-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VIJv/irlIHsX5WU99bVD+Lw6V9cuBhWIhaJOJvJnlpE9RPoMgy5JOqTQWuJKopap SXUXXSzBaipP96EN5D4quQ== 0000950137-01-501077.txt : 20010501 0000950137-01-501077.hdr.sgml : 20010501 ACCESSION NUMBER: 0000950137-01-501077 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010627 FILED AS OF DATE: 20010430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CLASSIC VOYAGES CO CENTRAL INDEX KEY: 0000315136 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 310303330 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-09264 FILM NUMBER: 1615916 BUSINESS ADDRESS: STREET 1: TWO N RIVERSIDE PLZ STREET 2: 2ND FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3122581890 MAIL ADDRESS: STREET 1: TWO NORTH RIVERSIDE PLAZA STREET 2: 2ND FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 DEF 14A 1 c61807ddef14a.txt DEFINITIVE PROXY STATEMENT 1 SCHEDULE 14A (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the registrant [X] Filed by a party other than the registrant [ ] Check the appropriate box: [ ] Preliminary proxy statement. [ ] 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-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 (set forth the amount on which the filing fee is calculated and state how it was determined): - -------------------------------------------------------------------------------- (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: - -------------------------------------------------------------------------------- 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 27, 2001 ------------------------ 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 27, 2001 at 10:00 A.M., Central Daylight Time, for the following purposes: 1. To elect eleven (11) directors to serve one-year terms, commencing immediately upon their election, 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 29, 2001, 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 30, 2001 ------------------------ 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. 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 30, 2001, 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 27, 2001, 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 eleven (11) directors of the Company who will serve one-year terms commencing immediately upon their election, 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 30, 2001. 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 2000 which contains the Company's audited financial statements at December 31, 2000. Additional copies of the Annual Report and of the Company's Annual Report on Form 10-K for the year ended December 31, 2000 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. 4 VOTING SECURITIES AND PROXIES As of April 29, 2001, 21,050,308 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 29, 2001 (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; and (ii) 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. 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, eleven (11) 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 eleven (11) director positions to be filled by vote at the Annual Meeting are (the "Management Nominees"): John R. Berry Jerry R. Jacob Philip C. Calian Emanuel L. Rouvelas Bradbury Dyer, III Mark Slezak Laurence S. Geller Jeffrey N. Watanabe Terence C. Golden Samuel Zell Arthur A. Greenberg
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 16, 2001, the board of directors determined that the number of directors shall be eleven (11). Each of the Management Nominees has consented to serve as a member of the board of directors if elected. 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). 2 5 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. 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 29, 2001 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 director and person who has been nominated for election as a director and each executive officer of the Company.
PRINCIPAL POSITIONS WITH THE COMPANY; PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AGE FIVE-YEAR EMPLOYMENT HISTORY - ---- --- -------------------------------------- Philip C. Calian............ 38 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............... 61 Director of the Company since December 1999; Partner of Heidrick & Struggles, an executive search firm since 1995; and President and Chief Executive Officer of Holland America Line, a cruise line operator, from 1977 until 1982. Bradbury Dyer, III.......... 58 Director of the Company since December 1999; and General Partner of Paragon Associates, a private investment partnership, since May 1972. Laurence S. Geller.......... 53 Director of the Company since December 1999; Chief Executive Officer of Strategic Hotel Capital, L.L.C., 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.
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PRINCIPAL POSITIONS WITH THE COMPANY; PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AGE FIVE-YEAR EMPLOYMENT HISTORY - ---- --- -------------------------------------- Terence C. Golden........... 56 Director of the Company since March 2000; Chairman of Bailey Capital Corporation, a private investment company, since May 2000; President and Chief Executive Officer of Host Marriott Corporation from 1995 until May 2000; and Director of Host Marriott Corporation, an owner and operator of lodging properties and airport and toll road food and merchandise concessions, since 1995. Arthur A. Greenberg......... 60 Director of the Company since 1982; principal of Arthur A. Greenberg, C.P.A. since 1997; 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.............. 67 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 until June 1993. Emanuel L. Rouvelas......... 56 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................. 42 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; Vice President of EGIL Investments, Inc. since July 1997; Treasurer of EGIL Investments, Inc. since January 2000 and from July 1997 until June 1999; Vice President of Equity since January 1999; Treasurer of Equity since January 2000; Senior Vice President of Equity from January 1991 until January 1997; Treasurer of Equity from January 1990 until January 1996; and Director of Equity since August 1997. Jeffrey N. Watanabe......... 58 Director of the Company since June 1998; partner and principal of the law firm Watanabe, Ing & Kawashima since 1971; and Director of Hawaiian Electric Industries, Inc., Hawaiian Electric Company, Inc., American Savings Bank, F.S.B., First Insurance Company of Hawaii, Ltd., Cheap Tickets, Inc. and Grace Pacific Corporation. Samuel Zell................. 59 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., Manufactured Home Communities, Inc., and Danielson Holding Corporation; and Chairman of the Board of Trustees of Equity Office Properties Trust and Equity Residential Properties Trust. See "Security Ownership of Certain Beneficial Owners" for a discussion of Mr. Zell's relationship with Equity.
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PRINCIPAL POSITIONS WITH THE COMPANY; PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AGE FIVE-YEAR EMPLOYMENT HISTORY - ---- --- -------------------------------------- Roderick K. McLeod.......... 60 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, a holding company for various cruise lines, 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............. 38 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............... 43 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.......... 62 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........... 58 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. Jon R. Rusten............... 49 President and Director of Ocean Development Co., a subsidiary of the Company created in 1998 to manage the construction of new vessels, since August 1998; Director of Development and Newbuildings of Disney Cruise Line from 1994 until 1998; and Superintendent/Vice President of Projects -- Newbuildings Department of Kloster Cruise Limited, owner/operator of Norwegian Cruise Line, Royal Viking Line and Royal Cruise Line, from 1987 until 1994.
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PRINCIPAL POSITIONS WITH THE COMPANY; PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AGE FIVE-YEAR EMPLOYMENT HISTORY - ---- --- -------------------------------------- David Simmons............... 44 Senior Vice President -- DQ Hotel Operations of AMCV Cruise Operations, Inc. since January 2000; Senior Vice President -- Hotel Operations of Delta Queen from October 1998 until January 2000; 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. Randall L. Talcott.......... 40 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.
BOARD COMMITTEES AND BOARD OF DIRECTORS AND COMMITTEE MEETINGS During 2000, the Company's board of directors held four (4) meetings. All directors were present for at least 75% of the meetings of the board and its committees they were eligible to attend. In addition, the board of directors took three (3) actions by unanimous written consent during 2000. The board of directors has an Executive Committee which consisted of Messrs. Calian and Zell during 2000. 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 actions by the Executive Committee are 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 2000. The Company has an Audit Committee which consisted of Messrs. Jacob, Sullivan and Greenberg from January until September 15 and Messrs. Greenberg, Golden and Sullivan from September 15 through December. Mr. Joseph P. Sullivan, a member of the board of directors since 1997, resigned from the board in January 2001. Mr. Jacob was reappointed to the Audit Committee, assuming Mr. Sullivan's position, following Mr. Sullivan's resignation. 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 2000. Each member of the Audit Committee is "independent" within the definition of independent under the Nasdaq Stock Market, Inc. listing standards. The Company has a Compensation Committee which consisted of Messrs. Zell, Slezak and Jacob from January until September 15 and Messrs. Zell, Slezak and Berry from September 15 through December. 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 2000, but did approve various actions by unanimous written consents in lieu of a meeting. 6 9 EXECUTIVE COMPENSATION GENERAL The following table sets forth all compensation awarded to, earned by, or paid to the Chief Executive Officer during 2000 and to those persons who were, at December 31, 2000, the other four most highly compensated executive officers of the Company. SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION AWARDS -------------------------------- ANNUAL COMPENSATION RESTRICTED SECURITIES ALL OTHER --------------------- STOCK UNDERLYING COMPENSATION NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS($) OPTIONS(#) ($) (1) --------------------------- ---- --------- -------- ---------- ---------- ------------ Philip C. Calian 2000 253,760 195,000 0 0 10,670 Chief Executive Officer 1999 253,422 133,224 0 100,000 11,468 1998 243,654 0 0 500,000 6,400 Roderick K. McLeod 2000 310,000 210,000 0 0 2,265 President and Chief 1999 256,346 210,000 1,397,364(2) 400,000 -- Operating Officer 1998 -- -- -- -- -- Jordan B. Allen 2000 202,800 135,000 0 0 9,563 Exec. VP and General 1999 202,530 73,515 0 50,000 10,451 Counsel 1998 194,230 0 0 312,500 6,400 Todd D. Allen 2000 185,400 85,597 0 0 9,304 Sr. VP -- Corporate 1999 180,000 65,250 0 10,000 5,400 Development 1998 110,000 15,000 0 90,000 -- Russell Varvel(3) 2000 205,868 82,427 0 0 9,967 VP -- Marketing of AMCV 1999 199,800 72,428 0 5,000 10,396 Cruise Operations, Inc. 1998 188,392 0 0 19,000 6,400
- --------------- (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 restricted stock granted during 1999. Of these shares, 36,060 have vested and the balance will vest in equal portions on July 1, 2001 and 2002. Issuance and sale of these shares is restricted prior to the first to occur of Mr. McLeod's 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, 2000 was $1,009,708, based on the closing price of the Company's Common Stock on such date of $14.00 per share. (3) Mr. Varvel resigned his positions with the Company and its subsidiaries in February 2001. OPTION GRANTS IN LAST FISCAL YEAR During 2000, the Company did not grant any options to the executive officers named in the Summary Compensation Table above. 7 10 AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS SHARES ACQUIRED VALUE OPTIONS AT FY-END(#) AT FY-END($) NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE - ---- --------------- ----------- ------------------------- ------------------------- Philip C. Calian.......... 0 0 683,846/233,334 1,231,545/0 Roderick K. McLeod........ 0 0 80,000/320,000 0/0 Jordan B. Allen........... 0 0 288,000/141,667 227,402/0 Todd D. Allen............. 0 0 63,333/36,667 0/0 Russell Varvel............ 4,000 72,500 49,000/9,667 120,084/0
COMPENSATION OF DIRECTORS The Company pays the non-employee members of its board of directors 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, and the Company's 1999 Stock Option Plan, on an annual basis, non-employee directors 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. In March 2001, the board of directors (with Mr. Zell recusing himself) approved the additional payment by the Company to the non-executive Chairman of the Board of annual compensation equal to $75,000 commencing in the 2001 calendar year. This amount is payable, at the election of the Chairman, in the form of cash or in the form of stock units currently used to compensate directors of the Company and is inclusive of all fees for services provided to the Company by the non-executive Chairman and any expenses incurred by the non-executive Chairman. For 2001, Mr. Zell has elected to receive such compensation, which is paid quarterly, in the form of cash. 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, under the agreement, Mr. McLeod received restricted shares of the Company's Common Stock and options to purchase the Company's Common Stock 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 is 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, J. Scott Young, formerly Executive Vice President -- Operations of the Company, resigned his positions with the Company and its subsidiaries. The Company entered into a separation agreement with Mr. Young under which he was 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. 8 11 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During 2000, the members of the Compensation Committee of the board of directors included Messrs. Zell, Slezak, Jacob and Berry. Please see Certain Relationships and Related Transactions for a description of certain payments made by the Company to entities affiliated with Mr. Zell. 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 2000, the Compensation Committee consisted of Messrs. Zell, Slezak and Jacob from January until September 15 and Messrs. Zell, Slezak and Berry from September 15 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 the Company's financial performance, an executive's departmental performance and 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 and an individual's performance. This form of compensation, available to the 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 these 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 and the participant's departmental performance during the year as compared to financial and other objectives approved by the board of directors. For 2000, the Company achieved certain stated financial operational objectives to qualify executive officers for bonus payments and, accordingly, bonus payments were made to executive officers for the year. 9 12 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. During 2000, the Company did not grant any stock options to its 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. For 2000, Mr. Calian was paid a salary of $253,760 and was paid a bonus of $195,000 since the Company achieved certain stated financial and operational objectives set by the board of directors. 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 his previous stock option grants, Mr. Calian's total compensation package is on market terms. Respectively submitted, Samuel Zell Mark Slezak John R. Berry AUDIT COMMITTEE REPORT The Audit Committee of the Company's board of directors has reviewed the Company's audited consolidated financial statements and discussed such statements with management and KPMG L.L.P., the Company's independent accountants during the 2000 fiscal year. The Audit Committee has discussed with KPMG L.L.P. the matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU sec.380). The Audit Committee received from KPMG L.L.P. the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and discussed with KPMG L.L.P. that firm's independence. Based on the review and discussions noted above, the Audit Committee recommended to the board of directors that the Company's audited consolidated financial statements be included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and be filed with the SEC. The Board adopted a written charter for the Audit Committee on June 10, 2000 and amended and restated the charter on March 16, 2001. The amended and restated charter is attached to this Proxy Statement as Appendix A. Respectively submitted, Arthur A. Greenberg Terence C. Golden Jerry R. Jacob 10 13 AUDIT FEES The aggregate fees and expenses billed (or expected to be billed) for professional services rendered by the independent auditors for the audit of the Company's financial statements for 2000 and the reviews by the independent auditors of the financial statements included in the Company's Forms 10-Q for 2000 were $192,259. FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES There were no fees billed for professional services rendered by the independent auditors for 2000 with respect to operating or supervising the operation of the Company's information system or managing the Company's local network area or designing or implementing a hardware or software system that aggregates source data underlying the financial statements or generates information that is significant to the Company's financial statements taken as a whole. ALL OTHER FEES The aggregate fees billed (or expected to be billed) for services rendered by the independent auditors to the Company for 2000 and not otherwise described under AUDIT FEES and FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES were $83,266. The Audit Committee has determined that the independent auditors' provision of the non-audit services described above is compatible with maintaining the independent auditors' independence. 11 14 PERFORMANCE GRAPH Below is a graph comparing total stockholder return on the Company's Common Stock, from December 31, 1995 through 2000, with a peer group comprising eleven (11) 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]
--------------------------------------------------------------------------------------------------- Description 1995 1996 1997 1998 1999 2000 --------------------------------------------------------------------------------------------------- American Classic Voyage Co. $100.00 $120.69 $166.67 $162.07 $321.84 $128.74 --------------------------------------------------------------------------------------------------- S&P 500 $100.00 $122.96 $163.98 $210.84 $255.22 $231.98 --------------------------------------------------------------------------------------------------- Peer Group $100.00 $106.14 $147.17 $172.37 $193.85 $164.67 ---------------------------------------------------------------------------------------------------
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 2000, all applicable filing requirements of the Company's officers and directors were complied with, except that a Form 4 for six transactions in March 2000 by Scott Young, a former officer, was filed late on April 13, 2000. 12 15 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The following table sets forth, as of April 29, 2001, 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:
AMOUNT AND NATURE OF BENEFICIAL NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS ------------------------------------ ----------------- ---------------- Samuel Zell and Entities Controlled by Samuel Zell:(2) EGI Holdings, Inc............................ 3,641,873(2)(3) Samstock, L.L.C.............................. 52,500(4) Samuel Zell.................................. 128,300(4) ----------- 3,822,673 Two N. Riverside Plaza, Suite 600 Chicago, IL 60606 Ann Lurie and Entities Controlled by Ann Lurie:(2) EGIL Investments, Inc........................ 3,641,874(2)(5) Anda Partnership............................. 52,500(6) Ann Lurie Revocable Trust.................... 13,500(6) ----------- 3,707,874 Two N. Riverside Plaza, Suite 1500.......................... 7,530,547 35.6% Chicago, IL 60606 Wallace R. Weitz & Company.................................. 3,258,400(7) 15.5% 1125 S. 103rd Street, Suite 600 Omaha, NE 68124-6008 J.P. Morgan Chase & Co...................................... 2,385,483(8) 11.3% 270 Park Avenue New York, NY 10017 Capital Research and Management Company..................... 1,988,280(9) 9.2% 333 Hope Street Los Angeles, CA 90071 Kern Capital Management LLC................................. 1,491,150(10) 7.1% 114 W. 47th Street, Suite 1926 New York, NY 10036 Credit Suisse Asset Management, LLC......................... 1,073,848(11) 5.1% 466 Lexington Avenue New York, NY 10017
- --------------- (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) Each of the referenced entities or individuals is 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. 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 13 16 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. Mr. Zell disclaims beneficial ownership of 3,641,874 shares beneficially owned by Investments. Mrs. Lurie disclaims beneficial ownership of 3,641,873 shares beneficially owned by Holdings. (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) 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 and members of his family. The above chart includes 8,300 stock units beneficially owned by Mr. Zell which convert to 8,300 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. (5) 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. (6) 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. (7) As of December 31, 2000, according to a Schedule 13G dated February 2, 2001 filed with the SEC by Wallace R. Weitz & Company ("Weitz & Company") and Wallace R. Weitz, President and primary owner of Weitz & Company. Weitz & Company, a Nebraska corporation and registered investment advisor, has sole voting and dispositive power with respect to the Common Stock reported herein. Weitz & Company and Mr. Weitz disclaim beneficial ownership of the shares of Common Stock reported herein, all of which are owned of record by investment advisory clients of Weitz & Company. (8) As of December 31, 2000, according to a Schedule 13G dated February 10, 2001 filed with the SEC by J.P. Morgan Chase & Co. J.P. Morgan Chase & Co., a Delaware corporation and parent holding company, has sole voting power with respect to 2,085,815 shares of the Common Stock reported herein and sole dispositive power with respect to all of the Common Stock reported herein. (9) As of December 29, 2000, according to a Schedule 13G dated February 9, 2001 filed with the SEC by Capital Research and Management Company ("CRMC"). CRMC, a Delaware corporation and registered investment advisor, has sole dispositive power with respect to the Common Stock reported herein. SMALLCAP World Fund, Inc., a Maryland corporation and registered investment company ("SMALLCAP") which is advised by CRMC, has sole voting power with respect to 1,340,000 shares of the Common Stock reported herein. CRMC and SMALLCAP disclaim beneficial ownership of the shares reported herein. Includes 400,000 shares of preferred securities of AMCV Capital Trust I, a Delaware business trust. These preferred securities will be redeemed on February 15, 2015, or upon early redemption by the Company. CRMC may elect to convert these preferred securities into shares of the Company's Common Stock at any time until the day before redemption. Each preferred security will be converted into 1.6207 shares of the Company's Common Stock, which is equal to a conversion price of $30.85 per share of Common Stock. (10) As of December 31, 2000, according to a Schedule 13G dated January 30, 2001 filed with the SEC by Kern Capital Management LLC ("Kern Capital"). Kern Capital , a Delaware limited liability company and registered investment advisor, and its principals and controlling members, Robert E. Kern Jr. and David G. Kern, have sole voting power with respect to 1,432,150 shares of 14 17 the Common Stock reported herein and sole dispositive power with respect to all of the Common Stock reported herein. Messrs. Robert Kern and David Kern disclaim beneficial ownership of the shares reported herein. (11) As of December 31, 2000, according to a Schedule 13G dated February 8, 2001 filed with the SEC by Credit Suisse Asset Management, LLC. Credit Suisse Asset Management, LLC, a limited liability company and registered investment advisor, has sole voting and dispositive power with respect to the Common Stock reported herein. SECURITY OWNERSHIP BY MANAGEMENT The following information is furnished as of April 29, 2001, 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. Unless otherwise indicated, each of the persons listed below has sole voting and dispositive power over the shares described below.
SHARES UPON EXERCISE OF STOCK OPTIONS NAME OF BENEFICIAL SHARES OF AND CONVERSION OF OWNER COMMON STOCK STOCK UNITS(1) TOTAL PERCENT ------------------ ------------ -------------------- ----- ------- Jordan B. Allen............................ 257 288,000 288,257 1.4% Todd D. Allen.............................. 200 83,333 83,533 * John R. Berry.............................. -- 1,950(7) 1,950 * Philip C. Calian........................... 16,891 683,846 700,737 3.2% Bradbury Dyer, III......................... 8,103(2) 1,950(7) 10,053 * Laurence S. Geller......................... -- 1,950(7) 1,950 * Terence C. Golden.......................... 2,370(3) 1,800(7) 4,170 * Arthur A. Greenberg........................ 70,000 48,945(4) 118,945 * Jerry R. Jacob............................. 10,083 33,945(4) 44,028 * Roderick K. McLeod......................... --(5) 160,000 160,000 * Emanuel L. Rouvelas........................ 13,000(6) 4,800(7) 17,800 * Mark Slezak................................ 7,336,247(8) 4,800(7) 7,341,047 34.9% Russell Varvel............................. 11,502 41,334 52,836 * Jeffrey N. Watanabe........................ 1,000(9) 4,800(7) 5,800 * Samuel Zell................................ 7,336,247(8) 128,300(4) 7,464,547 35.2% All Directors and Executive Officers as a Group (20 persons)....................... 7,538,563 1,595,419 9,133,982 40.3%
- --------------- * Less than 1%. (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) Includes 5,000 shares of preferred securities of AMCV Capital Trust I, a Delaware business trust, acquired by Mr. Dyer on February 22, 2000. These preferred securities will be redeemed on February 15, 2015, or upon early redemption by the Company. Mr. Dyer may elect to convert these preferred securities into shares of the Company's Common Stock at any time until the day before redemption. Each preferred security will be converted into 1.6207 shares of the Company's Common Stock, which is equal to a conversion price of $30.85 per share of Common Stock. (3) Jointly owned by Mr. Golden and his wife. (4) Includes 8,300 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. 15 18 (5) Does not include 72,122 reserved restricted shares since Mr. McLeod currently does not have the power to dispose of or vote these shares. (6) Jointly owned by Mr. Rouvelas and his wife. (7) 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. (8) 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. (9) 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 ("Chase") for up to $30,000,000. Under an agreement dated October 15, 1999, as consideration for issuance of the guarantee, the Company paid Equity a commitment fee of $500,000 in 1999 and agreed to pay Equity additional compensation contingent upon appreciation in the Company's Common Stock in the form of stock appreciation units. 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 units by paying a per share price, which escalates each year, during the first three years after issuance. If the Company does not retire Equity's stock appreciation units during the first three years after issuance, Equity may exercise, during the fourth and fifth years after issuance, 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. Based in part on the price of the Company's Common Stock, the board of directors, with Mr. Zell recusing himself, determined it was not in the Company's best interest to retire the stock appreciation units on or prior to October 15, 2000, when the cost to repurchase the stock appreciation units increased. Equity and its affiliates provided certain administrative support and advisory services for the Company, including, but not limited to, financial and tax advisory services, for which the Company has been charged by Equity. In 2000, the Company paid approximately $0.2 million for such services performed by Equity and its affiliates. As of December 31, 2000, the Company had also accrued $0.5 million in connection with the assistance of several Equity employees in recent debt and equity financing transactions undertaken by the Company. This amount was paid in the first quarter of 2001. The Company leases its principal executive offices in Chicago, Illinois from an affiliate of Equity. In 2000, the Company did not make any rental payments for base rent as its base rent obligations were abated under the terms of the lease. The Company paid approximately $1.0 million for legal services to Preston Gates Ellis LLP during 2000. Mr. Rouvelas is a partner of Preston Gates Ellis & Rouvelas Meeds LLP, which is the Washington, D.C. office of Preston Gates LLP. During 2000, the Company paid approximately $0.3 million for legal services to Watanabe, Ing & Kawashima ("WIK"). Mr. Watanabe is a partner of WIK. Also during 2000, the Company paid approximately $13,000 to Heidrick & Struggles ("H&S") for executive search services. Mr. Berry is a partner of H&S. 16 19 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 2002 ANNUAL MEETING A proposal submitted by a stockholder for the 2002 Annual Meeting of the Company must be received by the Secretary of the Company at Two North Riverside Plaza, Suite 200, Chicago, Illinois 60606, by December 29, 2001 in order to be eligible to be included in the Company's proxy statement for that meeting and must comply with the rules of the SEC for inclusion in the Company's proxy statement and form of proxy. The Company is not obligated to include any shareholder proposal in its proxy materials for the Company's 2002 Annual Meeting if the proposal is received after the December 29, 2001 deadline. If a stockholder wishes to bring a proposal before the Company's Annual Meeting, but does not wish to include it in the Company's proxy materials, the proposal must be received no later than March 14, 2002 and must present a matter which is proper for a shareholder action under Delaware law, the Company's certificate of incorporation and by-laws and relate to a matter which could not be excluded from a proxy statement under any rules promulgated by the SEC. The proxies that the Company solicits for the 2002 Annual Meeting will be voted in the discretion of the persons holding the proxies on all stockholder proposals received after March 14, 2002. 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 /s/ Jordan B. Allen Jordan B. Allen Executive Vice President, General Counsel and Secretary April 30, 2001 Chicago, Illinois 17 20 APPENDIX A AMENDED AND RESTATED CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF AMERICAN CLASSIC VOYAGES CO. I. PURPOSE The Audit Committee (the "Committee") of the Board of Directors (the "Board") of American Classic Voyages Co. (the "Corporation") is established in accordance with Article III, Section 11 of the Corporation's Third Amended and Restated By-Laws (the "By-Laws"). The Committee's primary duties and responsibilities are to: - monitor the Corporation's financial reporting process and systems of internal controls regarding finance, accounting, and legal and regulatory compliance - monitor the independence and performance of the Corporation's independent auditors. - provide an open avenue of communication among the independent auditors, financial and senior management and the Board. The Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in Section IV of this Charter. II. COMPOSITION Committee members shall meet the requirements of the National Association of Securities Dealers, Inc. ("NASD") and The Nasdaq Stock Market, Inc. ("Nasdaq") (combined, referred to as the "Exchange"). The Committee shall be made up of three or more directors as determined by the Board, all of whom shall be independent non-executive directors, as described in Section V, free from any relationship that would interfere with the exercise of his or her independent judgment as a member of the Committee. All members of the Committee shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial statements. At least one member of the Committee shall have accounting or related financial management expertise The members of the Committee shall be elected by the Board at the annual meeting of the Board or until their successors shall be duly elected and qualified. Unless a chairman is elected by the full Board, the members of the Committee may designate a chairman by majority vote of the full Committee membership. III. MEETINGS The Committee shall meet at least three times per year, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee should meet at least annually with management and the independent auditors in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. In addition, the Committee, or at least its Chair, should communicate with management and the independent auditors quarterly to review the Company's financial statements and significant findings based upon the auditors limited review procedures. 18 21 IV. RESPONSIBILITIES AND DUTIES To fulfill its responsibilities and duties, the Committee shall: Documents/Reports Review 1. Review and reassess the adequacy of this Charter periodically, at least annually, as conditions dictate, and update as necessary. Submit the Charter to the Board for approval and have the document published at least every three years in accordance with the regulations of the Securities and Exchange Commission ("SEC"). 2. Review, prior to filing or distribution and prior to the release of earnings, the organization's annual audited financial statements and any reports or other financial information submitted to any governmental body or the public, including any certification, report, opinion, or review rendered by the independent auditors. Such a review should include discussion with management and independent auditors of significant issues regarding accounting principles, practices, and judgements. 3. Review with financial management and the independent auditors the Company's quarterly financial results prior to the release of earnings and/or the Company's quarterly financial statements prior to their filing or distribution. Discuss any significant changes to the Company's accounting principles and any items required to be communicated by the independent auditors in accordance with SAS 61. The chairman of the Committee may represent the entire Committee for purposes of this review. 4. In consultation with management and the independent auditors, consider the integrity of the Company's financial reporting processes and controls. Discuss significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures. Review significant findings prepared by the independent auditors and the internal audit department together with management's responses. Independent Auditors 1. The independent auditors are ultimately accountable to the Committee and the Board, as representatives of the shareholders of the Corporation. The Committee shall recommend to the Board the selection of the independent auditors, considering independence and effectiveness and approve the fees and other compensation to be paid to the independent auditors. 2. The Committee is to require the independent auditors to submit to the Committee at least annually a formal written statement delineating all relationships between the independent auditors and the Corporation. On an annual basis, the Committee should review and discuss with the auditors all significant relationships the auditors have with the Corporation that could impair the auditors' independence. The Committee shall recommend to the Board any action to take to ensure the independence of the auditors. 3. Review the performance of the independent auditors and approve any proposed discharge of the independent auditors when circumstances warrant. 4. Periodically consult with the independent auditors out of the presence of management about internal controls and the fullness and accuracy of the organization's financial statements. 5. Review the independent auditors' audit plan. Discuss the scope, staffing, locations, reliance upon management, and general audit approach. 6. Prior to releasing year-end earnings, discuss the results of the audit with the independent auditors. Discuss certain matters required to be communicated to audit committees in accordance with SAS 61. 7. Consider the independent auditors' judgements about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting. 19 22 Financial Reporting Processes 1. In consultation with the independent auditors and the internal auditors, review the integrity of the organization's financial reporting processes, both internal and external. 2. Consider and approve, if appropriate, significant changes to the Corporation's accounting principles and practices as suggested by the independent auditors or management. Process Review 1. Establish regular and separate systems of reporting to the Committee by management and the independent auditors regarding any significant judgments made in management's preparation of the financial statements and the view of each as to appropriateness of such judgments. 2. Following completion of the annual audit, review separately with each of management and the independent auditors any significant difficulties encountered during the course of the audit, including restrictions on the scope of work or access to required information. 3. Review any significant disagreement among management and the independent auditors in connection with the preparation of the financial statements. 4. Review with the independent auditors and management the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have been implemented. This review should be conducted at an appropriate time subsequent to the implementation of changes or improvements, as decided by the Committee. Ethical and Legal Compliance 1. Review periodically a code of ethical conduct and ensure that management has established a system to enforce such code. 2. Periodically review management's monitoring of the Corporation's compliance with the organization's ethical code and ensure that management has the proper review system in place to ensure that the Corporation's financial statements, reports and other financial information disseminated to governmental organizations and the public satisfy legal requirements. 3. Periodically review, with the organization's counsel, legal compliance matters including corporate securities trade policies. 4. Periodically review, with the organization's counsel, any legal matter that could have a significant impact on the organization's financial statements, the Company's compliance with applicable laws and regulations, and inquiries received from regulators or governmental agencies Other 1. Annually, prepare a report to shareholders as required by the SEC. The report should be included in the Company's annual proxy statement. 2. Maintain minutes of meetings and periodically report to the Board on significant results of the foregoing activities. 3. Perform any other activities consistent with this Charter, the By-Laws and governing law, as the Committee or the Board deems necessary or appropriate. V. INDEPENDENCE OF DIRECTORS For the purposes of this Charter, the following set forth the conditions for independence of directors: - A director who is an employee (including non-employee executive officers) of the Corporation, its subsidiaries, or any of its affiliates may not serve on the Committee until three years following 20 23 termination of employment. "Affiliate" includes a subsidiary, sibling company, predecessor, parent company, or former parent company. - A director who is a partner, controlling shareholder, or executive officer of a for profit business organization to which the Corporation made, or from which the Corporation received, payments (other than those arising solely from investments in the Corporation's securities) that exceed 5% of the Corporation's or business organization's consolidated gross revenues for that year, or $200,000, whichever is more, in any of the past three years is not considered to be independent. "Business relationships" can include commercial, industrial, banking, consulting, legal, accounting, and other relationships. A director can have this relationship directly with the company, or the director can be a partner, officer, or employee of an organization that has such a relationship. - A director who accepts any compensation from the Corporation, or any of its affiliates, in excess of $60,000 during the previous fiscal year, other than compensation for board service, benefits under a tax- qualified retirement plan, or non-discretionary compensation. - A director who has, or within the preceding three years has had, a direct business relationship with the Corporation may serve on the Committee only if the Board of Directors determines in its business judgment that the relationship does not interfere with the director's exercise of independent judgment. - A director who is employed as an executive of another corporation where any of the Corporation's executives serves on that corporation's compensation committee may not serve on the Committee. - A director who is an immediate family member of an individual who is, or who was during the preceding three years was, an executive officer of the Corporation or any of its affiliates may not serve on the Committee. "Immediate family" includes a person's spouse, parent, children, siblings, in-laws and anyone (other than employees) who shares such person's home. 21 24 AMCV-PS-01 25 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 27, 2001 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 27, 2001 and any adjournment thereof regarding the following: 1. The election of directors of the group of eleven 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) Jeffrey N. Watanabe and (11) Samuel Zell. 2. 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| CONTINUED AND TO BE SIGNED ON REVERSE SIDE |SEE REVERSE| | SIDE | | SIDE | ----------- ----------- 26 DETACH HERE PLEASE MARK [X] 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. 2. In their discretion, the Proxy NOMINEES: (see reverse) Agents are authorized to vote upon such other matters as may FOR WITHHELD 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:____________________________________ -----END PRIVACY-ENHANCED MESSAGE-----