UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 17, 2006
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AMREP CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Oklahoma 1-4702 59-0936128
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification Number)
212 Carnegie Center, Suite 302, Princeton, New Jersey 08540
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (609) 716-8200
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant under any of the
following provisions (see General Instruction A.2 .below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Under contracts originally entered into in 1993 and amended and extended
from time to time, the Company's magazine distribution business has distributed
magazines for publishers owned or controlled by Nicholas G. Karabots, who is the
Company's controlling stockholder and a member and Vice Chairman of the
Company's Board of Directors and Executive Committee and Chairman of the
Company's Human Resources and Compensation Committee. The distribution contracts
were scheduled to expire on December 31, 2005. On March 17, 2006 effective as of
January 1, 2006, in accordance with the approval of the Independent Committee
described below, the Company entered into an agreement extending the
distribution contracts for 30 months to June 30, 2008, on their existing terms
except for an increase in the price paid to the publishers for the magazines and
the provision by the Company to the publishers of certain additional promotional
assistance.
In its magazine distribution business, the Company purchases magazines from
publishers and resells them at higher prices to wholesalers and reports as
revenues only the spread between the prices it pays the publishers and the
prices it receives from its wholesaler customers. For the Company's fiscal year
ended April 30, 2005, the Company's payments for magazines to Mr. Karabots'
publisher companies amounted to 28.2% of the Company's payments to all
publishers.
The Company also provides subscription fulfillment services for publishing
companies owned or controlled by Mr. Karabots. For fiscal 2005, the Company's
revenues for these services were $344,000. These contracts were to have been
effective through August 1, 2006, and year to year thereafter, unless terminated
at the election of either party. However, in conjunction with the extension of
the distribution contracts, the fulfillment services contracts were also
extended to June 30, 2008 substantially on their existing terms.
A committee of the Board of Directors of the Company (the 'Independent
Committee') comprised of independent directors whom the Board also found to be
independent of Mr. Karabots, has been appointed with authority to consider and,
if deemed appropriate, to approve new contracts and material modifications to
existing contracts between the Company and companies owned or controlled by Mr.
Karabots. In accordance with such authority, the Independent Committee has
approved the extensions of the distribution contracts and fulfillment services
contracts with Mr. Karabots' companies. In granting such approval, the
Independent Committee concluded that the extension terms are fair and reasonable
and no less favorable to the Company than would be obtained in a comparable
arm's length transaction with an unaffiliated publisher having the same volume
of business as Mr. Karabots' companies.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMREP CORPORATION
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(Registrant)
By: /s/ Peter M Pizza
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Peter M. Pizza
Vice President and
Chief Financial Officer
Date: March 20, 2006
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