DEF 14A of Amrep Corp.
Filed Aug 2, 2023 · FY20230001104659-23-086818
ELECTION OF DIRECTOR
ELECTION OF DIRECTOR The Board is a classified board divided into three classes – Class I, Class II and Class III. Class II and III each consists of one director and Class I consists of two directors. Each director serves for a term expiring at the annual meeting of shareholders held in the third year following the year of his election and until his successor is elected and qualified. At this Annual Meeting, one Class III director will be elected to serve until the 2026 annual meeting of shareholders and until his successor is elected and qualified, except in the event of such director’s earlier death, resignation or removal. The terms of office of the Class I and Class II directors will expire at the annual meetings of shareholders to be held in 2024 and 2025, respectively, upon the election and qualification of their successors, except in the event of any such director’s earlier death, resignation or removal. At the recommendation of its Nominating and Corporate Governance Committee, the Board is nominating Albert V. Russo, who is the incumbent Class III director, for election at the Annual Meeting. Although the Board does not expect that Mr. Russo will be unable to serve as a director, should he become unavailable it is intended that the shares represented by proxies in the accompanying form will be voted for the election of a substitute nominee designated by the Board or, in the discretion of the Board, the position may be left vacant. The Company believes that its directors have the qualifications and skills necessary to serve as directors of the Company. The following information relates to the nominee of the Board for election and the other directors of the Company. Nominee to serve until the 2026 Annual Meeting of Shareholders (Class III): ALBERT V. RUSSO, age 69, has been a director of the Company since 1996. Mr. Russo is the Managing Partner of real estate entities 401 Broadway Building, Russo Associates and Pioneer Realty and has held these positions for more than the past five years. Mr. Russo has been involved in the ownership and management of commercial real estate for more than 25 years and contributes to the Board his specialized knowledge of the real estate business. Directors continuing in office until the 2024 Annual Meeting of Shareholders (Class I): EDWARD B. CLOUES, II, age 75, has been a director of the Company since 1994 and currently serves as Chairman of the Board. Mr. Cloues has served as Chairman of the Board of Trustees of Virtua Health, Inc. (“Virtua”), a non-profit hospital and healthcare system, since January 2022, and since 2010 has held various positions on the Board of Trustees of Virtua. He served as a director of Hillenbrand, Inc., a diversified global industrial company, from 2010 to February 2021. Mr. Cloues also served as Chairman of the Board of Penn Virginia Corporation, an oil and gas exploration and development company, from 2011 to 2016 and as the interim Chief Executive Officer of Penn Virginia Corporation from 2015 to 2016 during the Board-led reorganization of that company, including a chapter 11 filing under the U.S. Bankruptcy Code in 2016 and the emergence from chapter 11 in 2016 pursuant to a confirmed plan of reorganization. He also served as a director (since 2003) and Chairman of the Board (since 2011) of PVR GP, LLC, the General Partner of PVR Partners, L.P., a pipeline and natural resources master limited partnership, until its sale in 2014. Mr. Cloues was also a director, the Chairman of the Board and the Chief Executive Officer of K-Tron International, Inc., a material handling equipment manufacturer, from 1998 until its sale in 2010. Prior to 1998, Mr. Cloues was a law firm partner at the law firm of Morgan, Lewis & Bockius LLP where he specialized in mergers and acquisitions and other business law matters. That law firm experience combined with the experience gained from his former 12-year chief executive position with K-Tron International, Inc., which had been publicly held prior to its sale, has given him a strong background in dealing with complex business transactions and general management issues. Additionally, he brings to the Board a broad understanding of governance, audit and compensation issues as a result of his service on several other boards. CHRISTOPHER V. VITALE, age 47, has been a director of the Company since July 2021 and has been President and Chief Executive Officer of the Company since 2017. From 2014 to 2017, Mr. Vitale was Executive Vice President, Chief Administrative Officer and General Counsel of the Company and, from 2013 to 2014, he was Vice President and General Counsel of the Company. Prior to joining the Company, Mr. Vitale held various legal positions at Franklin Square Holdings, L.P., a national sponsor and distributor of investment products, from 2011 to 2013 and at WorldGate Communications, Inc., a provider of digital voice and video phone services and video phones, from 2009 to 2011. Prior to joining WorldGate, Mr. Vitale was an attorney with the law firms of Morgan, Lewis & Bockius LLP and Sullivan & Cromwell LLP. Mr. Vitale’s qualifications to serve on the Board include his in-depth knowledge of the Company in connection with his position as President and Chief Executive Officer of the Company, and his law firm and in-house legal experience has given him a strong background in board and governance issues, as well as securities and complex business transactions. Directors continuing in office until the 2025 Annual Meeting of Shareholders (Class II): ROBERT E. ROBOTTI, age 70, has been a director of the Company since 2016. Mr. Robotti has been the president of Robotti & Company Advisors, LLC (a registered investment advisor) and Robotti Securities, LLC, FKA Robotti & Company, LLC (a registered broker-dealer), and their predecessors, since 1983. He has been the managing member of Ravenswood Management Company, LLC (and its predecessor) since 1980, which serves as the general partner of The Ravenswood Investment Company, L.P. and Ravenswood Investments III, L.P. He currently serves as a director and Chairman of the Board of Pulse Seismic Inc., a seismic data licensing business, and has held these positions for more than the past five years. Mr. Robotti has also served as a director of Tidewater Inc., an owner and operator of offshore support vessels providing offshore energy transportation services, since June 2021. Mr. Robotti was a director of PHX Minerals Inc. (formerly known as Panhandle Oil and Gas Inc.), a diversified mineral company, from 2004 to May 2020, a director of BMC Building Materials Holding Corporation from 2012 to 2015 and a director of PrairieSky Royalty Ltd., a petroleum and natural gas royalty-focused company, from October 2019 to April 2023. Mr. Robotti was a member of the SEC’s Advisory Committee of Smaller Public Companies from 2005 to 2006 and also served on its corporate governance subcommittee. He has both a BSBA and an MBA in Accounting and was a certified public accountant earlier in his career, which license is currently inactive. Mr. Robotti’s qualifications to serve on the Board include his extensive experience in the investment business as the founder, chief executive officer, chairman and controlling owner of a registered investment advisor and a registered broker-dealer, and their predecessors, and as the manager of several investment partnerships. Additionally, he brings to the Board a broad understanding of governance, audit and compensation issues as a result of his service on several other boards. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE CLASS III NOMINEE.
COMPENSATION OF EXECUTIVE OFFICERS
| Summary Compensation Table | | | | | | | | | | | Salary | Bonus | Stock Awards(1) | Option Awards(1) | All Other Compensation(2) | Total | | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | | Christopher V. Vitale | 2023 | 346,500 | 150,000 | 89,300 | - | 14,540 | 600,340 | | President and Chief Executive Officer of the Company | 2022 | 332,700 | 100,000 | 69,000 | 252,110 | 14,020 | 767,830 | | Adrienne M. Uleau | 2023 | 166,500 | 55,000 | 23,500 | - | 7,720 | 252,720 | | Vice President, Finance and Accounting of the Company | 2022 | 153,800 | 41,000 | 28,750 | - | 6,420 | 229,970 |
COMPENSATION OF EXECUTIVE OFFICERS
| Outstanding Equity Awards at April 30, 2023 | | | | | | | | Option Awards | | | Stock Awards | | | | | | | Equity Incentive Plan Awards | | | Name | Equity incentive plan awards: Number of securities underlying unexercised unearned options | Option exercise price ($) | Option expiration date | Number of Unearned Shares, Units or Other Rights that have not Vested (#) | Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested(1) ($) | | Christopher V. Vitale | 50,000(2) | 14.24 | 11/1/2031 | 14,000(3) | 194,600 | | Adrienne M. Uleau | - | - | - | 4,767(4) | 66,261 |
PAY VERSUS PEFORMANCE
| Pay Versus Performance | | | | | | | | | Summary Compensation Table total for PEO(1) | Compensation actually paid to PEO | Average summary compensation table total for non-PEO named executive officers(2) | Average compensation actually paid to non-PEO named executive officers | Value of initial fixed $100 investment based on total shareholder return(3) | Net Income | | Year | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 | 600,340 | 647,581(4) | 252,720 | 258,398(5) | 129.91 | 21,790,000 | | 2022 | 767,830 | 804,537(6) | 229,970 | 238,040(7) | 120.19 | 15,862,000 |
PAY VERSUS PEFORMANCE
| (4) For compensation actually paid to PEO in 2023, the Summary Compensation Table total for the PEO is adjusted to reflect the following changes: |
PAY VERSUS PEFORMANCE
| (5) For compensation actually paid to non-PEO named executive officers in 2023, the Summary Compensation Table total for the non-PEO named executive officers is adjusted to reflect the following changes: |
PAY VERSUS PEFORMANCE
| (6) For compensation actually paid to PEO in 2022, the Summary Compensation Table total for the PEO is adjusted to reflect the following changes: |
PAY VERSUS PEFORMANCE
| (7) For compensation actually paid to non-PEO named executive officers in 2022, the Summary Compensation Table total for the non-PEO named executive officers is adjusted to reflect the following changes: |
Relationship between Company Performance and Compensation Actually Paid
Relationship between Company Performance and Compensation Actually Paid The following charts show the relationship of the compensation actually paid to PEO and compensation actually paid to non-PEO named executive officers to net income and total shareholder return:
COMPENSATION OF DIRECTORS
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. Compensation provided to the non-employee members of the Board is as follows:
COMPENSATION OF DIRECTORS
| • | Each non-employee member of the Board is paid an annual cash fee of $30,000 in equal quarterly installments. |
COMPENSATION OF DIRECTORS
| • | On the last trading day of each calendar year, each non-employee member of the Board will be issued the number of deferred common share units of the Company under the AMREP Corporation 2016 Equity Compensation Plan equal to $30,000 divided by the closing price per share of Common Stock reported on the New York Stock Exchange on such date. |
COMPENSATION OF DIRECTORS
| • | The Chairman of the Audit Committee is paid an annual fee of $7,500 in equal quarterly installments. The Chairman of the Compensation and Human Resources Committee is paid an annual fee of $3,750 in equal quarterly installments. Other members of the Audit Committee and the Compensation and Human Resources Committee are not paid any fee with respect to service on such committees. The members of the Nominating and Corporate Governance Committee, including its Chairman, serve without additional compensation. |
COMPENSATION OF DIRECTORS
| • | In addition to the fees described above, Edward B. Cloues, II is paid an annual fee of $95,000 for his services as Chairman of the Board in equal monthly installments. |
COMPENSATION OF DIRECTORS
| • | All amounts are pro-rated to reflect any director’s removal or retirement from the Board, any decision that a director not stand for reelection to the Board or any new director being appointed or elected to the Board; provided that, any deferred common share units of the Company that would have been issued on the last trading day of a calendar year to a director who ceased to be a director prior to such issuance date shall be paid in cash rather than as deferred common share units of the Company, where the cash payment will equal the number of shares underlying the pro rata number of deferred common share units that would have been issued to the director multiplied by the closing price per share of Common Stock reported on the New York Stock Exchange on the last trading day of the calendar year. |
COMPENSATION OF DIRECTORS
| • | There are no separate meetings fees for the Board or any committee thereof. |
COMPENSATION OF DIRECTORS
The Board believes that significant stock ownership by Board members further aligns their interests with the interests of the Company’s shareholders. Accordingly, each current non-employee director is expected to maintain ownership of at least 30,000 shares of Common Stock of the Company. Newly elected non-employee directors would be expected to meet this level of ownership within five years of their election to the Board and to maintain such ownership thereafter. Non-employee members of the Board may satisfy the ownership guidelines with Common Stock in these categories: shares owned directly or indirectly and time-vested restricted stock, deferred stock units or restricted stock units. The Board may modify this policy in its discretion. The following table summarizes the compensation earned by the Company’s directors for 2023:
COMPENSATION OF DIRECTORS
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Edward B. Cloues, II | 132,500 | 30,000 | 162,500 | | Robert E. Robotti | 33,750 | 30,000 | 63,750 | | Albert V. Russo | 30,000 | 30,000 | 60,000 |
COMPENSATION OF DIRECTORS
| (1) The amounts indicated represent the grant date fair value related to awards of deferred common share units during 2023 computed in accordance with stock-based accounting rules (Financial Accounting Standards Board Accounting Standards Codification Topic 718). The determination of this value is based on the methodology set forth in Note 11 to the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2023. |
COMPENSATION OF DIRECTORS
| (2) The following table sets forth the number of deferred common share units issued to each non-employee director on the last trading day of calendar year 2022 and the total number of deferred common share units outstanding with respect to each non-employee director (where each deferred common share unit represents the right to receive one share of Common Stock within 30 days after the first day of the month to follow such director’s termination of service as a director of the Company). |
COMPENSATION OF DIRECTORS
| Name | Deferred Common Share Units Issued on the Last Trading Day of Calendar Year 2022 | Total Outstanding Deferred Common Share Units | | Edward B. Cloues, II | 2,597 | 20,493 | | Robert E. Robotti | 2,597 | 19,280 | | Albert V. Russo | 2,597 | 20,493 |