<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AMERICAN CLASSIC VOYAGES CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- -------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
AMERICAN CLASSIC VOYAGES CO.
TWO NORTH RIVERSIDE PLAZA
SUITE 200
CHICAGO, ILLINOIS 60606
(312) 258-1890
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ON JUNE 3, 1998
------------------------
TO: The Stockholders of American Classic Voyages Co.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of American
Classic Voyages Co. (the "Company") will be held at One North Franklin Street,
Third Floor, Chicago, Illinois 60606, on Wednesday, June 3, 1998 at 10:00 A.M.,
Central Daylight Time, for the following purposes:
1. To elect eight (8) Directors to serve one-year terms, commencing
immediately upon their election, or until their respective successors
are duly elected and qualified; and
2. To transact such other business as may properly come before the meeting
or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on April 3, 1998, as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting. You are cordially invited to attend the meeting.
Whether you plan to attend the meeting or not, we respectfully request that you
fill in, date, sign and return the enclosed proxy at your earliest convenience
in the enclosed return envelope.
By Order of the Board of Directors
LOGO
Jordan B. Allen
Executive Vice President, General
Counsel and Secretary
April 29, 1998
------------------------
IMPORTANT:
PLEASE FILL IN, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD IN THE
POSTPAID ENVELOPE PROVIDED TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE
MEETING. IF YOU ATTEND THE MEETING YOU MAY VOTE IN PERSON EVEN THOUGH YOU HAVE
SENT IN YOUR PROXY.
<PAGE> 3
AMERICAN CLASSIC VOYAGES CO.
TWO NORTH RIVERSIDE PLAZA
SUITE 200
CHICAGO, ILLINOIS 60606
(312) 258-1890
------------------------
PROXY STATEMENT
------------------------
INTRODUCTION
This Proxy Statement is being mailed or otherwise furnished to stockholders
of American Classic Voyages Co., a Delaware corporation (the "Company"), on or
about April 29, 1998, in connection with the solicitation of proxies by the
Board of Directors of the Company of proxies to be voted at the annual meeting
of stockholders of the Company (the "Annual Meeting") to be held at One North
Franklin Street, Third Floor, Chicago, Illinois 60606 at 10:00 A.M., Central
Daylight Time, on Wednesday, June 3, 1998, and at any adjournment(s) thereof.
Stockholders who, after reading this Proxy Statement, have any questions should
contact Jordan B. Allen, Executive Vice President, General Counsel and Secretary
of the Company, in Chicago, Illinois at (312) 258-1890.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
At the Annual Meeting, stockholders of the Company will consider and vote
upon:
(i) the election of eight (8) Directors of the Company who will serve
one-year terms commencing immediately upon their election, or until their
respective successors are duly elected and qualified; and
(ii) such other business as may properly come before the meeting or
any adjournment(s) thereof.
------------------------
The date of this Proxy Statement is April 29, 1998.
PROXY SOLICITATION
The enclosed proxy is solicited by the Board of Directors of the Company.
The cost of this proxy solicitation is anticipated to be nominal and will be
borne by the Company, including charges and expenses of brokerage firms and
others for forwarding solicitation material to beneficial owners of the
Company's common stock. The solicitation generally will be effected by mail and
such cost will include the cost of preparing and mailing these proxy materials.
In addition to the use of the mails, proxies also may be solicited by personal
interview, telephone, telecopy, or other similar means. Although solicitation
will be made primarily through the use of the mail, officers, Directors or
employees of the Company may solicit proxies personally or by the
above-described means without additional remuneration for such activity.
ANNUAL REPORTS
Stockholders are concurrently being furnished with a copy of the Company's
Annual Report for 1997 which contains the Company's audited financial statements
at December 31, 1997. Additional copies of the Annual Report and of the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 as
filed with the Securities and Exchange Commission (the "SEC") may be obtained by
any stockholder by contacting Karen Brown, Investor Relations Coordinator of the
Company, at Two North Riverside Plaza, Chicago, Illinois 60606, (312) 258-1890,
and such copies will be furnished promptly at no additional expense.
<PAGE> 4
VOTING SECURITIES AND PROXIES
Only stockholders of record at the close of business on April 3, 1998 (the
"Record Date"), have the right to receive notice of and to vote at the Annual
Meeting and any adjournment(s) thereof. As of the Record Date, 14,063,451 shares
of the Company's common stock, $.01 par value ("Common Stock"), were issued and
outstanding. Each share outstanding on the Record Date entitles the holder
thereof to one vote upon each matter to be voted upon at the Annual Meeting. The
holders of a majority of the Company's issued and outstanding Common Stock,
present in person or represented by proxy, shall constitute a quorum at the
Annual Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
If, however, a quorum is not present or represented at the Annual Meeting, the
stockholders entitled to vote at the Annual Meeting, whether present in person
or represented by proxy, shall only have the power to adjourn the Annual Meeting
until such time as a quorum is present or represented. At such time as a quorum
is present or represented by proxy, the Annual Meeting will reconvene without
notice to stockholders, other than an announcement at the prior adjournment of
the Annual Meeting, unless the adjournment is for more than thirty (30) days or
a new record date has been set. Two stockholders of the Company, each of which
is a wholly owned subsidiary of Equity Group Investments, Inc. ("Equity"), a
company indirectly controlled by Samuel Zell and Ann Lurie, can direct the vote
of approximately 51.8% of the outstanding shares of Common Stock. See "Security
Ownership of Certain Beneficial Owners" for more information about Equity and
certain of its affiliates.
If a proxy in the form enclosed is duly executed and returned, the shares
of Common Stock represented thereby will be voted in accordance with the
specifications made thereon by the stockholder. If no such specifications are
made, such proxy will be voted: (i) for election of the Management Nominees (as
hereinafter defined) for Directors; and (ii) at the discretion of Proxy Agents
(as hereinafter defined) with respect to such other business as may properly
come before the Annual Meeting or any adjournment(s) thereof. Abstentions are
counted in tabulations of the votes cast on proposals presented to stockholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved. Under applicable Delaware law, a broker non-vote
will have no effect on the outcome of the election of Directors. A proxy is
revocable prior to its exercise by either a subsequently dated, properly
executed proxy appointment or by a stockholder giving notice of revocation to
the Company in writing. The mere presence at the Annual Meeting of a stockholder
who appointed a proxy does not itself revoke the appointment.
ELECTION OF DIRECTORS
(PROPOSAL 1)
VOTING AND THE MANAGEMENT NOMINEES
At the Annual Meeting, eight (8) Directors will be elected to serve
one-year terms commencing immediately upon their election and will hold office
until the next Annual Meeting or until their respective successors are duly
elected and qualified. Management's nominees for the eight (8) Director
positions to be filled by vote at the Annual Meeting are (the "Management
Nominees"):
Philip C. Calian
Arthur A. Greenberg
Jerry R. Jacob
Emanuel L. Rouvelas
Mark Slezak
Joseph P. Sullivan
Jeffrey N. Watanabe
Samuel Zell
All of the Management Nominees are currently serving as Directors of the
Company except Messrs. Watanabe, Rouvelas and Slezak. For information regarding
the Management Nominees, see "Directors and Executive Officers of the Company"
in this section. According to the Company's By-laws, as amended, the number of
Directors of the Company shall be not less than two (2) and not more than
thirteen (13). By
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<PAGE> 5
resolution, on March 18, 1998, the Board of Directors determined that the number
of Directors shall be eight (8).
At the Annual Meeting, if a quorum is present, the vote by holders of a
majority of the Company's Common Stock present in person or represented by proxy
shall elect the Directors. It is the present intention of Samuel Zell and Philip
C. Calian, who will serve as the Company's proxy agents at the Annual Meeting
(the "Proxy Agents"), to vote the proxies which have been duly executed, dated
and delivered and which have not been revoked in accordance with the
instructions set forth thereon or if no instruction had been given or indicated
to elect the Management Nominees as Directors. The Board of Directors does not
believe that any of the Management Nominees will be unwilling or unable to serve
as a Director. However, if prior to the election of Directors any of the
Management Nominees becomes unavailable or unable to serve, the Board of
Directors reserves the right to name a substitute nominee or nominees and the
Proxy Agents expect to vote the proxies for the election of such substituted
nominee(s).
RECOMMENDATION OF BOARD OF DIRECTORS
WITH RESPECT TO THE MANAGEMENT NOMINEES:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE MANAGEMENT
NOMINEES. IF A CHOICE IS SPECIFIED ON THE PROXY BY A STOCKHOLDER, THE SHARES
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE
VOTED "FOR" THE MANAGEMENT NOMINEES.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age, position and offices with the
Company, present principal occupation or employment and material occupations and
employment for the past five (5) years of each person who has been nominated for
election as a Director or is presently an executive officer of the Company.
<TABLE>
<CAPTION>
PRINCIPAL POSITIONS WITH THE COMPANY;
PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AGE FIVE-YEAR EMPLOYMENT HISTORY
---- --- --------------------------------------
<S> <C> <C>
Philip C. Calian............... 35 Director, President and Chief Executive Officer of the
Company since February 1995; Executive Vice President and
Chief Operating Officer of the Company from December 1994
until February 1995; Director, Chairman of the Board and
Chief Executive Officer of The Delta Queen Steamboat Co.
("Delta Queen") and Great Hawaiian Cruise Line, Inc., the
Company's primary operating subsidiary for American Hawaii
Cruises, ("American Hawaii") since February 1995; Chairman
of the Board of CFI Industries, Inc. ("CFI") from March 1995
until August 1996; Co-Chairman and Chief Executive Officer
of CFI from September 1994 until March 1995; Acting
President and Chief Executive Officer of CFI from January
1994 until September 1994; Vice President, Chief Financial
Officer and Treasurer of CFI from September 1993 until
September 1994; and Director of Mergers and Acquisitions of
Great American Management and Investment, Inc. from May 1990
until December 1994.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL POSITIONS WITH THE COMPANY;
PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AGE FIVE-YEAR EMPLOYMENT HISTORY
---- --- --------------------------------------
<S> <C> <C>
Arthur A. Greenberg............ 57 Director of the Company since 1982; Vice President and
Assistant Treasurer of the Company from January 1990 until
June 1995; Director of Delta Queen and American Hawaii since
August 1993; Vice President and Assistant Treasurer of Delta
Queen and American Hawaii from August 1993 until June 1995;
Senior Vice President of American Hawaii from June 1993
until August 1993; principal of Arthur A. Greenberg, C.P.A.
and Senior Tax Advisor of Equity since 1997; President of
the accounting firm of Greenberg & Pociask, Ltd. from 1971
until 1997; and Executive Vice President of Equity from 1986
through 1996.
Jerry R. Jacob................. 64 Director of the Company since 1991 and a private investor;
Chairman of the Board of Midway Airlines Corporation from
August 1994 until February 1997; Vice President of American
Airlines, Inc. from 1974 to June 1993; and Director of
Syratech Corp.
Emanuel L. Rouvelas............ 53 Management Nominee for Director of the Company; senior
partner of Preston Gates Ellis & Rouvelas Meeds in
Washington, D.C. since 1974; Vice Chairman and Trustee of
the American College of Greece; and Director of OMI Corp.
Mark Slezak.................... 39 Management Nominee for Director of the Company; Director,
Chief Financial Officer and Treasurer of Lurie Investments,
Inc., a private investment management company, since March
1995; Senior Vice President of Equity from January 1991
until January 1997; Treasurer of Equity from January 1990
until January 1996; and Director of Equity.
Joseph P. Sullivan............. 65 Director of the Company since July 1997; Director and
Chairman of the Executive Committee of IMC Global, Inc.
since March 1996; Chairman of the Board of The Vigoro
Corporation from May 1991 until March 1996; Chief Executive
Officer of The Vigoro Corporation from May 1991 until
September 1994; and Director of Mycogen, Inc. since February
1998.
Jeffrey N. Watanabe............ 55 Management Nominee for Director of the Company; partner and
principal of Watanabe, Ing & Kawashima since 1971; and
Director of American Savings Bank, Grace Pacific
Corporation, Hawaiian Electric Industries, Inc., First
Insurance Company of Hawaii, Ltd., and The Children's
Television Workshop.
Samuel Zell.................... 56 Chairman of the Board of the Company since August 1993;
Director of the Company since 1980; previously Chairman of
the Board of the Company from 1984 through 1988; Chairman of
the Board of Equity, Anixter International Inc. ("Anixter"),
Jacor Communications, Inc. ("Jacor") and Manufactured Home
Communities, Inc.; Chairman of the Board of Trustees of
Capital Trust, Equity Office Properties Trust ("EOPT") and
Equity Residential Properties Trust ("ERPT"); and Director
of Chart House Enterprises, Inc., Fred Meyer, Inc., Ramco
Energy plc and TeleTech Holdings, Inc. See "Security
Ownership of Certain Beneficial Owners" for a discussion of
Mr. Zell's relationship with Equity.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL POSITIONS WITH THE COMPANY;
PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AGE FIVE-YEAR EMPLOYMENT HISTORY
---- --- --------------------------------------
<S> <C> <C>
Jordan B. Allen................ 35 Executive Vice President of the Company since January 1998;
Senior Vice President of the Company from June 1995 until
January 1998; Vice President of the Company from August 1993
until June 1995; General Counsel of the Company since August
1993; Secretary of the Company since February 1997;
Executive Vice President of Delta Queen and American Hawaii
since January 1998; Senior Vice President of Delta Queen and
American Hawaii from February 1997 until January 1998; Vice
President of Delta Queen and American Hawaii from August
1993 until January 1997; and a member of Rosenberg &
Liebentritt, P.C. from September 1990 until December 1996.
James Nobles................... 50 Executive Vice President -- Honolulu Operations of American
Hawaii since July 1995; and various positions with American
Airlines, Inc. from 1969 through May 1995, including
Managing Director -- Kennedy International Airport.
J. Scott Young................. 47 Executive Vice President -- Operations of the Company and
President of Delta Queen and American Hawaii since April
1998; Senior Vice President -- Operations of the Company
from June 1996 until April 1998; Executive Vice President of
Delta Queen from June 1992 until May 1994; Director of Delta
Queen since May 1994; Executive Vice President of Delta
Queen since August 1993; Chief Operating Officer of Delta
Queen since June 1996; and Director, Executive Vice
President and Chief Operating Officer of American Hawaii
since June 1996.
Russell Varvel................. 53 Executive Vice President and General Sales Manager of Delta
Queen and American Hawaii since June 1996; Senior Vice
President -- Sales and Marketing of Delta Queen from June
1995 through June 1996; and Senior Vice President and
General Sales Manager of Delta Queen from January 1991
through June 1995.
O. Ivy Wu...................... 31 Chief Accounting Officer and Treasurer of the Company since
September 1997; Assistant Treasurer of Delta Queen and
American Hawaii since September 1997; Director -- Corporate
Financial Planning of the Company from January 1997 to
September 1997; Manager -- Financial Planning of the Company
from May 1995 until January 1997; Manager -- Financial
Analysis of Equity from January 1995 until May 1995; Senior
Financial Analyst of Equity from February 1994 to January
1995; and Senior Accountant of CNA Insurance Companies from
January 1991 until February 1994.
</TABLE>
BOARD COMMITTEES AND BOARD OF DIRECTOR AND COMMITTEE MEETINGS
Two members of the Board of Directors resigned from the Board in 1997: Mr.
Jon E. M. Jacoby resigned effective July 1997 and The Honorable Corinne C.
"Lindy" Boggs resigned in October 1997. Mr. Sullivan was elected to the Board of
Directors in July 1997. During 1997, the Company's Board of Directors held four
meetings. All Directors, other than Mr. Jacoby, were present for at least 75% of
the meetings of the Board and its committees they were eligible to attend. Mr.
Jacoby was present for 50% of such meetings. Mrs. Ann Lurie and Mrs. Sheli
Rosenberg have declined to stand for reelection to the Board of Directors in
1998.
The Board of Directors has an Executive Committee which consisted of
Messrs. Calian and Zell and Mrs. Rosenberg during 1997. The Executive Committee
possesses and may exercise the full and complete authority of the Board of
Directors in the management and business affairs of the Company during the
intervals between the meetings of the Board of Directors. All action by the
Executive Committee is reported
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<PAGE> 8
to the Board of Directors at its next meeting and such actions are subject to
revision and alteration by the Board of Directors, provided that no rights of
third persons can be prejudicially affected by the subsequent action of the
Board of Directors. Vacancies on the Executive Committee are filled by the Board
of Directors. However, during the temporary absence of a member of the Executive
Committee, due to illness or inability to attend a meeting for other cause, the
remaining member(s) of the Executive Committee may appoint a member of the Board
of Directors to act in the place, and with all the authority, of such absent
member. For 1998, the Executive Committee will consist of Messrs. Calian and
Zell, who will continue in office until the Committee is dissolved, terminated
or reorganized, or such members are replaced. The Executive Committee did not
hold any meetings in 1997.
The Company has an Audit Committee which consists of Messrs. Jacob and
Sullivan. Prior to resigning from the Board of Directors, Mr. Jacoby and Mrs.
Boggs also served on the Audit Committee. The Audit Committee has the power to
(i) recommend to the Board of Directors the independent certified public
accountants to be selected to serve the Company, (ii) review with the
independent certified public accountants the planned scope and results of the
annual audit, their reports and recommendations, (iii) review with the
independent certified public accountants matters relating to the Company's
system of internal controls, and (iv) review all transactions between the
Company and related parties. The Audit Committee held two (2) meetings in 1997.
For 1998, the Audit Committee will consist of Messrs. Jacob, Sullivan and
Greenberg.
The Company has a Compensation Committee which consisted of Mr. Jacob and
Mrs. Lurie in 1997. The Compensation Committee exercises certain powers of the
Board of Directors in connection with compensation matters, including incentive
compensation and benefit plans. The Compensation Committee did not hold any
meetings in 1997, but did approve various actions by unanimous written consents
in lieu of a meeting. For 1998, the Compensation Committee will consist of
Messrs. Jacob and Slezak.
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<PAGE> 9
EXECUTIVE COMPENSATION
GENERAL
The following table sets forth all compensation awarded to, earned by, or
paid to the Chief Executive Officer during 1997 and to those persons who were,
at December 31, 1997, the other four most highly compensated executive officers
of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ---------------------
--------------------- SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#)(1) COMPENSATION($)(2)
- --------------------------- ---- --------- -------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
Philip C. Calian 1997 233,654 0 0/0 6,400
President and Chief 1996 200,000 129,050 202,180/0 8,250
Executive Officer 1995 201,446 0 70,000/0 5,895
R. Anthony McKinnon 1997 272,423 0 0/0 6,400
Executive Vice President - 1996 209,530 166,400 120,000/0 9,000
Operations; President of 1995 200,000 0 0/100,000 5,895
American Hawaii and Delta
Queen(3)
J. Scott Young 1997 194,423 0 0/0 6,400
Executive Vice President 1996 167,077 46,817 75,000/0 7,500
and Chief Operating Officer of 1995 140,000 9,450 0/45,000 5,895
American Hawaii and Delta
Queen(4)
Jordan B. Allen 1997 176,181 0 0/0 6,400
Executive Vice President 1996 137,595 55,550 35,000/0 9,000
and General Counsel 1995 114,583 0 30,000/0 4,583
Russell Varvel 1997 174,519 0 0/0 6,400
Executive Vice President/ 1996 156,682 46,081 60,000/0 7,500
General Sales Manager of 1995 143,138 9,390 0/40,000 5,895
American Hawaii and Delta Queen
</TABLE>
- ---------------
(1) In December 1996, the Company terminated 100,000, 45,000 and 40,000 Options
and Share Appreciation Rights ("SARs") previously granted to Messrs.
McKinnon, Young and Varvel, respectively, and issued replacement options to
recipients for the same number of underlying securities with vesting over
the same period as the SARs.
(2) Reflects amounts paid under the Advantage Savings Retirement Plan, a plan
qualified under Section 401 of the Internal Revenue Code of 1986, as amended
(the "Code"), for both the discretionary profit sharing component and
matching contribution.
(3) Mr. McKinnon resigned his positions with the Company and its subsidiaries in
April 1998.
(4) Mr. Young was named President of American Hawaii and Delta Queen in April
1998.
7
<PAGE> 10
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- ----------- --------------------- --------------------
<S> <C> <C> <C> <C>
Philip C. Calian............... 0 0 293,846/23,334 2,285,483/152,954
R. Anthony McKinnon............ 15,000 106,875 58,332/46,668 465,614/380,011
J. Scott Young................. 0 0 49,999/35,001 370,825/294,800
Jordan B. Allen................ 0 0 59,166/13,334 426,719/94,306
Russell Varvel................. 0 0 39,999/26,668 299,574/222,511
</TABLE>
COMPENSATION OF DIRECTORS
Commencing in January 1997, the Company paid its non-employee members of
the Board a certain number of stock units as an annual retainer. Each stock unit
is convertible into one share of the Company's Common Stock at a time determined
by each Director. For the first six (6) months of 1997, the Company granted
stock units with a market value of $7,500 to each non-employee Director. As set
forth in the Company's 1992 Stock Option Plan, as amended, on an annual basis
commencing July 1, 1997, non-employee Directors have received and will receive
stock units with a market value equal to $30,000, based on the average closing
price of the Company's Common Stock for the five (5) trading days preceding the
grant date. One-quarter (1/4) of such stock units vest on the first day of each
calendar quarter.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For the 1997 year, the members of the Compensation Committee of the Board
of Directors were Mr. Jacob and Mrs. Lurie. During 1997, the following
relationships existed:
Mrs. Rosenberg was a director of the Company and a director and member of
the Compensation Committees of Anixter and Jacor and Mr. Zell was an executive
officer and director of Anixter and Jacor and an executive officer and director
of the Company.
Mrs. Rosenberg was a director of the Company and was a trustee and member
of the Compensation Committees of ERPT, EOPT and Capital Trust and Mr. Zell was
an executive officer and director of the Company and an executive officer and
trustee of ERPT, EOPT and Capital Trust.
Mr. Zell and Mmes. Lurie and Rosenberg also served as members of the Board
of Directors of numerous non-public companies owned in whole or in part by Mr.
Zell or his affiliates which did not have compensation committees, and in many
cases the executive officers of those companies included Mr. Zell and/or Mrs.
Rosenberg.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, that might incorporate future filings, including the
Proxy Statement, in whole or in part, the Compensation Committee Report
presented below and the Performance Graph following shall not be incorporated by
reference into any such filings.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors is
responsible for recommending to the Board of Directors the Company's
compensation policy for executive officers. As a rule, the Company's policy is
to pay base salaries and bonuses that are both competitive in the marketplace
and which will attract and retain highly qualified personnel. In addition,
through grants of stock options, the Company provides meaningful incentives
intended to reward both individual and corporate performance as well as linking
its executive officers' interests with those of the Company's stockholders. To
the extent consistent with its compensation policy, it is the Company's intent
to structure its compensation in a manner which will comply
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<PAGE> 11
with the limitations imposed by the Omnibus Budget Reconciliation Act of 1993
regarding the deductibility of executive compensation under Section 162(m) of
the Code.
ANNUAL COMPENSATION
The Company has adopted a competitive salary and bonus structure for its
executive officers based on a review of local and national peer group salary
surveys. Base salaries for executive officers are reviewed annually and are
designed to be competitive with other well-managed companies in the travel,
leisure and entertainment industry, as adjusted by sales volume and
profitability. This group includes, but is not limited to, the companies
contained in the Peer Group Index selected by the Company for purposes of the
Performance Graph set forth below. Annual increases are based, in part, on an
executive officer's responsibilities, performance evaluations and expected
future contributions. Factors considered in evaluating the performance of an
executive officer include the achievement of pre-established quantitative goals
that are specific to an individual's and the Company's performance.
Incentive compensation, in the form of annual bonuses, is closely tied to
the Company's performance, provided that certain overall corporate goals are
met. This form of compensation, available to the Company's managers, including
its executive officers, is set in a manner that is intended to encourage
continued profitability and to enhance stockholder value. The Company has two
bonus plans, the Performance Management Objectives ("PMO") Bonus Plan and the
Executive Bonus Plan, which are available to employees based on their position
within the Company. Under the Company's bonus plans, each participant receives
an annual review to determine what, if any, bonus should be paid, and awards are
based on the Company's performance during the year as compared to budgeted
operating income approved by the Board. For 1997, the Company did not achieve
stated financial objectives to qualify executive officers for bonus payments
and, accordingly, no bonus payments were made to executive officers for the
year.
LONG-TERM COMPENSATION
The Compensation Committee believes that whereas bonus programs provide
rewards for positive short-term individual and corporate performance, the
interests of stockholders are best served by giving executive officers the
opportunity to participate in the appreciation of the Company's stock through
the granting of stock options. The Compensation Committee believes that over an
extended period of time, stock performance will, to a meaningful extent, reflect
individual performance, and that such arrangements further reinforce management
goals and incentives to achieve stockholder objectives. Under the Company's 1992
Stock Option Plan, the Compensation Committee determines those officers to whom,
and the time or times at which, stock options will be awarded as well as the
number of shares. The number of shares granted to an individual is based upon
established guidelines relating to the recipient's position, salary and the
Company's stock price. During 1997, the Company did not grant any stock options
to named executive officers.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Compensation Committee believes that the compensation of the Company's
Chief Executive Officer should be both competitive and based on Company
performance. In 1997, Mr. Calian was paid a salary of $233,654. It has been the
Company's desire to establish a long-term, incentive-based compensation
arrangement with Mr. Calian and Mr. Calian's desire to receive a significant
portion of his compensation in the form of stock option grants. Accordingly, in
1996, the Company granted to Mr. Calian options to purchase 202,180 shares and,
in 1998, the Company granted to Mr. Calian additional options vesting over five
(5) years, subject to certain acceleration provisions based on appreciation of
the Company's Common Stock price. Such grants were made at the market price for
the Common Stock on the date of the grant. The Compensation Committee believes
that Mr. Calian's salary and bonus are less than those of Chief Executive
Officers at companies of similar size in the travel industry, but that given the
stock option grants, Mr. Calian's total compensation package is on market terms.
Respectively submitted,
Jerry R. Jacob
Ann Lurie
9
<PAGE> 12
PERFORMANCE GRAPH
Below is a graph comparing total stockholder return on the Company's Common
Stock, from December 31, 1992 through 1997, with a peer group comprised of 19
entertainment and leisure companies and a published industry index, the S&P 500,
as required by the rules of the SEC.
COMPARISON OF CUMULATIVE TOTAL RETURN
ASSUMES INITIAL INVESTMENT OF $100 AND REINVESTMENT OF DIVIDENDS
<TABLE>
<CAPTION>
PEERS +
AMERICAN PEER YOUR
Measurement Period CLASSIC GROUP COMPANY
(Fiscal Year Covered) ($) S&P 500 ($) ONLY ($) ($)
<S> <C> <C> <C> <C>
December 1992 100.00 100.00 100.00 100.00
1993 132.45 110.08 114.37 114.43
1994 103.96 111.53 115.48 115.42
1995 84.46 153.45 139.84 139.62
1996 101.93 188.68 146.23 146.04
1997 140.76 251.63 196.38 196.15
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the rules of the SEC, the Company is required to report, based on its
review of reports to the SEC, about transactions in its Common Stock furnished
to the Company and written representations of its Directors, officers and 10%
stockholders that: (i) EGI Holdings, Inc. and EGIL Investments, Inc. filed Forms
3 for a reporting event on November 5, 1997 late on December 10, 1997; (ii) Mr.
Greenberg filed a Form 4 for June 1997 late on July 14, 1997 which reported one
transaction; and (iii) Mr. Jacoby, a former Director, filed two Form 4's late
which reported five transactions.
10
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of April 3, 1998, except as noted,
certain information with respect to each person or entity who is known by the
management of the Company to be the beneficial owner of more than 5% of the
outstanding shares of the Company's Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
------------------- ----------------------- --------
<S> <C> <C> <C>
Samuel Zell, Ann Lurie and Entities
Controlled by Samuel Zell and/or Ann Lurie:(2)(3)
EGI Holdings, Inc. ................................... 3,641,873
EGIL Investments, Inc. ............................... 3,641,874
Samstock, L.L.C. ..................................... 52,500
Anda Partnership...................................... 52,500
Samuel Zell........................................... 123,500
Ann Lurie............................................. 23,500 7,535,747 53.0%
Two N. Riverside Plaza
Chicago, IL 60606
Mellon Bank Corporation(4)........................................ 1,077,600 7.7%
One Mellon Bank Center
Pittsburgh, PA 15258
Ryback Management Corporation(5).................................. 706,200 5.0%
7711 Carondelet Ave.
Box 16900
St. Louis, MO 63105
</TABLE>
- ---------------
(1) The number of shares of the Company's Common Stock indicated as beneficially
owned are reported on the basis of regulations of the SEC governing the
determination of beneficial ownership of securities.
(2) The referenced entities or individuals are each the beneficial owner of the
shares of Common Stock shown next to their name. EGI Holdings, Inc.
("Holdings") and EGIL Investments, Inc. ("Investments") are both Illinois
corporations and wholly owned by Equity Group Investments, Inc., an Illinois
corporation ("Equity"). The stockholders of Equity are trusts created for
the benefit of Samuel Zell and his family and Ann Lurie and her family. The
trustees or co-trustees of the trusts are Sheli Z. Rosenberg, Arthur A.
Greenberg, Ann Lurie and Mark Slezak. Samstock, L.L.C. is a Delaware limited
liability company and wholly owned by SZ Investments, L.L.C., a Delaware
limited liability company. The sole managing member of SZ Investments,
L.L.C. is a corporation whose sole stockholder is a trust of which Mr. Zell
is the trustee and beneficiary; the non-managing members are two
partnerships whose partners are trusts created for the benefit of Mr. Zell
of which Mrs. Rosenberg and Mr. Greenberg are the trustees. Anda Partnership
is a Nevada general partnership whose partners are trusts created for the
benefit of Mrs. Lurie and her family of which Mrs. Lurie and Mr. Slezak are
co-trustees.
The above chart includes 3,500 stock units beneficially owned by Mr. Zell
which convert to 3,500 shares of Common Stock at a time determined by Mr.
Zell at the time of the grant. The chart also includes options to purchase
120,000 shares of Common Stock beneficially owned by Mr. Zell which are
currently exercisable or exercisable within 60 days of the date of this
table.
The above chart includes 3,500 stock units beneficially owned by Mrs. Lurie
which convert to 3,500 shares of Common Stock at a time determined by Mrs.
Lurie at the time of the grant. The chart also includes options to purchase
20,000 shares of Common Stock beneficially owned by Mrs. Lurie which are
currently exercisable or exercisable within 60 days of this table.
Mr. Zell disclaims beneficial ownership of 3,641,874 shares beneficially
owned by the subsidiaries of Equity; 52,500 shares beneficially owned by
Anda Partnership; 3,500 stock units beneficially owned by Mrs. Lurie; and
options to purchase 20,000 shares beneficially owned by Mrs. Lurie. Mrs.
Lurie disclaims beneficial ownership of 3,641,873 shares beneficially owned
by the subsidiaries of Equity; 52,500 shares
11
<PAGE> 14
beneficially owned by Samstock, L.L.C.; 3,500 stock units beneficially owned
by Mr. Zell; and options to purchase 120,000 shares beneficially owned by
Mr. Zell.
(3) 2,000,000 of the shares owned by Holdings are held at two financial
institutions as collateral for loans. Under the various loan agreements, the
institutions cannot vote or exercise any ownership rights relating to the
pledged shares unless there is an event of default.
(4) As of December 31, 1997, according to a Schedule 13G dated January 15, 1998
filed with the SEC by Mellon Bank Corporation ("Mellon"). The Common Stock
reported herein is beneficially owned by Mellon and direct or indirect
subsidiaries, including Mellon Bank, N.A., Mellon Capital Management
Corporation and The Dreyfus Corporation, in their various fiduciary
capacities.
(5) As of December 31, 1997, according to a Schedule 13G dated January 23, 1998
filed with the SEC by Ryback Management Corporation, a Michigan corporation
("Ryback"), a registered investment adviser. The Common Stock reported
herein is beneficially owned by Lindner Growth Fund, a registered investment
company and a separate series of the Lindner Investment Series Trust, and is
held in a fiduciary capacity by Ryback and/or Lindner Investment Series
Trust. The subject company has sole voting power and sole dispositive power
for these shares.
SECURITY OWNERSHIP BY MANAGEMENT
The following information is furnished as of April 3, 1998, with respect to
the shares of the Company's Common Stock beneficially owned by each of the
Directors, Management Nominees and executive officers named in the Summary
Compensation Table and by all Directors and executive officers as a group.
Information concerning the Directors and executive officers and their security
holdings has been furnished by them to the Company.
<TABLE>
<CAPTION>
SHARES UPON
NAME OF SHARES OF EXERCISE OF
BENEFICIAL OWNER COMMON STOCK STOCK OPTIONS(1) TOTAL(2) PERCENT
---------------- ------------ ---------------- -------- -------
<S> <C> <C> <C> <C>
Jordan B. Allen................................ 16 60,833 60,849 *
Philip C. Calian............................... 14,489 293,846 308,335 2.1%
Arthur A. Greenberg(3)(4)...................... 7,409,747 40,645 7,450,392 52.8%
Jerry R. Jacob(3).............................. 13,583 25,645 39,228 *
Ann Lurie(3)(4)................................ 7,339,747 20,000 7,359,747 52.2%
R. Anthony McKinnon............................ -- 59,999 59,999 *
Emanuel L. Rouvelas............................ 13,000 -- 13,000 *
Sheli Z. Rosenberg(3)(4)....................... 7,389,747 40,645 7,430,392 52.7%
Mark Slezak(4)................................. 7,336,247 -- 7,336,247 52.3%
Joseph P. Sullivan(5).......................... 2,900 -- 2,900 *
Russell Varvel................................. 647 41,666 42,313 *
Jeffrey N. Watanabe(6)......................... 1,000 -- 1,000 *
J. Scott Young................................. 104 51,666 51,770 *
Samuel Zell(3)(4).............................. 7,339,747 120,000 7,459,747 52.6%
All Directors and Executive Officers as a
Group(16 persons)............................ 7,568,725 773,611 8,342,336 56.2%
</TABLE>
- ---------------
* Less than 1%.
(1) Represents beneficial ownership of shares that may be acquired by the
exercise of stock options which are currently exercisable or exercisable
within 60 days of the date of this table.
(2) The amounts of the Company's Common Stock and stock options beneficially
owned are reported on the basis of regulations of the SEC governing the
determination of beneficial ownership of securities.
(3) Includes 3,500 stock units which convert to Common Stock (on a 1-for-1
basis) at the time determined at the date of grant. Holders of such stock
units do not vote the shares.
12
<PAGE> 15
(4) Includes 3,641,873 shares beneficially owned by Holdings and 3,641,874
shares beneficially owned by Investments. For Messrs. Zell and Greenberg and
Mrs. Rosenberg, includes 52,500 shares beneficially owned by Samstock,
L.L.C. For Mr. Slezak and Mrs. Lurie, includes 52,500 shares beneficially
owned by Anda Partnership. See footnote (2) to Security Ownership of Certain
Beneficial Owners for further information and disclaimer of ownership.
(5) Includes 2,900 stock units which convert to Common Stock (on a 1-for-1
basis) at the time determined at the date of grant. Holders of such stock
units do not vote the shares.
(6) Shares are beneficially owned by Mr. Watanabe through a self-directed
pension plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Equity and its affiliates provided certain administrative support and
advisory services for the Company, including, but not limited to, tax advisory
and benefit services, for which the Company has been charged by Equity. In 1997,
the Company paid approximately $498,000 for such services performed by Equity
and its affiliates. Additionally, the Company and certain of its subsidiaries
lease office space from a company affiliated with Equity at Two North Riverside
Plaza, Chicago, Ill. 60606. The Company paid approximately $173,000 during 1997
for such office space. In 1997, the Company received approximately $23,000 from
Equity Office Properties Trust, an affiliate of Equity, in rent for certain
office space under a sublease arrangement commencing November 15. These
arrangements with Equity and its affiliates were approved by a majority of the
non-affiliated members of the Board of Directors and were conducted on terms no
less favorable to the Company than could be obtained from unaffiliated third
parties.
The Company paid approximately $189,300 during 1997 to the law firm
Rosenberg & Liebentritt, P.C., of which Mrs. Rosenberg was a member until
September 1997. This amount includes approximately $29,100 in salary and payroll
expenses which the Company reimbursed at cost for a part-time paralegal. The
Company paid approximately $348,300 for legal services to Preston Gates Ellis &
Rouvelas Meeds ("Preston Gates") during 1997. Mr. Rouvelas, a Management
Nominee, is a partner of Preston Gates. The Company paid approximately $75,500
for legal services to Watanabe, Ing & Kawashima ("WIK") during 1997. Mr.
Watanabe, a Management Nominee, is a partner of WIK.
On April 1, 1998, R. Anthony McKinnon resigned as Executive Vice President
- - Operations of the Company and as a Director and President of Delta Queen and
American Hawaii. The Company entered into a one (1) year Consulting Agreement
with Mr. McKinnon for advisory services for $275,600 over the term. As of such
date, Mr. McKinnon owed $120,000 on a loan made by the Company during 1995 for
relocation-related and miscellaneous expenses. The loan bears interest at the
prime rate plus 2% payable quarterly in arrears. The largest amount owed during
the year and the balance at December 31, 1997 was $120,000 plus accrued
interest. The loan is due and payable on January 1, 1999.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick, L.L.P. have been the principal auditors for the Company
for the past year. Representatives of KPMG Peat Marwick, L.L.P. are expected to
be present at the Annual Meeting, will be given an opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions from stockholders.
STOCKHOLDERS' PROPOSALS FOR 1999 ANNUAL MEETING
A proposal submitted by a stockholder for the 1999 Annual Meeting of the
Company must be received by the Secretary of the Company, Two North Riverside
Plaza, Suite 200, Chicago, Illinois 60606, by December 31, 1998, in order to be
eligible to be included in the Company's proxy statement for that meeting.
13
<PAGE> 16
CONCLUSION
The Company knows of no other business which will be presented at the
Annual Meeting. However, if other matters properly come before the meeting, it
is the intention of the Proxy Agents to vote upon such matters in accordance
with their good judgment in such matters.
By Order of the Board of Directors
LOGO
Jordan B. Allen
Executive Vice President, General
Counsel
and Secretary
April 29, 1998
Chicago, Illinois
14
<PAGE> 17
AMCV-PS-98
<PAGE> 18
PROXY
AMERICAN CLASSIC VOYAGES CO.
TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 3, 1998
This undersigned hereby appoints SAMUEL ZELL and PHILIP C. CALIAN, or
either of them, with individual power of substitution, proxies to vote all
shares of Common Stock of American Classic Voyages Co. (the "Company") which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders
of the Company to be held in Chicago, Illinois, on June 3, 1998 and any
adjournment thereof regarding the following:
1. Authority to vote for the election as directors of the group of
eight nominees proposed by the Board of Directors listed below:
Philip C. Calian, Arthur A. Greenberg, Jerry R. Jacob, Emanuel L.
Rouvelas, Mark Slezak, Joseph P. Sullivan, Jeffrey N. Watanabe and
Samuel Zell
2. In their discretion, the Proxy Agents are authorized to vote such
other matters as may properly come before the meeting.
You are encouraged to specify your choices by marking the appropriate
boxes ON THE REVERSE SIDE. If you do not mark any boxes, your proxy will be
voted in accordance with the Board of Directors' recommendations. The Proxy
Agents cannot vote your shares unless you sign and return this card.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
<PAGE> 19
<TABLE>
<S> <C>
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, the Proxy will be
voted FOR election of the director nominees proposed by the Board of Directors
and listed on the other side.
1. Election of Directors (see reverse). 2. In their discretion, the Proxy Agents are authorized to vote
upon such other matters as may properly come before the
FOR WITHHELD meeting.
[ ] [ ]
[ ] _______________________________________________
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Note: Please sign as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
Signature:_____________________________Date:________________________ Signature:_________________________Date:____________________
</TABLE>
