<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:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] 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)
AMERICAN CLASSIC VOYAGES CO.
- --------------------------------------------------------------------------------
(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 21, 2000
------------------------
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 21, 2000 at 10:00 A.M.,
Central Daylight Time, for the following purposes:
1. To elect twelve (12) directors to serve one-year terms, commencing
immediately upon their election, until their respective successors are
duly elected and qualified;
2. To approve an amendment to the Company's Certificate of Incorporation to
increase the Company's authorized capital stock to 110,000,000 shares
from 45,000,000 shares, which will include an increase of the Company's
authorized shares of common stock, $.01 (one cent) par value per share,
to 100,000,000 from 40,000,000 shares and an increase of the Company's
authorized shares of preferred stock, $.01 (one cent) par value per
share, to 10,000,000 from 5,000,000 shares; and
3. 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 23, 2000,
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
/s/ Jordan B. Allen
Jordan B. Allen
Executive Vice President, General
Counsel and Secretary
April 28, 2000
------------------------
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 28, 2000, in connection with the solicitation 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 21, 2000, 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 twelve (12) directors of the Company who will
serve one-year terms commencing immediately upon their election, until
their respective successors are duly elected and qualified;
(ii) the approval of an amendment to the Company's Certificate of
Incorporation to increase the Company's authorized capital stock to
110,000,000 shares from 45,000,000 shares, which will include an increase
of the Company's authorized shares of common stock, $.01 (one cent) par
value per share, to 100,000,000 from 40,000,000 shares and an increase of
the Company's authorized shares of preferred stock, $.01 (one cent) par
value per share, to 10,000,000 from 5,000,000 shares; and
(iii) such other business as may properly come before the meeting or
any adjournment(s) thereof.
------------------------
The date of this Proxy Statement is April 28, 2000.
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, facsimile, 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 1999 which contains the Company's audited financial statements
at December 31, 1999. Additional copies of the Annual Report and of the
Company's Annual Report on Form 10-K for the year ended December 31, 1999 as
filed with the Securities and Exchange Commission (the "SEC") may be obtained by
any stockholder by
<PAGE> 4
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.
VOTING SECURITIES AND PROXIES
As of April 6, 2000, 20,754,486 shares of the Company's common stock, $.01
par value per share ("Common Stock"), were issued and outstanding. The Company's
Common Stock is the only class of shares entitled to vote at the Annual Meeting.
Only stockholders of record at the close of business on April 23, 2000 (the
"Record Date") have the right to receive notice of and to vote at the Annual
Meeting and any adjournment(s) thereof. Each share outstanding on the Record
Date entitles the holder thereof to one vote in 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.
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; (ii) for approval of an amendment to the
Company's Certificate of Incorporation to increase the Company's authorized
capital stock to 110,000,000 shares from 45,000,000 shares; and (iii) at the
discretion of the 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, but will have the effect of a vote against approval
of the amendment to the Company's Certificate of Incorporation to increase the
Company's authorized capital stock to 110,000,000 shares from 45,000,000 shares.
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, twelve (12) 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 twelve (12) director
positions to be filled by vote at the Annual Meeting are (the "Management
Nominees"):
<TABLE>
<S> <C>
John R. Berry Jerry R. Jacob
Philip C. Calian Emanuel L. Rouvelas
Bradbury Dyer, III Mark Slezak
Laurence S. Geller Joseph P. Sullivan
Terence C. Golden Jeffrey N. Watanabe
Arthur A. Greenberg Samuel Zell
</TABLE>
2
<PAGE> 5
All of the Management Nominees are currently serving as directors of the
Company. For information regarding the Management Nominees, see "Directors and
Executive Officers of the Company" in this section. According to the Company's
Second Amended and Restated By-laws, the number of directors of the Company
shall be not less than two (2) and not more than thirteen (13). By resolution
dated March 22, 2000, the board of directors determined that the number of
directors shall be twelve (12).
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 has 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 as of April 14, 2000 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............ 37 Director and Chief Executive Officer of the Company since
February 1995; since January 2000, Director and Chief
Executive Officer of AMCV Cruise Operations, Inc., a
subsidiary created in January 2000 as the primary operating
subsidiary of the Company; President of the Company from
February 1995 until October 1999; Executive Vice President
and Chief Operating Officer of the Company from December
1994 until February 1995; Chairman of the Board of CFI
Industries, Inc., a packaging company, from March 1995 until
August 1996; and Co-Chairman and Chief Executive Officer of
CFI Industries, Inc. from September 1994 until March 1995.
John R. Berry............... 60 Director of the Company since December 1999; Partner of
Heidrick & Struggles, an executive search firm, and its
predecessor firm since 1990; and President and Chief
Executive Officer of Holland America Line, a cruise line
operator, from 1977 through 1983.
Bradbury Dyer, III.......... 57 Director of the Company since December 1999; and General
Partner of Paragon Associates, a private investment
partnership, since May 1972.
</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>
Laurence S. Geller.......... 52 Director of the Company since December 1999; Chief Executive
Officer of Strategic Hotel Capital, a multinational
ownership and asset management services organization for
first-class and luxury lodging real estate, since May 1997;
and Chairman of Geller & Co., a real estate, gaming, tourism
and lodging industry advisory company, from 1989 to May
1997.
Terence C. Golden........... 55 Director of the Company since March 2000; President, Chief
Executive Officer and Director of Host Marriott Corporation,
an owner and operator of lodging properties and airport and
toll road food and merchandise concessions, since 1995; and
Director of certain subsidiaries of Host Marriott
Corporation.
Arthur A. Greenberg......... 59 Director of the Company since 1982; Vice President and
Assistant Treasurer of the Company from January 1990 until
June 1995; principal of Arthur A. Greenberg, C.P.A. Senior
Tax Advisor of Equity Group Investments, L.L.C. since 1999;
and Senior Tax Advisor of Equity Group Investments, Inc.
("Equity") from 1997 until 1999; 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.............. 66 Director of the Company since 1991 and a private investor;
Chairman of the Board of Midway Airlines Corporation from
August 1994 until February 1997; and Vice President of
American Airlines, Inc. from 1974 to June 1993.
Emanuel L. Rouvelas......... 55 Director of the Company since June 1998; and senior partner
of the law firm Preston Gates Ellis & Rouvelas Meeds LLP in
Washington, D.C. since 1974.
Mark Slezak................. 41 Director of the Company since June 1998; 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.......... 67 Director of the Company since July 1997; Chairman of the
Board of IMC Global Inc. since October 1999 and Director of
IMC Global, Inc. since March 1996; Chairman of the Executive
Committee of IMC Global, Inc. since March 1996; Chairman of
the Board of The Vigoro Corporation from March 1991 until
February 1996; and Chief Executive Officer of The Vigoro
Corporation from March 1991 until September 1994.
Jeffrey N. Watanabe......... 57 Director of the Company since June 1998; partner and
principal of the law firm Watanabe, Ing & Kawashima since
1971; and Director of American Savings Bank.
Samuel Zell................. 58 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 Group Investments, L.L.C., Anixter
International Inc., Capital Trust, Inc., Chart House
Enterprises, Inc., Davel Communications, Inc., Manufactured
Home Communities, Inc., and Danielson Holding Corporation;
Chairman of the Board of Trustees of Equity Office
Properties Trust and Equity Residential Properties Trust;
and Director of Ramco Energy plc. 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>
Roderick K. McLeod.......... 59 President and Chief Operating Officer of the Company since
October 1999; Director, President and Chief Operating
Officer of AMCV Cruise Operations, Inc. since January 2000;
Executive Vice President of the Company from February 1999
until October 1999; Senior Vice President -- Marketing of
Carnival Corporation from July 1997 through February 1999;
Executive Vice President of Sales, Marketing and Passenger
Services of Royal Caribbean Cruises Ltd. from January 1972
through August 1986 and October 1988 through June 1996; and
President and Chief Operating Officer of Norwegian Cruise
Line from August 1986 through October 1988.
Jordan B. Allen............. 37 Executive Vice President of the Company since January 1998;
Director and Executive Vice President of AMCV Cruise
Operations, Inc. since January 2000; 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; and a member of
Rosenberg & Liebentritt, P.C. from September 1990 until
December 1996.
Todd D. Allen............... 42 Senior Vice President -- Corporate Development of the
Company since May 1998; independent consultant to the
Company from October 1997 until April 1998; and principal at
Mercer Management Consulting, Inc. from January 1990 until
September 1997.
Townsend E. Carman.......... 61 Senior Vice President -- Marine Operations of AMCV Cruise
Operations, Inc. since January 2000; Executive Vice
President -- Honolulu Operations of Great Hawaiian Cruise
Lines, Inc., ("American Hawaii"), previously the Company's
primary operating subsidiary for American Hawaii Cruises,
from September 1998 until January 2000; Senior Vice
President -- Marine Operations of American Hawaii from March
1997 until September 1998; Vice President -- Marine
Operations of The Delta Queen Steamboat Co. ("Delta Queen"),
previously the Company's primary operating subsidiary for
the Delta Queen line, from September 1989 until January
1995; and Senior Project Manager of Guido Perla &
Associates, a naval architect firm, from February 1995 until
April 1996 and from September 1996 until March 1997.
Heinz Niedermaier........... 57 Senior Vice President -- Hotel Operations-Hawaii of AMCV
Cruise Operations, Inc. since January 2000; Vice
President -- Hotel Operations of Royal Caribbean Cruises,
Ltd. from 1991 until January 1999; and Vice
President -- Food and Beverage of Royal Caribbean Cruises,
Ltd. from 1986 until 1991.
Ronald W. Sieman............ 56 Vice President -- Information Technology and Chief
Information Officer of the Company since January 2000; Vice
President -- Information Technology of Royal Carribbean
Cruises, Ltd. from October 1989 until February 1999; and
Vice President -- Information Technology Systems for Budget
Rent-A-Car from March 1984 until October 1989.
David Simmons............... 43 Senior Vice President -- DQ Hotel Operatinos of AMCV Cruise
Operations, Inc. Since January 2000; Senior Vice
President -- Hotel Operations of Delta Queen from October
1996 until October 1998; and Regional Director, far west
division, of Bristol Hotels from January 1995 until May
1996.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
PRINCIPAL POSITIONS WITH THE COMPANY;
PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AGE FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- --------------------------------------
<S> <C> <C>
Randall L. Talcott.......... 38 Vice President -- Finance and Treasurer of the Company since
October 1998; Vice President and Treasurer of AMCV Cruise
Operations, Inc. Since January 2000; and Treasurer of ANTEC
Corporation from July 1994 through September 1998.
Russell Varvel.............. 55 Vice President -- Marketing of AMCV Cruise Operations, Inc.
Since January 2000; Executive Vice President and General
Sales Manager of Delta Queen and American Hawaii from June
1996 until January 2000; 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.
</TABLE>
BOARD COMMITTEES AND BOARD OF DIRECTOR AND COMMITTEE MEETINGS
During 1999, the Company's board of directors held five (5) meetings. All
directors were present for at least 75% of the meetings of the board and its
committees they were eligible to attend.
The board of directors has an Executive Committee which consisted of
Messrs. Calian and Zell during 1999. 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 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. The Executive Committee did not hold any meetings in 1999.
The Company has an Audit Committee which consists of Messrs. Jacob,
Sullivan and Greenberg. 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 six (6) meetings in 1999.
The Company has a Compensation Committee which consisted of Messrs. Jacob
and Slezak from January through June and Messrs. Jacob, Slezak and Zell from
July through December in l999. 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 1999, but did approve various actions by unanimous
written consents in lieu of a meeting.
6
<PAGE> 9
EXECUTIVE COMPENSATION
GENERAL
The following table sets forth all compensation awarded to, earned by, or
paid to the Chief Executive Officer during 1999 and to those persons who were,
at December 31, 1999, the other four most highly compensated executive officers
of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
--------------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES ALL OTHER
--------------------- STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS ($) OPTIONS(#) ($) (1)
- --------------------------- ---- --------- -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Philip C. Calian.......... 1999 253,422 133,224 0 100,000 9,600
Chief Executive Officer 1998 243,654 0 0 500,000 6,400
1997 233,654 0 0 0 6,400
Roderick K. McLeod........ 1999 256,346 210,000 1,397,364(2) 400,000 --
President and Chief 1998 -- -- -- -- --
Operating Officer 1997 -- -- -- -- --
J. Scott Young (3)........ 1999 253,384 133,027 0 50,000 9,600
Exec. VP -- Operations 1998 235,052 0 0 200,000 6,400
1997 194,423 0 0 0 6,400
Jordan B. Allen........... 1999 202,530 73,515 0 50,000 9,600
Exec. VP and General 1998 194,230 0 0 312,500 6,400
Counsel 1997 176,181 0 0 0 6,400
Russell Varvel............ 1999 199,800 72,428 0 5,000 9,600
VP -- Marketing of 1998 188,392 0 0 19,000 6,400
AMCV Cruise 1997 174,519 0 0 0 6,400
Operations, Inc.
</TABLE>
- ---------------
(1) 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.
(2) Reflects 72,122 shares of stock granted during 1999. Of these shares, 18,030
have vested and the balance will vest in equal portions on July 1, 2000,
2001 and 2002. Issuance and sale of these shares is restricted prior to
retirement from the Company; these shares are not issued to Mr. McLeod until
the first to occur of his retirement or a business combination involving the
Company. Dividends will be paid with respect to these shares if dividends
are paid by the Company. The value of these shares at December 31, 1999 was
$2,524,270, based on the closing price of the Company's Common Stock on such
date of $35.00 per share.
(3) Mr. Young resigned his positions with the Company and its subsidiaries in
January 2000.
7
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------------------------ AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($)(2) 10%($)(3)
---- ---------- ------------ -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Philip C. Calian....... 100,000(4) 9.9% 17.00 1/4/09 1,069,121 2,709,362
Roderick K. McLeod..... 400,000(5) 39.7% 18.025 2/2/09 4,534,330 11,490,883
J. Scott Young......... 50,000(4) 5.0% 17.00 1/4/09 534,500 1,354,681
Jordan B. Allen........ 50,000(4) 5.0% 17.00 1/4/09 534,500 1,354,681
Russell Varvel......... 5,000(6) 0.5% 29.125 12/8/09 91,583 232,089
</TABLE>
- ---------------
(1) These numbers are for presentation purposes only and are not predictions of
future stock price.
(2) Assumes a stock price of: $27.69 at the end of ten years for options granted
with an exercise price of $17.00 per share and an expiration date of January
4, 2009; $29.36 at the end of ten years for the options granted with an
exercise price of $18.025 per share and an expiration date of February 2,
2009; and $47.44 at the end of ten years for options granted with an
exercise price of $29.125 per share and an expiration date of December 8,
2009.
(3) Assumes a stock price of: $44.09 at the end of ten years for options granted
with an exercise price of $17.00 per share and an expiration date of January
4, 2009; $46.75 at the end of ten years for the options granted with an
exercise price of $18.025 per share and an expiration date of February 2,
2009; and $75.54 at the end of ten years for options granted with an
exercise price of $29.125 per share and an expiration date of December 8,
2009.
(4) Options were granted to Messrs. Calian, Young and Allen on January 4, 1999.
These options were scheduled to vest in three equal installments beginning
one year after the initial grant, subject to certain acceleration provisions
based on appreciation of the Company's Common Stock price. Since the average
closing price of the Company's Common Stock exceeded 130% of the exercise
price of the granted options for a 30 calendar-day period during 1999,
two-thirds of such options vested in 1999.
(5) Options were granted to Mr. McLeod on February 2, 1999. These options vest
in five annual installments beginning one year after the initial grant.
(6) Options were granted to Mr. Varvel on December 8, 1999. These options vest
in three equal annual installments beginning one year after the initial
grant.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- ----------- --------------------- --------------------
<S> <C> <C> <C> <C>
Philip C. Calian.............. 0 0 638,846/233,334 14,304,588/4,150,012
Roderick K. McLeod............ 0 0 0/400,000 0/790,000
J. Scott Young................ 0 0 238,333/96,667 4,829,994/1,720,006
Jordan B. Allen............... 5,333 91,994 288,000/141,667 1,068,501/164,214
Russell Varvel................ 13,000 306,125 45,000/17,667 1,068,501/264,214
</TABLE>
COMPENSATION OF DIRECTORS
The Company pays 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 in advance by each director.
As set forth in the Company's 1992 Stock Option Plan, as amended, on an annual
8
<PAGE> 11
basis commencing July 1, 1997, non-employee directors have received 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.
EMPLOYMENT AGREEMENTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
In February 1999, the Company entered into an employment agreement with Mr.
McLeod which provides for his employment through February 2, 2006 subject to
earlier termination. The agreement provides for an annual salary of $310,000,
subject to annual salary review, and participation in the Company's bonus plan,
such bonus to be not less than $200,000 for the first two years of the
agreement. In addition, Mr. McLeod received restricted shares of the Company's
Common Stock and options to purchase Common Stock of the Company and may
participate in benefit plans provided to other executive officers. The issuance
and sale of the restricted shares is restricted prior to Mr. McLeod's retirement
from the Company, and the options vest in five annual installments beginning one
year after the initial grant date. If Mr. McLeod's employment should be
terminated by the Company for "cause" prior to the expiration of the agreement,
any restricted shares and options issued under the agreement, whether or not
vested, shall immediately be returned to the Company. In the event of a business
combination involving the Company, all restricted shares and options granted and
not yet vested will vest. The agreement also contains certain confidentiality
and non-compete provisions.
Effective January 28, 2000, Mr. Young resigned his positions with the
Company and its subsidiaries. The Company entered into a separation agreement
with Mr. Young under which he is eligible to receive his base salary for a
period of twelve months. The agreement also contains certain restrictions and
requirements in connection with the sale of shares of Common Stock owned by Mr.
Young.
9
<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the members of the Compensation Committee of the board of
directors included Messrs. Jacob, Slezak and Zell. During 1999, no interlocking
relationships existed.
Messrs. Zell and Slezak 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 Messrs. Zell and Slezak.
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 COMMITTEE
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 named executive officers. In addition, the Compensation
Committee is responsible for the administration of the Company's stock option
plans. In 1999, the Compensation Committee consisted of Messrs. Jacob and Slezak
from January through June and Messrs. Jacob, Slezak and Zell from July through
December.
THE COMPANY'S COMPENSATION STRUCTURE
The Company strives to pay base salaries and bonuses that are both
competitive and will attract and retain highly qualified personnel. In addition,
through grants of stock-based incentives, 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.
Based on his subjective determination, the Chief Executive Officer
recommends to the Compensation Committee the amount of total compensation
payable to named executive officers for each fiscal year. The Committee
undertakes subjective review of these recommendations in light of the various
factors discussed below.
To the extent consistent with its compensation policy, it is the Company's
intent to structure its compensation in a manner which will comply 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.
BASE SALARIES AND BONUSES
The Company believes it 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 financial performance, provided that certain overall corporate
goals are met. This form of compensation, available to the
10
<PAGE> 13
Company's managers, including its executive officers, is structured in a manner
that is intended to encourage continued profitability and enhance stockholder
value. The Company has two bonus plans, the Performance Management Objectives
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 financial and other objectives approved by the board. For 1999, the
Company achieved stated financial objectives to qualify executive officers for
bonus payments and, accordingly, bonus payments were made to executive officers
for the year.
LONG-TERM COMPENSATION
The Compensation Committee believes that while 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 Common Stock
through the granting of stock-based incentives. The Company has two stock option
plans, the 1992 Stock Option Plan and the 1999 Stock Option Plan. Based upon the
Chief Executive Officer's recommendation, 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 Common Stock price. In addition, in 1999, the
Company reserved and set aside 72,122 shares of the Company's Common Stock which
are restricted and non-transferable on behalf of Mr. McLeod, President and Chief
Operating Officer of the Company, in accordance with the terms of his employment
agreement. This restricted stock vests over a 41-month period but will not be
issued to McLeod until the first to occur of his retirement or a business
combination involving the Company.
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. For 1999, Mr. Calian was paid a salary of $253,422 and was paid a
bonus of $133,324 since the Company achieved the stated financial objectives set
by the board of directors. In addition, in 1999 the Company granted to Mr.
Calian options to purchase 100,000 shares of Common Stock vesting over three (3)
years, subject to certain acceleration provisions based on appreciation of the
Company's Common Stock price. The grant of options to Mr. Calian was 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. In 1999, options to purchase 166,666 shares, with respect to
grants to Mr. Calian in 1998 and 1999, were accelerated based on the
appreciation of the market value of the Company's Common Stock.
Respectively submitted,
Jerry R. Jacob
Mark Slezak
Samuel Zell
11
<PAGE> 14
PERFORMANCE GRAPH
Below is a graph comparing total stockholder return on the Company's Common
Stock, from December 31, 1994 through 1999, with a peer group comprised of 16
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
[PERFORMANCE CHART]
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Starting
Basis
Description 1994 1995 1996 1997 1998 1999
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Company $100.00 $ 81.24 $ 98.05 $135.40 $131.67 $261.46
----------------------------------------------------------------------------------------------------
S & P 500 $100.00 $137.58 $169.17 $225.60 $290.08 $351.12
----------------------------------------------------------------------------------------------------
Peer Group $100.00 $123.09 $130.76 $181.28 $212.27 $239.00
----------------------------------------------------------------------------------------------------
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of its Common Stock,
to file reports of ownership and changes of ownership with the SEC. Officers,
directors and greater than 10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
The Company believes that, for 1999, all applicable filing requirements of
the Company's officers and directors were complied with.
12
<PAGE> 15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of April 6, 2000, 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>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OF BENEFICIAL
OWNER OWNERSHIP (1) PERCENT OF CLASS
------------------------------ ----------------- ----------------
<S> <C> <C> <C>
Samuel Zell and Entities Controlled by
Samuel Zell and/or Ann Lurie: (2)(3)(4) ............ 36.3%
EGI Holdings, Inc. ............................... 3,641,873
EGIL Investments, Inc............................. 3,641,874
Samstock, L.L.C................................... 52,500
Anda Partnership.................................. 52,500
Samuel Zell....................................... 126,800
Ann Lurie Revocable Trust......................... 13,500 7,529,047
-----------
Two N. Riverside Plaza
Chicago, IL 60606
Wallace R. Weitz & Company(5).................................... 2,281,700 11.0%
1125 S. 103rd Street, Suite 600
Omaha, NE 68124-6008
Robert Fleming, Inc.(6).......................................... 1,041,915 5.0%
320 Park Avenue, 11th Floor
New York, NY 10022
</TABLE>
- ---------------
(1) The number of shares of the Company's Common Stock indicated as beneficially
owned is 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. One
of the co-trustees of certain of the trusts created for the benefit of Mrs.
Lurie and her family is 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
and members of his family are beneficiaries; the non-managing members are
two partnerships whose partners are trusts created for the benefit of Mr.
Zell. Anda Partnership is an Illinois 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. Mrs. Lurie is the trustee and
beneficiary of the Ann Lurie Revocable Trust.
The above chart includes 6,800 stock units beneficially owned by Mr. Zell
which convert to 6,800 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.
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 and 13,500 shares beneficially owned by the Ann Lurie
Revocable Trust. Mrs. Lurie disclaims beneficial ownership of 3,641,873
shares beneficially owned by the subsidiaries of Equity; 52,500 shares
beneficially owned by Samstock, L.L.C.; 6,800 stock units beneficially owned
by Mr. Zell; and options to purchase 120,000 shares beneficially owned by
Mr. Zell.
13
<PAGE> 16
Under a stockholders' agreement dated December 31, 1999 among certain trusts
created for the benefit of Mr. Zell and his family (the "Zell Trusts") and
Mrs. Lurie and her family (the "Lurie Trusts"), the Zell Trusts have the
power to vote and to dispose of the shares beneficially owned by Holdings
and the Lurie Trusts have the power to vote and to dispose of the shares
beneficially owned by Investments.
(3) 3,603,000 of the shares owned by Holdings are held at four 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) 1,000,000 of the shares owned by Investments are held at a financial
institution as collateral for a loan. Under the loan agreement, the
institution cannot vote or exercise any ownership rights relating to the
pledged shares unless there is an event of default.
(5) As of December 31, 1999 according to a Schedule 13G dated February 4, 2000
filed with the SEC by Wallace R. Weitz & Company. Wallace R. Weitz &
Company, a Nebraska corporation and registered investment advisor, has sole
voting and dispositive power with respect to the Common Stock reported
herein.
(6) As of December 31, 1999 according to a Schedule 13G dated February 7, 2000
filed with the SEC by Robert Fleming, Inc. Robert Fleming, Inc., a Delaware
corporation and registered investment advisor, has shared voting and
dispositive power with respect to the Common Stock reported herein.
SECURITY OWNERSHIP BY MANAGEMENT
The following information is furnished as of April 6, 2000, with respect to
the shares of the Company's Common Stock beneficially owned by each of the
directors 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. 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.
<TABLE>
<CAPTION>
SHARES UPON EXERCISE
OF STOCK OPTIONS(1)
NAME OF BENEFICIAL SHARES OF AND CONVERSION OF
OWNER COMMON STOCK STOCK UNITS(2) TOTAL PERCENT
------------------ ------------ -------------------- ----- -------
<S> <C> <C> <C> <C>
Jordan B. Allen............................ 170 288,000 288,170 1.4%
John R. Berry.............................. -- 450 450 *
Philip C. Calian........................... 16,023 683,846 699,869 3.3%
Bradbury Dyer, III......................... -- 450 450 *
Laurence S. Geller......................... -- 450 450 *
Terence C. Golden.......................... -- 300(5) 300 *
Arthur A. Greenberg........................ 70,000 47,445(3) 117,445 *
Jerry R. Jacob............................. 10,083 32,445(3) 42,528 *
Roderick K. McLeod......................... --(4) 80,000 152,122 *
Emanuel L. Rouvelas........................ 13,000 3,300(5) 16,300 *
Mark Slezak................................ 7,336,247(6) 3,300(5) 7,339,547 35.4%
Joseph P. Sullivan......................... -- 6,200(5) 6,200 *
Russell Varvel............................. 7,502 47,333 54,835 *
Jeffrey N. Watanabe........................ 1,000(7) 3,300(5) 4,300 *
J. Scott Young............................. 731 138,333 139,064 *
Samuel Zell................................ 7,336,247(6) 126,800(4) 7,463,047 35.7%
All Directors and.......................... 7,522,838 1,554,283 9,077,121 40.7%
Executive Officers as a Group (22
persons)
</TABLE>
14
<PAGE> 17
- -------------------------
* 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) Represents beneficial ownership of stock units which convert to Common Stock
(on a 1-for-1 basis) at a time determined at the date of grant; since such
time of conversion is not ascertainable, the Company has chosen to include
all stock units which are now vested or will vest within 60 days of the date
of this table.
(3) Includes 6,800 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.
(4) Does not include 72,122 reserved restricted shares since Mr. McLeod
currently does not have the power to dispose of or vote these shares.
(5) Represents 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) Includes 3,641,873 shares beneficially owned by Holdings and 3,641,874
shares beneficially owned by Investments. For Mr. Zell, includes 52,500
shares beneficially owned by Samstock, L.L.C. For Mr. Slezak, includes
52,500 shares beneficially owned by Anda Partnership. Mr. Slezak disclaims
beneficial ownership of these shares. See footnote (2) to Security Ownership
of Certain Beneficial Owners for further information and disclaimer of
ownership.
(7) Represents shares beneficially owned by Mr. Watanabe through a self-directed
pension plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1999, persons and entities affiliated with Equity guaranteed an
unsecured letter of credit facility for the Company with The Chase Manhattan
Bank for up to $30,000,000. As consideration for issuance of the guarantee, the
Company paid Equity a commitment fee of $500,000 in 1999 and has agreed to pay
Equity additional compensation contingent upon appreciation in the Company's
Common Stock in the form of "stock appreciation units" pursuant to a
reimbursement agreement (the "reimbursement agreement") dated October 15, 1999.
Equity's rights to receive this additional compensation vested, on a monthly
basis, during the period that the guarantee remained outstanding. The Company
replaced the guarantee in February 2000, at which time 286,668 of Equity's stock
appreciation units had vested. The Company has the right to retire Equity's
stock appreciation rights by paying a per share price, which escalates each
year, during the first three years after the date of the reimbursement
agreement. The Company intends to pay to Equity amounts attributable to the
vested rights by October 2000. If the Company does not retire Equity's stock
appreciation rights during the first three years after the date of the
reimbursement agreement, Equity may exercise, during the fourth and fifth years
after the date of the reimbursement agreement, its right to receive payment
based upon the market value of the Company's Common Stock at such time. A
committee consisting of the Company's independent directors negotiated the
arrangement with Equity on behalf of the Company. The committee received
independent legal and financial advice.
Equity and its affiliates provided certain administrative support and
advisory services for the Company, including, but not limited to, legal, tax
advisory and benefit services, for which the Company has been charged by Equity.
In 1999, the Company paid approximately $419,000 for such services performed by
Equity and its affiliates.
The Company leases its principal executive offices in Chicago, Illinois
from an affiliate of Equity. In 1999, the Company did not make any rental
payments as its rent obligations were abated under the terms of the lease.
The Company paid approximately $622,000 for legal services to Preston Gates
Ellis & Rouvelas Meeds LLP ("Preston Gates") during 1999. Mr. Rouvelas is a
partner of Preston Gates. During 1999, the Company paid approximately $52,000
for legal services to Watanabe, Ing & Kawashima ("WIK"). Mr. Watanabe is a
15
<PAGE> 18
partner of WIK. Also during 1999, the Company paid approximately $190,000 to
Heidrick & Struggles ("H&S") for executive search services. Mr. Berry is a
partner of H&S.
APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK AND THE
NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK
(PROPOSAL 2)
The Company seeks stockholder approval of an amendment (the "Amendment") to
the Company's Second Amended and Restated Certificate of Incorporation
("Certificate of Incorporation). The board of directors believes that it is
advisable and in the Company's best interests to have available additional
authorized but unissued shares of common stock and preferred stock in amounts
adequate to provide for the Company's future needs. Accordingly, the Board
recommends that the Company's Certificate of Incorporation be amended to
increase the Company's authorized capital stock to 110,000,000 shares from
45,000,000 shares, which will include an increase of the Company's authorized
shares of common stock, $.01 (one cent) par value per share, to 100,000,000 from
40,000,000 shares and an increase of the Company's authorized shares of
preferred stock, $.01 (one cent) par value per share, to 10,000,000 from
5,000,000 shares, and recommends that the Amendment be submitted to the
stockholders of the Company for approval.
The Board believes that it is advisable and in the Company's best interests
to have available additional authorized but unissued shares of common stock in
an amount adequate to provide for its future needs. The additional shares also
will be available for issuance from time to time by the Company in the
discretion of the Board, normally without further stockholder action (except as
may be required for a particular transaction by applicable law, requirements of
regulatory agencies or by stock exchange rules), for any proper corporate
purpose including, among other things, future acquisitions of property or
securities of other corporations, stock dividends, stock splits, stock options,
issuances of convertible debt and equity financings.
APPROVAL OF THE AMENDMENT
The Amendment shall not be effective until approved by the stockholders of
the Company. The affirmative vote of the holders of a majority of the shares of
the Company's Common Stock entitled to vote is required for approval of the
Amendment.
RECOMMENDATION OF BOARD OF DIRECTORS
WITH RESPECT TO THE AMENDMENT TO
THE CERTIFICATE OF INCORPORATION:
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT TO THE CERTIFICATE
OF INCORPORATION. 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" APPROVAL.
INDEPENDENT ACCOUNTANTS
KPMG L.L.P. have been the principal auditors for the Company for the past
year. Representatives of KPMG 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 2001 ANNUAL MEETING
A proposal submitted by a stockholder for the 2001 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 29, 2000, in order to be
eligible to be included in the Company's proxy statement for that meeting. New
SEC rules regarding stockholder proposals became effective on June 29, 1998.
Pursuant to these new
16
<PAGE> 19
rules, if the Company has not received notice by December 29, 2000 of any matter
a stockholder intends to propose for a vote at the Company's annual meeting,
then a proxy solicited by the board of directors may be voted on such matter in
the discretion of the proxy holder, without discussion of the matter in the
Proxy Statement soliciting such proxy and without such matter appearing as a
separate item on the proxy card.
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
Jordan B. Allen
Executive Vice President, General
Counsel and Secretary
April 28, 2000
Chicago, Illinois
17
<PAGE> 20
AMCV-PS-00
<PAGE> 21
<TABLE>
<S> <C>
DETACH HERE
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 21, 2000
The undersigned hereby appoints SAMUEL ZELL and PHILIP C. CALIAN ("Proxy Agents"), 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 21, 2000 and any adjournment thereof regarding the following:
1. The election as directors of the group of twelve nominees proposed by the Board of Directors listed below:
(01) John R. Berry, (02) Philip C. Calian, (03) Bradbury Dyer, III, (04) Laurence S. Geller,
(05) Terence C. Golden, (06) Arthur A. Greenberg, (07) Jerry R. Jacob, (08) Emanuel L. Rouvelas,
(09) Mark Slezak, (10) Joseph P. Sullivan, (11) Jeffrey N. Watanabe and (12) Samuel Zell.
2. Approval of an amendment to the Company's Certificate of Incorporation to increase the Company's authorized
capital stock.
3. In their discretion, the Proxy Agents are authorized to vote on 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 SIDE] CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE SIDE]
</TABLE>
<PAGE> 22
<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 AND FOR APPROVAL OF THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
FOR AGAINST ABSTAIN
1. Election of Directors. 2. Approval of the amendment [ ] [ ] [ ]
Nominees: (see reverse) to the Company's Certificate
of Incorporation.
FOR WITHHELD
[ ] [ ]
3. In their discretion, the Proxy agents are authorized to
vote upon such other matters as may properly come before
the 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>
