AmBase Corp PRE 14A, filed Mar 22, 2024
AmBase Corp (ABCP)
PRE 14A
2024-03-22
For: 2024-06-04
View Original
Added on
October 17, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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AMBASE CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 011 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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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:
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Amount previously paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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AMBASE CORPORATION
7857 West Sample Road, Suite 134
Coral Springs, FL 33065
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 4, 2024
The 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of AmBase Corporation (the “Company”) will be held at the Sheraton Tarrytown Hotel, 600 White Plains Road, Tarrytown, New York, on Thursday, June 4,
2024, at 9:00 a.m., Eastern Daylight Time, to consider and act upon the following matters:
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The election of one director to hold office for a three-year term expiring in 2027;
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The ratification of the appointment of Marcum LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2024;
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To authorize an Amendment to the Company’s Restated Certificate of Incorporation to increase the number of shares of authorized shares of common stock from 85,000,000 to 200,000,000 (a copy of which is attached as Exhibit A to the Proxy
Statement);
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and such other matters as may properly come before the Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on Monday, April 15, 2024, as the record date (the “Record Date”) for determining stockholders entitled to notice of and to vote at the Annual Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 4, 2024. This Proxy Statement, the Notice of Annual
Meeting of Stockholders and our Annual Report to Stockholders are available at http://www.proxyvote.com. The Company intends to mail the Notice of Annual Meeting and accompanying Proxy Statement to stockholders on or about the Record Date.
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. If you prefer, you may instead vote electronically through the internet or by telephone. The instructions on your proxy card describe how to use these convenient services. Your vote is important no matter how
many shares you own. If you plan to attend the Annual 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.
Admission to Annual Meeting
Attendance at the Annual Meeting is limited to shareholders of the Company as of the Record Date. For safety and security reasons, video and audio recording devices and other electronic devices will not be allowed in
the meeting. If your shares are held in the name of your bank, brokerage firm or other nominee, you must bring to the Annual Meeting, a copy of your proxy card, an account statement, or a letter from the nominee
indicating that you beneficially owned the shares as of the Record Date for voting. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting.
For registered shareholders, a copy of your proxy card can serve as verification of stock ownership. Shareholders who do not present a copy of their proxy card at the Annual Meeting will be admitted only upon
verification of stock ownership, as indicated herein. If you do not have proof of share ownership, you will not be admitted to the Annual Meeting. In addition, all Annual Meeting attendees will be asked to present valid government-issued photo
identification, such as a driver’s license or passport, as proof of identification before entering the Annual Meeting, and attendees may be subject to security inspections.
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By Order of the
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Board of Directors
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/s/ John Ferrara
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John Ferrara
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Secretary
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AMBASE CORPORATION
7857 West Sample Road, Suite 134
Coral Springs, FL 33065
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 4, 2024
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 Sheraton Tarrytown Hotel, 600 White Plains Road, Tarrytown, New York at 9:00 a.m., Eastern Daylight Time, on Thursday, June 4, 2024, and at any adjournment or postponement thereof. This Proxy Statement and the
accompanying proxy are being mailed to stockholders commencing on or about the Record Date.
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 Annual 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 Annual Meeting.
At the Annual Meeting, the stockholders will be asked: (i) to elect Ms. Alessandra F. Bianco as a director of the Company to serve a three-year terms ending in 2027; and until her successor is elected and qualified
or until her earlier resignation, removal or death; (ii) to ratify the approval of the appointment of Marcum LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024; and (iii) to authorize an
Amendment to the Company’s Restated Certificate of Incorporation to increase the number of shares of common stock from 85,000,000 to 200,000,000 (the “Authorized Capital Increase Charter Amendment,” a copy of which is attached as Exhibit A to the
Proxy Statement). The Authorized Capital Increase Charter Amendment does not change the number of authorized shares of cumulative preferred stock from the 20,000,000 shares currently authorized under the Company’s Restated Certificate of
Incorporation.
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 a properly executed proxy (i) for the
election of the nominee for director named above; and (ii) for the approval of the appointment of Marcum LLP as the Company’s independent registered public accounting firm; and (iii) for the authorization of the Authorized Capital Increase Charter
Amendment.
If a stockholder is not the record holder, such as where the shares are held through a broker, bank or other financial institution, the stockholder must provide voting instructions to the record holder of the shares
in accordance with the record holder’s requirements in order to ensure the shares are properly voted. Your broker will not be permitted to vote on your behalf on the election of the director or the Authorized Capital Increase Charter Amendment
unless you provide specific instructions by completing and returning the voting instruction form or following the instructions provided to you to vote your shares. For your vote to be counted, you now will need to communicate your voting decisions
to your broker, bank or other financial institution before the date of the stockholders meeting.
The close of business on Monday, April 15, 2024, 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 the record date, are entitled to vote on the matters presented at the Annual Meeting. Each
share of Common Stock entitles the holder to one vote on each matter presented at the Annual Meeting. As of April [ ], 2024, there were approximately [ ] 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 Annual 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 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, a quorum being present, is necessary for the ratification of the appointment of Marcum LLP as the Company’s independent registered public accounting firm. The affirmative vote of
the holders a majority of the shares of Common Stock issued and outstanding as of the Record Date is necessary for the approval of the Authorized Capital Increase Charter Amendment.
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In June 2024, after many years of exemplary service, Mr. Jerry Y. Carnegie’s term with the Company’s Board of Directors will expire and he will not stand for re-election. The Board of Directors and the Company thank
him for his valuable service.
Abstentions, votes withheld and shares not voted, including broker non-votes, are not included in determining the number of votes cast for the election of the director; or for the approval of Marcum LLP as the
Company’s independent registered public accounting firm, but will have the same effect as a vote against the approval of the Authorized Capital Increase Charter Amendment. Abstentions, votes withheld and broker non-votes, are counted for purposes
of determining whether a quorum is present at the Annual Meeting.
PROPOSAL NO. 1 - ELECTION OF DIRECTOR
In accordance with the method of electing director(s) 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
2024 Annual Meeting of Stockholders to hold office until the Company’s Annual Meeting of Stockholders to be held in 2027. The director will serve until her successor shall be elected and shall qualify or until her earlier resignation, removal, or
death.
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 a duly executed accompanying proxy will be voted for the election of the 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 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 nominee unavailable.
The name, age, principal occupation, other business affiliations, and certain other information concerning the nominee for election as director of the Company is set forth below.
Alessandra F. Bianco, 43. Ms. Bianco was elected a director of the Company in November 2012. Ms. Bianco received a Bachelor of Arts at Boston College in 2003. Ms. Bianco
worked in the Office of the President at American Bible Society from 2009 through 2013. Prior to her current work, Ms. Bianco worked as an assistant to the Head of the Investment Banking department at Broadpoint Capital. Ms. Bianco is the
daughter of Richard A. Bianco, the Chairman of the Board, President and Chief Executive Officer of the Company. Since March 2009, Ms. Bianco has been a senior officer of BARC Investments LLC. Ms. Bianco, through BARC LLC, is one of the largest
stockholders of the Company, and thus has a direct interest in the Company optimizing stockholder value. The Board of Directors has determined that Ms. Bianco is well qualified to serve as a member of the Company’s Board of Directors and that she
has the requisite experience, qualifications, attributes, and skills necessary to serve as a member of the Board of Directors. If elected, her term will expire in 2027.
Information Concerning Directors Continuing in Office
Certain information concerning the directors of the Company whose terms do not expire in 2024 and who are continuing in office is set forth below.
Richard A. Bianco, 75. Mr. R. A. 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. R. A. 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 Savings” or “Carteret”), then a
subsidiary of the Company, from May 1991 to December 1992. Mr. R. A. Bianco has a unique background as the former President and Chief Executive Officer of Carteret Savings who was responsible for the Carteret Savings recapitalization efforts. Mr.
R. A. Bianco is the father of Alessandra F. Bianco and Richard A. Bianco, Jr., both of whom are members of the Board of Directors of the Company. Mr. R. A. Bianco has detailed knowledge of the Company’s history including detailed knowledge of its
current and prior legal and governmental proceedings. Mr. R. A. Bianco additionally has knowledge in real estate, real estate investing and a background in lending and capital raising. Based on these attributes combined with his prior investment
banking, managerial and leadership experience, the Board of Directors has determined that Mr. R. A. Bianco is uniquely qualified to serve as a Director and the Chairman of the Company’s Board of Directors and that he has the requisite experience,
qualifications, attributes, and skills necessary to serve as a member of the Board of Directors. His term will expire in 2026.
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Richard A. Bianco, Jr., 39. Mr. Bianco, Jr. was elected a director of the Company in June 2016. Mr. Bianco, Jr. received a Bachelor of Science degree in Finance at Boston
College in 2006. Mr. Bianco, Jr. has been working with the Company since September 2006. Prior to his work with AmBase, Mr. Bianco, Jr. worked for UBS Financial Services. Mr. Bianco, Jr. is the son of Richard A. Bianco, the Chairman of the
Board, President and Chief Executive Officer of the Company. Mr. Bianco, Jr. is a senior officer of BARC Investments LLC. Mr. Bianco, Jr., through BARC LLC, is one of the largest stockholders of the Company and has a direct interest in the
Company optimizing stockholder value. The Board of Directors has determined that Mr. Bianco, Jr. is well qualified to serve as a member of the Company’s Board of Directors and that he has the requisite experience, qualifications, attributes and
skills necessary to serve as a member of the Board of Directors. His term will expire in 2025.
Scott M. Salant, 58. Mr. Salant was elected a director of the Company in January 2023. He is a partner at the firm, DelBello Donnellan Weingarten Wise & Wiederkehr LLP,
based in White Plains, New York. Mr. Salant is a graduate of the University of Chicago and the Boston University School of Law and has practiced in the area of commercial litigation for several decades. He is admitted to both the New York and
Massachusetts bar and has experience in a wide range of commercial litigation areas. He handles cases in a variety of jurisdictions and venues, including state and federal courts, and arbitrations. Mr. Salant has an understanding of the Company’s
history including knowledge of its current and prior legal proceedings. Mr. Salant’s current background and legal expertise in many areas of law provides the Board with a valuable perspective and insight into the legal process and the New York
State Courts, which is important to the Company’s current legal proceedings. The Board of Directors has determined that Mr. Salant is well qualified to serve as a Director of the Company and he has the requisite experience, qualifications,
attributes, and skills necessary to serve as a member of the Board of Directors. His term will expire in 2025.
Information Concerning Executive Officers
For biographical information concerning Richard A. Bianco, see “PROPOSAL NO. 1 - ELECTION OF DIRECTOR” above.
John Ferrara, 61, Vice President, Chief Financial Officer and Controller. Mr. Ferrara was elected to the position of Vice President, Chief Financial Officer and Controller of
the Company in December 1995, having previously served as Acting Chief Financial Officer, Treasurer and Assistant Vice President and Controller since January 1995; as Assistant Vice President and Controller from January 1992 to January 1995; and as
Manager of Financial Reporting from December 1988 to January 1992.
Joseph R. Bianco, 78, Treasurer. Mr. J. Bianco was elected to the position of Treasurer of the Company in January 1998. He has dedicated his career to the financial services
and investment industry. Prior to his employment with the Company in 1996, he worked for Merrill Lynch & Co. (“Merrill”) as Vice President, responsible for Sales and Marketing in the Merrill Global Securities Clearing office from 1983 to
1996. Mr. Joseph R. Bianco and Mr. Richard A. Bianco are related.
Director Qualifications
The Company’s equity securities are not currently traded on a national securities exchange and therefore the Company is not subject to any independence standards for directors, including without limitation the
independence standards of any national securities exchange that are required by Rules 10A-3 and 10C-1 promulgated under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”). For more information about policies and
procedures of the Board of Directors relating to actual or potential conflicts of interest and the review and approval of related person transactions, see “Certain Relationships and Related Party Transactions.”
INFORMATION CONCERNING THE BOARD AND ITS COMMITTEES
Meetings and Attendance
During 2023, the Company’s Board of Directors held two (2) meetings. Matters were also addressed by unanimous written consent in accordance with Delaware law six (6) times. 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 2023.
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Committees of the Board
In 2023, the Board of Directors had (i) an Accounting and Audit Committee and (ii) a Personnel Committee.
The Company is not a “listed issuer” as such term is defined in Rule 10A-3 of the Exchange Act and is not required to provide the disclosure set forth under Item 407(d)(4) of Regulation S-K. The Accounting and Audit
Committee met one (1) time during 2023. Matters were also addressed by unanimous written consent in accordance with Delaware law three (3) times. Mr. Schmidt was a member of the Accounting and Audit Committee until the end of his term in June
2023. The Accounting and Audit Committee currently consists of Mr. Carnegie, Chairman, Ms. Bianco and Mr. Salant. The Board of Directors determined Mr. Carnegie 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 the independence of the independent auditors; 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, which has been approved by the Company’s Board
of Directors. A copy of the Audit Committee Charter is included as Exhibit A to this Proxy Statement.
The Personnel Committee held one (1) meeting in 2023. The Company is not a “listed issuer” as such term is defined in Rule 10C-1 of the Exchange Act. The Personnel Committee currently consists of Mr. Salant,
Chairman, and Mr. Carnegie. Mr. Schmidt served as the Chairman of the Personnel Committee until the end of his term in June 2023.
The principal functions of the Personnel Committee, which is equivalent to compensation and nominating committees, 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 is also responsible for reviewing
and approving the goals and objectives relevant to compensation of officers and senior employees, evaluating their performance in light of those goals and objectives and determining and approving their compensation levels based on this evaluation.
The Personnel Committee is responsible for setting and approving salary, bonus and other employment terms for the Company’s Chief Executive Officer. The Chief Executive Officer recommends salary and bonus awards for other officers of the Company,
which are subject to modification and/or approval by the Personnel Committee. In connection therewith, the Personnel Committee approves and makes recommendations with respect to bonus and incentive-based compensation plans and equity-based plans.
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 one year anniversary of the date on which the Company’s proxy statement was 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 if 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, such a proposal must be received by the Company a reasonable time before the solicitation is
made. The proposal must include 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; and the consent of the nominee to serve as a director if elected. See “Nomination of Directors” below.
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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 Chairman of the Company’s Accounting and Audit Committee, the Chairman of the 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, 12 Lincoln Blvd., Suite 202, Emerson, New Jersey 07630.
All communications received in accordance with these procedures will be reviewed initially by the Company’s Secretary and/or other executive officers. The Company will relay all such communications to the
appropriate director or directors unless the Secretary determines that the communication:
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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;
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relates to routine or insignificant matters that do not warrant the attention of the Board of Directors;
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is an advertisement or other commercial solicitation or communication;
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is frivolous or offensive; or
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is otherwise not appropriate for delivery to directors.
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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 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
expected to be present for the Annual Meeting. Four (4) of the five (5) members of the Board at the time of the Company’s 2023 Annual Meeting of Stockholders attended that meeting either in person or telephonically.
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Nomination of Directors
The Personnel Committee has adopted specifications applicable to members of the Board of Directors and for identifying and evaluating nominees for the Board of Directors recommended by the Personnel Committee or by
shareholders. The specifications provide that a candidate for director should:
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have a reputation in the business community for integrity, honesty, candor, fairness, and discretion;
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be knowledgeable in his or her chosen industry or field of endeavor, which field should have relevance to our businesses as would contribute to the Company’s success;
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be knowledgeable, or willing and able to become so quickly, in the critical aspects of our businesses, as well as overall operations; and
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be experienced and skillful in communicating with and serving as a competent overseer, and trusted advisor and confidant to senior management, of a publicly held corporation or other corporation.
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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 does not have a formal diversity policy, although it considers diversity when it evaluates nominees for the Board of Directors in light of the qualifications summarized above, and endeavors to nominate directors with a broad mix
of professional and personal backgrounds. The Personnel Committee will consider nominees recommended by stockholders for election at the 2025 Annual Meeting of Stockholders that are submitted prior to December 16, 2024, to our Secretary at the
Company’s offices, 12 Lincoln Boulevard, Suite 202, Emerson, New Jersey 07630. There are no differences in the manner in which the Personnel Committee evaluates nominees for directors based on whether the nominee is recommended by a shareholder or
otherwise. 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 2023, there were no transactions with respect to the Company’s equity securities 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.
Certain Relationships and Related Party Transactions
Pursuant to the Company’s Code of Business Conduct and Ethics (“Code of Conduct”), all employees (including our Named Executive Officers, as defined below) who have, or whose immediate family members have, any direct
or indirect financial or other participation in any business that competes with, supplies goods or services to, or is a customer of the Company or its subsidiaries, are required to disclose to us and receive written approval prior to transacting
such business. Except for the Participation Interest and the Litigation Funding Agreement discussed below, no such relationships have been reported. Our employees are expected to make reasoned and impartial decisions in the workplace. As a
result, approval of a business relationship would be denied if it is believed that the employee’s interest in such a relationship could influence decisions relative to the Company’s business or have the potential to adversely affect the Company’s
business or the objective performance of the employee’s work. In addition, the Company’s Code of Conduct requires adherence to a number of other underlying principles which are important to the Company. These items include, but are not limited to,
restrictions on disclosure of Company information, insider trading, and the protection and use of Company assets.
The Board of Directors assesses all transactions between the Company and “related persons” as such term is defined in Item 404(a) of Regulation S-K. If a transaction is deemed to be a related party transaction that
transaction would be reviewed by the Company’s Board of Directors and approved by the disinterested members of the Board of Directors.
Participation Interest
For information about Mr. R. A. Bianco’s 10% subordinated interest in 111 West 57th Investment LLC, see “Compensation Narrative – Participation Interest.”
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Litigation Funding Agreement
For information about the Litigation Funding Agreement (the “LFA”) entered into between the Company and Mr. R. A. Bianco in 2017, see “Compensation Narrative – Litigation Funding Agreement.”
Operating Agreement of 111 West 57th Investment LLC
For information about the Company’s and Mr. R.A. Bianco’s investment interests in 111 West 57th Investment LLC, see “Executive Compensation – Operating Agreement of 111 West 57th Investment
LLC.”
Standby Purchase Agreement with BARC Investments, LLC
To provide the necessary cash resources to continue operations and continue the litigation related to the 111 West 57th Property, on April [__], 2024 the Company completed a private placement offering (the “Equity
Offering”) of 44,200,460 shares of the Company’s common stock (the “Shares”) to existing shareholders of the Company (the “Equity Offering”) for gross proceeds of approximately $8.8 million before deducting offering expenses as further described in
the Company’s Current Reports on Form 8-K as filed with the SEC on February 28, 2024 and April [__], 2024. The Shares were not registered under the Securities Act and will be “restricted securities” under the Securities Act and will generally be
subject to a minimum holding period of six months under Rule 144 before the Shares may be resold. The Shares were offered and sold only to existing stockholders of record of the Company as of February 28, 2024 (the “Record Ownership Date”). Each
qualifying stockholder was permitted to purchase up to his, her or its pro rata share of the Shares in the Equity Offering, based on the amount of shares of Common Stock owned by such stockholder as of the Record Ownership Date, in an amount equal
to up to one hundred and eight and one-half percent (108.5%) of the number of shares of Common Stock beneficially owned by such stockholder as of the Record Ownership Date. The Shares were offered and sold pursuant to a Subscription Agreement (the
“Subscription Agreement”) by and between the Company and each subscribing stockholder. In connection with the Equity Offering, the Company entered into a securities standby purchase agreement dated February 28, 2024 (the “SPA”) with BARC
Investments, LLC (“BARC”), an affiliate of the Company owned and controlled by Company directors Alessandra F. Bianco and Richard A. Bianco, Jr. Under the terms of the SPA, BARC agreed to act as standby a purchaser for all of the shares of common
stock offered in the Equity Offering that were not otherwise subscribed to by other stockholders prior to the Subscription Deadline during the 30-day offering period. For additional information about the Equity Offering, including the material
terms and conditions of Standby Purchase Agreement and the form of Subscription Agreement, see the Company’s Current Report on Form 8-K as filed with the SEC on February 28, 2024. Pursuant to the terms and conditions of the Standby Purchase
Agreement, at the closing of the Equity Offering on April [__], 2024, BARC purchased [_________] shares of Common Stock from the Company at a purchase price of $0.20 per share.
Corporate Governance
In addition to the various procedures followed by the Company’s Board of Directors as described herein, the Company maintains a separate Audit Committee and Personnel Committee. The Company believes the functions of
its Board of Directors and existing committees essentially perform the responsibilities of a nominating and a corporate governance committee and therefore, the Company does not maintain these additional separate committees.
Mr. R. A. Bianco, the Company’s President and Chief Executive Officer, also serves as the Chairman of the Company’s Board of Directors. Given the Company’s history, operations and its’ past success in the
Supervisory Goodwill litigation, tax and other proceedings, the Company and the Board of Directors believe it is appropriate and most effective for Mr. R. A. Bianco to continue to serve in these dual capacities. These considerations are based on
Mr. R. A. Bianco’s combined business experience prior to joining the Company and his responsibilities with the Company for over thirty years, including his position as President and Chief Executive Officer of Carteret during 1991 and 1992. The
Board of Directors also considered the size of the Company’s operations, cost considerations and the effectiveness of communication between the Company’s management and the Board of Directors.
8
Risk Oversight
The Board of Directors monitors overall risk and performs risk assessment on a proactive basis by maintaining frequent, informal communications with the Company’s senior management, in addition to formal updates
given by management to the Board of Directors during Board of Directors and committee meetings.
The Board of Directors additionally monitors risk through direct interaction with the Company’s senior management and also to a lesser extent direct communication with the Company’s outside professionals for a
specific expertise. The Company hires highly qualified professionals to work on the Company’s outside proceedings and real estate investment transactions. The Company’s management works closely with these professionals, assisting in the
management of the proceedings and interacting with the professionals on a regular basis.
In setting compensation, the Personnel Committee considers the risks to our stockholders and to the achievement of the Company’s goals that may be inherent in our compensation programs. The Personnel Committee
concluded that the Company’s compensation programs are designed with the appropriate balance of risk and reward to align employees’ interests with those of the Company and our overall business, and do not incent employees to take unnecessary or
excessive risks. Although a portion of executive compensation is performance based and “at-risk” we believe our executive compensation plans are appropriately structured and are not reasonably likely to result in a material adverse effect on the
Company.
Code of Ethics
We have adopted a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, and other senior officers as well as all employees with respect to policies and procedures relating to trading in
the Company’s securities. A copy of the Code of Ethics was filed with the SEC as Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Insider Trading Policies and Procedures
The Company’s Code of Ethics includes insider trading policies and procedures governing the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers, and employees. The Code of
Ethics requires compliance with all applicable laws, rules and regulations governing the offer and sale of securities and prohibits directors, officers, and employees from engaging in transactions in the Company’s securities while in possession of
material nonpublic information until at least two trading days have elapsed from the date of public announcement of such nonpublic information. The Company has designated a compliance officer under the Code of Ethics to oversee compliance with and
enforcement of the Code of Ethics, including the insider trading provisions.
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 (which was included as Exhibit A to the Company’s 2023 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:
| ● |
financial reports and other financial information provided by the Company to any governmental or regulatory body, the public or other users thereof;
|
| ● |
the Company’s internal accounting and financial controls over financial reporting; and
|
| ● |
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 Marcum LLP, the Company’s independent registered 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.
9
The Audit Committee has received from and discussed with Marcum LLP the written disclosure and the letter required by applicable requirements of the Public Company Accounting Oversight Board the (“PCAOB”) regarding
that firm’s independence from the Company. The Audit Committee also discussed with Marcum LLP any matters required to be discussed by the applicable requirements of the PCAOB, as may be modified or supplemented.
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, 2023, and filed with the SEC.
|
Audit Committee:
|
||
|
Jerry Y. Carnegie, Chairman
|
||
|
Alessandra F. Bianco
|
||
|
Scott M. Salant
|
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee appointed Marcum LLP (“Marcum”) as the Company’s principal accountants and independent registered public accounting firm, to audit the consolidated financial statements of the Company for the year
ended December 31, 2023. A representative of Marcum will be present at the meeting and will have the opportunity to make a statement if such representative desires to do so and will be available to respond to appropriate questions.
Audit Fees
Aggregate fees billed by Marcum for professional services rendered for the audit of our annual consolidated financial statements included in the Annual Report on Form 10-K, 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 approximately $72,000 for the year ended December 31, 2023 and approximately $69,000
for the year ended December 31, 2022.
Audit Related Fees
No audit related fees were paid to either Marcum 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” for the years ended December 31, 2023, and 2022.
Tax Fees and All Other Fees
No other fees relating to tax advisory or other services were paid to Marcum for professional services rendered to the Company for the years ended December 31, 2023, and 2022.
Audit Committee Pre-Approval Policy
Pursuant to its charter, the Audit Committee is responsible for selecting, approving compensation and overseeing the independence, qualifications and performance of the Company’s 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 Company’s independent accountants, the Audit
Committee considers whether such services are consistent with the auditor’s independence; whether the Company’s 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 Marcum in fiscal years 2023 and 2022.
10
COMPENSATION NARRATIVE
The following compensation narrative describes the material elements of compensation for the Company’s officers identified in the Summary Compensation Table (“Named Executive Officers”). As more fully described above
herein, the Personnel Committee consists of two independent directors of the Company.
The Personnel Committee is responsible for establishing the Company’s compensation programs, including benefit plans, retirement plans and the Company’s stock option program, including approving the granting of stock
option awards to the Company’s officers and employees. The Personnel Committee annually reviews and approves all compensation decisions relating to the Company’s officers, including Named Executive Officers.
The day-to-day design and administration of health, welfare and paid time-off plans and policies applicable to salaried employees in general are handled by the Company’s management. The Personnel Committee is
responsible for certain plan design changes outside the day-to-day requirements necessary to maintain these plans and policies.
The Personnel Committee has the ability to, and may from time to time, utilize the services of independent compensation consultants or other outside advisors in reviewing the Company’s compensation programs, as it
deems necessary. The Personnel Committee did not utilize the services of any compensation consultants in 2023.
Objectives of the Compensation Program
The Personnel Committee’s overall objective in administering the Company’s compensation programs is to attract, motivate and retain qualified personnel, reward corporate performance and recognize individual
contributions on both a short-term and long-term basis. The Personnel Committee seeks to 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. Management compensation is intended to be set at levels that the Personnel Committee believes
fully reflect the challenges confronted by management.
The Company strives to provide a combined, overall competitive salary and benefits package, including annual cash bonus incentives, to retain qualified personnel who are familiar with the Company’s operations and
critical to the long-term success of the Company. The Company rewards personnel for contributions to a variety of matters, including the pursuit of claims, recovery of claims, compromising of actual and contingent liabilities, and attention to the
maintenance of a controlled level of expenditures. Cash bonus incentives are utilized to reward above average corporate performance and recognize individual initiative and achievements which provide immediate and/or long-term value to the
Company. Due to the nature of the Company’s operations, which are focused on the recovery of assets, with an emphasis on the 111 West 57th legal proceedings and a previous emphasis on the recovery of the Company’s investment in Carteret
through the Supervisory Goodwill litigation (which was settled in October 2012, pursuant to which the Company received a settlement award of $180,650,000), the minimization of the income tax impact of settlement awards, and other proceedings, the
Personnel Committee has continued its strategy of compensation through programs that provide an incentive for performance and for contributions to the Company’s operations and efforts to realize recoveries, achieve asset appreciation, eliminate
liabilities and control costs.
Elements of Compensation
The Company’s total compensation program for its officers consists of competitive market salaries, annual cash bonus awards, other benefits such as health and other insurance programs, a retirement plan in the form
of a 401(k) Savings Plan, which is a qualified plan within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”) and may include stock option or other equity awards.
Due to cost considerations, administrative requirements and as part of an overall compensation philosophy, the Company seeks to maintain a minimal level of benefit programs and other perquisites. Section 162(m) of
the Code, as amended, imposes a limitation on the deduction for certain executive officers’ compensation. The Company has paid in the past, and reserves the right to pay in the future, compensation that is not deductible if it believes it is in the
best interests of the Company. The Personnel Committee considered the provisions of Section 162(m) with regard to compensation paid for 2023.
11
Base Annual Salary
Base annual salaries for Named 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, and also may include comparison with companies confronting problems of the magnitude and complexity faced by the Company.
Base annual salaries are intended to be competitive with the overall marketplace, commensurate with the qualifications and experience of the Named Executive Officer. The Company’s compensation structure is intended
to provide the necessary incentive to retain and motivate qualified personnel. Individuals are encouraged to add value and provide benefit in all aspects of the Company’s operations currently and in the future.
Base annual salaries and salary adjustments are evaluated on a number of factors, both internal and external in nature. The most important factor is the executive’s performance and contribution to the Company,
followed by the performance of the Company, any increased responsibilities assumed by the executive and the competition in the marketplace for similarly experienced executives.
The salaries of the Named Executive Officers are reviewed on an annual basis, typically at the end of each year and may also be adjusted from time to time based on changes in responsibilities, changes in benefit
programs or as a result of other external and economic factors. No salary changes were made to the Company’s executive officers during 2023 and 2022.
Annual Bonus Awards
The Company paid no bonuses for 2023 and 2022 to Mr. R. A. Bianco, Mr. Ferrara or Mr. J. Bianco.
Participation Interest
On June 28, 2013, the Company, through a newly formed subsidiary, purchased an equity interest in a real estate development property through a joint venture agreement to purchase and develop real property located at
105 through 111 West 57th Street in New York, New York (the “111 West 57th Property”), as further described under the heading “Operating Agreement of 111 West 57th Investment LLC.” The Company’s interests in the joint venture are held through 111
West 57th Investment LLC (the “Investment LLC”).
In March 2014, the Company entered into an amended and restated operating agreement for the Investment LLC (the “Amended and Restated Investment Operating Agreement”) to grant a 10% subordinated
participation interest in the Investment LLC to Mr. R. A. Bianco as incentive compensation for Mr. R. A. Bianco’s past, current and anticipated ongoing role to develop and commercialize the Company’s equity investment in the 111 West 57th
Property. Pursuant to the terms of the Amended and Restated Investment Operating Agreement, Mr. R. A. Bianco has no voting rights with respect to his interest in the Investment LLC, and his right to receive 10% of the distributions from the
Investment LLC is subject to the Company first receiving distributions equal to 150% of the Company’s initial aggregate $57,250,000 investment in the Investment LLC, plus any additional investments by the Company if any, and only with respect to any distributions thereafter.
The Board of Directors approved the Company entering into the Amended and Restated Investment Operating Agreement with Mr. R.A. Bianco. Mr. R.A. Bianco, Mr. Bianco Jr. and Ms. Bianco recused themselves from the
deliberations and voting of the Board of Directors in considering the Amended and Restated Investment Operating Agreement.
12
Litigation Funding Agreement
In 2017, the Company entered into a Litigation Funding Agreement (the “LFA”) with Mr. R. A. Bianco. Pursuant to the LFA, Mr. R. A. Bianco agreed to provide litigation funding to the Company, up to an aggregate amount
of seven million dollars ($7,000,000) (the “Litigation Fund Amount”) to satisfy actual documented litigation costs and expenses of the Company, including attorneys’ fees, expert witness fees, consulting fees and disbursements in connection with the
Company’s legal proceedings relating to the Company’s equity investment in the 111 West 57th Property.
After receiving substantial AMT credit carryforward refunds in 2019, in light of the Company’s improved liquidity, the Company’s Board of Directors (the “Board”) authorized the establishment of a Special Committee of
the Board (the “Special Committee”) to evaluate and negotiate possible changes to the LFA. The Special Committee was comprised of Mr. Schmidt and Mr. Carnegie.
In 2019, after receiving approval from the Special Committee, the Company and Mr. R. A. Bianco entered into an amendment to the LFA (the “Amendment”) which provides for the following: (i) the repayment of $3,672,000
in funds previously provided to the Company by Mr. R. A. Bianco pursuant to the LFA (the “Advanced Amount”), (ii) the release of Mr. R. A. Bianco from all further funding obligations under the LFA, and (iii) a modification of the relative
distribution between Mr. R. A. Bianco and the Company of any Litigation Proceeds received by the Company from the 111 West 57th Litigation, as described below.
The Amendment provides that, in the event that the Company receives any Litigation Proceeds from the 111 West 57th Litigation, such Litigation Proceeds shall be distributed as follows:
| (i) |
first, 100% to the Company in an amount equal to the lesser of (a) the amount of actual litigation expenses incurred by the Company with respect to the Company’s 111 West 57th Litigation (including the Advanced Amount); or (b)
$7,500,000; and
|
| (ii) |
thereafter, any additional amounts shall be distributed (a) 75% to the Company and (b) 25% to the Mr. R. A. Bianco (a reduction of Mr. R.A. Bianco’s percentage, which under the terms of the original LFA prior to the Amendment would have
been 30% to 45% based on the length of time of any recovery).
|
The Special Committee was dissolved in 2019.
2007 Employment Agreement with the Company’s President and Chief Executive Officer
An employment agreement, as amended, is in effect between Mr. R. A. Bianco and the Company (the “2007 Employment Agreement”), which provides for him to serve as Chairman, President and Chief Executive Officer of the
Company through May 31, 2028. The employment agreement also provides for additional benefits, including his participation in various employment benefit plans and annual bonus eligibility for work performed on non-Supervisory Goodwill activities.
During 2006, the Company entered into an employment agreement with Mr. R. A. Bianco (the “2007 Employment Agreement”). As part of the 2007 Employment Agreement terms: (i) Mr. R. A. Bianco’s annual rate of base
salary was $625,000 per year during the first three years of the 2007 Employment Agreement with the amount of Mr. R. A. Bianco’s base salary for subsequent years to be determined by the Personnel Committee, in its sole discretion; and (ii) Mr. R.
A. Bianco’s annual bonus opportunity each year was no longer linked to recovery efforts in connection with the Company’s Supervisory Goodwill litigation. Instead, the Company and Mr. R. A. Bianco agreed to
a long term incentive bonus formula, at varying percentages ranging from 5% to 10%, or more, based upon recoveries received by the Company for its investment in Carteret, through litigation or otherwise (including the Company’s Supervisory Goodwill litigation).
13
Retirement/Pension Benefits
401(k) Savings Plan
The only retirement type plan maintained by the Company is the Company’s 401(k) Savings Plan (the “Savings Plan”). Pursuant to the terms of the Savings Plan, employees can make contributions which are 100% matched
by the Company. The employee and the employer matching contribution are subject to the maximum limitations as set forth in the Internal Revenue Code of 1986, as amended.
The Company’s matching contributions to the Savings Plan on behalf of the Named Executive Officers aggregated approximately $90,000 in 2023 and $81,000 in 2022.
Other Benefits
The Company provides only a limited number of additional benefits and perquisites. Such additional items, to the extent provided, are included as Other Compensation in the Summary Compensation table presented herein.
The benefits and other perquisites are reasonably consistent with general competitive market practices.
Items provided by the Company include, depending on the Named Executive Officer, Company paid term life insurance at up to two times the individual’s base annual salary, Company paid long-term disability insurance
with a monthly benefit up to 60% of the individual’s base monthly salary, supplemental medical and dental coverage for costs not covered under the base health insurance plans, and depending on the Named Executive Officer, reimbursement for income
tax services and Company provided transportation. Health and welfare plans are provided through outside insurance carriers. Benefits generally available to all full-time employees of the Company are not included herein.
The Company does not provide any other type of deferred compensation programs, nor does it provide or have outstanding loans with the Named Executive Officers or any other employee of the Company.
Personnel Committee Summary
The Personnel Committee believes that its compensation programs, 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. The Personnel Committee has found all the components of Company’s officers’ compensation to be fair, reasonable and appropriate.
14
EXECUTIVE COMPENSATION
The following table sets forth the information regarding compensation earned by the Chief Executive Officer and each other executive officer of the Company and its subsidiaries (the “Named Executive Officers”) with
respect to services rendered to the Company in the fiscal years ended December 31, 2023, and December 31, 2022:
Summary Compensation Table (a)
|
Name and Principal Position
|
Year
|
($)
Salary
|
($)
Bonus
|
($) (c)
All Other Compensation
|
($)
Total
|
||||||||||||
|
Richard A. Bianco, Chairman
|
2023
|
$
|
440,000
|
$
|
-
|
$
|
98,735
|
$
|
538,735
|
||||||||
|
President and Chief Executive Officer (b)
|
2022
|
$
|
440,000
|
$
|
-
|
$
|
94,519
|
$
|
534,519
|
||||||||
|
John Ferrara, Vice President
|
2023
|
$
|
235,000
|
$
|
-
|
$
|
44,324
|
$
|
279,324
|
||||||||
|
Chief Financial Officer & Controller
|
2022
|
$
|
235,000
|
$
|
-
|
$
|
41,084
|
$
|
276,084
|
||||||||
|
Joseph R. Bianco
|
2023
|
$
|
116,000
|
$
|
-
|
$
|
47,002
|
$
|
163,002
|
||||||||
|
Treasurer
|
2022
|
$
|
116,000
|
$
|
-
|
$
|
43,774
|
$
|
159,774
|
||||||||
|
(a)
|
The columns relating to “Stock Option Awards,” “Stock Awards,” “Non-Equity Incentive Plan Compensation,” and “Non-qualified Deferred Compensation Earnings” have been omitted because no compensation required
to be reported in these columns were awarded to, earned by, or paid to any of the Named Executive Officers with respect to 2023 or 2022.
|
|
(b)
|
See the discussion under the heading “Employment Contracts” below for information relating to the 2007 Employment Agreement between Mr. R. A. Bianco and the Company and the amounts which could be payable to
Mr. R. A. Bianco based on value realized by the Company with respect to a gross-up for federal taxes imposed on the settlement amount, if any.
|
|
(c)
|
All Other Compensation for fiscal year 2023, in the table above consists of the following:
|
|
Mr. R. A. Bianco
|
Mr. Ferrara
|
Mr. J. Bianco
|
||||||||||
|
Company contributions to 401(k) savings plan
|
$
|
30,000
|
$
|
30,000
|
$
|
30,000
|
||||||
|
Supplemental life insurance premiums
|
8,750
|
555
|
2,461
|
|||||||||
|
Long-term disability insurance premiums
|
18,804
|
693
|
693
|
|||||||||
|
Supplemental medical and dental insurance
|
11,856
|
12,264
|
11,856
|
|||||||||
|
Reimbursement of income tax costs for participation in life insurance plans
|
5,420
|
344
|
1,524
|
|||||||||
|
Reimbursement of income tax costs for participation in long-term disability plans
|
12,116
|
468
|
468
|
|||||||||
|
Company provided automobile (d)
|
1,914
|
-
|
-
|
|||||||||
|
Reimbursement for tax services
|
9,875
|
-
|
-
|
|||||||||
|
Total
|
$
|
98,735
|
$
|
44,324
|
$
|
47,002
|
||||||
| (d) |
All All amounts for personal use of a Company-provided automobile for Mr. R. A. Bianco, included in table above for other compensation, include mileage, fuel, maintenance, insurance, and other miscellaneous fees.
|
15
Pay vs. Performance Table
|
Year
|
Summary Compensation Table Total for PEO (a) (c)
|
Compensation Actually Paid to PEO (a) (c)
|
Average
Summary
Compensation
Table Total for
Non-PEO NEOs
(b) (c)
|
Average
Compensation
Actually Paid
to Non-PEO
NEOs (b) (c)
|
Value of Initial
Fixed $100
Investment
Based On
Total
Shareholder
Return (d)
|
Net Income (Loss) (d)
|
||||||||||||||||||
|
2023
|
$
|
538,735
|
$
|
440,000
|
$
|
221,163
|
$
|
175,500
|
$
|
38.96
|
$
|
(5,271,000
|
)
|
|||||||||||
|
2022
|
$
|
534,519
|
$
|
440,000
|
$
|
217,929
|
$
|
175,500
|
$
|
18.18
|
$
|
(3,473,000
|
)
|
|||||||||||
|
2021
|
$
|
533,212
|
$
|
440,000
|
$
|
216,758
|
$
|
175,500
|
$
|
90.91
|
$
|
(5,208,000
|
)
|
|||||||||||
| (a) |
PEO in all years presented above is Richard A. Bianco
|
| (b) |
Non-PEO NEO’s in all years presented above are John Ferrara and Joseph R. Bianco
|
| (c) |
In all years presented above, “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs” is the amounts shown in the Summary Table, “Total” column less amounts shown in the “All Other Compensation”,
column.
|
| (d) |
Due to the nature of the Company’s operations, the Company does not believe there is a correlation between the compensation actually paid to the PEO or the average compensation actually paid to the Non-PEO NEOs to the Company’s
cumulative total shareholder return or the Company’s net income (loss) in the periods presented.
|
Grants of Plan Based Awards During 2023
No stock options, SARs, or any other type of stock award grants were granted to the Named Executive Officers during the year ended December 31, 2023.
No long-term incentive plan awards were made to the Named Executive Officers in 2023. The Company does not have any stock options, SARs or other stock award grants outstanding, hence no stock
options previously awarded to any of the Named Executive Officers were repriced during 2023.
Outstanding Equity Awards at December 31, 2023
The Company does not have any stock options, SARs or other stock award grants outstanding.
Option Exercises and Stock Vested Table during Fiscal 2023
The Company has no stock options outstanding; hence, there were no stock options exercised or vested during 2023.
16
EMPLOYMENT CONTRACTS
2007 Employment Agreement with the Company’s President and Chief Executive Officer
An employment agreement, as amended, is in effect between Mr. R. A. Bianco and the Company, (the “2007 Employment Agreement”). The terms of the 2007 Employment Agreement provide for Mr. R. A. Bianco to serve as
Chairman, President and Chief Executive Officer of the Company. In January 2018, the Company and Mr. R. A. Bianco agreed to an amendment to Mr. Bianco’s Employment Agreement with the Company, to extend the term of Mr. R. A. Bianco’s employment with
the Company to May 31, 2028 from May 31, 2023 (the “Employment Period”). Under the terms of the 2007 Employment Agreement, Mr. R. A. Bianco was entitled to receive an annual base salary of $625,000 for the first three (3) years and was then
eligible for discretionary increases to the amount of his base salary in subsequent years. The 2007 Employment Agreement provides for discretionary annual bonuses (which may not take into consideration his efforts to obtain a recovery for the
Company of its investment in Carteret Savings), employee benefit plans participation, and certain long-term disability benefits. The 2007 Employment Agreement provides a long-term incentive arrangement for Mr. R. A. Bianco (the “Long-Term
Incentive Award”); based upon receipt by the Company of a recovery of its investment in Carteret Savings through litigation or otherwise (including the Company’s Supervisory Goodwill litigation) (the
“Recovery Amount”), Mr. R. A. Bianco would receive, with certain exceptions, a lump-sum payment equal to a percentage of that recovery, as follows:
|
Long-Term Incentive Award = 5% of the first $50,000,000 of Recovery Amount;
|
|
|
Plus
|
|
|
8% of Recovery Amount in excess of $50,000,000 but not greater than $150,000,000;
|
|
|
Plus
|
|
|
10% of Recovery Amount in excess of $150,000,000 but not greater than $250,000,000;
|
|
|
Plus
|
|
|
Discretionary amount (not less than 10%), to be determined by the Board, of Recovery Amount in excess of $250,000,000.
|
Pursuant to the terms of the 2007 Employment Agreement between Mr. R. A. Bianco and the Company as amended, and the receipt by the Company of $180,650,000 as part of the Supervisory Goodwill legal proceedings
Settlement Agreement, in 2012 Mr. R. A. Bianco received a bonus payment as calculated in accordance with the 2007 Employment Agreement. Additional amounts to be determined could be due to Mr. R. A. Bianco pursuant to the 2007 Employment Agreement,
based on value realized by the Company with respect to a gross-up for federal taxes imposed on the settlement amount, if any.
Under the terms of the 2007 Employment Agreement, if no recovery has been obtained by the Company by the expiration of the 2007 Employment Agreement, the Company and Mr. R. A. Bianco could enter into a consulting
arrangement pursuant to which, following his employment with the Company, he would continue to provide services to the Company as an independent contractor, solely for the purpose of assisting the Company in obtaining such a recovery.
Any further Long-Term Incentive Award to Mr. R. A. Bianco is to be paid in the future (i.e., whether during or after the Employment Period and/or the Consulting Period) except if Mr. R. A. Bianco willfully refuses to
cooperate in a reasonable fashion with the Company and/or the Board in connection with the Company’s efforts to obtain a Recovery Amount, in which case he would forfeit his entitlement to receive any further Long-Term Incentive Award.
During the Employment Period, if Mr. R. A. Bianco voluntarily resigns or has his employment with the Company terminated by the Company for cause (as set forth in the 2007 Employment Agreement), Mr. R. A. Bianco will
forfeit his entitlement to receive any further Long-Term Incentive Award. If Mr. R. A. Bianco becomes disabled (as set forth in the 2007 Employment Agreement) or dies, Mr. R. A. Bianco or his estate, as applicable, would be entitled to receive any
further Long-Term Incentive Award upon the Company’s receipt of the Recovery Amount, regardless of when the Recovery Amount is received by the Company. If the Company terminates Mr. R. A. Bianco’s employment with the Company without cause, Mr. R.
A. Bianco or his estate, as applicable would be entitled to receive any further Long-Term Incentive Award upon the Company’s receipt of the Recovery Amount, regardless of when the Recovery Amount is received by the Company.
17
Mr. R. A. Bianco’s employment under the 2007 Employment Agreement automatically terminates if Mr. R. A. Bianco dies during the term of the Employment Period and can be terminated by the Company at its option for
cause (as set forth in the 2007 Employment Agreement) or Mr. R. A. Bianco’s inability to engage in any substantial gainful activity (as set forth in the 2007 Employment Agreement).
In the event the Company terminates Mr. R. A. Bianco’s employment for any reason other than those permitted pursuant to the 2007 Employment Agreement, Mr. R. A. Bianco would be entitled to receive a lump-sum amount
equal to the salary payments provided for in the 2007 Employment Agreement for the remaining term thereof, following the passage of a six (6) month period from the date of his termination. As of December 31, 2023, the aggregate lump-sum amount of
such salary payments, pursuant to the 2007 Employment Agreement as amended, would be approximately $2,760,000.
Operating Agreement of 111 West 57th Investment LLC
In June 2013, 111 West 57th Investment LLC (“Investment LLC”), a then newly formed subsidiary of the Company, entered into a joint venture agreement (as amended, the “JV Agreement”) with 111 West 57th
Sponsor LLC, (the “Sponsor”), pursuant to which Investment LLC invested (the “Investment”) in a real estate development property to purchase and develop the 111 West 57th Property. In consideration for making the Investment, Investment
LLC was granted a membership interest in 111 West 57th Partners LLC (“111 West 57th Partners”), which indirectly acquired the 111 West 57th Property on June 28, 2013 (the “Joint Venture,” and such date, the “Closing
Date”). The Company also indirectly contributed an additional amount to the Joint Venture in exchange for an additional indirect interest in the Joint Venture. Other members and the Sponsor contributed additional cash and/or property to the Joint
Venture. The Company recorded its investment in 111 West 57th Partners utilizing the equity method of accounting. The Joint Venture plans were to redevelop the 111 West 57th Property into a luxury residential tower and retail
project.
The JV Agreement and related operating agreements generally provide that all distributable cash shall be distributed as follows: (i) first, 100% to the members in proportion to their percentage interests until
Investment LLC has received distributions yielding a 20% internal rate of return as calculated; (ii) second, 100% to the Sponsor as a return of (but not a return on) any additional capital contributions made by the Sponsor on account of manager
overruns; and (iii) thereafter, (a) 50% to the members in proportion to their respective percentage interests at the time of such distribution, and (b) 50% to the Sponsor.
In March 2014, the Company entered into an amended and restated operating agreement for Investment LLC (the “Amended and Restated Investment Operating Agreement”) to grant a 10%
subordinated participation interest in Investment LLC to Mr. R. A. Bianco as contingent future incentive for Mr. R. A. Bianco’s past, current and anticipated ongoing role to develop and commercialize the
Company’s equity investment in the 111 West 57th Property. Pursuant to the terms of the Amended and Restated Investment Operating Agreement, Mr. R.A. Bianco has no
voting rights with respect to his interest in Investment LLC, and his entitlement to receive 10% of the distributions from Investment LLC is subject to the Company first receiving distributions equal to 150% of the Company’s initial aggregate
investment in Investment LLC and the Joint Venture, plus any additional investments by the Company, and only with respect to any distributions thereafter. At the current time the Company has not expensed nor accrued any amounts relating to this
subordinated participation interest, as no amount or range of amounts can be reasonably estimated or assured.
During 2014, in connection with the funding of additional capital calls under the JV Agreement for required borrowing and development costs for the 111 West 57th Property, the Company’s management and its
Board of Directors concluded that, given the continuing development risks of the 111 West 57th Property and the Company’s financial position, the Company should not at that time increase its already significant concentration and risk
exposure to the 111 West 57th Property. Nonetheless, the Company sought to limit dilution of its interest in the Joint Venture resulting from any failure to fund the capital call requirements, but at the same time wished to avoid the time, expense
and financial return requirements (with attendant dilution and possible loss of voting rights) that obtaining a replacement third-party investor would require. The Company therefore entered into a second amended and restated operating agreement for
Investment LLC (“Second Amended and Restated Investment Operating Agreement”) pursuant to which Capital LLC was admitted as a member of Investment LLC. In exchange for Capital LLC contributing toward Investment LLC capital calls in respect of the
111 West 57th Property, available cash of Investment LLC will be distributed first to Capital LLC until it has received a 20% internal rate of return (calculated as provided for in the JV Agreement as noted above), second to the Company
until it has received 150% of its capital, and, thereafter, available cash is split 10/90, with 10% going to Mr. R. A. Bianco as the subordinated participation interest noted above and 90% going to Capital LLC and the Company pari-passu, with
Capital LLC receiving one-half of its pro-rata share based on capital contributed and the Company receiving the balance. No other material changes were made to the Amended and Restated Investment Operating Agreement, and neither Mr. R. A. Bianco
nor Capital LLC has any voting rights with respect to their interest and investment in Investment LLC.
18
Because of time constraints, concerns regarding the potential level of any financial dilution, complications relating to structure of the investments in the Joint Venture, bank constraints and
potential loss of voting rights over the Joint Venture, the terms of Capital LLC’s admission to and investment in the Investment LLC were reviewed by the Board of Directors and determined to be no less favorable to the Company than would have been
obtained in negotiations with a third party unaffiliated with the Company, even assuming that any such third party investor was available and prepared to fund under the time constraints imposed by the JV Agreement. Based in part on such
determination, the Board of Directors unanimously approved the admission of Capital LLC to Investment LLC on the terms described by a vote of the disinterested members of the Board of Directors. In April 2015, Capital LLC contributed an additional
amount toward Investment LLC capital calls in respect of the 111 West 57th Property.
In July 2015, based on available net proceeds received from the financing and equity previously invested in the project, funds were distributed to the members of 111 West 57th Partners
(the “July 2015 Distribution”). As part of the July 2015 Distribution, in accordance with the Second Amended and Restated Investment Operating Agreement as noted herein, the Company through Investment LLC repaid Capital LLC the full amount of its
capital contributions of $9,868,000. Additional amounts may still be payable to Capital LLC based on investment returns received on the 111 West 57th Property as further described herein.
Pension Benefits
Other than the Company’s 401(k) Savings Plan, the Company maintains no other retirement or deferred compensation type plans.
Nonqualified Deferred Compensation
The Company does not maintain any other type of nonqualified deferred compensation plan.
Potential Payments upon Termination or Change in Control
Other than Mr. R. A. Bianco, there are no employment agreements or employment contracts with any other officer or employee of the Company. See Employment Contracts above, for information concerning potential payments
due to Mr. R. A. Bianco upon termination, pursuant to the employment agreement between Mr. R. A. Bianco and the Company.
The Company does not have any severance or termination payment plans in effect.
19
COMPENSATION OF DIRECTORS
The annual fee paid to each director of the Company, including Mr. R. A. Bianco, who is the Company’s Chairman, President and Chief Executive Officer, is $12,000 per year. Mr. R. A. Bianco elected not to receive his
annual director fee for 2023. In addition, each Chairperson and/or Co-Chairperson of a Board committee is paid an additional fee of $1,000 per year, and after four (4) Board and/or committee meetings, each director is paid a $500 per meeting
attendance fee. 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.
Directors Compensation Table
Details of amounts paid to the Company’s directors in their capacities as directors and/or board committee members for the year ending December 31, 2023, is as follows:
|
Name and Position
|
Fees Earned or Paid in
Cash
|
Totals
(a) (b)
|
||||||||
|
Richard A. Bianco
|
||||||||||
|
Chairman of the Board, President
|
||||||||||
|
and Chief Executive Officer
|
$
|
-
|
(a)
|
$
|
-
|
(a)
|
||||
|
Alessandra F. Bianco
|
||||||||||
|
Board Member
|
||||||||||
|
Member Audit Committee
|
$
|
12,000
|
$
|
12,000
|
||||||
|
Richard A. Bianco, Jr.
|
||||||||||
|
Board Member
|
$
|
12,000
|
$
|
12,000
|
||||||
|
Jerry Y. Carnegie
|
||||||||||
|
Board Member
|
||||||||||
|
Chairman Audit Committee
|
||||||||||
|
Member Personnel Committee
|
$
|
13,000
|
$
|
13,000
|
||||||
|
Scott M. Salant
|
||||||||||
|
Board Member
|
||||||||||
|
Member Audit Committee
|
||||||||||
|
Chairman Personnel Committee
|
$
|
13,000
|
$
|
13,000
|
||||||
|
(a)
|
Mr. R. A. Bianco waived payment of his director fees in 2023.
|
|
(b)
|
No other additional fees or any other type of compensation, including equity, non-equity and/or deferred compensation payments or awards were paid or granted to any of the Company’s outside directors in
2023.
|
20
Personnel Committee Interlocks and Insider Participation
The members of the Personnel Committee during 2023 were Scott M. Salant, Chairperson, and Jerry Y. Carnegie. Kenneth M. Schmidt served as Chairperson until the end of his term in June 2023. No executive officer
serves, or in the past has served, as a member of the Board of Directors or Personnel Committee of any entity that has any of its executive officers serving as a member of the Company’s Board of Directors or Personnel Committee.
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
[April [__], 2024], except as set forth below.
|
Name and Address of Beneficial Owner
|
Amount and Nature
of Beneficial
Ownership
|
Percentage
of Common
Stock Owned
|
|||||||
|
BARC Investments, LLC
|
[ ]
|
|
(a)
|
[
|
]%
|
||||
|
c/o Barry Strauss & Associates
|
(direct)
|
||||||||
|
307 Fifth Avenue
|
|||||||||
|
New York, NY 10016
|
|||||||||
|
Camac Partners, LLC
|
2,257,055
|
(b)
|
[
|
]%
|
|||||
|
350 Park Avenue, 13th floor
|
|||||||||
|
New York, NY 10022
|
|||||||||
|
(a)
|
Ownership amount reported is based on a Schedule [13D/A-3] filed by BARC Investments, LLC on April [ ], 2024, and assumes that in the absence of any subsequent amendments to such Schedule 13D that the
amounts reported therein have not changed. Ms. Alessandra F. Bianco and Mr. Richard A. Bianco, Jr., are managing members of BARC Investments, LLC, and share voting and dispositive power with respect to shares held by BARC Investments,
LLC. Ms. Bianco and Mr. Richard A. Bianco, Jr. are the adult children of Mr. Richard A. Bianco, the Company’s Chairman, President and Chief Executive Officer. The business address of the reporting persons under this Schedule 13D/A is
c/o Barry Strauss & Associates, 307 Fifth Avenue, New York, NY 10016.
|
|
(b)
|
Ownership amount is reported on a Schedule 13D/A-5, filed by Camac Partners, LLC (“Camac Partners”) on March 11, 2024, dated March 13, 2024; Camac Partners is the general partner of Camac Fund, LP (the “Fund”). Camac Capital, LLC is
the investment manager of the Fund. Eric Shahinian (“Mr. Shahinian”) is the managing member of Camac Partners. Camac Partners, Camac Capital, Camac Fund and Eric Shahinian may each be deemed to have voting and dispositive power with
respect to the shares of the Company’s common stock held by the Fund. The business address of the reporting persons under this Schedule 13D is 350 Park Avenue, 13th Floor, New York, NY 10022.
|
21
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 [April [__], 2024], was as follows:
|
Name of Beneficial Owner
|
Amount and
Nature of
Beneficial
Ownership (a) (b)
|
Percentage of Common Stock Owned
|
|||||||||
|
Richard A. Bianco
|
1,622,547
|
(c
|
)
|
[
|
]%
|
||||||
|
Joseph R. Bianco
|
50,000
|
*
|
|||||||||
|
John Ferrara
|
36,029
|
*
|
|||||||||
|
Alessandra F. Bianco
|
[
|
] |
(d
|
)
|
[
|
]%
|
|||||
|
Richard A. Bianco, Jr.
|
[
|
] |
(d
|
)
|
[
|
]%
|
|||||
|
Jerry Y. Carnegie
|
71,898
|
*
|
|||||||||
|
Scott M. Salant
|
-
|
-
|
|||||||||
|
All Directors and Officers as a group (7 persons)
|
[
|
] |
[
|
]%
|
|||||||
* 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) |
There are no pledges of Company shares by any of the Company’s officers, employees or directors.
|
| (c) |
Includes 1,420,000 shares held in a Uniform Gifts to Minors Act Account for the benefit of his grandchildren. Mr. R.A. Bianco retains voting control of the shares, but pursuant to Rule 13d-4, he disclaims beneficial ownership of the
shares to the extent he does not have a pecuniary interest in such shares.
|
| (d) |
Ownership amount reported is based on a Schedule [13D/A-3] filed by BARC Investments, LLC on April [ ], 2024, and assumes that in the absence of any subsequent amendments to such Schedule 13D that the amounts reported therein have not
changed. Ms. Alessandra F. Bianco and Mr. Richard A. Bianco, Jr. are managing members of BARC Investments, LLC and share voting and dispositive power with respect to shares held by BARC Investments, LLC. Ms. Bianco and Mr. Richard A.
Bianco, Jr. are the adult children of Mr. Richard A. Bianco, the Company’s Chairman, President, and Chief Executive Officer.
|
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 ratify the appointment of Marcum LLP as the independent registered public accounting firm for the Company for
the year ending December 31, 2024. Your ratification of the appointment of Marcum LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2024, does not preclude the Board of Directors from
terminating its engagement of Marcum LLP and retaining a new independent registered public accounting firm if it determines that such an action would be in the best interests of the Company. The Company has been advised by Marcum 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 Marcum 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 Marcum LLP.
22
PROPOSAL NO. 3 – TO AUTHORIZE AN AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 85,000,000 TO 200,000,000.
General
The Board of Directors believes that it would be in the best interests of both the Company
and its stockholders and is proposing that stockholders approve an Amendment (the “Authorized Capital Increase Charter Amendment”) to the Company’s Restated Certificate of Incorporation (the “Current Certificate”) to increase the number
of shares of common stock from 85,000,000 to 200,000,000 and no changes to the number of authorized shares of cumulative preferred stock the Company is authorized to issue (a copy of which is attached as Exhibit A to the Proxy Statement) (the
“Increase in Authorized Shares”). Other than the proposed increase in the number of shares of the Company’s authorized Common Stock, the proposed Authorized Capital Increase Charter Amendment is not intended to modify the rights of existing
stockholders in any material respect. The Board of Directors approved the proposed Increase in Authorized Shares and recommends the approval and adoption of Proposal No. 3 by the stockholders.
If the Increase in Authorized Shares is approved, the Company will file an appropriate Certificate of Amendment to its Restated Certificate of Incorporation to affect such an Increase in Authorized Shares which would
become effective upon filing with the Secretary of State of the State of Delaware, which the Company intends to file promptly after the Annual Meeting.
Approval will require a majority vote of the holders of the Company’s issued and outstanding shares of Common Stock.
If Proposal No. 3 is not approved, the Authorized Capital Increase Charter Amendment would not be filed, and the Current Certificate would remain in effect. A copy of the Current Certificate is available as Exhibit
3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 18, 2024. The following general description of the Authorized Capital Increase Charter Amendment and the effect of Proposal No. 3
on the Current Certificate are qualified in their entirety by reference to the text of the Authorized Capital Increase Charter Amendment set forth in Exhibit A.
Background of Proposed Increase in the Number of Authorized Shares of Common Stock
Under Delaware law, the Company may only issue shares of its capital stock to the extent such shares have been authorized for issuance under our Current Certificate. The Current Certificate authorizes the issuance of
up to 85,000,000 shares of Common Stock and up to 20,000,000 shares of preferred stock, having a par value of $0.01 per share. As of April [__], 2024, [ ] shares of Common Stock were issued and outstanding, leaving approximately [ ] shares of
Common Stock unissued and unreserved. In addition, 20,000,000 undesignated shares of cumulative preferred stock are authorized under the Current Charter, but no shares of preferred stock have been issued. In order to ensure sufficient shares of
Common Stock will be available for issuance by the Company, the Board of Directors has approved, subject to stockholder approval, the Authorized Capital Increase Charter Amendment to increase the number of shares of such Common Stock authorized for
issuance from 85,000,000 to 200,000,000. The proposed Increase in Authorized Shares will not affect any stockholder’s proportionate equity interest in the Company. Neither the par value of the Common Stock nor
any rights presently accruing to holders of Common Stock would be affected by this Amendment.
23
The following table illustrates the effect of the Amendment to the Restated Certificate of Incorporation on the Company’s Common Stock based on shares authorized, issued,
outstanding and available for future issuance as of [April [ ], 2024].
|
Common Stock 0.01 Par Value
|
||||||||
|
Prior to
Amendment
|
Assuming Amendment
|
|||||||
|
Authorized shares
|
85,000,000
|
200,000,000
|
||||||
|
Issued shares
|
[
|
]
|
[
|
]
|
||||
|
Net shares outstanding
|
[
|
]
|
[
|
]
|
||||
|
Shares available for future issuance
|
[
|
]
|
[
|
]
|
||||
Purpose and Effect of the Authorized Capital Increase Charter Amendment
The Board of Directors believes it desirable to increase the authorized number of shares of Common Stock in order to provide the Company with adequate flexibility in corporate planning and strategies. The
availability of additional shares of Common Stock for issuance could be used for a number of purposes, including corporate financing, public or private offerings of Common Stock, future acquisitions, stock dividends, stock splits, strategic
relationships with corporate partners, stock options, and other stock-based compensation. The availability of additional shares of Common Stock is particularly important in the event that the Board of Directors needs to undertake any of the
foregoing actions on an expedited basis and thus to avoid the time and expense of seeking stockholder approval in connection with the contemplated issuance of Common Stock. The are currently no other plans, agreements or understandings regarding
the issuance of any of the additional shares of Common Stock that would be available if this proposal is approved. Such additional authorized shares may be issued for such purposes and for such consideration as the Board of Directors may determine
without further stockholder approval, unless such action is required by applicable law or the rules of any stock exchange on which the Company’s securities may be listed at the time.
The increase in authorized Common Stock will not have any immediate effect on the rights of existing stockholders. The additional shares of Common Stock for which authorization is sought would be part of the existing
class of Common Stock. There will be no change in voting rights, dividend rights, liquidation rights, preemptive rights or any other stockholder rights as a result of the Authorized Capital Increase Charter Amendment. However, the Board of
Directors will have the authority to issue authorized Common Stock without requiring future stockholder approval of such issuances, except as may be required by applicable law or the rules of any stock exchange on which the Company’s securities may
be listed at the time. To the extent that additional authorized shares are issued in the future, they may decrease the existing stockholders’ percentage equity ownership and, depending on the price at which they are issued, could be dilutive to the
existing stockholders. Except for the preemptive rights granted to BARC Investments pursuant to its Standby Purchase Agreement with the Company entered into on February 28, 2024, the holders of Common Stock have no preemptive rights under the
Current Certificate and the Board of Directors has no plans to grant such rights with respect to any such shares.
The increase in the Company’s authorized but unissued shares of Common Stock that would result from adoption of the Authorized Capital Increase Charter Amendment could have a potential anti-takeover effect with
respect to the Company, although management is not presenting the proposal for this reason and does not presently anticipate using the increased authorized shares for such a purpose. The potential anti-takeover effect of the Authorized Capital
Increase Charter Amendment arises because it would enable the Company to issue additional shares of Common Stock up to the total authorized number with the effect that stockholdings and related voting rights of then existing stockholders would be
diluted to an extent proportionate to the number of additional shares of Common Stock issued. In addition, if the Company were the subject of a hostile takeover attempt, it could try to impede the takeover by issuing shares of Common Stock, thereby
diluting the voting power of the other outstanding shares and increasing the potential cost of the takeover. The availability of this defensive strategy to the Company could discourage unsolicited takeover attempts, thereby limiting the opportunity
for the Company’s stockholders to realize a higher price for their shares than is generally available in the public markets. The Board of Directors is not aware of any attempt or contemplated attempt to acquire control of the Company, and this
proposal is not being presented with the intent that it be utilized as a type of anti-takeover device.
24
Market for the Company’s Common Stock
The Common Stock of the Company trades through one or more market makers, with quotations made available in the over-the-counter market under the symbol ABCP.
As of February 15, 2024, there were approximately 5,900 beneficial owners of the Company’s Common Stock. The closing price of the Common Stock was $0.24 on February 15, 2024.
Vote Required and Board of Directors Reservation of Rights
Under Delaware law, approval of the Authorized Capital Increase Charter Amendment requires the affirmative vote of at least a majority of the outstanding shares of the Company’s Common Stock. Such approval will
authorize the Board of Directors to effectuate an increase in the number of authorized shares of Common Stock by filing the Authorized Capital Increase Charter Amendment with the Secretary of State of the State of Delaware.
No Dissenter’s Rights
Under Delaware law, stockholders are not entitled to dissenter’s rights of appraisal with respect to the proposed Authorized Capital Increase Charter Amendment.
For the reasons stated herein, the Board of Directors recommends a vote FOR the Authorized Capital Increase Charter Amendment to increase the number of authorized shares of
capital stock under the Company’s Restated Certificate of Incorporation.
25
DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS
Only one copy of the Company’s 2023 Annual Report and Proxy Statement for the 2024 Annual Meeting of Stockholders will be delivered to an address where two or more stockholders reside unless we have received contrary
instructions from a stockholder at the address. A separate Proxy Card will be delivered to each stockholder at the shared address.
If you are a stockholder who lives at a shared address and you would like additional copies of the 2023 Annual Report, this Proxy Statement or any future annual reports or proxy statements, please contact American
Stock Transfer & Trust Company, LLC 6201 15th Ave, New York NY 11219, Attention: Shareholder Services, (800) 937-5449 or (718) 921-8200, extension 6820, and a copy will be promptly mailed to you.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 4, 2024. This Proxy Statement, the Notice of Annual Meeting of Stockholders and our Annual Report to Stockholders are
available at http://www.proxyvote.com.
ADDITIONAL INFORMATION
The Annual Report of the Company on Form 10-K for the year ended December 31, 2023, is being mailed with this Proxy Statement to each stockholder entitled to vote at the Annual Meeting. Any stockholder who wishes to
submit a nominee for election to the Board of Directors or a proposal for action to be included in the Proxy Statement for the Company’s 2025 Annual Meeting of Stockholders in accordance with Rule 14a-8 of the Securities Exchange Act and the
Company’s by-laws must submit such proposal so that it is received by the Secretary of the Company by December 16, 2024.
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 Annual 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, LLC
6201 15th Avenue
Brooklyn, NY 11219
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
12 Lincoln Boulevard, Suite 202
Emerson, NJ 07630
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 internet at
www.sec.gov.
26
EXHIBIT A
PROPOSED AMENDMENT OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF AMBASE CORPORATION
The undersigned, being the duly elected Vice President and Chief Financial Officer of AmBase Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That the first paragraph of Article Fourth, of the Restated Certificate of Incorporation be, and it hereby is, amended to read as follows:
“FOURTH: The total number of shares of all classes of stock which the Company is authorized to issue is 220,000,000. All such shares are
to have a par value and are classified as 20,000,000 shares of Cumulative Preferred Stock, each share of such class having a par value of $0.01, and 200,000,000 shares of Common Stock, each share of such class having a par value of $0.01.
SECOND: That the amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware by the Board of Directors and the stockholders of the corporation.
THIRD: That this Certificate of Amendment shall be effective on June [ ], 2024.
[signature page to follow]
IN WITNESS WHEREOF, the undersigned has signed this Certificate of Amendment as of this [ ] day of June 2024.
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AMBASE CORPORATION
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By:
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/s/ John Ferrara
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Name: John Ferrara
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Title: Vice President & Chief Financial Officer
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