DEF 14A of Amrep Corp.
Filed Aug 1, 2024 · FY20240001104659-24-084927
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS 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, two Class I directors will be elected to serve until the 2027 annual meeting of shareholders and until their successors are elected and qualified, except in the event of any such director’s earlier death, resignation or removal. The terms of office of the Class II and Class III directors will expire at the annual meetings of shareholders to be held in 2025 and 2026, 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 Edward B. Cloues, II and Christopher V. Vitale, who are the incumbent Class I 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 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 designated by the Board or, in the discretion of the Board, the position or positions 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 nominees of the Board for election and the other directors of the Company. Nominees to serve until the 2027 Annual Meeting of Shareholders (Class I): EDWARD B. CLOUES, II, age 76, 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 was publicly held during his tenure, 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 48, 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. Director continuing in office until the 2025 Annual Meeting of Shareholders (Class II): ROBERT E. ROBOTTI, age 71, 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. Director continuing in office until the 2026 Annual Meeting of Shareholders (Class III): ALBERT V. RUSSO, age 70, 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. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE TWO CLASS I NOMINEES.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| | | Salary | Bonus | Stock Awards(1) | All Other Compensation(2) | Total | | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | | Christopher V. Vitale President and Chief Executive Officer of the Company | 2024 2023 | 357,700 346,500 | 165,000 150,000 | 153,900 89,300 | 16,100 14,500 | 692,700 600,300 | | Adrienne M. Uleau Vice President, Finance and Accounting of the Company | 2024 2023 | 173,900 166,500 | 60,000 55,000 | 40,400 23,500 | 9,000 7,700 | 283,300 252,700 |
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| (1) The amounts indicated represent the grant date fair value related to awards of restricted stock granted during 2024 and 2023 computed in accordance with stock-based accounting rules (Financial Accounting Standards Board Accounting Standards Codification Topic 718). The determination of this value is based on the methodology set forth in Note 11 to the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2024. |
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| (2) The amounts reported include payment of life insurance premiums and matching contributions to the Company’s 401(k) retirement plan and Simple IRA plan. |
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| Outstanding Equity Awards at April 30, 2024 | | | | | | | | Option Awards | | | Stock Awards | | | | Equity incentive | | | Equity Incentive Plan Awards | | | Name | plan awards: Number of securities underlying unexercised unearned options | Option exercise price ($) | 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 | 15,334(3) | 311,035 | | Adrienne M. Uleau | - | - | - | 4,334(4) | 87,911 |
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| (1) Value is based on the closing price per share of Common Stock of $20.284 on April 30, 2024, as reported on the New York Stock Exchange. |
Summary Compensation Table
| (2) In November 2021, the Company granted Mr. Vitale an option to purchase 50,000 shares of Common Stock under the AMREP Corporation 2016 Equity Compensation Plan with an exercise price of $14.24 per share, which was the closing price on the New York Stock Exchange on the date of grant. The option will become exercisable for 100% of the option shares on November 1, 2026 if Mr. Vitale is employed by, or providing service to, the Company on such date. Subject to the definitions in the AMREP Corporation 2016 Equity Compensation Plan, in the event (a) Mr. Vitale has a termination of employment with the Company on account of death or disability, (b) the Company terminates Mr. Vitale’s employment with the Company for any reason other than cause or (c) of a change in control, then the option will become immediately exercisable for 100% of the option shares. The option has a term of ten years from the date of grant and terminates at the expiration of that period. The option automatically terminates upon: (i) the expiration of the three month period after Mr. Vitale ceases to be employed by the Company, if the termination of his employment by Mr. Vitale or the Company is for any reason other than as hereinafter set forth in clauses (ii), (iii) or (iv); (ii) the expiration of the one year period after Mr. Vitale ceases to be employed by the Company on account of Mr. Vitale’s disability; (iii) the expiration of the one year period after Mr. Vitale ceases to be employed by the Company, if Mr. Vitale dies while employed by the Company; or (iv) the date on which Mr. Vitale ceases to be employed by the Company, if the termination is for cause. If Mr. Vitale engages in conduct that constitutes cause after Mr. Vitale’s employment terminates, the option immediately terminates. Notwithstanding the foregoing, in no event may the option be exercised after the date that is immediately before the tenth anniversary of the date of grant. Except as described above, any portion of the option that is not exercisable at the time Mr. Vitale has a termination of employment with the Company immediately terminates. |
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| (3) 2,000 restricted shares of Common Stock that will vest on July 7, 2024, 2,666 restricted shares of Common Stock that will vest on July 12, 2024, 2,666 restricted shares of Common Stock that will vest on July 13, 2024, 2,667 restricted shares of Common Stock that will vest on July 12, 2025, 2,668 restricted shares of Common Stock that will vest on July 13, 2025 and 2,667 restricted shares of Common Stock that will vest on July 12, 2026, subject in each case to the continued employment of Mr. Vitale on each vesting date. |
Summary Compensation Table
| (4) 834 restricted shares of Common Stock that will vest on July 7, 2024, 700 restricted shares of Common Stock that will vest on July 12, 2024, 700 restricted shares of Common Stock that will vest on July 13, 2024, 700 restricted shares of Common Stock that will vest on July 12, 2025, 700 restricted shares of Common Stock that will vest on July 13, 2025 and 700 restricted shares of Common Stock that will vest on July 12, 2026, subject in each case to the continued employment of Ms. Uleau on each vesting date. |
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On July 18, 2024, the Company approved the following compensation for Mr. Vitale and Ms. Uleau:
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| • | effective as of July 29, 2024, the annual base salary for Mr. Vitale was changed from $360,000 to $375,000 and the annual base salary for Ms. Uleau was changed from $175,000 to $180,000; |
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| • | Mr. Vitale was awarded a cash bonus of $150,000 and Ms. Uleau was awarded a cash bonus of $55,000; and |
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| • | the Company awarded Mr. Vitale 7,200 restricted shares of Common Stock of the Company under the AMREP Corporation 2016 Equity Compensation Plan that vest as follows: 2,400 shares on July 18, 2025, 2,400 shares on July 18, 2026 and 2,400 shares on July 18, 2027, subject to the continued employment of Mr. Vitale on each vesting date and the Company awarded Ms. Uleau 1,890 restricted shares of Common Stock of the Company under the AMREP Corporation 2016 Equity Compensation Plan that vest as follows: 630 shares on July 18, 2025, 630 shares on July 18, 2026 and 630 shares on July 18, 2027, subject to the continued employment of Ms. Uleau on each vesting date. |
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In November 2021, the Company entered into an employment agreement with Mr. Vitale. Pursuant to the employment agreement,
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| • | Mr. Vitale will serve as the President and Chief Executive Officer of the Company. |
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| • | The parties agreed to provisions relating to vacation, paid-time-off, office location, confidentiality, invention assignment, non-competition and non-solicitation. |
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| • | Upon any termination of Mr. Vitale’s employment, the Company will pay and issue to Mr. Vitale any earned but unpaid base salary, the dollar value equivalent of the number of days of vacation and paid-time-off earned but not used, unreimbursed business expenses, unpaid bonus previously awarded by the Company and vested benefits, equity awards or payments (excluding any severance benefits or payments) payable or issuable under any policy or plan of the Company or under any equity award agreement or other arrangement between the Company and Mr. Vitale. |
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| • | Upon any termination of Mr. Vitale’s employment due to the death of Mr. Vitale, the Company will pay to Mr. Vitale’s executors, administrators or personal representatives, an amount equal to his then-annual base salary which he would otherwise have earned for the month in which he dies and for three months thereafter. |
Summary Compensation Table
| • | Upon any termination of Mr. Vitale’s employment by Mr. Vitale for Good Reason or the Company without Cause and delivery by Mr. Vitale of a release of claims to the Company, the Company will pay or provide to Mr. Vitale (a) a lump sum amount equal to 200% of the highest of (i) Mr. Vitale’s annual base salary in effect immediately prior to the termination date, (ii) Mr. Vitale’s annual base salary in effect on the date 210 days prior to the termination date or (iii) in the event the termination of Mr. Vitale’s employment was for Good Reason, Mr. Vitale’s annual base salary in effect prior to the event constituting Good Reason; and (b) all restricted stock, stock options and other outstanding equity grants with respect to the Company that are held by Mr. Vitale immediately prior to the termination date will become fully vested and, as applicable, fully exercisable as of the termination date. |
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| • | For purposes of the employment agreement, the term “Good Reason” means any of the following actions taken by the Company without Mr. Vitale’s consent: a diminution in base salary of more than five percent; the removal of Mr. Vitale as the President and Chief Executive Officer of the Company; a material diminution in Mr. Vitale’s authority, duties or responsibilities as the President and Chief Executive Officer of the Company; assigning any material new duties or responsibilities to Mr. Vitale in addition to those normally associated with his role as President and Chief Executive Officer of the Company; the Company ceasing to be a company subject to the periodic and current reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, or ceasing to have its Common Stock traded on an exchange registered as a national securities exchange under Section 6 of the Securities Exchange Act of 1934, as amended; a requirement that Mr. Vitale relocate his office other than as permitted by the employment agreement; or the failure of the Company to observe or perform any of its obligations to Mr. Vitale under the employment agreement. |
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| • | For purposes of the employment agreement, the term “Cause” means the failure of Mr. Vitale to observe or perform (other than by reason of illness, injury, disability or incapacity) any of the material terms or provisions of the employment agreement, conviction of a felony or other crime involving moral turpitude, misappropriation of funds of the Company, the commission of an act of dishonesty by Mr. Vitale resulting in or intended to result in wrongful personal gain or enrichment at the expense of the Company or a material breach (other than by reason of illness, injury, disability or incapacity) of any written employment or other policy of the Company. |
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| • | Upon any termination of Mr. Vitale’s employment in connection with a long-term disability, by Mr. Vitale for Good Reason or by the Company without Cause, the Company will pay to Mr. Vitale a lump sum cash payment equal to 200% of the annual cost of medical and other health care benefits for Mr. Vitale, his spouse and his other dependents and an amount equal to the estimated federal, state and local income and FICA taxes related thereto. |
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| • | Payments under the employment agreement may be adjusted as a result of section 409A and section 280G of the Internal Revenue Code of 1986, as amended. |
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| • | In the event Mr. Vitale is made, or threatened to be made, a party to any legal action or proceeding, whether civil or criminal, including any governmental or regulatory proceeding or investigation, by reason of the fact that Mr. Vitale is or was a director or senior officer of the Company, the Company will defend, indemnify and hold harmless Mr. Vitale, and the Company will promptly pay or reimburse Mr. Vitale’s related expenses to the fullest extent contemplated or permitted from time to time by applicable law and required by the Company’s Certificate of Incorporation. During Mr. Vitale’s employment with the Company and after termination of any such employment for any reason, the Company will cover Mr. Vitale under the Company’s directors’ and officers’ insurance policy applicable to other officers and directors according to the terms of such policy, but in no event for a period of time to exceed six years after the termination date. |
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Other than as described above, the Company’s executive officers are not subject to agreements or other arrangements that provide for payments upon a change in control of the Company and the Company’s policies for severance payments upon termination of employment apply to the executive officers on the same basis as the Company’s other salaried employees. The Compensation and Human Resources Committee retains the discretion to enter into severance agreements with individual executive officers on terms satisfactory to it. Under the terms of the AMREP Corporation 2016 Equity Compensation Plan and subject to the provisions of the applicable award agreement, restrictions on certain awards under the AMREP Corporation 2016 Equity Compensation Plan shall automatically lapse upon a change in control of the Company.
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 $100 investment based on total shareholder return(3) | Net Income | | Year | ($) | ($) | ($) | ($) | ($) | ($) | | 2024 | 692,700 | 1,087,600(4) | 283,300 | 311,000(5) | 189.57 | 6,690,000 | | 2023 | 600,300 | 647,600(6) | 252,700 | 258,300(7) | 129.91 | 21,790,000 | | 2022 | 767,800 | 804,500(8) | 230,000 | 238,000(9) | 120.19 | 15,862,000 |
PAY VERSUS PEFORMANCE
| (4) For compensation actually paid to PEO in 2024 (rounded to nearest hundred), 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 2024 (rounded to nearest hundred), 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 2023 (rounded to nearest hundred), 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 2023 (rounded to nearest hundred), the Summary Compensation Table total for the non-PEO named executive officers is adjusted to reflect the following changes: |
PAY VERSUS PEFORMANCE
| (8) For compensation actually paid to PEO in 2022 (rounded to nearest hundred), the Summary Compensation Table total for the PEO is adjusted to reflect the following changes: |
PAY VERSUS PEFORMANCE
| (9) For compensation actually paid to non-PEO named executive officers in 2022 (rounded to nearest hundred), 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 $95,000 for his services as Chairman of the Board in equal monthly installments. |
COMPENSATION OF DIRECTORS
| • | All amounts are pro-rated to reflect any director’s removal or retirement from the Board, any decision that a director not stand for reelection to the Board or any new director being appointed or elected to the Board; provided that, any deferred common share units of the Company that would have been issued on the last trading day of a calendar year to a director who ceased to be a director prior to such issuance date shall be paid in cash rather than as deferred common share units of the Company, where the cash payment will equal the number of shares underlying the pro rata number of deferred common share units that would have been issued to the director multiplied by the closing price per share of Common Stock reported on the New York Stock Exchange on the last trading day of the calendar year. |
COMPENSATION OF DIRECTORS
| • | There are no separate meetings fees for the Board or any committee thereof. |
COMPENSATION OF DIRECTORS
The Board believes that significant stock ownership by Board members further aligns their interests with the interests of the Company’s shareholders. Accordingly, each current non-employee director is expected to maintain ownership of at least 30,000 shares of Common Stock of the Company. Newly elected non-employee directors would be expected to meet this level of ownership within five years of their election to the Board and to maintain such ownership thereafter. Non-employee members of the Board may satisfy the ownership guidelines with Common Stock in these categories: shares owned directly or indirectly and time-vested restricted stock, deferred stock units or restricted stock units. The Board may modify this policy in its discretion. The following table summarizes the compensation earned by the Company’s directors for 2024:
COMPENSATION OF DIRECTORS
| Name | Fees Earned or Paid in Cash ($) | 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 2024 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, 2024. |
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 2023 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 2023 | Total Outstanding Deferred Common Share Units | | Edward B. Cloues, II | 1,365 | 21,858 | | Robert E. Robotti | 1,365 | 20,645 | | Albert V. Russo | 1,365 | 21,858 |