Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 13, 2016, the shareholders
of AMREP Corporation (the “Company”), at the Company’s 2016 Annual Meeting of Shareholders, approved the AMREP
Corporation 2016 Equity Compensation Plan (the “Plan”). The Plan will become effective on September 20, 2016. The Plan
terminates on, and no award will be granted under the Plan on or after, September 19, 2026; provided, however, that the Company’s
Board of Directors (the “Board”) may, at any time prior to that date, terminate the Plan.
The Plan is administered by the
Compensation and Human Resources Committee of the Board or a subcommittee thereof (the “Committee”). All directors
and employees of the Company or its affiliates are eligible to receive awards under the Plan, including the Company’s named
executive officers, Rory Burke, Clifford R. Martin and Christopher V. Vitale.
Awards under the Plan may be made
to eligible persons in the form of options, restricted stock, restricted stock units, deferred stock units, stock appreciation
rights, dividend equivalent rights and other forms of equity-based awards, as contemplated in the Plan. With respect to option
awards, the exercise price of the option is required to be at least 100% of the fair market value of a share of the Company’s
common stock, par value $0.10 per share (“Common Stock”) on the grant date. The aggregate maximum number of shares
of Common Stock that may be granted under the Plan is 500,000 shares, subject to adjustment in the event there is a merger, consolidation,
stock split, reclassification, recapitalization or similar transaction with respect to the Common Stock.
The maximum number of shares of
Common Stock that may underlie options granted in any calendar year to any eligible participant under the Plan, other than any
non-employee director of the Company or its subsidiaries (each a “Director”), may not exceed 50,000 shares. The maximum
number of shares of Common Stock that may underlie awards issued under the Plan, other than options, granted in any calendar year
to any eligible participant under the Plan, other than any Director, may not exceed 30,000 shares. The maximum number of shares
of Common Stock that may underlie options granted in any calendar year to any Director may not exceed 25,000 shares. The maximum
number of shares of Common Stock that may underlie awards issued under the Plan, other than options, granted in any calendar year
to any Director may not exceed 15,000 shares.
Awards under the Plan may be subject
to the attainment of objective performance goals that are established by the Committee and, with respect to awards to executive
officers of the Company, may be made with the intention of qualifying as “performance-based” compensation (“Performance-Based
Compensation”) under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”),
thereby exempting such awards from the limitations in Section 162(m) on the tax deductibility of certain compensation paid
to executive officers in excess of $1,000,000 (“Performance-Based Compensation Rules”).
For awards intended to qualify as
Performance-Based Compensation, performance goals will be based on one or more of the following business criteria (which may be
determined for these purposes either by reference to the Company as a whole or by reference to any one or more of its subsidiaries,
operating divisions or other operating units): stock price, revenues, pretax income, operating income, cash flow, earnings per
share, return on equity, return on invested capital or assets, cost reductions and savings, return on revenues, productivity, level
of managed assets and near or long-term earnings potential, or any variation or combination of the preceding business criteria.
In addition, the Committee may utilize as an additional performance measure (to the extent consistent with the Performance-Based
Compensation Rules) the attainment by a participant of one or more personal objectives and/or goals that the Committee deems appropriate,
including, but not limited to, implementation of Company policies, negotiation of significant corporate transactions, development
of long-term business goals or strategic plans for the Company, or the exercise of specific areas of managerial responsibility.
On September 13, 2016, the Board
approved the Form of Deferred Stock Unit Agreement to be used for awards of deferred stock units under the Plan and a sub-committee
of the Compensation and Human Resources Committee of the Board approved the Form of Restricted Stock Award Agreement to be used
for awards of restricted stock under the Plan.
As discussed in the Company’s
Proxy Statement filed with the Securities and Exchange Commission on August 5, 2016, (1) on the last trading day of calendar year
2016, each non-employee member of the Board shall be issued the number of deferred stock units of the Company under the Plan equal
to $15,000 divided by the closing price per share of Common Stock, reported on the New York Stock Exchange on such date and (2)
on the last trading day of each calendar year after calendar year 2016, each non-employee member of the Board shall be issued the
number of deferred stock units of the Company under the Plan equal to $20,000 divided by the closing price per share of Common
Stock reported on the New York Stock Exchange on such date.
The foregoing description of the
Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Plan, which is attached
hereto as Exhibit 10.1 and is incorporated herein by reference. The Form of Deferred Stock Unit Agreement and Form of Restricted
Stock Award Agreement are attached hereto as Exhibits 10.2 and 10.3.