SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the Securities Exchange Act of
1934
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-16(e) (2) )
/X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule 240.14a-12
AmBase Corporation
(Name of Registrant as Specified in its Charter)
AmBase Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each part 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 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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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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/ / Check box if any part of the fee is offset as provided by Exchange Rule 0-11
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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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4) Date filed: _____________________________________________________________
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY STATEMENT
2001
AMBASE CORPORATION
51 Weaver Street, Building 2
Greenwich, CT 06831-5155
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 2001
The 2001 Annual Meeting of Stockholders of AmBase Corporation (the "Company")
will be held at the Cole Auditorium at the Greenwich Library, 101 West Putnam
Avenue, Greenwich, Connecticut, on Friday, June 1, 2001 at 9:00 a.m., Eastern
Daylight Time, to consider and act upon the following matters:
1. The election of one director to hold office for a three-year term
expiring in 2004;
2. the approval of the appointment of PricewaterhouseCoopers LLP as
the independent accountants of the Company for the year ending
December 31, 2001;
and such other matters as may properly come before the meeting or any
adjournments thereof.
The Board of Directors has fixed the close of business on Friday, April 20, 2001
as the record date for determining stockholders entitled to notice of and to
vote at the meeting.
Whether or not you plan to attend the Annual Meeting, please sign, date and
return the enclosed proxy card in the prepaid envelope provided, as soon as
possible, so your shares can be voted at the meeting in accordance with your
instructions. Your vote is important no matter how many shares you own. If you
plan to attend the meeting and wish to vote your shares personally, you may do
so at any time before your proxy is voted. Your prompt cooperation is greatly
appreciated.
All stockholders are cordially invited to attend the Annual Meeting.
By Order of the
Board of Directors
/s/ John P. Ferrara
-------------------------
John P. Ferrara
Secretary
AMBASE CORPORATION
51 WEAVER STREET, BUILDING 2
GREENWICH, CT 06831-5155
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 2001
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of AmBase Corporation (the "Company") of proxies to be voted
at the Annual Meeting of Stockholders of the Company (the "Annual Meeting") to
be held at the Cole Auditorium at the Greenwich Library, 101 West Putnam Avenue,
Greenwich, Connecticut, at 9:00 a.m., Eastern Daylight Time, on Friday, June 1,
2001, and at any adjournments thereof. This Proxy Statement and the accompanying
proxy are being mailed to stockholders commencing on or about April 20, 2001.
Shares represented by a duly executed proxy in the accompanying form received by
the Company prior to the Annual Meeting will be voted at the meeting in
accordance with instructions given by the stockholder in the proxy. Any
stockholder granting a proxy may revoke it at any time before it is exercised by
granting a proxy bearing a later date, by giving notice in writing to the
Secretary of the Company or by voting in person at the meeting.
At the Annual Meeting, the stockholders will be asked (i) to re-elect Michael L.
Quinn as a director of the Company to serve a three-year term ending in 2004,
and (ii) to approve the appointment of PricewaterhouseCoopers LLP as independent
accountants of the Company for the year ending December 31, 2001. The persons
acting under the accompanying proxy have been designated by the Board of
Directors and, unless contrary instructions are given, will vote the shares
represented by the proxy (i) for the election of the nominee for the director
named above and, (ii) for the approval of the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants.
The close of business on Friday, April 20, 2001, has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof. Only
the holders of record of Common Stock at the close of business on April 20,
2001, are entitled to vote on the matters presented at the Annual Meeting. Each
share of the Company's Common Stock entitles the holder to one vote on each
matter presented at the Annual Meeting. As of April 1, 2001, the Company had
46,208,519 outstanding shares of Common Stock (excluding treasury stock). A
plurality vote of the holders of the shares of Common Stock represented in
person or by proxy and voting at the Annual Meeting is required for the election
of the director. The affirmative vote of the holders of a majority of the shares
of Common Stock represented in person or by proxy and voting at the Annual
Meeting is necessary for the approval of PricewaterhouseCoopers LLP as
independent accountants.
Abstentions, votes withheld and shares not voted, including broker non-votes,
are not included in determining the number of votes cast for the approval of
PricewaterhouseCoopers LLP as independent accountants. Abstentions, votes
withheld and broker non-votes are counted for purposes of determining whether a
quorum is present at the Annual Meeting.
1
PROPOSAL NO. 1 - ELECTION OF DIRECTOR
In accordance with the method of electing directors by class with terms expiring
in different years, as required by the Company's Restated Certificate of
Incorporation, one director will be elected at the Company's 2001 Annual Meeting
of Stockholders to hold office until the Company's Annual Meeting of
Stockholders for the year 2004. The director will serve until his successor
shall be elected and shall qualify.
The person named below has been nominated for directorship. The nominee is a
director now in office, and has indicated a willingness to accept re-election.
It is intended that at the Annual Meeting the shares represented by the
accompanying proxy will be voted for the election of this nominee unless
contrary instructions are given. In the event that the nominee should become
unavailable for election as a director at the time the Annual Meeting is held,
shares represented by proxies in the accompanying form will be voted for the
election of a substitute nominee elected by the Board of Directors, unless
contrary instructions are given or the Board by resolution shall have reduced
the number of directors. The Board is not aware of any circumstances likely to
render the nominee unavailable.
Information Concerning the Nominee for Election as Director
The name, age, principal occupation, other business affiliations, and certain
other information concerning the nominee for election as a director of the
Company is set forth below.
Michael L. Quinn, 54. Mr. Quinn has dedicated his career to the financial
services and investment industry. He worked for Merrill Lynch & Co. ("Merrill")
from 1983 to February 1999 in a wide array of senior management roles across the
fixed income, equity and asset management divisions. His most recent position
was as Vice Chairman at Merrill's Global Asset Management Division. He retired
from Merrill on February 1, 1999, and has been actively involved in a private
investment partnership (ECOM Partners) which finances and manages start up
companies involved in e-commerce. Mr. Quinn was elected a director in May 1999.
If elected, his term will expire in 2004.
Information Concerning Director(s) Continuing in Office
Certain information concerning the director(s) of the Company whose terms do not
expire in 2001 is set forth below.
Richard A. Bianco, 53. Mr. Bianco was elected a director of the Company in
January 1991, and has served as President and Chief Executive Officer of the
Company since May 1991. On January 26, 1993, Mr. Bianco was elected Chairman of
the Board of Directors of the Company. He served as Chairman, President and
Chief Executive Officer of Carteret Savings Bank, FA ("Carteret"), then a
subsidiary of the Company, from May 1991 to December 1992. His term will expire
in 2002.
John B. Costello, 63. Mr. Costello spent twenty-five years in the
transportation industry in which he founded and operated companies which were
purchased by Ryder Systems, Inc. ("Ryder"). He served three years as
President of United States Packing and Shipping Company, a subsidiary of
Ryder. He has been a private investor since 1989. Mr. Costello
was elected a director of the Company in August 1993. His term will expire in
2002.
Robert E. Long, 69. Mr. Long was elected a director of the Company in October
1995. Mr. Long is currently the Chief Executive Officer of Goodwyn, Long &
Black Investment Management, Inc., a registered investment company and GLB
Fund Management, Inc., a registered mutual fund management company. He has
been the Chairman of Emerald City Radio Partners from 1997 to 2001. From 1991
to 1995, Mr. Long was President and CEO of Southern Starr Broadcasting Group,
Inc. Prior to 1991, Mr. Long was President of Potomac Asset Management,
Inc., a registered investment company. Mr. Long is a Chartered Financial
Analyst and a graduate of George Washington University School of Law. In
addition to his service as a director of AmBase, Mr. Long serves as a director
of Allied Capital Corporation, CSC Scientific, Inc. and Advanced
Solutions International, Inc. His term will expire in 2003.
The Company presently has four directors.
2
INFORMATION CONCERNING THE BOARD AND ITS COMMITTEES
Meetings and Attendance
During 2000, the Company's Board of Directors held 3 meetings. Matters were also
addressed by unanimous written consent in accordance with Delaware law. All
directors attended at least 75% of the meetings of the Board of Directors and
the committees of the Board on which they served.
Committees of the Board
The Board of Directors currently has (i) an Accounting and Audit Committee and
(ii) a Personnel Committee.
The Accounting and Audit Committee met 3 times during 2000. Matters were also
addressed by unanimous written consent in accordance with Delaware law. The
Accounting and Audit Committee currently consists of Robert E. Long,
Chairman, John B. Costello and Michael L. Quinn. Mr. Long, Mr. Costello and
Mr. Quinn are independent directors of the Company.
The principal functions of the Accounting and Audit Committee are to review, in
conjunction with the Company's independent accountants, the accounting and
auditing practices and procedures followed by the Company, its subsidiaries and
their accountants, and to advise and consult with the Company's officers and
make recommendations to the Board with respect to internal and external audit
matters affecting the Company, including recommendation for the appointment of
independent accountants of the Company. The functions and principal activities
of the Accounting and Audit Committee are more fully described below under the
heading Report of the Accounting and Audit Committee.
The Personnel Committee held 2 meetings in 2000. Matters were also addressed
by unanimous written consent in accordance with Delaware law. The Personnel
Committee currently consists of Mr. Costello, Chairman, Mr. Long and
Mr. Quinn. Mr. Costello, Mr. Long and Mr. Quinn are independent directors of
the Company.
The principal functions of the Personnel Committee are to consider and recommend
nominees for the Board, to oversee the performance and approve the remuneration
of officers and senior employees of the Company and its subsidiaries and to
oversee and approve the employee benefit and retirement plans of the Company and
its subsidiaries. The Personnel Committee will consider stockholder
recommendations for director, submitted in accordance with the Company's
By-Laws.
The Company's By-Laws require that in the event a stockholder wishes to nominate
a person for election as a director, advance notice must be given to the
Secretary of the Company not less than 120 days in advance of the date of the
Company's proxy statement released to stockholders in connection with the
previous year's annual meeting of stockholders, except that if no annual meeting
was held in the previous year or the date of the annual meeting has been changed
by more than 30 calendar days from the date contemplated at the time of the
previous year's proxy statement, a proposal shall be received by the Company a
reasonable time before the solicitation is made, together with the name and
address of the stockholder and of the person to be nominated; a representation
that the stockholder is entitled to vote at the meeting and intends to appear in
person or by proxy to make the nomination; a description of arrangements or
understandings between the stockholder and others pursuant to which the
nomination is to be made; such other information regarding the nominee as would
be required in a proxy statement filed under the proxy rules of the Securities
and Exchange Commission (the "SEC"); and the consent of the nominee to serve as
a director if elected.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of the forms filed with the SEC and written
representations received by the Company pursuant to the requirements of Section
16(a) of the Securities Exchange Act of 1934, the Company believes that, during
2000, there were no transactions which were not reported on a timely basis to
the SEC, no late reports nor other failure to file a required form by any
director or officer of the Company.
3
INDEPENDENT ACCOUNTANT MATTERS
Report of the Accounting and Audit Committee
During 2000, the Accounting and Audit Committee (the "Audit Committee") of the
Board of Directors developed an Audit Committee charter for the Audit Committee,
which was approved by the full Board of Directors. The complete text of the
charter, is reproduced in Appendix A to this proxy statement.
As set forth in more detail in the charter, the primary purpose of the Audit
Committee is to assist the Board of Directors in fulfilling its responsibility
to oversee management's conduct of the Company's financial reporting process,
including the oversight of the following:
o financial reports and other financial information provided by the
Company to any governmental or regulatory body, the public or other
users thereof;
o the Company's systems of internal accounting and financial controls;
and
o the annual independent audit of the Company's financial statements.
The Audit Committee reviewed the Company's audited financial statements and met
with both Company management and PricewaterhouseCoopers LLP, the Company's
independent auditors, to discuss those financial statements. Management has
represented to us that the financial statements were prepared in accordance with
generally accepted accounting principles.
The Audit Committee has received from and discussed with PricewaterhouseCoopers
LLP the written disclosure and the letter required by Independence Standards
Board Standard No. 1 "Independence Discussions with Audit Committees". These
items relate to that firm's independence from the Company. The Audit Committee
also discussed with PricewaterhouseCoopers LLP any matters required to be
discussed by Statement on Auditing Standards No. 61 "Communication with Audit
Committees".
Based on these reviews and discussions, the Audit Committee recommended to the
Board of Directors that the Company's audited financial statements be included
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2000.
Audit Committee: Robert E. Long, Chairman
John B. Costello
Michael L. Quinn
Audit Fees
Fees for the calendar year 2000 audit and the reviews of the Form 10-Q are
$35,000. No other services were rendered by PricewaterhouseCoopers LLP during
2000.
4
EXECUTIVE COMPENSATION
The following table sets forth the total compensation earned by the Chief
Executive Officer and each other executive officer of the Company and its
subsidiaries (the "Named Executive Officers") for services rendered to the
Company during the last three fiscal years:
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
Other Annual Stock Options All Other
Name and Principal Salary Bonus Compensation Granted Compensation
Position Year ($) ($) (1) ($) (2) (#) ($) (3)
- ---------------------------------------------------------------------------------------------------------------------
Richard A. Bianco - 2000 $500,000 $1,000,000 $10,970 45,000 $ 9,485
Chairman, President 1999 $500,000 $1,000,000 $11,287 45,000 $10,025
and Chief Executive 1998 $500,000 $825,000 $10,989 45,000 $13,728
Officer of the
Company
John P. Ferrara - 2000 $100,000 $85,000 $ 1,090 10,000 $ 5,915
Vice President, Chief 1999 $100,000 $60,000 $ 1,166 10,000 $ 5,879
Financial Officer 1998 $95,000 $50,000 $ 1,113 5,000 $ 4,521
& Controller
of the Company
(1) Amounts include bonuses earned for the years indicated and paid in
the following fiscal year, consistent with past practice of the
Company.
(2) Other Annual Compensation shown above includes reimbursement to
designated executive officers for the income tax costs associated with
their participation in the long-term disability plans and supplemental
life insurance plans of the Company. The aggregate incremental cost to
the Company for perquisites and other personal benefits paid to each
named executive officer (including, depending upon the executive
officer, supplemental life insurance benefits, other personal benefits,
the use of Company provided transportation and reimbursement for tax
services for Mr. Bianco) in each instance aggregated less than $50,000
or 10% of the total annual salary and bonus for each Named Executive
Officer and, accordingly, is omitted from the table.
(3) Amounts included as All Other Compensation in 2000 include the
following: The Company's contributions to the AmBase 401(k) Savings
Plan, excluding employee earnings reductions: Mr. Bianco, $5,100 and
Mr. Ferrara, $4,878; and costs associated with participation in the
supplemental term life insurance plans of the Company: Mr. Bianco,
$4,385 and Mr. Ferrara, $1,037.
5
Stock Options/SAR Grants During 2000
The following table sets forth information concerning stock options granted
during the year ended December 31, 2000 to the Named Executive Officers. The
Company does not have any outstanding SAR's.
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term
------------------------------------------------------------------------------------------------------------
Number of Securities Percent of
Underlying Total Options/ Exercise or
Options/SARs SARs Granted to Base Price Expiration
Name Granted (#) Employees in Year ($/Share) Date 5% 10%
- ---------------------------------------------------------------------------------------------------------------------------
Richard A. Bianco 45,000 50% $1.05 1/3/2005 $10,184 $21,933
John P. Ferrara 10,000 11% $0.95 1/3/2010 $ 5,238 $12,902
Aggregate Option/SAR Values as of December 31, 2000
Both of the Named Executive Officers exercised stock options during 2000. The
Company does not have any outstanding SARs. The following table sets forth
information concerning the fiscal year-end value of unexercised options held by
the Named Executive Officers on December 31, 2000 and the value realized upon
exercise of stock options during 2000 as follows:
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
December 31, 2000 December 31, 2000
------------------- --------------------
Number of
Shares Acquired
Upon Exercise of Value Realized
Name Option Upon Exercise Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
Richard A. Bianco 850,000 $654,000 67,500 67,500 - -
John P. Ferrara 10,000 $ 7,400 85,000 15,000 $ 27,750 -
No awards under the long-term incentive plan were made to the Named Executive
Officers in 2000, and there were no stock options previously awarded to any of
the Named Executive Officers that were repriced during 2000.
Retirement Benefits
One current executive officer and two former officers of the Company are
participants in the Supplemental Retirement Plan (the "Supplemental Plan"), an
unfunded retirement plan under which benefit payments to participants are based
on a varying percentage (historically ranging from 2.5% to 4%, determined on an
individual basis by the Personnel Committee) of the participant's average base
salary and bonus (averaged over the three years of credited service that will
produce the highest average) multiplied by the number of years of the
participant's credited service, up to 20 years, plus 1% of his or her average
base salary and bonus multiplied by his or her years of credited service from 20
to 25 years, plus 0.5% of his or her average base salary and bonus multiplied by
his or her years of credited service in excess of 25 years. Benefits vest after
ten years of service although the Personnel Committee may waive or reduce the
ten-year service requirement for individual participants. Upon the election of a
vested participant whose employment has terminated after ten years of service or
after a change in control of the Company, the actuarial equivalent of benefits
will be paid in a lump-sum. Mr. Bianco is the only current executive officer of
the Company who participates in the Supplemental Plan.
6
The following table presents, for representative periods of credited service,
estimated annual benefits payable upon retirement at the normal retirement age
of 60 (under the Supplemental Plan) to hypothetical vested participants in the
Supplemental Plan, in the form of a ten-year certain and life annuity. For
purposes of the Supplemental Plan, accrual has been assumed at the rate of 4%
per year.
Assumed Final Years of Credited Service
Average Earnings 15 20 25 30 35
- -------------------------------------------------------------------------------------------------------------------
$ 125,000 $ 75,000 $100,000 $106,250 $109,375 $112,500
200,000 120,000 160,000 170,000 175,000 180,000
400,000 240,000 320,000 340,000 350,000 360,000
600,000 360,000 480,000 510,000 525,000 540,000
800,000 480,000 640,000 680,000 700,000 720,000
1,000,000 600,000 800,000 850,000 875,000 900,000
1,200,000 720,000 960,000 1,020,000 1,050,000 1,080,000
1,400,000 840,000 1,120,000 1,190,000 1,225,000 1,260,000
1,600,000 960,000 1,280,000 1,360,000 1,400,000 1,440,000
1,800,000 1,080,000 1,440,000 1,530,000 1,575,000 1,620,000
2,000,000 1,200,000 1,600,000 1,700,000 1,750,000 1,800,000
2,200,000 1,320,000 1,760,000 1,870,000 1,925,000 1,980,000
Years of credited service as of March 1, 2001, for the purposes of computing
accrued benefits are: Mr. Bianco, 9.83 years. Mr. Bianco had no vested
service in the AmBase Retirement Plan and received no payments in connection
with the termination of the AmBase Retirement Plan. No other employee of the
Company has credited service under the Supplemental Plan.
AmBase 401(k) Savings Plan and Retirement Benefits
The Company sponsors the AmBase 401(k) Savings Plan (the "Savings Plan"), which
is a "Section 401(k) Plan" within the meaning of the Internal Revenue Code of
1986, as amended (the "Code"). The Savings Plan permits eligible employees to
make contributions of up to 15% of salary, which are matched by the Company at a
percentage determined annually. The employer match is currently 100% of the
first 3% of the employee's salary eligible for deferral. Employee contributions
to the Savings Plan are invested at the employee's discretion, in various
investment funds. The Company's matching contributions are invested in the same
manner as the salary reduction contributions. All contributions are subject to
maximum limitations contained in the Code.
COMPENSATION OF DIRECTORS
The annual fee to be paid to all directors who are not employees of or
consultants to the Company is $7,500. The annual fees are payable in December,
provided that a director who is not an employee of or consultant to the Company
attends at least 75% of all meetings during the calendar year. In December 2000,
Mr. Costello, Mr. Long and Mr. Quinn each received $7,500 for their services on
the Board during 2000. In January 2001, Mr. Bianco received a stock option grant
of 200,000 shares in his capacity as President and Chief Executive Officer.
Pursuant to the Company's By-Laws, directors may be compensated for additional
services for the Board of Directors or for any Committee at the request of the
Chairman of the Board or the Chairman of any Committee. No additional fees were
paid to outside directors in 2000.
Compensation Committee Interlocks and Insider Participation
The Personnel Committee of the Board of Directors is the committee whose
functions are equivalent to those of a compensation committee. The
Committee members during 2000 were John B. Costello, Chairman, Robert E. Long,
and Michael L. Quinn. Mr. Costello, Mr. Long and Mr. Quinn are independent
directors of the Company.
EMPLOYMENT CONTRACTS
An employment agreement, as amended, is in effect between Mr. Bianco and the
Company which provides for him to serve as Chairman, President and Chief
Executive Officer of the Company at an annual base salary of $625,000 through
May 31, 2002. The employment agreement also provides for additional benefits,
including his participation in various employee benefit plans, annual bonus
eligibility, certain long-term disability benefits and the accrual of benefits
under the Company's Supplemental Retirement Plan at 4% of his average base
salary and bonus, and 100% vesting in his accrued benefits.
7
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Personnel Committee (the "Committee") is responsible for fixing compensation
and other employee benefits for executive officers of the Company. The
Committee's executive compensation philosophy is to provide competitive levels
of compensation to its executive officers through a combination of base salary,
incentive awards and equity in the Company. It is designed to reward above
average corporate performance, recognize individual initiative and achievement
and assist the Company in attracting and retaining qualified management.
Management compensation is intended to be set at levels that the Committee
believes fairly reflect the challenges confronted by management.
Overview and Philosophy
The Committee believes that the objectives of executive compensation are to
attract, motivate and retain the highest quality executives, align the interests
of these executives with those of the Company's stockholders by encouraging
stock ownership by executive officers to promote a proprietary interest in the
Company's success and to provide incentives to achieve the Company's goals. In
furtherance of these objectives, the Company's executive compensation policies
are designed to focus the executive officers on the Company's goals. The
Committee determines salary, bonuses and equity incentives based upon the
performance of the individual executive officer and the Company.
Executive Officers and Chief Executive Officer Compensation
Base salaries for executive officers are determined initially by evaluating the
responsibilities of the position, the experience of the individual and the
competition in the marketplace for management talent, including companies
confronting problems of the magnitude and complexity faced by the Company.
Annual salary adjustments are determined by evaluating a number of factors. The
most important factor is the performance of the executive, followed by the
performance of the Company, any increased responsibilities assumed by the
executive and the competition in the marketplace for similarly experienced
executives. Salary adjustments are determined and normally made at twelve month
intervals. Mr. Bianco, the Chief Executive Officer, received a salary adjustment
of $125,000 as of January 1, 2001.
In January 2001, the Committee approved cash bonuses for officers and employees
for 2000. Factors considered included performance of the executive, performance
of the Company, total compensation level, the Company's financial position and
other pertinent factors. This analysis is necessarily a subjective process which
utilizes no specific weighting or formula with respect to the described factors
in determining cash bonuses. Mr. Bianco was paid a bonus of $1,000,000 in
recognition of his focused management of the Company's significant litigation,
particularly the litigation settlement with Zurich SF Holdings, Inc. pursuant to
which the Company received $8.2 million as well as other significant benefits,
the Supervisory Goodwill litigation, his role in maintaining a controlled level
of expenditures, and his role in pursuing several potential acquisitions.
The Company believes that its compensation programs, carefully mixing equity and
cash incentives, will focus the efforts of the Company's executive officers on
long-term growth for the benefit of the Company and its stockholders.
Personnel Committee: John B. Costello, Chairman
Robert E. Long
Michael L. Quinn
8
STOCK PERFORMANCE GRAPH
The following graph compares the price performance of the Company's Common Stock
for the past five years with the performance of the Standard & Poor's Financial
Index and the Standard & Poor's 500 Stock Index (S&P 500). The Standard & Poor's
Financial Index was selected because it includes companies similar in nature to
the Company through most of the five year period. The stock price performance
shown in the graph below should not be considered indicative of potential future
stock price performance.
Years Ending December 31
Base Period
Company/Index 1995 1996 1997 1998 1999 2000
- ----------------------- --------------- ------------- ------------ ------------- ------------- -------------
AmBase 100.00 597.83 852.17 560.87 204.35 128.26
S&P Financial Index 100.00 135.17 200.20 223.07 231.92 292.40
S&P 500 Index 100.00 122.96 163.98 210.85 255.21 231.98
9
STOCK OWNERSHIP
Stock Ownership of Certain Beneficial Owners
The following information is set forth with respect to persons known by the
Company to be the beneficial owners of more than 5% of the Company's outstanding
Common Stock, the Company's only class of voting securities, as of January 31,
2001 for Mr. Bianco, and as of February 15, 2001 for Mr. Haywood, pursuant to
his Schedule 13G.
Amount and Percentage
Name and Address of Nature of Beneficial of Common
Beneficial Owner Ownership Stock Owned
- ---------------------------------------------------------------------------------------------------------------
Richard A. Bianco 9,814,500 (a) 21.19%
Chairman, President and (direct)
Chief Executive Officer
AmBase Corporation
51 Weaver Street, Bldg. 2
Greenwich, CT 06831-5155
Mr. George W. Haywood 4,089,500 (b) 8.90%
642 Second Street
Brooklyn, NY 11215
(a) Includes the number of shares that could be purchased by the exercise
of options as of January 31, 2001 or within 60 days thereafter, under
the Company's Stock Option Plans.
(b) On a Schedule 13G dated February 15, 2001, Mr. George Haywood reported
that, as of February 15, 2001, he beneficially owned 4,089,500 shares of
the Company's Common Stock.
Stock Ownership of Directors and Executive Officers
According to information furnished by each nominee, continuing director and
executive officer included in the Summary Compensation Table, the number of
shares of the Company's Common Stock beneficially owned by them as of January
31, 2001 was as follows:
Amount Percentage
Name of Beneficial and Nature of of Common
Owner Beneficial Ownership(a) Stock Owned
- ------------------------------------------------------------------------------------------------------------------
Richard A. Bianco.................................... 9,814,500 (b) 21.97%
John B. Costello..................................... 60,000 *
John P. Ferrara...................................... 121,029 (b) *
Robert E. Long....................................... 5,000 *
Michael L. Quinn..................................... 289,500 *
All Directors and Officers as a group,
(5 persons) including those named above.............. 10,290,029 22.17%
* Represents less than 1% of Common Stock outstanding
(a) All of the named individuals have sole voting and investment power with
respect to such shares.
(b) Includes 112,500 shares for Mr. Bianco and 95,000 shares for Mr. Ferrara
that could be purchased by the exercise of stock options as of January 31,
2001 or within 60 days thereafter, under the Company's stock option plans.
10
PROPOSAL NO. 2 - APPOINTMENT OF ACCOUNTANTS
Based on the recommendation of the Accounting and Audit Committee, the Board of
Directors is proposing that the stockholders approve the appointment of
PricewaterhouseCoopers LLP as the independent accountants of the Company for the
year ending December 31, 2001. The Company has been advised by
PricewaterhouseCoopers LLP that neither that firm nor any of its partners had
any direct financial interest or any material indirect financial interest in the
Company, or any of its subsidiaries, except as independent certified public
accountants. A representative of PricewaterhouseCoopers LLP is expected to be
present at the Annual Meeting with the opportunity to make a statement, if he or
she desires to do so, and to respond to appropriate questions from the
stockholders.
Management recommends a vote FOR approval of the appointment of
PricewaterhouseCoopers LLP.
ADDITIONAL INFORMATION
The Annual Report of the Company on Form 10-K, covering the fiscal year ended
December 31, 2000, is being mailed with this Proxy Statement to each stockholder
entitled to vote at the Annual Meeting.
Stockholders not receiving a copy of the Annual Report on Form 10-K may obtain
one by contacting: American Stock Transfer and Trust Company, 40 Wall Street,
46th Floor, New York, NY 10005, Attention: Stockholder Services, (800) 937-5449
or (718) 921-8200.
Any stockholder who wishes to submit a proposal for action to be included in the
Proxy Statement for the Company's 2001 Annual Meeting of Stockholders must
submit such proposal so that it is received by the Secretary of the Company by
December 21, 2001.
The accompanying proxy is solicited by and on behalf of the Company's Board of
Directors. The cost of such solicitation will be borne by the Company. In
addition to solicitation by mail, regular employees of the Company may, if
necessary to assure the presence of a quorum, solicit proxies in person, or by
telephone, facsimile or other electronic means. Arrangements have been made with
brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of Common Stock
held of record by such persons, and the Company will reimburse such entities for
reasonable out-of-pocket expenses incurred in connection therewith. The Company
has engaged American Stock Transfer & Trust Company to assist in the tabulation
of proxies.
If any matter not described in this Proxy Statement should properly come before
the Annual Meeting, the persons named in the accompanying proxy will vote the
shares represented by that proxy in accordance with their best judgment unless a
stockholder, by striking out the appropriate provision of the proxy, chooses to
withhold authority to vote on such matters.
As of the date this Proxy Statement was printed, the directors knew of no other
matters to be brought before the meeting.
All other stockholder inquiries, including requests for the following: (i)
change of address; (ii) replacement of lost stock certificates; (iii) Common
Stock name registration changes; (iv) Quarterly Reports on Form 10-Q; (v) Annual
Reports on Form 10-K; (vi) proxy material; and (vii) information regarding
stockholdings, should be directed to American Stock Transfer & Trust Company, 40
Wall Street, 46th Floor, New York, New York 10005, Attention: Stockholder
Services, (800) 937-5449 or (718) 921-8200.
In addition, the Company's public reports, including Quarterly Reports on Form
10-Q, Annual Reports on Form 10-K and Proxy Statements, can be obtained through
the Securities and Exchange Commission's EDGAR Database, over the World Wide Web
at www.sec.gov.
11
Appendix A
AMBASE CORPORATION
AUDIT COMMITTEE CHARTER
Purpose
The primary purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including the
oversight of the (i) financial reports and other financial information provided
by the Company to any governmental or regulatory body, the public or other users
thereof; (ii) the Company's systems of internal accounting and financial
controls; and (iii) the annual independent audit of the Company's financial
statements.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the power to retain outside counsel,
auditors or other experts for this purpose. The Board and the Committee are in
place to represent the Company's shareholders; accordingly, the outside auditor
is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis, and
shall be approved by the full Board annually, with a copy to be published in the
proxy statement for the Annual Meeting of Shareholders at least once every three
years.
Membership
The Committee shall be comprised of not less than three members of the Board,
and the Committee's composition will meet the requirements of the Audit
Committee Policy of the NASD, as applicable.
Accordingly, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and
2. Who are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee. In
addition, at least one member of the Committee will have accounting or
related financial management expertise.
The Committee members, including the Chairperson, will be appointed by the Board
of Directors annually.
Key Responsibilities
The Committee's job is one of oversight and it recognizes that the Company's
management is responsible for preparing the Company's financial statements and
that the outside auditors are responsible for auditing those financial
statements. Additionally, the Committee recognizes that the Company's
management, as well as the outside auditors, have more time, knowledge and more
detailed information on the Company than do Committee members. Consequently, in
carrying out its oversight responsibilities, the Committee is not providing any
expert or special assurance as to the Company's financial statements or any
professional certification as to the outside auditor's work. The Committee shall
meet, at least annually to perform its responsibilities.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. The functions are set forth as
a guide with the understanding that the Committee may diverge from this guide as
appropriate given the circumstances.
o The Committee shall review with management and the outside auditors the
audited financial statements to be included in the Company's Annual Report
on Form 10-K and review and consider with the outside auditors the matters
required to be discussed by Statement of Auditing Standards ('SAS') No. 61
as amended.
o As a whole, or through the Committee chair, the Committee shall review with
the outside auditors the Company's interim financial results to be included
in the Company's quarterly reports to be filed with Securities and Exchange
Commission and the matters required to be discussed by SAS No. 61 as
amended; this review will occur prior to the Company's filing of the
Form-10Q.
o The Committee shall discuss with management and the outside auditors the
quality and adequacy of the Company's internal controls.
o The Committee shall:
o discuss with management and the outside auditors the significant
financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements.
o request from the outside auditors annually, a formal written
statement delineating all relationships between the auditor
and the Company consistent with Independence Standards Board
Statement No. 1;
o discuss with management and outside auditors any such
disclosed relationships and their impact on the outside auditor's
independence; and
o recommend, if necessary, that the Board take appropriate action to
oversee the independence of the outside auditor.
o The Committee, subject to any action that may be taken by the full Board,
shall have the ultimate authority and responsibility to select (or nominate
for shareholder approval), evaluate and, where appropriate, replace the
outside auditor.
AMBASE CORPORATION
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY,JUNE 1, 2001 This Proxy is Solicited
on Behalf of the Board of Directors
The undersigned revoking all prior proxies, hereby appoints Richard A. Bianco
and John P. Ferrara and each of them, with full power of substitution, as
proxies to represent and vote, as designated on the reverse, all shares of
Common Stock of AmBase Corporation (the "Company"), held or owned by the
undersigned, at the Annual Meeting of Stockholders of the Company, to be held on
Friday, June 1, 2001 at 9:00 a.m. Eastern Daylight Time, at the Cole Auditorium
Greenwich Library, 101 West Putnam Avenue, Greenwich, Connecticut, and at any
adjournment(s) or postponement(s) thereof, with all powers which the undersigned
would possess if personally present, and in their discretion upon such other
business as may properly come before the meeting or any adjourment(s) or
postponement(s) thereof.
This proxy is given with authority to vote FOR Proposals (1) and (2), unless a
contrary choice is specified.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
/X/ Please mark your vote as in this example.
Proposal (1) Election of Director.
Nominee: Michael L. Quinn
[INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list above.]
FOR / / AGAINST / / ABSTAIN / /
Proposal (2) Approval of Appointment of PricewaterhouseCoopers LLP as
Independent Accountants for the calendar year 2001.
FOR / / AGAINST / / ABSTAIN / /
THE PROXY WILL BE USED IN CONNECTION WITH THE PROPOSALS ABOVE AS SPECIFIED BY
YOU. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE USED IN ACCORDANCE WITH THE
DIRECTORS' RECOMMENDATIONS, FOR ALL PROPOSALS.
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS ABOVE AND RETURN IN THE ENCLOSED
ENVELOPE.
SIGNATURE --------------------------- DATE ---------
SIGNATURE --------------------------- DATE----------
IF HELD JOINTLY
NOTE: Please sign name exactly as it appears hereon. Joint owners should each
sign. When signing as attorney, as executor, administrator, trustee or guardian,
please give full title as such.