dispute among the partners.
JONATHAN B. WELLER, age 60, has been a director of the Company since his
election to the Board in March 2007. Mr. Weller began working as an Adjunct
Lecturer at the Wharton School of the University of Pennsylvania in January 2007
after his retirement in April 2006. From June 2004 to April 2006, Mr. Weller was
Vice Chairman of Pennsylvania Real Estate Investment Trust, a national owner,
manager and operator of retail properties. He also served as Pennsylvania Real
Estate Investment Trust's President and Chief Operating Officer from 1994 to
June 2004, and served on its Board of Trustees from 1994 to March 2006. In
addition, Mr. Weller is a director of PVG GP, LLC, the General Partner of Penn
Virginia GP Holdings, L.P.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company's Common Stock is listed on the New York Stock Exchange, and
the Company is subject to the Exchange's Corporate Governance Standards (the
"Governance Standards"). The Governance Standards, among other things, generally
require a listed company to have independent directors within the meaning of the
Governance Standards as a majority of its board of directors and for the board
to have a nominating/corporate governance committee and a compensation committee
each composed entirely of independent directors. However, the Company is a
"controlled company" within the meaning of the Governance Standards because
Nicholas G. Karabots and entities related to him have the power to vote more
than a majority of the outstanding Common Stock, and the Governance Standards
permit a controlled company to choose not to comply with those requirements. The
Board has chosen not to have a nominating/corporate governance committee. Also,
the Board has chosen not to comply with the Governance Standards applicable to
compensation committees. Although the Board has a Compensation and Human
Resources Committee, not all of its members are independent directors as would
be required by the Governance Standards if the Company were not a controlled
company.
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Mr. Karabots does not qualify as an independent director under the
Governance Standards. He owns and he and certain of his family members are
executives of publishers that are customers for the Company's distribution and
fulfillment services for which the payments involved are in amounts greater than
permitted under the Governance Standards for a director to be considered
independent. Also, his son-in-law, Michael P. Duloc, is the President and Chief
Executive Officer of the Company's Kable Media Services, Inc. subsidiary. Mr.
Wall is a Company employee and therefore does not qualify as an independent
director under the Governance Standards.
Based principally on their responses to questions to these persons
regarding the relationships addressed by the Governance Standards and
discussions with them, the Board has determined that, except for Messrs.
Karabots and Wall, all of its members meet the director independence
requirements of the Governance Standards. The Board was informed that Mr.
Coombs, who is a certified public accountant, for many years has provided, and
expects to continue to provide, business and tax consulting services to
companies owned by Mr. Karabots, including companies that are customers for the
Company's distribution and fulfillment services. The revenues from such business
and tax consulting services for the Company's last three fiscal years have
accounted for from 7.5% to 8.5% of Mr. Coombs' professional service revenues
over those periods. However, the Board concluded that Mr. Coombs' relationship
with Mr. Karabots and his companies is as an independent contractor, and not as
an employee, partner, shareholder or officer, and would not interfere with Mr.
Coombs' independence from the Company's management.
The nominees for election as directors are selected by the whole Board. The
Board has no charter addressing the director nomination process or any specific
qualifications for nominees to meet. If the Board determines in the future to
seek any new director, it will consider the qualifications for the position at
that time. The Board will consider candidates for director recommended by
shareholders on the same basis as any other proposed nominees. Any shareholder
desiring to propose a candidate for selection as a nominee of the Board for
election at the 2008 Annual Meeting may do so by sending a written communication
no later than May 1, 2008 to AMREP Corporation, 300 Alexander Park, Suite 204,
Princeton, New Jersey 08540, Attention: Corporate Secretary, identifying the
proposing shareholder, specifying the number of shares of Common Stock held and
stating the name and address of the proposed nominee and the information
concerning such person that the regulations of the Securities and Exchange
Commission require be included in a proxy statement relating to such person's
election as a director. Shareholders should recognize that so long as Mr.
Karabots remains the Company's controlling shareholder, his concurrence is
necessary for the election of any director.
In July 2004 in response to the Governance Standards, the Board adopted
Corporate Governance Guidelines (the "Guidelines") which address various matters
involving the Board and the conduct of its business. The Board also adopted a
new Code of Business Conduct and Ethics setting forth principles of business
conduct applicable to the directors, officers and employees of the Company. The
Guidelines and Code of Business Conduct and Ethics, as well as the charters of
the Board's Audit Committee and Compensation and Human Resources Committee, may
be viewed under "Corporate Governance" on the Company's website at
www.amrepcorp.com, and written copies will be provided to any shareholder upon
request to the Company at AMREP Corporation, 300 Alexander Park, Suite 204,
Princeton, New Jersey 08540, Attention: Corporate Secretary. The Company intends
to disclose on its website any amendment to or waiver of any provision of the
Code of Business Conduct and Ethics that applies to any of its executive
officers, including its principal financial and accounting officer.
Directors are expected to attend Annual Meetings of Shareholders, and all
of the directors (except Mr. Weller, who first became a director in March 2007)
attended last year's Annual Meeting. The Board held seven meetings during the
last fiscal year, and all of the directors (except Mr. Weller) attended at least
75% of the total of those meetings and the meetings during such year of the
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Board Committees of which they were members. Mr. Weller attended all of the
meetings of the Board and the Audit Committee held since he became a director.
Pursuant to the Guidelines, the Board has established a policy that the
non-management directors meet in executive session at least twice per year and
that the independent directors also meet in executive session at least twice per
year. The Chairman of the Board (currently, Edward B. Cloues, II), if in
attendance, will be the presiding director at each such executive session;
otherwise, those attending will select a presiding director.
Any shareholder wishing to communicate with the Board or any of the
directors may send a letter addressed to the member or members of the Board to
whom the communication is directed in care of AMREP Corporation, 300 Alexander
Park, Suite 204, Princeton, New Jersey 08540, Attention: Corporate Secretary.
All such communications will be forwarded to the specified addressee(s).
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 (the Company has not had a CEO since January 1996),
the Committee is charged with the oversight of the Company's business. The
current members of the Committee are Messrs. Cloues, Karabots and Russo. Mr.
Cloues is Chairman of the Board and of the Committee, and Mr. Karabots is Vice
Chairman of the Board and of the Committee. During fiscal 2007, the Executive
Committee met two times on a formal basis and frequently on an informal basis.
The Board also has an Audit Committee that operates under a written charter
adopted by the Board, most recently on July 13, 2004. Each member of the Audit
Committee is an independent director, as defined by the Governance Standards.
The duties of the Audit Committee include (i) appointing the Company's
independent registered public accounting firm, approving the services to be
provided by that firm and its compensation and reviewing that firm's
independence and performance of services, (ii) reviewing the scope and results
of the yearly audit by the independent registered public accounting firm, (iii)
reviewing the Company's system of internal controls and procedures, (iv)
reviewing with management and the independent registered public accounting firm
the Company's annual and quarterly financial statements, (v) reviewing the
Company's financial reporting and accounting standards and principles, and (vi)
overseeing the administration of the Guidelines. This Committee reports
regularly to the Board concerning its activities. The current members of this
Committee are Messrs. Coombs, Seidman (Chairman) and Weller, each of whom has
been determined by the Board to be independent and financially literate within
the meaning of the Governance Standards. The Board has also determined that Mr.
Coombs, who is a certified public accountant, qualifies as an audit committee
financial expert within the meaning of Securities and Exchange Commission
regulations. Elmer F. Hansen, Jr., who resigned from the Board in March 2007,
had been a member of the Audit Committee and was determined to be independent
within the meaning of the Governance Standards. The Audit Committee held nine
meetings during the last fiscal year.
The Board also has a Compensation and Human Resources Committee that
operates under a written charter adopted by the Board in July 2005. The
Compensation and Human Resources Committee is responsible for determining
salaries and bonuses for the executives of the Company and its subsidiaries,
establishing overall compensation and benefit levels and fixing bonus pools for
other employees, and making recommendations to the Board concerning other
matters relating to employees and regarding director compensation. The members
of this Committee are Messrs. Cloues, Karabots (Chairman) and Russo, and it held
two meetings during the last fiscal year.
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COMPENSATION OF EXECUTIVE OFFICERS
Compensation Discussion and Analysis
Overview of Compensation Program
Determining the compensation of the Company's executive officers is the
responsibility of the Compensation and Human Resources Committee
(the "Compensation Committee") of the Board. The Compensation Committee sets
management compensation policies, programs and levels, and continually monitors
adherence to the Company's compensation policy. The Compensation Committee's
compensation policy is to pay the Company's executive officers competitively
while balancing pay versus performance, and otherwise to be fair and equitable
in the administration of compensation.
With respect to salaries, bonuses and other compensation and benefits, the
decisions and recommendations of the Compensation Committee are subjective and
are not based on any list of specific criteria. In the past, factors influencing
the Compensation Committee's decisions regarding executive salaries have
included the Compensation Committee's perception of the executive's performance
and any changes in functional responsibility. In determining the salary to be
paid to a particular individual, the Compensation Committee applies these and
other criteria, while also using its best judgment of compensation applicable to
other executives holding comparable positions both within the Company and at
other companies. The Company believes that the compensation earned by each of
its executive officers for fiscal 2007 was reasonable. Executive officers of the
Company do not play a role in determining their compensation.
Chief Executive Officer Compensation
The Company has not had a Chief Executive Officer since January 1996.
Senior management operates under the supervision of the Executive Committee of
the Board and its Chairman, who is also the Chairman of the Board.
Compensation Components for Fiscal 2007
For the fiscal year ended April 30, 2007, the principal compensation
components for the Company's executive officers named in the Summary
Compensation Table at page 11 of this Proxy Statement consisted of
the following:
o base salary - fixed pay that takes into account an individual's role
and responsibilities, experience, expertise and individual
performance; and
o perquisites and other personal benefits.
Additionally, it has been the Company's policy to pay bonuses to the
executive officers to reward their performance during the fiscal year although
the Compensation Committee has yet to act on this matter for fiscal 2007.
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Base Salaries
The Company provides named executive officers and other employees with base
salaries to compensate them for services rendered during the fiscal year. Base
salaries are determined by an annual assessment of factors deemed relevant by
the Compensation Committee in its discretion, which may include position and
responsibilities, experience, individual job performance relative to
responsibilities, impact on development and achievement of the Company's
business strategy and competitive market factors for comparable talent.
Base salaries paid to the named executive officers in fiscal 2007 are shown
in the Summary Compensation Table under the heading "Salary."
Perquisites and Other Personal Benefits
The Company provides its executive officers with limited perquisites and
other personal benefits that are not otherwise available to all of its
employees. The Company and the Compensation Committee believe the few
perquisites and other personal benefits made available to the Company's
executive officers are reasonable and consistent with the Company's overall
compensation program, and better enable the Company to attract and retain
superior employees for key positions. The Compensation Committee periodically
reviews the levels of perquisites and other personal benefits provided to the
named executive officers. Certain perquisites may be subject to the approval of
the Compensation Committee, depending on the amount and type. Perquisites and
personal benefits are taken into account as part of the total compensation to
the named executive officers, and generally include a car allowance and
eligibility to participate in the Company's 401(k) plan, and, in selected cases,
a living allowance.
Perquisites and other personal benefits for the named executive officers
are described in the Summary Compensation Table (and related footnotes) under
the heading "All Other Compensation."
Performance Bonuses
The Company traditionally has augmented cash compensation in appropriate
circumstances with the payment of performance-based bonuses. The amount of each
executive's bonus is determined by the Compensation Committee using subjective
criteria within the guidelines of the Company's compensation policy.
During fiscal 2007, the Compensation Committee determined and paid bonuses
to the executive officers with respect to fiscal 2006. The amounts of those
bonuses are listed in footnote (2) to the Summary Compensation Table.
Other Compensation Components
Equity Incentive Plan
Although the Company has not made any stock option grants to its executive
officers since 1995, the Board determined in 2006 that the interests of the
Company and its shareholders may be advanced by allowing the Company the
flexibility to offer its employees and non-employee directors the opportunity to
acquire or increase their ownership interest in the Company by receiving equity
grants from the Company. Accordingly, at the Company's 2006 Annual Meeting, the
shareholders approved the 2006 Equity Compensation Plan (the "Equity Plan"),
which had been adopted by the Board on July 14, 2006. The Equity Plan went into
effect on September 20, 2006.
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The Equity Plan provides that grants may be made in any of the following
forms: (i) incentive stock options, (ii) nonqualified stock options (incentive
stock options and nonqualified stock options are collectively referred to as
"options"), (iii) stock awards, (iv) stock units, (v) stock appreciation rights
("SARs"), (vi) dividend equivalents and (vii) other stock-based awards.
The Equity Plan authorizes up to 400,000 shares of Common Stock for
issuance. If and to the extent options and SARs granted under the Equity Plan
terminate, expire or are cancelled, forfeited, exchanged or surrendered without
being exercised or if any stock awards, stock units or other stock-based awards
are forfeited or terminated, the shares subject to such grants will become
available again for purposes of the Equity Plan.
The Equity Plan provides that the maximum aggregate number of shares of
Common Stock with respect to which grants may be made to any individual during
any calendar year is 20,000 shares, subject to certain adjustments. Grants under
the Equity Plan will be expressed in shares of Common Stock.
The Equity Plan provides that it is to be administered and interpreted by
the Board or a committee designated by it. At this time, no such committee has
been formed. The administrator of the Equity Plan has the authority to (i)
determine the individuals to whom grants will be made under the Equity Plan,
(ii) determine the type, size, terms and conditions of the grants, (iii)
determine when grants will be made and the duration of any applicable exercise
or restriction period, including the criteria for exercisability and the
acceleration of exercisability, (iv) amend the terms and conditions of any
previously issued grant, subject to certain limitations, and (v) deal with any
other matters arising under the Equity Plan.
Should the administrator of the Equity Plan elect to make grants under the
Equity Plan, it will do so with regard to the provisions of Statement of
Financial Accounting Standard 123R, "Share-based Payments." Under this Standard,
grants of equity-classified awards will result in compensation expense for the
Company based on the grant date fair value of the awards.
Tax Implications
Payments during fiscal 2007 to the Company's executives were made with
regard to the provisions of Section 162(m) of the Internal Revenue Code. Section
162(m) limits the annual deduction that may be claimed by a "public company" for
compensation paid to certain individuals to $1 million, except to the extent
that any excess compensation is "performance-based compensation." It is the
Compensation Committee's intention that compensation will not be awarded that
exceeds the deductibility limits of Section 162(m).
-10-
2007 Summary Compensation Table
Change in
Pension Value
and
Non-qualified
Deferred
Compensation All Other
Salary Bonus(2) Earnings (3) Compensation Total
Name and Principal Position Year(1) ($) ($) ($) ($) ($)
------------------------------------------ ---------- ---------- ----------------- ----------------- -----------
JAMES WALL 2007 283,868 - 93,592 13,855(4) 391,315
Senior Vice President;
Chairman of the Board,
President and Chief Executive
Officer of the Company's AMREP
Southwest Inc. subsidiary
-------------------------------- --------- ---------- ---------- ----------------- ----------------- -----------
PETER M. PIZZA 2007 182,556 - 2,038 14,865(5) 199,459
Vice President, Chief
Financial Officer and Treasurer
-------------------------------- --------- ---------- ---------- ----------------- ----------------- -----------
IRVING NEEDLEMAN(6) 2007 91,670 - - - 91,670
Vice President, General
Counsel and Secretary
-------------------------------- --------- ---------- ---------- ----------------- ----------------- -----------
MICHAEL P. DULOC 2007 297,819 - 3,002 71,766(7) 372,587
President and Chief Executive
Officer of the Company's Kable
Media Services, Inc. subsidiary
-------------------------------- --------- ---------- ---------- ----------------- ----------------- -----------
JOHN F. MENEOUGH(8) 2007 98,648 - - - 98,648
Executive Vice President,
Fulfillment Services of the
Company's Kable Media
Services, Inc. subsidiary;
President and Chief Operating
Officer of Kable Fulfillment
Services, Inc.
-------------------------------- --------- ---------- ---------- ----------------- ----------------- -----------
JOSEPH S. MORAN Former Vice 2007 117,445 - - 17,742(9) 135,187
President, General Counsel and
Secretary
-------------------------------- --------- ---------- ---------- ----------------- ----------------- -----------
---------------------------------------
(1) References to the year 2007 are to the fiscal year that ended April 30, 2007.
(2) Bonuses for the named executives are entirely discretionary with the
Compensation Committee, which has yet to act on the matter with respect to
fiscal 2007. During 2007, bonuses with respect to fiscal 2006 were
determined and payments were made to the following executive officers in
the indicated amounts: Mr. Wall - $56,700; Mr. Pizza - $20,000; and Mr.
Duloc - $90,000. The Company will make appropriate public disclosure when
bonuses with respect to 2007 are determined and paid.
(3) The amounts reported represent the increases for 2007 in the actuarial
present values of the retirement benefits under the Company's Retirement
Plan for Employees.
(4) Mr. Wall received an auto allowance of $6,000, and the Company made
matching contributions to his 401(k) plan account in the amount of $7,855.
(5) Mr. Pizza received an auto allowance of $6,000, and the Company made
matching contributions to his 401(k) plan account in the amount of $8,865.
(6) Mr. Needleman joined the Company effective November 1, 2006. His annual
salary is $184,860.
(7) Mr. Duloc received a housing allowance of $40,000, an auto allowance of
$17,142 and partial reimbursement for club membership dues. The Company
also made matching contributions to Mr. Duloc's 401(k) plan account in the
amount of $10,319.
(8) Mr. Meneough joined the Company effective January 16, 2007. His annual
salary is $346,600.
(9) Mr. Moran received a housing allowance of $5,792, transportation
reimbursement in the amount of $8,174 and meal reimbursement in the amount
of $3,776.
11
The Company is an at-will employer and has no employment arrangements with
its current named executive officers. As described more fully in the
Compensation Discussion and Analysis section of this Proxy Statement,
compensation of executive officers is set by the Compensation Committee. The
decisions of the Compensation Committee are subjective and are not based on any
list of specific criteria.
Pension Benefits
Name Plan Name Number Present Payments
of During
Years Value of Last
Credited Accumulated Fiscal
Service Benefit Year
(#)(1) ($)(2) ($)
--------------------------- --------------------- ------------------- ------------------ --------------------
James Wall Retirement Plan 32.167 954,366 0
--------------------------- --------------------- ------------------- ------------------ --------------------
Peter M. Pizza Retirement Plan 7.833 40,552 0
--------------------------- --------------------- ------------------- ------------------ --------------------
Irving Needleman(3) - - - -
--------------------------- --------------------- ------------------- ------------------ --------------------
Michael P. Duloc Retirement Plan 9.500 58,809 0
--------------------------- --------------------- ------------------- ------------------ --------------------
John F. Meneough(3) - - - -
--------------------------- --------------------- ------------------- ------------------ --------------------
Joseph S. Moran(3) - - - -
--------------------------- --------------------- ------------------- ------------------ --------------------
--------------------------------
(1) The years of credited service under the Retirement Plan (as defined below)
is based on each named individual's service with the Company through
February 29, 2004, when the Retirement Plan was frozen. Years of credited
service are different from the named individual's actual years of service
with the Company. As of the date the Retirement Plan was frozen, the actual
years of service for each of the named individuals were: Mr. Wall - 35.333
years, Mr. Pizza - 8.917 years and Mr. Duloc - 10.583 years. The difference
between years of credited service and years of actual service did not
augment any benefits payable to the named individuals under the Retirement
Plan.
(2) The actuarial present value is calculated assuming commencement of benefits
when the named individual reaches the normal retirement age of 65 in the
case of Messrs. Pizza and Duloc and April 30, 2007 in the case of Mr. Wall,
who is currently over age 65. Mortality assumptions for the calculation of
the actuarial present value are based on The RP 2000 Combined Healthy
Table, and the assumed discount rate is 5.75%.
(3) Messrs. Needleman, Meneough and Moran were first employed by the Company
after the Retirement Plan ceased accepting participants.
The Company's named executive officers who were employees prior to March 1,
2004 participate in The Retirement Plan for Employees of AMREP Corporation (the
"Retirement Plan"), which was amended effective January 1, 1998 to change the
Retirement Plan into a cash balance defined benefit plan, and subsequently
frozen effective March 1, 2004, so that in the determination of the benefit
payable, a participant's compensation from and after March 1, 2004 is not taken
into account. A participant's benefit under the amended Retirement Plan is now
comprised of the participant's cash balance as of February 29, 2004, plus
12
interest on the cash balance compounded at the rate of 5% per year, and the
participant's periodic pension benefit under the Retirement Plan as at December
31, 1997 had the participant been at normal retirement age at that date.
Mr. Wall has continued to serve the Company past the Retirement Plan's
normal retirement age of 65. Had he elected to receive his pension as a single
life annuity when he turned 65, his annual retirement benefit would have been
$54,290. If he had retired on May 1, 2007 and elected to receive the life
annuity pension, his annual retirement benefit would have been $105,624.
Assuming that Messrs. Pizza and Duloc (i) continue to be employed until age 65,
and (ii) elect the life annuity form of pension, their annual retirement
benefits are estimated to be: Mr. Pizza - $6,380 and Mr. Duloc - $12,236.
Retirement Plan participants with at least five years of credited service
are eligible for early retirement benefits starting at age 55. A participant's
early retirement benefit under the amended Retirement Plan is comprised of (i)
the participant's cash balance as of February 29, 2004, plus interest on the
cash balance compounded at the rate of 5% per year, and (ii) the participant's
periodic pension benefit under the Retirement Plan as at December 31, 1997 had
the participant been at normal retirement age at that date, reduced by 1/180 for
each of the first 60 months and by 1/360 for each of the next 60 months by which
the early retirement date precedes the normal retirement date. Currently, only
Mr. Pizza is eligible to elect early retirement under the Retirement Plan. If he
had elected to receive early retirement benefits on May 1, 2007 and elected to
receive the life annuity pension, his annual retirement benefit would have been
$3,012.
Potential Payments Upon Termination or Change in Control
The Company's executive officers are not subject to change of control
agreements or other arrangements that provide for payments upon termination or a
change in control of the Company. The Committee retains the discretion to enter
into severance agreements with individual executive officers on terms
satisfactory to it.
While there are not individual agreements in place, under the terms of the
Equity Plan described on pages 9 and 10 of this Proxy Statement, the
administrator of the Equity Plan has the discretion to accelerate the vesting of
or otherwise remove restrictions on equity awards under the Equity Plan upon a
change in control of the Company. No awards have been made under the Equity
Plan. Even if awards are made in the future, the administrator of the Equity
Plan would have a wide range of options to respond to changes in control in the
best interests of the Company's shareholders.
For purposes of the Equity Plan, a change in control would occur if: (i)
the Company liquidates, dissolves, or sells all or substantially all of its
assets (except to a subsidiary); (ii) a holder of less than 15% of the Company's
shares as of July 14, 2006 becomes the beneficial owner of 25% or more of the
Company's shares or combined voting power; or (iii) a majority of the seats on
the Board change hands without the approval of the incumbent directors.
Named Executive Officer Departure during Fiscal 2007
The employment of Joseph S. Moran, who had been the Company's Vice
President, General Counsel and Secretary until November 1, 2006, ended effective
November 30, 2006. The Company has no continuing payment obligations with
respect to Mr. Moran.
13
Executive Officers
For information with respect to identification of executive officers, see
"Executive Officers of the Registrant" in Part I of the Company's Annual Report
on Form 10-K for the year ended April 30, 2007 filed pursuant to the Securities
Exchange Act of 1934.
Report of the Compensation and Human Resources Committee
The Compensation and Human Resources Committee of the Board has submitted
the following report for inclusion in this Proxy Statement:
The Compensation and Human Resources Committee has reviewed and discussed
the Compensation Discussion and Analysis contained in this Proxy Statement with
management. Based on the Committee's review of and the discussions with
management with respect to the Compensation Discussion and Analysis, the
Committee has recommended to the Board that the Compensation Discussion and
Analysis be included in this Proxy Statement and in the Company's Annual Report
on Form 10-K for the fiscal year ended April 30, 2007.
The foregoing report is provided by the following directors, who constitute
the Compensation and Human Resources Committee:
Nicholas G. Karabots, Chairman
Edward B. Cloues, II
Albert V. Russo
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, in exchange for 575,593 shares of
its Common Stock, acquired various rights to distribute magazines for its
distribution business. The distribution rights covered various magazines
published by unaffiliated publishers, as well as magazines published by Mr.
Karabots' companies. Mr. Karabots is a director, Vice Chairman of the Board and
of the Executive Committee, Chairman of the Compensation and Human Resources
Committee and the father-in-law of Michael P. Duloc, one of the Company's
executive officers. Mr. Duloc's spouse, who is Mr. Karabots' daughter, is an
officer at one of Mr. Karabots' companies to which the Company provides
services.
The conduct of the Company's magazine distribution business involves the
purchase of magazines from publishing companies, including those owned or
controlled by Mr. Karabots, and their resale to wholesalers. During the fiscal
year ended April 30, 2007, the purchases of magazines from Mr. Karabots'
companies amounted to approximately $45.2 million. The Company reports as
revenues only the spread between the prices paid to publishers and the prices
received for copies sold to wholesaler customers. The $45.2 million paid to Mr.
Karabots' companies represents 3.8% of the approximately $1.2 billion which the
Company paid to all publishers in fiscal 2007. Consistent with industry
practice, advance payments for magazine purchases are made to publishers,
including Mr. Karabots' companies, based upon estimates of the amounts that will
be due to 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 total
overadvance to Mr. Karabots' companies at June 30, 2007 was approximately
$84,000, and its highest amount between May 1, 2006 and June 30, 2007 was
approximately $233,000.
14
The distribution contracts with publishing companies owned or controlled by
Mr. Karabots were scheduled to expire on December 31, 2005. On March 17, 2006,
effective as of January 1, 2006, in accordance with the approval of the
Independent Committee described below, the Company entered into an agreement
extending these distribution contracts for 30 months to June 30, 2008, on their
existing terms except for an increase in the price paid to the publishers for
the magazines and the provision by the Company to the publishers of certain
additional promotional assistance.
The Company also provides fulfillment services for publishing companies
owned or controlled by Mr. Karabots. The fulfillment services contracts were to
have been effective through August 1, 2006, and year to year thereafter, unless
terminated at the election of either party. However, in conjunction with the
extension of the distribution contracts, the fulfillment services contracts were
also extended to June 30, 2008, substantially on their existing terms. For
fiscal 2007, the Company's revenues from these fulfillment services contracts
were $350,000.
A committee of the Board (the "Independent Committee") comprised of
independent directors whom the Board also found to be independent of Mr.
Karabots, has been appointed with authority to consider and, if deemed
appropriate, to approve new contracts and material modifications to existing
contracts between the Company and companies owned or controlled by Mr. Karabots.
During fiscal 2007, the Independent Committee consisted of Mr. Seidman and,
prior to his resignation from the Board, Mr. Hansen. In accordance with such
authority, the Independent Committee approved the extensions of the distribution
contracts and fulfillment services contracts with Mr. Karabots' companies. In
granting such approval, the Independent Committee concluded that the extension
terms were fair and reasonable and no less favorable to the Company than would
be obtained in a comparable arm's length transaction with an unaffiliated
publisher having the same volume of business as Mr. Karabots' companies.
COMPENSATION OF DIRECTORS
Compensation for the non-employee members of the Board is approved by the
Board, which considers recommendations for director compensation from the
Company's Compensation and Human Resources Committee. On December 6, 2006, the
Board approved certain changes to the compensation of non-employee directors,
which became effective as of the date of the Company's 2006 Annual Meeting.
Prior to the changes approved by the Board on December 6, 2006, each
non-employee director of the Company was paid an annual fee of $20,000 in
addition to fees paid to such director as a member of one or more Board
Committees. Additionally, under the Company's 2002 Non-Employee Directors' Stock
Plan, each non-employee director received a grant from the Company of 1,250
shares of the Company's Common Stock on each March 15 and September 15 as
partial payment for services for the preceding six months. Prior to the changes
to director compensation approved by the Board, each member of the Audit
Committee was entitled to receive a fee of $1,000 for each Audit Committee
meeting attended, and each member of the Compensation and Human Resources
Committee was entitled to receive a fee of $750 for each Compensation and Human
Resources Committee meeting attended. In addition, Mr. Cloues received an
additional fee of $135,000 annually for his service as the Chairman of the Board
and of the Executive Committee, and the Company paid a monthly fee of $10,000 to
a company owned by Mr. Karabots for making him available to act as the Vice
Chairman of the Board and of the Executive Committee. These payments to Messrs.
Cloues and Karabots were in addition to the other fees paid to them as directors
and members of the Compensation and Human Resources Committee.
As a part of the changes to director compensation approved by the Board on
December 6, 2006, the 2002 Non-Employee Directors' Stock Plan was terminated and
the Board determined that no further grants of Common Stock would be made to
directors thereunder after September 15, 2006. In addition, effective as of the
15
Company's 2006 Annual Meeting, the annual fee paid to each non-employee director
was increased to $80,000, payable in equal quarterly installments on or about
the first day of December, March, June and September. Non-employee directors are
also entitled to receive an additional $1,500 for each Board meeting attended in
person and $500 for each meeting attended by telephone unless, in the case of a
telephonic meeting, the Board determines that the meeting and attendant
preparation were so brief that no payment is warranted. The Board also
eliminated the per meeting attendance fees for the members of the Audit
Committee and the Compensation and Human Resources Committee, and approved an
annual fee of $7,500 for the Chairman of each Committee, as well as a $5,000
annual fee for each other member of those Committees, all of which are payable
in equal quarterly installments on or about the first day of December, March,
June and September, commencing on March 1, 2007. The additional fees payable to
Messrs. Cloues and Karabots as, respectively, the Chairman and Vice Chairman of
the Board and the Executive Committee were not changed by the director
compensation changes approved by the Board on December 6, 2006 and remain
payable in addition to the other fees described above.
The table below summarizes the compensation earned by the Company's
directors for fiscal 2007:
Director Compensation
Name(1) Fees Earned or Paid in Stock Awards ($) Total ($)
Cash ($)
----------------------------- --------------------------- --------------------------- ---------------------------
Edward B. Cloues, II 195,500 54,600 250,100
----------------------------- --------------------------- --------------------------- ---------------------------
Lonnie A. Coombs 63,250 54,600 117,850
----------------------------- --------------------------- --------------------------- ---------------------------
Nicholas G. Karabots 181,125(2) 54,600 235,725
----------------------------- --------------------------- --------------------------- ---------------------------
Albert V. Russo 60,500 54,600 115,100
----------------------------- --------------------------- --------------------------- ---------------------------
Samuel N. Seidman 63,875 54,600 118,475
----------------------------- --------------------------- --------------------------- ---------------------------
Jonathan B. Weller(3) 10,500 - 10,500
----------------------------- --------------------------- --------------------------- ---------------------------
Elmer F. Hansen, Jr.(4) 61,250 54,600 115,850
----------------------------- --------------------------- --------------------------- ---------------------------
---------------------------------
(1) Mr. Wall is not included in this table as he is an employee of the Company
and receives no compensation for his service as a director.
(2) Includes $120,000 paid to a company owned by Mr. Karabots.
(3) Mr. Weller was first elected to the Board on March 20, 2007.
(4) Mr. Hansen served as a Class III director until March 20, 2007, when he
resigned from the Board.
16
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information as of April 30, 2007 concerning
Common Stock of the Company that is issuable under its compensation plans.
(B) (C)
(A) Weighted Number of securities
Number of average exercise remaining available for
securities to be price of future issuance under
issued upon exercise outstanding equity compensation
of outstanding options, plans (excluding
options,warrants warrants and securities reflected in
Plan Category and rights rights column (A))
------------- ----------------------- ----------------- -----------------------------
Equity compensation plans approved by 4,500(1) $20.28 400,000(2)
shareholders
Equity compensation plans not
approved by shareholders - - -
Total 4,500 $20.28 400,000
------------------------------------
(1) Represents outstanding options to acquire Common Stock granted under the
Company's Non-Employee Directors Option Plan, which was terminated in 2005.
(2) Represents shares of Common Stock available for grant under the Company's
2006 Equity Compensation Plan.
CERTAIN TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation" for
information concerning transactions involving Nicholas G. Karabots.
The Company paid the law firm of McElroy, Deutsch, Mulvaney & Carpenter,
LLP $311,098 for services rendered during the Company's fiscal year ended April
30, 2007. In fiscal 2007, until November 1, 2006, Irving Needleman, the
Company's Vice President, General Counsel and Secretary, was of counsel to that
law firm and his compensation was based, in part, on the fees paid by the
Company to that firm.
Prior to joining the Company in 2007, John F. Meneough, the Executive Vice
President, Fulfillment Services of the Company's Kable Media Services, Inc.
subsidiary and President and Chief Operating Officer of Kable Fulfillment
Services, Inc., served as President of Palm Coast Data Holdco, Inc. ("Palm Coast
Data"). In connection with the Company's acquisition of Palm Coast Data on
January 16, 2007, Mr. Meneough received merger consideration of approximately
$1,500,000 and is eligible to receive up to approximately $116,000 upon the
release of funds placed into escrow in connection with the closing of the
acquisition.
17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, officers and holders of more than 10% of its Common
Stock to file initial reports of ownership and reports of changes of ownership
of the Common Stock with the Securities and Exchange Commission and the New York
Stock Exchange. The related regulations require directors, officers and greater
than 10% shareholders to provide copies of all Section 16(a) reports to the
Company.
Based solely on a review of the copies of the reports received by the
Company and certain written representations from the directors and executive
officers, the Company believes that for the fiscal year ended April 30, 2007,
all required Section 16(a) reports were filed on a timely basis, except that a
Form 4 was filed by Mr. Russo on November 21, 2006 reporting a total of eight
sales of the Company's Common Stock made by Mr. Russo on November 7, 2006,
November 9, 2006 and November 14, 2006.
AUDIT-RELATED MATTERS
The consolidated financial statements of the Company and its subsidiaries
included in the Annual Report to Shareholders for the fiscal year ended April
30, 2007 have been audited by McGladrey & Pullen, LLP, an independent registered
public accounting firm. No representative of McGladrey & Pullen, LLP is expected
to attend the Annual Meeting. The retention of an independent registered public
accounting firm for fiscal 2008 has not yet been approved by the Audit
Committee.
Audit Committee Report
The Audit Committee has reviewed and discussed the Company's audited
financial statements with management, which has primary responsibility for the
financial statements. McGladrey & Pullen, LLP, as the Company's independent
registered public accountants, are responsible for expressing an opinion on the
conformity of the Company's audited financial statements with U.S. 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 has 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 has discussed with
McGladrey & Pullen, LLP that firm's independence. Based on these considerations,
the Audit Committee has recommended to the Board that the consolidated financial
statements audited by McGladrey & Pullen, LLP be included in the Company's
Annual Report on Form 10-K for fiscal 2007.
The foregoing report is provided by the following directors who constitute
the Audit Committee:
Samuel N. Seidman, Chairman
Lonnie A. Coombs
Jonathan B. Weller
18
Audit Fees
The following table sets forth certain information concerning the fees of
McGladrey & Pullen, LLP and its affiliate, RSM McGladrey Inc., for the Company's
last two fiscal years. The reported fees, except the Audit Fees, are amounts
billed to the Company in the indicated fiscal years. The Audit Fees are for
services for those fiscal years.
Fiscal Year Ended April 30,
---------------------------
2007 2006
---- ----
Audit Fees (1)............................. $303,900 $129,501
Audit-Related Fees (2)..................... 108,705 36,826
Tax Fees (3)............................... 32,575 47,117
All Other Fees............................. - -
----------- -----------
Total............................ $445,180 $213,444
=========== ===========
-------------------
(1) Includes fees for the audit of the Company's annual financial statements
and for review of the unaudited financial statements included in the
Company's quarterly reports to the Securities and Exchange Commission on
Form 10-Q and, in 2007, attestation of management's assessment of internal
control over financial reporting and the audit of the effectiveness of
internal control over financial reporting, and procedures required in
connection with the issuance of consents and other services related to
Securities and Exchange Commission filings.
(2) Includes fees for consultation related to preparation for Sarbanes-Oxley
Section 404 compliance, for employee benefit plan audits, consultation on
the accounting treatment of certain transactions and, in 2007, due
diligence pertaining to acquisitions.
(3) Includes fees for tax compliance, tax advice and tax planning services.
Such services principally involved reviews of the Company's federal income
tax returns and advice on the tax treatment of certain transactions.
Pre-Approval Policies and Procedures
The Audit Committee pre-approves all audit services to be provided by the
independent registered public accountants and, separately, all permitted
non-audit services to be performed by the independent registered public
accountants.
OTHER MATTERS
The Board knows of no matters that 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.
19
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 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 2008 Annual Meeting
and who wish to have such proposals included in the Company's Proxy Statement
for the 2008 Annual Meeting must be certain that such proposals are received by
the Company's Secretary at the Company's executive offices, 300 Alexander Park,
Suite 204, Princeton, New Jersey 08450, not later than May 1, 2008. 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 2008 Annual Meeting, Securities and Exchange Commission 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 16, 2008.
By Order of the Board of Directors
Irving Needleman, Secretary
Dated: August 22, 2007
20
PROXY AMREP CORPORATION PROXY
SOLICITED BY BOARD OF DIRECTORS FOR
2007 ANNUAL MEETING OF SHAREHOLDERS
The Conference Center at Normandy Farm
Route 202 and Morris Road, Blue Bell, Pennsylvania
October 2, 2007, 9:00 A.M. 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 2007 Annual Meeting of Shareholders
of AMREP Corporation, and any continuation or adjournment thereof, for the
election of directors as set forth in the Notice of 2007 Annual Meeting of
Shareholders and Proxy Statement of the Board of Directors, and upon all other
matters which come before said meeting or any continuation or adjournment
thereof.
Receipt of the Notice of 2007 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. ELECTION OF TWO (2) DIRECTORS.
FOR all [ ] WITHHOLD AUTHORITY [ ] * EXCEPTIONS [ ]
nominees to vote for all
listed below nominees listed
below
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
--------------------------------------------
To change your address, please mark this box. [ ]
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