SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
AmBase Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY STATEMENT
2005
AMBASE CORPORATION
100 Putnam Green, 3rd Floor
Greenwich, CT 06830-6027
AMBASE CORPORATION
100 PUTNAM GREEN, 3RD FLOOR
GREENWICH, CT 06830-6027
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 2005
The 2005 Annual Meeting of Stockholders of AmBase Corporation (the
"Company") will be held at the Hyatt Regency Hotel, 1800 East Putnam Avenue,
Greenwich, Connecticut, on Friday, May 20, 2005 at 9:00 a.m., Eastern Daylight
Time, to consider and act upon the following matters:
1. The election of two directors to hold office for three-year terms
expiring in 2008;
2. The approval of the appointment of PricewaterhouseCoopers LLP as the
independent registered public accounting firm of the Company for the year ending
December 31, 2005;
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 Monday, April 4,
2005 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
Greenwich, Connecticut
April 1, 2005
AMBASE CORPORATION
100 PUTNAM GREEN, 3RD FLOOR
GREENWICH, CT 06830-6027
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 2005
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 Hyatt Regency Hotel, 1800 East Putnam Avenue,
Greenwich, Connecticut, at 9:00 a.m., Eastern Daylight Time, on Friday, May 20,
2005, and at any adjournments thereof. This Proxy Statement and the accompanying
proxy are being mailed to stockholders commencing on or about April 4, 2005.
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
Richard A. Bianco and John B. Costello as directors of the Company to serve
three-year terms ending in 2008; and (ii) to approve the appointment of
PricewaterhouseCoopers LLP as the Company's independent registered public
accounting firm for the year ending December 31, 2005. 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 nominees for directors named above; and (ii)
for the approval of the appointment of PricewaterhouseCoopers LLP as the
Company's independent registered public accounting firm.
The close of business on Monday, April 4, 2005, 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 of the Company, par value $0.01 per share
(the "Common Stock") at the close of business on April 4, 2005, are entitled to
vote on the matters presented at the Annual Meeting. Each share of the Common
Stock entitles the holder to one vote on each matter presented at the Annual
Meeting. As of Monday, April 4, 2005, there were 46,233,519 shares of Common
Stock issued and outstanding. The holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting shall constitute a
quorum. If there is less than a quorum, a majority of those present in person or
by proxy may adjourn the meeting. A plurality vote of the holders of the shares
of Common Stock represented in person or by proxy and voting at the Annual
Meeting, a quorum being present, is required for the election of directors. 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, a quorum
being present, is necessary for the approval of PricewaterhouseCoopers LLP as
the Company's independent registered public accounting firm.
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 the Company's independent registered
public accounting firm. 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 DIRECTORS
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, two directors will be elected at the Company's 2005 Annual
Meeting of Stockholders to hold office until the Company's Annual Meeting of
Stockholders for the year 2008. The directors will serve until their successors
shall be elected and shall qualify.
The persons named below have been nominated for directorship. The nominees
are directors now in office, and have 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 these nominees unless
contrary instructions are given. In the event that the nominees should become
unavailable for election as directors 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 nominees selected 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 nominees unavailable.
Information Concerning the Nominees for Election as Directors
The name, age, principal occupation, other business affiliations, and
certain other information concerning the nominees for election as directors of
the Company is set forth below.
Richard A. Bianco, 57. 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, then a subsidiary of the
Company, from May 1991 to December 1992. If elected his term will expire in
2008.
John B. Costello, 67. Mr. Costello was elected a director of the Company in
August 1993. 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. If elected his term will expire in 2008.
The Board of Directors recommends a vote FOR the election of the nominees
for election as directors.
Information Concerning Directors Continuing in Office
Certain information concerning the directors of the Company whose terms do
not expire in 2005 is set forth below.
Robert E. Long, 73. Mr. Long was elected a director of the Company in
October 1995. Mr. Long is currently the Chairman of GLB Group, Inc., a
registered investment company. He has been the Chairman of Emerald City Radio
Partners since 1997. 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.,
Graphic Computer Solutions, Inc., Advanced Solutions International, Inc. and
Global Travel, Inc. His term will expire in 2006.
Michael L. Quinn, 58. Mr. Quinn was elected a director in May 1999. 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 is a Chartered Financial Analyst. His term will expire in
2007.
The Company presently has four directors.
2
INFORMATION CONCERNING THE BOARD AND ITS COMMITTEES
Meetings and Attendance
During 2004, the Company's Board of Directors held four (4) 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 during 2004.
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 one (1) time during 2004. 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. Messrs. Long, Costello and
Quinn are independent directors of the Company under the applicable rules of the
NASD. The Board of Directors has determined that Mr. Robert E. Long is an "audit
committee financial expert" as that term is defined in Item 401(h) of Regulation
S-K promulgated by the Securities and Exchange Commission (the "SEC").
The Accounting and Audit Committee is directly responsible for the
appointment, compensation and oversight of the audit and related work of the
Company's independent auditors. The Accounting and Audit Committee reviews the
degree of their independence; approves the scope of the audit engagement,
including the cost of the audit; approves any non-audit services rendered by the
auditors and the fees for these services; reviews with the auditors and
management the Company's policies and procedures with respect to internal
accounting and financial controls and, upon completion of an audit, the results
of the audit engagement; and reviews internal accounting and auditing procedures
with the Company's financial staff and the extent to which recommendations made
by the independent auditors have been implemented. The Accounting and Audit
Committee has adopted a charter, a copy of which was attached as an exhibit to
the 2004 proxy statement.
The Personnel Committee held four (4) meetings in 2004. Matters were also
addressed by unanimous written consent in accordance with Delaware law. The
Personnel Committee currently consists of Mr. Costello, Chairman, and Messrs.
Long and Quinn. Messrs. Costello, Long and Quinn are independent directors of
the Company under the applicable rules of the NASD.
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 Personnel Committee does not currently have a written
charter.
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 as set forth in the
Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"); and
the consent of the nominee to serve as a director if elected.
3
Communications with Directors
In order to provide the Company's security holders and other interested
parties with a direct and open line of communication to the Board of Directors,
the Board of Directors has adopted the following procedures for communications
to directors. The Company's security holders and other interested persons may
communicate with the chairmen of the Company's Accounting and Audit Committee
and Personnel Committee or with the non-management directors of the Company as a
group by mailing a letter addressed in care of the Corporate Secretary, AmBase
Corporation, 100 Putnam Green, 3rd Floor, Greenwich, Connecticut 06830.
All communications received in accordance with these procedures will be
reviewed initially by the Company. The Company will relay all such
communications to the appropriate director or directors unless the Secretary
determines that the communication:
o does not relate to the business or affairs of the Company or the
functioning or constitution of the Board of Directors or any of its committees;
o relates to routine or insignificant matters that do not warrant the
attention of the Board of Directors;
o is an advertisement or other commercial solicitation or communication;
is frivolous or offensive; or
o is otherwise not appropriate for delivery to directors.
The director or directors who receive any such communication will have
discretion to determine whether the subject matter of the communication should
be brought to the attention of the full Board of Directors or one or more of its
committees and whether any response to the person sending the communication is
appropriate. Any such response will be made only in accordance with applicable
law and regulations relating to the disclosure of information.
The Secretary will retain copies of all communications received pursuant to
these procedures for a period of at least one year. The Personnel Committee of
the Board of Directors will review the effectiveness of these procedures from
time to time and, if appropriate, recommend changes.
Board Attendance at Annual Meetings
We have not established a formal policy regarding director attendance at
our annual meetings of shareholders, but our directors generally do attend the
annual meeting. The Chairman of the Board presides at the annual meeting of
shareholders, and the Board of Directors holds one of its regular meetings in
conjunction with the annual meeting of shareholders. Accordingly, unless one or
more members of the Board are unable to attend, all members of the Board are
present for the annual meeting. All of the four members of the Board at the time
of the Company's 2004 annual meeting of shareholders attended that meeting.
Nomination of Directors
The Personnel Committee has adopted specifications applicable to members of
the Board of Directors, and nominees for the Board of Directors recommended by
the Personnel Committee must meet these specifications. The specifications
provide that a candidate for director should:
o have a reputation for industry, integrity, honesty, candor, fairness and
discretion;
o be knowledgeable in his or her chosen field of endeavor, which field
should have such relevance to our businesses as would contribute to the
Company's success;
o be knowledgeable, or willing and able to become so quickly, in the
critical aspects of our businesses and operations; and
o be experienced and skillful in communicating with and serving as a
competent overseer of, and trusted advisor and confidant to senior management of
a publicly held corporation or other corporation.
4
In addition, nominees for the Board of Directors should contribute to the
mix of skills, core competencies and qualifications of the Board through
expertise in one or more of the following areas: accounting and finance, the
financial industry, international business, mergers and acquisitions,
leadership, business and management, strategic planning, government relations,
investor relations, executive leadership development, and executive
compensation. The Personnel Committee will consider nominees recommended by
stockholders for election at the 2006 Annual Meeting of Stockholders that are
submitted prior to December 5, 2005, to our Secretary at the Company's offices,
100 Putnam Green, 3rd Floor, Greenwich, Connecticut 06830. Any recommendation
must be in writing and must include a detailed description of the business
experience and other qualifications of the recommended nominee as well as the
signed consent of the nominee to serve if nominated and elected, so that the
candidate may be properly considered. All stockholder recommendations will be
reviewed in the same manner as other potential candidates for Board membership.
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, the Company believes that, during 2004,
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,
officer or 10% stockholder of the Company.
INDEPENDENT REGISTERED PUBLIC ACCOUNTANT MATTERS
Report of the Accounting and Audit Committee
As set forth in more detail in the Accounting and Audit Committee (the
"Audit Committee") charter (attached as an Exhibit A to the Company's 2004 Proxy
Statement) 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
registered independent public accounting firm, to discuss those financial
statements. Management has represented to us that the financial statements were
prepared in accordance with accounting principles generally accepted in the
United States of America.
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, 2004.
Audit Committee: Robert E. Long, Chairman John B. Costello Michael L. Quinn
5
Audit Fees
Aggregate fees billed by PricewaterhouseCoopers LLP for professional
services rendered for the audit of our annual consolidated financial statements
included in the Annual Report on Form 10-K and the review of interim
consolidated financial statements included in Quarterly Reports on Form 10-Q and
the review and audit of the application of new accounting pronouncements and SEC
releases were $54,000 and $52,500 for the years ended December 31, 2004 and
2003, respectively.
Audit Related Fees
Aggregate fees billed by PricewaterhouseCoopers LLP for assurance and
related services that are reasonably related to the performance of the audit or
review of our financial statements and that are not disclosed under "Audit Fees"
above were $0 and $0 for the years ended December 31, 2004 and 2003,
respectively. These audit related services were for regulatory reporting
services in connection with a building acquisition by the Company.
Tax Fees and All Other Fees
No other fees relating to tax advisory or other services were paid to
PricewaterhouseCoopers LLP for professional services rendered to the Company for
the years ended December 31, 2004 and 2003.
Audit Committee Pre-Approval Policy
Pursuant to its charter, the Audit Committee is responsible for selection,
approving compensation and overseeing the independence, qualifications and
performance of the independent accountants. The Audit Committee has adopted a
pre-approval policy pursuant to which certain permissible audit and non-audit
services may be provided by the independent accountants. Pre-approval is
generally provided for up to one year, is detailed as to the particular service
or category of services and may be subject to a specific budget. The Audit
Committee may also pre-approve particular services on a case-by-case basis. In
assessing requests for services by the independent accountants, the Audit
Committee considers whether such services are consistent with the auditor's
independence; whether the independent accountants are likely to provide the most
effective and efficient service based upon their familiarity with the Company;
and whether the service could enhance our ability to manage or control risk or
improve audit quality.
There were no non audit-related, tax or other services provided by
PricewaterhouseCoopers in fiscal year 2004.
6
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 - 2004 $625,000 $800,000 $14,715 200,000 $26,083
Chairman, President 2003 $625,000 $800,000 $14,715 - $24,083
and Chief Executive 2002 $625,000 $1,000,000 $12,041 500,000 $13,385
Officer
John P. Ferrara 2004 $150,000 $175,000 $1,487 20,000 $14,449
Vice President, Chief 2003 $125,000 $150,000 $1,348 - $13,233
Financial Officer 2002 $125,000 $100,000 $985 100,000 $11,044
& Controller
(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, the use of Company provided
transportation, other personal benefits 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 2004 consists of: The
Company's contributions to the AmBase 401(k) Savings Plan, excluding employee
earnings reductions: Mr. Bianco, $16,000 and Mr. Ferrara, $13,000; and premiums
paid in connection with participation in the supplemental term life insurance
plans of the Company: Mr. Bianco, $10,083 and Mr. Ferrara, $1,449.
7
Stock Options/SAR Grants During 2004
The following table sets forth information concerning stock options granted
during the year ended December 31, 2004 to the Named Executive Officers.
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term
----------------------------------------------------------------- ----------------------------
Number of Securities Percent of
Underlying Total Options/ Exercise or
Options/SARs SARs Granted to Base Price Expiration
Name Granted (#) Employees in Year ($/Share) Date 5% 10%
- ---------------------------------------------------------------------------------------------------------------------------
Richard A. Bianco 200,000 83% $0.64 1/2/2014 $80,480 $204,000
John P. Ferrara 20,000 8% $0.64 1/2/2014 $ 8,048 $ 20,400
- ---------------------------------------------------------------------------------------------------------------------------
Option/SAR Exercises During Fiscal 2004 and Aggregate Option/SAR Values as
of December 31, 2004
One of the Named Executive Officers exercised stock options during 2004.
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, 2004 and the value realized upon
exercise of stock options during 2004 follows:
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
December 31, 2004 December 31, 2004
-------------------- -------------------
Number of
Shares Acquired
Upon Exercise of Value Realized
Name Option Upon Exercise Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------
Richard A. Bianco - - 633,000 312,000 $ 22,000 $ 26,000
John P. Ferrara 75,000 $ 33,750 135,000 20,000 $ 1,700 $ 2,600
- ------------------------------------------------------------------------------------------------------------------------------
No awards under the long-term incentive plan were made to the Named
Executive Officers in 2004, and there were no stock options previously awarded
to any of the Named Executive Officers that were repriced during 2004.
Retirement Benefits
The AmBase Supplemental Retirement Plan, as amended and restated (the
"Supplemental Plan"), is an unfunded retirement plan which has been in effect
since 1985, under which benefit payments to participants are based on a varying
percentage accrual (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. Benefits are payable
in the form of a 10-year life and certain annuity or 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
can be paid in a lump-sum. Mr. Bianco is the only current executive officer of
the Company who participates in the Supplemental Plan and his Supplemental Plan
benefits are fully vested, effective with the terms of his initial employment
with the Company in 1991.
8
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
- -------------------------------------------------------------------------------------------------------------------
$ 400,000 $ 240,000 $ 320,000 $ 340,000 $ 350,000 $ 360,000
800,000 480,000 640,000 680,000 700,000 720,000
1,200,000 720,000 960,000 1,020,000 1,050,000 1,080,000
1,600,000 960,000 1,280,000 1,360,000 1,400,000 1,440,000
2,000,000 1,200,000 1,600,000 1,700,000 1,750,000 1,800,000
2,400,000 1,440,000 1,920,000 2,040,000 2,100,000 2,160,000
2,600,000 1,560,000 2,080,000 2,210,000 2,275,000 2,340,000
2,800,000 1,680,000 2,240,000 2,380,000 2,450,000 2,520,000
3,000,000 1,800,000 2,400,000 2,550,000 2,625,000 2,700,000
3,200,000 1,920,000 2,560,000 2,720,000 2,800,000 2,880,000
3,400,000 2,040,000 2,720,000 2,890,000 2,975,000 3,060,000
3,600,000 2,160,000 2,880,000 3,060,000 3,150,000 3,240,000
3,800,000 2,280,000 3,040,000 3,230,000 3,325,000 3,420,000
For the purposes of computing accrued benefits under the Supplemental Plan,
Mr. Bianco had 13.67 years of credited service as of December 31, 2004 and his
accrual percentage is 4% in effect from the time of his initial employment with
the Company. Mr. Bianco had no vested service in the AmBase Retirement Plan,
which was terminated in 1993 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.
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. Mr. Costello, Mr.
Long and Mr. Quinn each received $7,500 for their services on the Board during
2004. In addition as Chairman of the Audit Committee, Mr. Long received an
additional $2,000 of fees, and as Chairman of the Personnel Committee, Mr.
Costello received an additional $1,000 of fees. 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 2004.
9
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 members of
the Personnel Committee during 2004 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, 2007. 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 (averaged over the three years of credited service that will
produce the highest benefit), and 100% vesting in his accrued benefits. In the
event the Company was to terminate his employment, other than for reasons
permitted in the employment agreement, Mr. Bianco would be entitled to receive a
lump-sum amount equal to the salary payments provided for in the employment
agreement for the remaining term thereof.
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Personnel Committee is responsible for fixing compensation and other
employee benefits for executive officers of the Company. The Personnel
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 Personnel
Committee believes fairly reflect the challenges confronted by management.
Overview and Philosophy
The Personnel 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 Personnel 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.
10
The Personnel Committee approved cash bonuses for officers and employees
for 2004. 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 received base salary payments in 2004 of
$625,000 in accordance with his employment agreement. Mr. Bianco was paid a
bonus of $800,000 for 2004, at the same level as 2003 which represents a
reduction of $200,000 from 2002. The Personnel Committee considered Mr. Bianco's
continuing and integral role in the Company's Supervisory Goodwill case,
continued pursuit of the Company's tax carryback claims, and other proceedings
pending which are significant to the Company. Mr. Bianco was also recognized for
his role in maintaining a controlled level of expenditures, his management of
the Company's investment returns, and his role in pursuing several potential
acquisitions.
Pursuant to Section 162(m) of the Internal Revenue Code compensation
exceeding $1 million paid to our executive officers may not be deducted by us
unless such compensation is performance based and paid pursuant to criteria
approved by our shareholders. The Personnel Committee considered the provisions
of Section 162(m) in setting 2004 compensation paid to Mr. Bianco.
The Company maintains a Supplemental Plan, as more fully described under
Executive Compensation - Retirement Benefits, above.
The Personnel Committee has been reviewing the Supplemental Plan to
determine possible alternatives. This includes the impact of Internal Revenue
Code Section 409A enacted in October 2004 (with further guidance expected later
this year), its impact on deferred compensation plans and the flexibility or
restrictions in the future with regard to such plans. The Personnel Committee is
also reviewing the desirability of continuing to maintain and administer the
Supplemental Plan, the untying of Mr. Bianco's future employment from the timing
of payouts from the Supplemental Plan, the Company's overall financial position
and the desirability of future accruals under the Supplemental Plan after Mr.
Bianco's current employment contract expires on May 31, 2007.
The Company intends to continue its review of these matters and may in the
future determine to continue, modify or terminate, and pay out the benefits
under the Supplemental Plan, subject to its legal obligations to Mr. Bianco.
The Company believes that its compensation programs, carefully mixing
equity and cash incentives, will continue to 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
11
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Stock for the past five years with the performance of the
Standard & Poor's 500 Financials Index (S&P 500 Financials) and the Standard &
Poor's 500 Stock Index (S&P 500). The graph assumes that a $100 investment was
made in the Company's Common Stock and each of the indices at the earliest date
shown, and the dividends, if any, were reinvested. No dividends have been paid
by the Company over the past five (5) years. The stock price performance shown
in the graph below should not be considered indicative of potential future stock
price performance.
December 31
- ----------------------------------------------------------------------------------------------------------------------
Company/Index 1999 2000 2001 2002 2003 2004
- ----------------------------------------------------------------------------------------------------------------------
AmBase Corporation 100.00 62.77 109.57 93.62 69.15 81.91
- ----------------------------------------------------------------------------------------------------------------------
S&P 500
Index 100.00 90.90 80.09 62.39 80.29 89.03
- ----------------------------------------------------------------------------------------------------------------------
S&P 500 100.00 125.70 114.45 97.69 128.01 141.95
Financials Index
- ----------------------------------------------------------------------------------------------------------------------
12
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 outstanding Common
Stock, the Company's only class of voting securities, as of February 28, 2005
except as set forth below. Amount and Percentage Name and Address of Nature of
Beneficial of Common Beneficial Owner Ownership Stock Owned
- ----------------------------------------------------------------------------------------------------------------------
Amount and Percentage
Name and Address of Nature of Beneficial of Common
Beneficial Ownership Stock Owned
- ----------------------------------------------------------------------------------------------------------------------
Richard A. Bianco 10,334,000 (a) 22.1%
Chairman, President and (direct)
Chief Executive Officer
AmBase Corporation
100 Putnam Green, 3rd Floor
Greenwich, CT 06830-6027
Mr. George W. Haywood 5,523,475 (b) 11.9%
c/o Cronin & Vris, LLP
380 Madison Avenue, 24th Floor
New York, NY 10017
(a) Includes 632,000 shares that could be purchased by the exercise of
options as of February 28, 2005 or within 60 days thereafter, under the
Company's stock option plans.
(b) As indicated on Schedule 13D, dated March 22, 2004 as filed with the
SEC, reporting Mr. George Haywood's beneficial ownership of the Company's Common
Stock as of March 22, 2004. Mr. Haywood's Schedule 13D indicated he may be part
of a group with Mr. Dennis Cronin who has sole voting power and has beneficial
ownership of 536,000 shares. Mr. Haywood disclaims being part of a group with
Mr. Cronin and disclaims beneficial ownership of any of Mr. Cronin's shares and
such shares are not included in the amounts above.
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 February
28, 2005 was as follows:
- ----------------------------------------------------------------------------------------------------------------------
Amount and Percentage
Name of Beneficial Nature of Beneficial of Common
Owner Ownership (a) Stock Owned
- ----------------------------------------------------------------------------------------------------------------------
Richard A. Bianco....................... 10,334,000 (b) 22.1%
John B. Costello........................ 60,000 *
John P. Ferrara......................... 246,029 (b) *
Robert E. Long.......................... 25,000 *
Michael L. Quinn........................ 322,840 *
All Directors and Officers as a group,
(5 persons)............................. 10,987,869 (b) 23.4%
* 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 632,000 shares for Mr. Bianco and 145,000 shares for Mr.
Ferrara that could be purchased by the exercise of stock options as of February
28, 2005 or within 60 days thereafter, under the Company's stock option plans.
13
PROPOSAL NO. 2 - APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
Based on the direction of the Audit Committee, the Board of Directors is
proposing that the stockholders approve the appointment of
PricewaterhouseCoopers LLP as the independent registered public accounting firm
for the Company for the year ending December 31, 2005. 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.
The Board of Directors 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, 2004, is being mailed with this Proxy Statement to each
stockholder entitled to vote at the Annual Meeting.
Any stockholder who wishes to submit a proposal for action to be included
in the Proxy Statement for the Company's 2006 Annual Meeting of Stockholders
must submit such proposal so that it is received by the Secretary of the Company
by December 5, 2005.
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.
14
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.
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 59 Maiden Lane New York, NY 10038
Attention: Stockholder Services (800) 937-5449 or (718) 921-8200 Ext. 6820
Copies of Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and
Proxy Statements can also be obtained directly from the Company free of charge
by sending a request to the Company by mail as follows:
AmBase Corporation 100 Putnam Green 3rd Floor Greenwich, CT 06830 Attn:
Shareholder Services
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 SEC's EDGAR Database over the World Wide Web at www.sec.gov.
Materials filed with the SEC may also be read or copied by visiting the SEC's
Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549. Information
on the operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
15
AMBASE CORPORATION
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, MAY 20, 2005
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 on April 4, 2005, at the Annual Meeting of Stockholders of the
Company, to be held on Friday, May 20, 2005 at 9:00 a.m. Eastern Daylight Time,
at the Hyatt Regency Hotel, 1800 East Putnam Avenue, Old Greenwich, Connecticut
06870 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 adjournment(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) PLEASE DATE, SIGN AND MAIL
YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE
The Board of Directors recommends a vote "FOR" the election of the nominees
as directors and "FOR" proposal 2. Please sign, date and return promptly in the
enclosed envelope. Please mark your vote in blue or black ink as shown here. X
Proposal (1) Election of Directors.
Nominee: Richard A. Bianco
Nominee: John B. Costello
/ / For all Nominee(s) / / Withhold Authority for all Nominee(s) / / For
all except (see INSTRUCTIONS below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
mark "For all except" and fill in the circle next to each nominee you wish to
withhold, as shown here:
Proposal (2) Approval of appointment of PricewaterhouseCoopers LLP as the
Company's Independent Registered Public Accounting Firm for the calendar year
2005. 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 THESE PROPOSALS.
DISCRETIONARY AUTHORITY IS HEREBY GRANTED WITH RESPECT TO SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND THE PROXY STATEMENT FURNISHED THEREWITH.
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS ABOVE AND RETURN IN THE
ENCLOSED ENVELOPE.
SIGNATURE OF STOCKHOLDER _________________________________________________
DATE _____________________
SIGNATURE OF STOCKHOLDER _________________________________________________
DATE ________________
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method. .
NOTE: Please sign exactly as your name or names appears on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.