AMREP CORP. — Proxy Solicitation & Information Statement 1995

Oct 2, 1995

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 {x} Definitive Proxy Statement { } Definitive Additional Materials { } Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12 AMREP CORPORATION .............................................................. (Name of Registrant as Specified In Its Charter) .............................................................. (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): {x} $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). { } $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). { } Fee computed on table below per Exchange Act Rules 14a(6)(i)(4) and O-11. 1) Title of each class of securities to which transaction applies; ................................................ 2) Aggregate number of securities to which transaction applies: ................................................ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule O-11:1 ................................................ 4) Proposed maximum aggregate value of transaction: ................................................ (1) Set forth the amount on which the filing fee is calculated and state how it was determined. { } Check box if any part of the fee is offset as provided by Exchange Act Rule O-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: ............................................. 2) Form, Schedule or Registration Statement No.: ............................................. 3) Filing Party: ............................................. 4) Date Filed: ............................................. AMREP CORPORATION (An Oklahoma corporation) NOTICE OF ANNUAL MEETING OF SHAREHOLDERS November 1, 1995 NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of AMREP CORPORATION (the "Company") will be held at the Plaza Hotel, White & Gold Suites, 768 Fifth Avenue, New York, New York 10019 on November 1, 1995 at 9:00 A.M. for the following purposes: (1) To elect three directors, each to serve for a term of three years; (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 September 22, 1995 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 Valerie Asciutto, Secretary Dated: October 2, 1995 New York, New York AMREP CORPORATION 641 Lexington Avenue New York, New York 10022 PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS To be Held 9:00 A.M. November 1, 1995 This 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 November 1, 1995, and at any adjournment thereof. 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 meeting and voting. This statement, the accompanying notice of meeting and proxy form of the Board of Directors have been first sent to shareholders on or about October 2, 1995. 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. With a quorum being present, directors are elected by a plurality of the votes cast. Only shares affirmatively voted for a nominee will be counted toward the achievement of a plurality. Votes withheld (including broker non-votes, if any), will be counted as present for the purpose of determining a quorum but will not otherwise be counted. A copy of the 1995 Annual Report of the Company for the fiscal year ended April 30, 1995, including financial statements, accompanies this Proxy Statement. Such Annual Report does not constitute a part of the proxy solicitation material. VOTING SECURITIES Only shareholders of record at the close of business on September 22, 1995, the date fixed by the Board of Directors in accordance with the By-Laws, are entitled to vote at the meeting and any adjournment thereof. As of September 15, 1995, the Company had issued and outstanding 7,395,650 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 meeting. Set forth below is information concerning the ownership as of September 15, 1995 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: Name and Address of Amount Owned % of Beneficial Owner Beneficially (1) Class Nicholas G. Karabots 2,729,093(2) 36.9% P.O. Box 736 Fort Washington, PA 19034 Albert Russo(3) 679,070 9.2% Lena Russo Clifton Russo Lawrence Russo c/o American Simlex Company 401 Broadway Suite 1712 New York, New York 10013 Dimensional Fund Advisors Inc.(4) 537,222 7.3% 1299 Ocean Avenue 11th Floor Santa Monica, CA 90401 ____ (1) Except as set forth in Footnotes 3 and 4, the beneficial owners have sole voting and investment power over the shares owned. (2) Includes 1,000 shares which Mr. Karabots 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 679,070 shares representing 9.2% 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 327,891, 58,740, 153,967 and 138,472 shares, respectively, of the Common Stock representing 4.4%, 0.8%, 2.1%, and 1.9% of the outstanding Common Stock. (4) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 537,222 shares of Common Stock of the Company all of which shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and the DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, all of which Dimensional serves as investment manager. Dimensional disclaims beneficial ownership of all such shares. SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth, as of September 15, 1995, certain information regarding the beneficial ownership, or the right to acquire beneficial ownership, of the Common Stock of the Company of each director, each nominee for election as a director, each executive officer named in the Summary Compensation Table and all directors and executive officers of the Company as a group. Unless otherwise indicated, each person has sole voting and dispositive power with respect to the shares beneficially owned: Amount and Nature of Percent of Name of Beneficial Owner Beneficial Ownership Class ------------------------ -------------------- ---------- Jerome Belson 44,500(1) * Edward B. Cloues, II 2,500(2) * Joseph Cohen 1,500(1) * David N. Dinkins 500(2) * Harvey I. Freeman 4,500(2)(3) * Daniel Friedman 46,424(4)(5) * Anthony B. Gliedman 85,000(6) 1.1% Nicholas G. Karabots 2,729,093(7) 36.9% Samuel N. Seidman 9,690(1) * Mohan Vachani 18,000(8) * James Wall 19,007(9)(10) * Harvey W. Schultz 2,000(11) * Directors and Executive Officers as a Group (13 persons) 2,974,714(12) 39.4% -------------------------------- * Indicates less than 1% (1) Includes 1,500 shares which the individual has the right to acquire pursuant to currently exercisable options. (2) Includes 500 shares which the individual has the right to acquire pursuant to currently exercisable options. (3) Jointly owned with Mr. Freeman's wife. (4) Includes 314 shares of Common Stock held in the Company's Savings and Salary Deferral Plan allocated to the account of Mr. Friedman. (5) Includes 7,500 shares which Mr. Friedman has the right to acquire pursuant to currently exercisable options. (6) Includes 55,000 shares Mr. Gliedman has the right to acquire pursuant to currently exercisable options. (7) Includes 1,000 shares which Mr. Karabots has the right to acquire pursuant to currently exercisable options. (8) Includes 17,500 shares which Mr. Vachani has the right to acquire pursuant to currently exercisable options. (9) Includes 7,500 shares which Mr. Wall has the right to acquire pursuant to currently exercisable options. (10) Includes 287 shares of Common Stock held in the Company's Savings and Salary Deferral Plan allocated to the account of Mr. Wall. (11) Includes 2,000 shares which Mr. Schultz has the right to acquire pursuant to currently exercisable options. (12) Includes 12,000 shares which an executive other than those named have the right to acquire pursuant to currently exercised options. ELECTION OF DIRECTORS The Board of Directors has amended the By-Laws of the Company, effective the date of the 1995 Annual Meeting, to decrease the number of directors from eleven to ten. The Board of Directors of the Company is a classified board divided into three classes - Class I consisting of four directors, Class II consisting of three directors and Class III consisting, effective on the date of the 1995 Annual Meeting, of three directors. Each class of directors serves for a term of three years. At this Annual Meeting three Class II directors will be elected to serve until the 1998 Annual Meeting and until their successors are elected and qualified. Although the Board of Directors does not expect that any of the persons named will be unable to serve as a director, should any of them become unavailable for election it is intended that the shares represented by proxies in the accompanying form will be voted for the election of a substitute nominee or nominees selected by the Board. The following table sets forth information regarding the nominees of the Board of Directors for election and the directors whose terms of office do not expire this year. Year First Elected As Principal Occupation Name Age A Director For Past Five Years ---- --- ---------- -------------------- Nominees to serve until the l998 Annual Meeting (Class II) Daniel Friedman 60 1972 Chairman of the Board of Kable News Company, Inc., a wholly-owned subsidiary of the Company; Senior Vice President of the Company. Samuel N. Seidman 61 1977 President of Seidman & Co., Inc., Economic Consultants and Investment Bankers. Mohan Vachani 53 1990 Senior Vice President - Chief Financial Officer of the Company, since June 1993; Consultant to the Company, from September 1992 to June 1993; Vice President-Chief Financial Officer of Bedford Properties, Inc., real estate management and development, from prior to 1990 to June 1993. -------------------------- * Mr. Vachani currently is a Class III director, but he has resigned as such a director contingent and effective upon his election as a Class II director at the 1995 Annual Meeting. Year First Elected As Principal Occupation Name Age A Director For Past Five Years ---- --- ---------- -------------------- Directors continuing in office until the 1996 Annual Meeting (Class III) Jerome Belson 70 1967 Chairman of the Board and Chief Executive Officer of Jerome Belson Associates, Inc., a real estate management company operating in excess of 10,000 high rise multi-family residential apartments in New York; President of Associated Builders and Owners of Greater New York, Inc.; Chairman Emeritus of Waterhouse Investor Services, Inc. Anthony B. Gliedman 53 1991 Chairman of the Board, President and Chief Executive Officer of the Company since July 1991; Executive Vice President of the Company from December 1990 to July 1991; Executive Vice President of the Trump Organization, real estate development, from prior to 1990 to December 1990. Nicholas G. Karabots 62 1993 Chairman of the Board and Chief Executive Officer of Spartan Organization, Inc.; KPG, Inc., the general partner of Kappa Printing Group, L.P.; Kappa Publishing Group, Inc.; Geopedior, Inc. as well as other affiliated entities, which companies are engaged primarily in the fields of printing, publishing and real estate. ----------------------- * Mr. Gliedman became seriously ill in mid-July, 1995 and currently is on a medical leave of absence of indefinite duration, and it is not known whether, or when, he will be able to resume his duties as a director and Chief Executive Officer. Year First Elected As Principal Occupation Name Age A Director For Past Five Years ---- --- ---------- -------------------- Directors continuing in office until the 1997 Annual Meeting (Class I) Edward B. Cloues, II 47 1994 Partner in the law firm of Morgan, Lewis & Bockius. David N. Dinkins 68 1994 Professor, Columbia University School of International and Public Affairs since January 1994; Mayor of the City of New York from January 1990 to December 1993. Harvey I. Freeman 57 1994 Attorney and Real Estate Consultant since August 1991; Executive Vice President of the Trump Organization, real estate development, from prior to 1990 to July 1991. James Wall 58 1991 President of AMREP Southwest Inc. ("ASI") and of AMREP Southeast, Inc., wholly-owned subsidiaries of the Company, since January 1991; Vice President of ASI from prior to 1990 to January 1991; General Manager of Southwest Operations, since prior to 1990; Senior Vice President of the Company, since September 1991. Each of the directors other than Mr. Friedman has served continuously since the year in which he was first elected. Mr. Friedman served continuously from 1972 to January 1977, when he resigned. He was reelected as director in September 1980 and has served continuously since. Mr. Karabots was nominated for election as a director pursuant to the agreement described below in the "Compensation Committee Interlocks and Insider Participation" section. Mr. Cloues' law firm represents Mr. Karabots and various corporations owned by him. He was nominated in 1994 for election as a director at the recommendation of Mr. Karabots. The Board of Directors and its Committees The Board held five meetings during the last fiscal year. The Board has an Executive Committee which meets as needed and has the power to act generally between meetings of the Board. It met six times during the last fiscal year. Until September l995 the Committee members were Messrs. Friedman, Gliedman, Vachani and Wall. As noted above Mr. Gliedman is on an indefinite medical leave, and in September Messrs. Belson and Cloues were added to the Committee, Mr. Cloues was made the Chairman, and the Committee was charged with the oversight of the Company's business. Mr. Cloues will be compensated for his services as Committee Chairman at the rate of $l25,000 per year, and Mr. Belson will be compensated for his services as a Committee member at the rate of $25,000 per year, such amounts being in addition to the fees paid them as directors and members of other Committees. 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 Audit and Examining Committee recommends to the Board the engagement of the auditors, reviews the scope and results of the yearly audit by the independent auditors, reviews the Company's system of internal controls and procedures, and investigates 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. Cohen (Chairman), Belson, Freeman, Karabots and Seidman. The Committee held four meetings during the last fiscal year. Mr. Cohen is a Class II director who is not standing for reelection. 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. Karabots (Chairman), Belson, Cohen, Cloues and Dinkins. The Committee held one meeting 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. Seidman (Chairman), Cloues, Dinkins and Freeman. The Committee held one meeting during the last fiscal year. Functioning as a Committee of the whole, the Board meets as a Strategy Committee. This Committee makes recommendations concerning possible new opportunities for the growth of the Company and actions that should be considered to meet changing times and conditions. The Committee held three meetings during the last fiscal year. Each director of the Company except those directors who are employees and Mr. Cohen (who has been on retainer as a consultant to the Company) is paid a fee of $22,500 per annum. See "Compensation Committee Interlocks and Insider Participation" for information concerning consulting fees paid to Mr. Cohen. The members of the Audit and Examining Committee other than Mr. Cohen receive $750 for each committee meeting attended. The members of the Human Resources Committee other than Mr. Cohen receive $500 for each committee meeting attended. 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 1994 Annual Meeting the exercise price is $7.50. Each option becomes exercisable as to all or any portion of the shares covered thereby one year after the date of grant and expires five years after the date of grant. The various directors and nominees hold other directorships of public companies as follows: Name Director of Jerome Belson Waterhouse Investor Services, Inc. Edward B. Cloues, II K-Tron International, Inc. Samuel N. Seidman Production Systems Acquisition Corporation EXECUTIVE COMPENSATION Executive Compensation The Summary Compensation Table below sets forth individual compensation information for each of the Company's last three fiscal years of its Chief Executive Officer ("CEO") and the four other most highly paid executive officers who were serving as such at the end of the Company's fiscal year ended April 30, 1995. SUMMARY COMPENSATION TABLE Long Term Annual Compensation Compensation Awards ------------------------ -------------------------- Securities Name and Underlying Principal Options/ All Other Position Year Salary($) Bonus($) SAR's(#) Compensation($) (1)(2) - -------- ---- --------- -------- ----------- --------------- Anthony B. Gliedman 1995 $366,183 $15,000 10,000 $1,498 CEO, Chairman and 1994 332,300 15,000 -0- 1,540 President 1993 289,800 -0- -0- 1,944 Daniel Friedman 1995 260,066 9,000 5,000 1,521 Senior Vice President 1994 249,850 9,000 -0- 1,540 and CEO of Kable 1993 247,767(3) -0- -0- 2,259 News Company, Inc. Mohan Vachani 1995 240,583 8,000 5,000 1,904 Senior Vice President- 1994 214,625 8,000 15,000 -0- Chief Financial Officer(4) James Wall 1995 218,675 9,000 5,000 1,519 Senior Vice President 1994 202,625 9,000 -0- 1,540 and President of 1993 183,092 -0- -0- 1,473 AMREP Southwest Inc. and AMREP Southeast Inc. Harvey W. Schultz 1995 188,150 5,000 4,000 1,516 Senior Vice President 1994 178,208 6,000 -0- 1,540 and President of 1993 167,158 -0- -0- 281 AMREP Solutions, Inc. (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) Includes $6,667 of retroactive salary increase. (4) Mr. Vachani became Senior Vice President in June 1993. Option Tables The following table sets forth, for the CEO and each of the executive officers named in the Summary Compensation Table, information with respect to grants of stock options made during the fiscal year ended April 30, 1995(1).

• ------------------------- (1) The options are exercisable as to 50% of the shares one year after the date of grant and the remaining 50% two years after the date of grant. (2) The dollar amounts under these columns use the hypothetical 5% and 10% rates of appreciation prescribed by the Securities and Exchange Commission's rules. They would result in per share prices at the expiration date of the options of $8.75 and $10.07, respectively. The Company makes no representations as to the future prices of its Common Stock. The following table sets forth option exercise activity in the last fiscal year and the fiscal year end option values with respect to the CEO and each of the executive officers named in the Summary Compensation Table based on the market price of the Common Stock of the Company at April 28, 1995. Aggregated Option/SAR Exercises in the Fiscal Year Ended April 30, 1995 and April 30, 1995 Option/SAR Values Shares Acquired Name On Exercise Value Realized ---- ----------- --------------- Anthony B. Gliedman 10,000 $19,775 Daniel Friedman 10,000 13,012 Mohan Vachani -0- -0- James Wall 8,000 11,762 Harvey W. Schultz 10,000 25,800 - ---------------------------- * Excess of market over exercise price on date of exercise. Values of Number of Unexercised Unexercised In-the-money Options at Options at 4/30/95 4/30/95 Exercisable Unexercisable Exercisable Unexercisable ----------- ------------- ------------ ------------- Anthony B. Gliedman 50,000 10,000 $73,000 -0- Daniel Friedman 5,000 5,000 7,300 -0- Mohan Vachani 15,000 5,000 -0- -0- James Wall 5,000 5,000 7,300 -0- Harvey W. Schultz -0- 4,000 -0- -0- ** Excess of market price at 4/30/95 over exercise price. 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. Karabots, Belson, Cohen, Cloues and Dinkins, but until September 23, 1994 Mr. Seidman and former directors Mitchell Roberts and S. Fred Singer were members together with Messrs. Belson, Cohen and Karabots. The HRC's recommendations regarding executive compensation other than stock option grants must be approved by the entire Board. The Stock Option Committee, also consisting of non-employee directors, has sole authority to award options. Its current members are Messrs. Seidman, Cloues, Dinkins and Freeman. Compensation Policy for Executive Officers The HRC's policy is that the Company's executive officers should be paid a salary commensurate with their responsibilities, should receive short-term incentive compensation in the form of a bonus determined in accordance with the Bonus Plan referred to below which takes into account both the Company's profits for a year and the executive's performance during the year, and should receive long-term incentive compensation in the form of stock options. The policy with respect to salaries of executive officers other than the Chief Executive Officer ("CEO") is that they should be in amounts recommended by the CEO, and the current salaries are in amounts so recommended. The current salaries for the named executive officers are incorporated in employment agreements which were effective October 1, 1993 and originally were for terms ending September 30, 1995. However, on May 5, 1995, pursuant to a recommendation by the CEO, the HRC recommended and the Board approved an extension of the term of each to September 30, 1996, with no change in compensation except for a cost of living adjustment on October 1, 1995. The considerations entering into the determination by the CEO of the salaries for the named executives which he recommended to the HRC in 1993 were the salaries payable immediately prior to the effective date of the employment agreements, his subjective evaluation of the abilities and past performances of the respective executives and his judgment of their potential for enhancing the profitability of the Company. The CEO advised the HRC that, in his subjective judgment based on his experience and knowledge of the market place, such salaries were reasonable and proper in light of the respective duties and responsibilities of the executives. On the recommendation of the HRC, the Board in September l993 adopted the Company's Bonus Plan for Executives and Key Employees pursuant to which in each year that the Company's earnings exceed a formula amount, a percentage of the excess becomes a Bonus Pool. Under this Plan (which is described in detail under the caption "Employment Contracts with Executives") each executive officer other than the CEO is to receive from the Bonus Pool an amount equal to such percentage thereof as the CEO determines, but the bonus amount to any such executive officer may not exceed his or her salary for the applicable year. The CEO has informed the HRC that his determinations of awards from the Bonus Pool would be based on his subjective evaluation of the performance of each executive during the applicable year, which would include the executive's contribution to the Company's profitability for the year, the success of the executive in resolving problems and the extent to which the executive had been effective in laying the ground work for increased future profitability of the Company. The earnings in fiscal 1995 were insufficient to fund the Bonus Pool but bonuses aggregating $l45,000 were paid to the Company's executive officers and key employees, of which $55,000 was paid to the executive officers, in recognition of Company performance in fiscal 1995. The Stock Option Committee has informed the HRC that its policy generally is to grant options to executives only under the Company's l992 Stock Option Plan ("Plan") and in amounts not exceeding the amounts recommended by the CEO. The CEO has advised that his recommendations for option grants will reflect his subjective judgment of the performances of employees and the potential benefit to the Company from the grant of this form of incentive compensation. In recommending option grants the CEO, among other things, considers the amounts and terms of options granted in the past. Options to purchase 36,000 shares of the Company's common stock were granted under the Plan to executive officers in the l995 fiscal year. Section 162(m) of the Internal Revenue Code, enacted in 1993, generally disallows a tax deduction to public companies for compensation over $1,000,000 paid to each of the Company's Chief Executive Officer and the four other most highly compensated executive officers. The Compensation Committee has not established any policy regarding annual compensation to such executive officers in excess of $1,000,000. Bases for Chief Executive Officer's Compensation Anthony B. Gliedman, the CEO, was employed in late l990 as Executive Vice President with the expectation that he would become the CEO within a year upon the anticipated retirement of the then CEO. Mr. Gliedman's initial annual salary was $275,000 and until October 1, l993 it was increased only by a percentage equal to the percentage increase in the cost-of-living. In fiscal l992, the year in which Mr. Gliedman became CEO, the Company had an after-tax loss of nearly $7 million, and in fiscal l993 the Company had a small profit. Based upon this improvement and the expectation that it would continue under Mr. Gliedman's leadership, the HRC recommended (i) that his salary be increased to $360,000 and (ii) the adoption of the Bonus Plan with Mr. Gliedman to receive 25% of the Bonus Pool up to an amount equal to his salary. Before the HRC made its recommendation, one of its members had analyzed several published surveys of CEO compensation and reported to it that, in his judgment based on such analysis, the recommended compensation was within a reasonable range. On October 1, l993 the Company entered into an employment contract with Mr. Gliedman which incorporated the compensation recommendations of the HRC and which is described under the caption "Employment Contracts with Executives". As noted above, the earnings in fiscal l995 were insufficient to fund the Bonus Pool but bonuses were paid to various executive officers for that year, of which $l5,000 was paid to Mr. Gliedman. Of the options granted under the Plan to executives in fiscal l995, options to purchase 10,000 shares were granted to Mr. Gliedman. Such grant reflects both the improved results in fiscal l994 and the size of the option grants to the other executives. Nicholas G. Karabots, Chairman Jerome Belson Joseph Cohen Edward B. Cloues II David N. Dinkins Human Resources Committee Compensation Committee Interlocks and Insider Participation Joseph Cohen, a Class II director who is not standing for reelection, is an independent management consultant. He has been retained by the Company as a management consultant and was paid $132,770 as consulting fees in the fiscal year ended April 30, 1995. During the year, he consulted in connection with the Company's marketing programs, performed system analyses for the Company's construction and development operations, and consulted with Kable News Company, Inc. in connection with various systems and operations. 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 cover 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 distribution agreements, Kable purchases magazines from publishing companies owned or controlled by Mr. Karabots, and during the fiscal year ended April 30, 1995 paid such companies a total of approximately $21,000,000 for magazines. Kable continues as distributor 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 has 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 will 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. Messrs. Cohen and Karabots are members of the Human Resources Committee. Performance Graph The graph below 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 the Standards & Poor's Homebuilding Index for the five years beginning April 30, 1990 and ending April 30, 1995 (assuming the investment of $100 in the Company's stock, the S&P 500 Index and the S&P Homebuilding Index on April 30, 1990, and the reinvestment of all dividends). [GRAPH] 1990 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- ---- AMREP CORP 100.00 65.52 89.66 81.03 106.90 86.21 S & P 500 INDEX 100.00 117.62 134.12 146.51 154.30 181.28 HOMEBUILDING INDEX 100.00 127.58 154.52 181.04 183.82 148.26 Employment Contracts with Executives The Company has employment agreements with Messrs. Gliedman, Friedman, Wall, Vachani and Schultz. The employment term of the agreement with Mr. Gliedman originally was for the three years ending September 30, 1996, but the term was extended for one year and now ends September 30, 1997. The employment term of all the other agreements, as amended, ends September 30, 1996. The compensation provided by Mr. Gliedman's agreement is an annual salary which until September 30, 1995 was $370,600 with a cost-of-living increase on each October 1st, plus a bonus in an amount equal to 25% of the bonus pool ("Bonus Pool") created by the Company's Bonus Plan for Executives and Key Employees but not exceeding his salary for the applicable year. The compensation provided by the agreements with Messrs. Friedman, Wall, Vachani and Schultz is an annual salary which until September 30, 1995 were in the following amounts: Daniel Friedman $242,900 James Wall 221,300 Mohan Vachani 243,500 Harvey W. Schultz 190,400 Each will receive a cost of living increase on October 1, 1995. Mr. Friedman was paid in fiscal 1995 an additional $20,000 to compensate him for the reduction in the pension which will be payable to him under the Company's retirement plan resulting from a change in the tax law, and the Company currently is paying him such additional amount. Each of Messrs. Friedman, Wall, Vachani and Schultz will receive such percentage of the Bonus Pool as the CEO determines but the bonus amount to the executive may not exceed his earnings for the applicable year. The Bonus Pool for a fiscal year is 15% of the Bonus Pool Earnings (if any) for that year. The Bonus Pool Earnings for a fiscal year is determined by (A) deducting from the Company's after-tax income for the year the following: (a) an inflation adjustment consisting of (x) the shareholders' equity at the beginning of the year times (y) the percentage increase in the cost of living during the year, and (b) a return on equity, consisting of 5.1% of the shareholders' equity at the beginning of the year, and (B) dividing the resultant amount by the reciprocal of the effective income tax rate applicable to the Company for such year. * For example, if the amount determined by (A) for a year were $620,000 and the effective tax rate for the year were 38%, the Bonus Pool Earnings for that year would be $620,000 divided by 0.62, or $1,000,000. In the event there is a "Change in Control" of the Company, each of the five executives will have the option to have an amount equal to the bonus paid or payable to him for the fiscal year immediately preceding the date of exercise of such option frozen into his salary and, if such option is exercised, will also have the option to terminate his employment and become a consultant to the Company until the end of his employment term. As a consultant, the executive will be paid 57-1/2% of his salary at the time of termination of the employment period (plus a cost of living adjustment). There will be a "Change in Control" of the Company if, among other things, 20% or more of the Company's Common Stock is acquired by a person or a group and such person or group, by its filing on Schedule 13D under the Securities Exchange Act of 1934 or otherwise, indicates the intention of seeking or exercising control of the Company or reserves the right to do so. The employment agreements with Messrs. Gliedman, Wall and Friedman provide that during the employment term each shall be included in the management slate for election as a director and shall be elected to the respective offices presently held by him. The employment agreements with Messrs. Vachani and Schultz provide that each shall be elected to the offices presently held by him. Each of the employment agreements provide for certain continuing payments in the event of the death or disability of the executive. Retirement Benefits The following table sets out estimated annual retirement benefits payable under the life annuity form of pension to a person retiring at age 65, for specified earnings and years of service, estimated as of January 1, 1995. The table does not reflect use of the maximum earnings currently permitted to be taken into account under applicable law ($150,000). Pension Plan Table Average Annual Pay (a) Years of Credited Service - -------------- ----------------------------------------------------------- 15 Years 20 Years 25 Years 30 Years 35 Years -------- -------- -------- -------- -------- $100,000 $19,583 $26,111 $32,639 $39,167 $45,694 125,000 25,208 33,611 42,014 50,417 58,819 150,000 30,833 41,111 51,389 61,667 71,944 175,000 36,458 48,611 60,764 72,917 85,069 200,000 42,083 56,111 70,139 84,167 98,194 225,000 47,708 63,611 79,514 95,417 111,319 (a) The highest average annual earnings in any period of 60 consecutive months. Mr. Gliedman has four years of credited service, Mr. Friedman has twenty-four years of credited service, Mr. Wall has twenty- four years of credited service, Mr. Schultz has two years of credited service, and Mr. Vachani has one year of credited service. Assuming (i) these individuals continue to be employed until age 65, (ii) their annual salaries continue to be at least at current levels, (iii) annual increases of 5% in the maximum earnings of $150,000 currently permitted to be taken into account under applicable law and in the Social Security taxable wage base which is taken into account in calculating retirement benefits under the Company's pension plan, and (iv) the individuals elect life annuity form of pension, their annual retirement benefits would be as set forth below: Estimated Benefit --------- Anthony B. Gliedman $48,600 Daniel Friedman $79,200* Mohan Vachani $40,600 James Wall $73,800 Harvey W. Schultz $37,000 * Mr. Friedman's estimated benefit includes amounts "grandfathered" under the law. Certain Transactions In September 1993, the Human Resources Committee ("HRC") recommended that the Company from time to time loan to Mr. Gliedman up to $360,000 with the proceeds to be used solely to purchase shares of the Company's common stock, the loans to carry interest at the average rate paid by the Company, 10% of the loan to be repaid annually and the unpaid balance of each advance to be repaid on the fifth anniversary of the borrowing. The HRC made the recommendation because it believed it would be in the Company's best interest for Mr. Gliedman to have a meaningful equity interest in the Company. The Board approved such loan and in December 1993 Mr. Gliedman borrowed $150,500 from the Company and applied the proceeds to the purchase of 20,000 shares of the Company's common stock from the Company at a price of $7.625 per share, the then market price and in December 1994 Mr. Gliedman borrowed $39,625 from the Company and applied the proceeds to purchase 10,000 shares of Common Stock from the Company at a price of $4.0625 per share upon exercise of an option granted to him in December 1991. At August 22, 1995, Mr. Gleidman was indebted to Company in the amount of $175,075, while the largest amount of his indebtedness outstanding since May 1, 1994 was $190,125. See "Compensation Committee Interlocks and Insider Participation" for information concerning consulting fees paid Joseph Cohen, and transactions with Nicholas G. Karabots. 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, 1995 and 1994 have been examined by Arthur Andersen & Co., independent public accountants. A representative of Arthur Andersen & Co. is expected to attend the meeting with the opportunity to make a statement if the representative desires, and it is expected such representative will be available to respond to appropriate questions from shareholders. The Board of Directors has not yet acted with respect to the selection of auditors for fiscal 1996. OTHER MATTERS The Board of Directors knows of no matters which will be presented for consideration at the meeting other than the matters referred to in this statement. Should any other matters properly come before the 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. The Company has also retained The Kissel-Blake Organization, Inc. to assist in the solicitation of proxies and will pay that firm a fee of $8,000 and reimburse it for out-of-pocket expenses, estimated not to exceed $3,000. Directors, officers and employees of the Company may also 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 the annual meetings. To be considered, proposals must be submitted on a timely basis. Proposals for the 1996 meeting must be received by the Company no later than June 4, 1996. By Order of the Board of Directors Valerie Asciutto, Secretary Dated: October 2, 1995 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 1995, including the financial statements and the schedules thereto, filed with the Securities and Exchange Commission. Any request should be directed to Valerie Asciutto, 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. APPENDIX TO PROXY STATEMENT OF AMREP CORPORATION Dated August 15, 2994 The substantive information conveyed by the Performance Graph on Page 17 of the Proxy Statement is contained in the table which appears at the bottom of Page 17. PROXY PROXY AMREP CORPORATION SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS Plaza Hotel, 768 Fifth Avenue New York, New York 10019 November 1, 1995, 9:00 A.M. Local Time The undersigned hereby appoints Valerie Asciutto, Loretta L. Alonso, 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 1995 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 October 2, 1995 and upon all matters which come before said meeting or any 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. Please mark boxes [X] or [ ] in blue or black ink. A vote FOR is recommended by the Board of Directors. For election of three (3) Directors as described in the Proxy Statement of the Board of Directors. FOR all nominees listed WITHHOLD AUTHORITY to below (except as marked vote for all nominees to the contrary below.) [ ] listed below. [ ] (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) Daniel Friedman, Samuel N. Seidman, Mohan Vachani, - ------------------------------------------------------------------------------- (Continued and to be signed and dated on reverse side) 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 , 1995 ---------------------- ----------------------------------- (Signature) ----------------------------------- (Signature) PLEASE MARK, DATE, SIGN AND MAIL YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED.