DEF 14A 1 sched14a06.htm

                                   UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  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 §240.14a-12

                               AMREP CORPORATION
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                (Name of Registrant as Specified In Its Charter)

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     (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:

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         (2) Aggregate number of securities to which transaction applies:

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         (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):

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         (4) Proposed maximum aggregate value of transaction:

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         (5) Total fee paid:

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[   ]  Fee paid previously with preliminary materials.



[   ]  Check box if  any part of the fee is  offset as provided by Exchange  Act
Rule0-11(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:

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         (2) Form, Schedule or Registration Statement No.:

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         (3) Filing Party:

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         (4) Date Filed:

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                                AMREP CORPORATION

                            (An Oklahoma corporation)



                  NOTICE OF 2006 ANNUAL MEETING OF SHAREHOLDERS

                               September 20, 2006


     NOTICE IS HEREBY  GIVEN that the 2006  Annual  Meeting of  Shareholders  of
AMREP  Corporation  (the  "Company")  will be held at the  Conference  Center at
Normandy Farm,  Route 202 and Morris Road, Blue Bell,  Pennsylvania on September
20, 2006 at 9:00 A.M. for the following purposes:

          (1)  To elect two directors;

          (2)  To approve an amendment to the  Certificate of  Incorporation  of
               the  Company  allowing   vacancies  in  the  Board  of  Directors
               resulting  from an  increase  in the  number of  directors  to be
               filled by the Board;

          (3)  To approve the adoption of the Company's 2006 Equity Compensation
               Plan; and

          (4)  To consider and act upon such other business as may properly come
               before the meeting.

     In accordance with the By-Laws,  the Board of Directors has fixed the close
of  business  on July  31,  2006 as the  record  date for the  determination  of
shareholders of the Company entitled to notice of and to vote at the meeting and
any continuation or adjournment  thereof.  The list of such shareholders will be
available  for  inspection  by  shareholders  during  the ten days  prior to the
meeting  at  the  offices  of the  Company,  212  Carnegie  Center,  Suite  302,
Princeton, New Jersey.

     Whether or not you expect to be present at the meeting,  please mark,  date
and sign the enclosed  proxy and return it to the Company in the  self-addressed
envelope  enclosed for that purpose.  The proxy is revocable and will not affect
your right to vote in person in the event you attend the meeting.

                                                Order of the Board of Directors

                                                Joseph S. Moran, Secretary
Dated:       August 14, 2006
             Princeton, New Jersey














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Upon the written  request of any  shareholder  of the Company,  the Company will
provide to such  shareholder a copy of the Company's  annual report on Form 10-K
for fiscal 2006,  including the financial  statements and the schedules thereto,
filed  with the  Securities  and  Exchange  Commission.  Any  request  should be
directed to Joseph S. Moran, Secretary, AMREP Corporation,  212 Carnegie Center,
Suite 302, Princeton,  New Jersey 08540. There will be no charge for such report
unless one or more exhibits  thereto are requested,  in which case the Company's
reasonable expenses of furnishing exhibits may be charged.
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                                AMREP CORPORATION
                         212 Carnegie Center, Suite 302
                           Princeton, New Jersey 08540
                           --------------------------
                                 PROXY STATEMENT
                           --------------------------

                         ANNUAL MEETING OF SHAREHOLDERS

                  To be Held at 9:00 A.M. on September 20, 2006

     This Proxy  Statement is furnished in connection  with the  solicitation of
proxies by the Board of Directors of AMREP  Corporation  (the "Company") for use
at the Annual Meeting of Shareholders of the Company to be held on September 20,
2006 and at any  continuation  or  adjournment  thereof (the "Annual  Meeting").
Anyone giving a proxy may revoke it at any time before it is exercised by giving
the Secretary of the Company written notice of the  revocation,  by submitting a
proxy bearing a later date or by attending the Annual  Meeting and voting.  This
Proxy Statement and the accompanying Notice of Annual Meeting and proxy form are
first being sent to shareholders on or about August 14, 2006.

     All properly  executed,  unrevoked  proxies in the enclosed  form which are
received in time will be voted in accordance with the  shareholders'  directions
and,  unless  contrary  directions are given,  will be voted for the election as
directors of the nominees named below and for approval of the proposed amendment
to the Certificate of Incorporation and adoption of the 2006 Equity Compensation
Plan. The presence,  in person or by proxy,  of the holders of a majority of the
outstanding  shares  of  Common  Stock of the  Company  authorized  to vote will
constitute  a quorum for the  transaction  of  business  at the Annual  Meeting.
Abstentions and broker non-votes will be counted in determining whether a quorum
is present at the Annual Meeting.

     Directors are elected by a plurality of the votes of the shares  present in
person or represented by proxy at the Annual Meeting and entitled to vote on the
election of directors,  and abstentions and broker non-votes have no effect. The
favorable vote of the holders of at least  two-thirds of the outstanding  shares
of Common Stock is required to approve the proposed amendment to the Certificate
of  Incorporation,  and the favorable vote of a majority of the shares of Common
Stock  present in person or by proxy at the meeting and  entitled to vote on the
proposal is required  to approve  the  adoption of the 2006 Equity  Compensation
Plan.  Abstentions  will have the effect of  negative  votes on both  proposals.
Broker non-votes will have the effect of negative votes on the proposal to amend
the Certificate of Incorporation  and will be treated as not entitled to vote on
the Equity  Compensation  Plan proposal and,  therefore,  will have no effect on
that vote.

     A copy of the 2006  Annual  Report of the Company for the fiscal year ended
April  30,  2006,  including  financial   statements,   accompanies  this  Proxy
Statement.  Such  Annual  Report  does  not  constitute  a  part  of  the  proxy
solicitation material.



     Only  shareholders of record at the close of business on July 31, 2006, the
date  fixed by the  Board of  Directors  in  accordance  with the  By-Laws,  are
entitled to notice of and to vote at the Annual  Meeting.  As of July 31,  2006,
the Company had issued and  outstanding  6,645,112  shares of Common Stock,  par
value $.10 per  share.  Each share of Common  Stock is  entitled  to one vote on
matters to come before the Annual Meeting.

                            COMMON STOCK OWNERSHIP OF
                    CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Set forth in the following table is information concerning the ownership of
the Common  Stock of the Company by the persons  who,  to the  knowledge  of the
Company, own beneficially more than 5% of the outstanding shares. The table also
sets  forth  the  same  information  concerning  beneficial  ownership  for each
director of the Company, each executive officer of the Company and all directors
and executive  officers of the Company as a group.  Unless otherwise  indicated,
reported ownership is as of July 31, 2006, and the Company  understands that the
beneficial  owners have sole  voting and  investment  power with  respect to the
shares  beneficially  owned by  them.  In the case of  directors  and  executive
officers, the information below has been provided by such persons at the request
of the Company.

                                               Shares Owned                % of
Beneficial Owner                               Beneficially(1)             Class
----------------                               ------------                -----

Nicholas G. Karabots (Director)                  3,645,953 (2)              54.9
P.O. Box 736
Fort Washington, PA 19034

Albert V. Russo (Director)                       1,214,490 (3)              18.3
Lena Russo, Clifton Russo,
Lawrence Russo
American Simlex Company
401 Broadway
New York, NY 10012

Dimensional Fund Advisors Inc.                     387,936 (4)               5.8
1299 Ocean Avenue
Santa Monica, CA 90401


Other Directors and Executive Officers
Edward B. Cloues II                                 15,250                    *
Lonnie A. Coombs                                    12,250                    *
Michael P. Duloc                                     5,000 (5)                *
Elmer F. Hansen, Jr.                                 1,750                    *
Joseph S. Moran                                         -                     -
Peter M. Pizza                                          -                     -
Samuel N. Seidman                                   13,250                    *
James Wall                                           8,057 (6)                *

Directors and Executive Officers as a Group
(10 persons)                                     4,916,000 (2),(3),(5),(6)  73.9
-----------------------------
*        Indicates less than 1%.

                                      -2-



(1)  The shareholdings include 500 shares for each of Messrs.  Karabots,  Cloues
     and Hansen,  1,500 shares for Mr. Coombs,  1,000 shares for Mr. Seidman and
     1,500  shares  for Albert V. Russo  which  such  persons  have the right to
     acquire  pursuant  to  options  issued  under  the  Company's  Non-Employee
     Directors  Option  Plan  that  are now  exercisable  or will  become  so on
     September 22, 2006.
(2)  Includes  580,615  shares  owned  by The  Karabots  Foundation,  a  private
     non-profit  corporation  founded  by Mr.  Karabots  and of  which he is the
     President,  Foundation  Manager  and  one of two  directors.  Mr.  Karabots
     disclaims  beneficial  ownership  of  the  shares  owned  by  The  Karabots
     Foundation.
(3)  Albert V. Russo, Lena Russo, Clifton Russo and Lawrence Russo have reported
     that they share  voting  power as to these shares and that each of them has
     sole  dispositive  power  as  to  the  following  numbers  of  such  shares
     representing  the indicated  percentages of the  outstanding  Common Stock:
     Albert V.  Russo - 683,491  (10.3%);  Lena Russo - 48,740  (0.7%);  Clifton
     Russo - 262,317 (3.9%); and Lawrence Russo - 219,942 (3.3%).
(4)  Dimensional  Fund Advisors Inc.  ("Dimensional"),  a registered  investment
     advisor,  is deemed to have  beneficial  ownership of these shares,  all of
     which are held in portfolios  of four  registered  investment  companies or
     other investment  vehicles,  including  commingled group trusts,  for which
     Dimensional serves as investment manager or investment advisor. Dimensional
     disclaims  beneficial  ownership  of all such  shares.  This  ownership  is
     reported  in a February  6, 2006  amendment  to the  Schedule  13G filed by
     Dimensional with the Securities and Exchange Commission.
(5)  Held jointly with Mr. Duloc's spouse.
(6)  Includes 287 shares held in the Company's  Savings and Salary Deferral Plan
     allocated to the account of Mr. Wall.

                              ELECTION OF DIRECTORS

     The Board of Directors of the Company is a  classified  board  divided into
three classes - Class I consisting of two directors,  Class II consisting of two
directors and Class III consisting of three  directors.  Each class of directors
serves for a term of three years. At this Annual Meeting,  two Class I directors
will be  elected  to serve  until  the  2009  Annual  Meeting  and  until  their
successors are elected and qualified.

     The Board of  Directors is  nominating  Edward B. Cloues II and James Wall,
who are  incumbent  Class I  directors,  for  election  at the  Annual  Meeting.
Although  the Board of  Directors  does not expect  that  either of the  persons
nominated  will be unable to serve as a director,  should  either of them become
unavailable  for election it is intended that the shares  represented by proxies
in the accompanying form will be voted for the election of a substitute  nominee
or nominees selected by the Board.

     The Board of Directors unanimously  recommends a vote "for" the two Class I
nominees.

     The following  table sets forth  information  regarding the nominees of the
Board of Directors for election and the  directors  whose terms of office do not
expire this year.



                                      -3-


                              Year First
                              Elected As  Principal Occupation For Past
Name                    Age   A Director  Five Years and Current Directorships
----                    ---   ----------  ------------------------------------

Nominees to serve until the 2009 Annual Meeting (Class I)

Edward B. Cloues II      58       1994    Chairman  and Chief  Executive Officer
                                          of K-Tron International, Inc.,   a
                                          material handling equipment
                                          manufacturer;   Director   of  K-Tron
                                          International,  Inc.,  Penn Virginia
                                          Corporation and  Penn  Virginia
                                          Resource GP, the general partner of
                                          Penn Virginia Resource Partners, L.P.

James Wall               69       1991    Chairman of the Board,  President  and
                                          Chief Executive  Officer  of AMREP
                                          Southwest Inc., a  wholly-owned
                                          subsidiary  of the Company;  Senior
                                          Vice President of the Company.

Directors continuing in office until the 2008 Annual Meeting (Class III)

Elmer F. Hansen, Jr.     69       2005    President/Chief Executive Officer of
                                          Hansen  Properties, Inc., a  company
                                          engaged  in the  development  and
                                          management of real estate investments.

Nicholas G. Karabots     73       1993    Chairman of the Board and Chief
                                          Executive Officer of Kappa Media
                                          Group, Inc., Spartan Organization,
                                          Inc., Jericho  National  Golf Club,
                                          Inc. and other  private companies,
                                          which companies are engaged
                                          primarily in the publishing,
                                          printing, recreational sports and
                                          real estate businesses.

Albert V. Russo          52       1996    Managing  Partner, Russo  Associates,
                                          Pioneer Realty, real estate entities;
                                          Partner, American Simlex Company,
                                          textile exports. Also, Managing
                                          Partner of 401 Broadway Building, a
                                          real estate  company that acquired its
                                          principal asset in 2006 from a Court
                                          appointed receiver for 401 Broadway
                                          Realty Company, of which Mr. Russo was
                                          a general partner, in connection with
                                          the resolution of a dispute among the
                                          partners.


                                     - 4 -


                              Year First
                              Elected As  Principal Occupation For Past
Name                    Age   A Director  Five Years and Current Directorships
----                    ---   ----------  ------------------------------------

Directors continuing in office until the 2007 Annual Meeting (Class II)

Samuel N. Seidman        72       1977    President of  Seidman  &  Co.,  Inc.,
                                          economic consultants  and  investment
                                          bankers;  Director,  Chairman of  the
                                          Board  and  Chief   Executive Officer
                                          of Productivity  Technologies   Corp.,
                                          manufacture   of  metal  forming  and
                                          handling automation  equipment  and  a
                                          wirer  of  control panels.


Lonnie A. Coombs         58       2001    Certified  Public Accountant,  Lonnie
                                          A. Coombs, CPA,  accounting,  tax  and
                                          business consulting services.


     Each current  director has served  continuously  since the year in which he
was first elected.

                    THE BOARD OF DIRECTORS AND ITS COMMITTEES

     The Company's  Common Stock is listed on the New York Stock  Exchange,  and
the Company is subject to the  Exchange's  Corporate  Governance  Standards (the
"Governance Standards"). The Governance Standards, among other things, generally
require a listed company to have independent directors within the meaning of the
Governance  Standards as a majority of its board of directors  and for the board
to have a nominating/corporate governance committee and a compensation committee
composed  entirely  of  independent   directors.   However,  the  Company  is  a
"controlled  company"  within the meaning of the  Governance  Standards  because
Nicholas G.  Karabots  and  entities  related to him have the power to vote more
than a majority of the outstanding  Common Stock,  and the Governance  Standards
permit a controlled company to choose not to comply with those requirements. The
Board has chosen not to have a nominating/corporate  governance committee. Also,
the Board has chosen not to comply with the Governance  Standards  applicable to
compensation  committees.  Although  the  Board  has a  Compensation  and  Human
Resources  Committee,  not all of its members are  independent  directors  as is
required by the Governance Standards.

     Under the  Governance  Standards,  a director  of the  Company  will not be
considered  independent  if such person has any material  relationship  with the
Company,  either  directly  or  as a  partner,  shareholder  or  officer  of  an
organization that has a relationship with the Company.  The Governance Standards
also provide that the presence of any of the following particular  relationships
will preclude a determination of independence:

     (1) the director  is, or has been within the last three years,  an employee
     of the Company,  or an immediate  family  member is, or has been within the
     last three years, an executive officer of the Company;

     (2) the director has  received,  or has an immediate  family member who has
     received,  during any twelve-month period within the last three years, more
     than $100,000 in direct compensation from the Company,  other than director

                                      -5-


     and committee fees and pension or other forms of deferred  compensation for
     prior service  (provided such  compensation is not contingent in any way on
     continued service);

     (3) (A) the director or an immediate  family member is a current partner of
     a firm that is the Company's internal or external auditor; (B) the director
     is a current  employee of such a firm;  (C) the  director  has an immediate
     family member who is a current employee of such a firm and who participates
     in the firm's  audit,  assurance or tax  compliance  (but not tax planning)
     practice;  or (D) the director or an immediate family member was within the
     last three  years (but is no longer) a partner or  employee  of such a firm
     and personally worked on the Company's audit within that time;

     (4) the director or an immediate  family  member is, or has been within the
     last three years, employed as an executive officer of another company where
     any of the Company's present executive  officers at the same time serves or
     served on that company's compensation committee; or

     (5) the director is a current employee,  or an immediate family member is a
     current  executive  officer,  of a company  that has made  payments  to, or
     received  payments  from, the Company for property or services in an amount
     which,  in any of the last three  fiscal  years,  exceeds the greater of $1
     million or 2% of such other company's consolidated gross revenues.

     Mr.  Karabots  does  not  qualify  as an  independent  director  under  the
Governance  Standards.  He owns and he and  certain  of his family  members  are
executives of publishers that are customers for the Company's  distribution  and
fulfillment services for which the payments involved are in amounts greater than
permitted  under  the  Governance  Standards  for a  director  to be  considered
independent.  Also, his  son-in-law,  Michael P. Duloc,  is the chief  operating
officer of the Company's fulfillment and distribution  services businesses.  Mr.
Wall is a Company  employee  and  therefore  does not qualify as an  independent
director under the Governance Standards.

     Based  principally  on  their  responses  to  questions  to  these  persons
regarding  the   relationships   addressed  by  the  Governance   Standards  and
discussions  with  them,  the Board has  determined  that,  except  for  Messrs.
Karabots  and  Wall,   all  of  its  members  meet  the  director   independence
requirements  of the  Governance  Standards.  The  Board was  informed  that Mr.
Coombs, who is a certified public accountant,  for many years has provided,  and
expects  to  continue  to  provide,  business  and tax  consulting  services  to
companies owned by Mr. Karabots, including companies which are customers for the
Company's distribution and fulfillment services. The revenues from such business
and tax  consulting  services  for the  Company's  last three  fiscal years have
accounted for from 16.5% to 7.7% of Mr. Coombs'  professional  service  revenues
over those years.  However,  the Board  concluded that Mr. Coombs'  relationship
with Mr. Karabots and his companies is as an independent contractor,  and not as
an employee,  partner,  shareholder or officer, and would not interfere with Mr.
Coombs' independence from the Company's management.

     The nominees  for election as directors  are selected by the whole Board of
Directors.  The Board has no charter addressing the director  nomination process
or any specific  qualifications for nominees to meet. If the Board determines in

                                      -6-


the future to seek any new director, it will consider the qualifications for the
position  at  that  time.  The  Board  will  consider  candidates  for  director
recommended by  shareholders  on the same basis as any other proposed  nominees.
Any  shareholder  desiring to propose a candidate  for selection as a nominee of
the Board for election at the 2007 Annual Meeting may do so by sending a written
communication  no later  than May 1,  2007 to AMREP  Corporation,  212  Carnegie
Center, Suite 302, Princeton, New Jersey 08540, Attention:  Corporate Secretary,
identifying the proposing shareholder, specifying the number of shares of Common
Stock held and  stating  the name and  address of the  proposed  nominee and the
information  concerning  such person that the  regulations of the Securities and
Exchange  Commission  require be included in a proxy statement  relating to such
person's election as a director.  Shareholders  should recognize that so long as
Mr. Karabots remains the Company's controlling  shareholder,  his concurrence is
necessary for the election of any director.

     In July 2004 in response to the  Governance  Standards,  the Board  adopted
Corporate Governance Guidelines (the "Guidelines") which address various matters
involving  the Board and the conduct of its  business.  The Board also adopted a
new Code of Business  Conduct and Ethics  setting  forth  principles of business
conduct applicable to the directors,  officers and employees of the Company. The
Guidelines and Code of Business  Conduct and Ethics,  as well as the charters of
the Board's Audit Committee and Compensation and Human Resources Committee,  may
be  viewed  under   "Corporate   Governance"   on  the   Company's   website  at
www.amrepcorp.com,  and written copies will be provided to any shareholder  upon
request to the Company at AMREP  Corporation,  212 Carnegie  Center,  Suite 302,
Princeton, New Jersey 08540, Attention: Corporate Secretary. The Company intends
to disclose on its website any  amendment  to or waiver of any  provision of the
Code of  Business  Conduct  and  Ethics  that  applies  to any of its  executive
officers, including its principal financial and accounting officer.

     Directors are expected to attend Annual Meetings of  Shareholders,  and all
of the incumbent  directors attended last year's Annual Meeting.  The Board held
four meetings  during the last fiscal year,  and all of the incumbent  directors
attended at least 75% of the total of those  meetings  and the  meetings  during
such year of the Board  Committees of which they were  members.  Pursuant to the
Guidelines, the Board has established a policy that the non-management directors
meet in executive  session at least two times per year and that the  independent
directors  also meet in executive  session at least twice per year. The Chairman
of the Board  (currently,  Edward B. Cloues II), if in  attendance,  will be the
presiding  director at each such executive session;  otherwise,  those attending
will select a presiding director.

     Any  shareholder  wishing  to  communicate  with  the  Board  or any of the
directors may send a written  communication to AMREP  Corporation,  212 Carnegie
Center, Suite 302, Princeton,  New Jersey 08540, Attention:  Corporate Secretary
for forwarding to the intended person or persons.

     The Board has an Executive  Committee  which generally has the power of the
Board and acts, as needed,  between meetings of the Board.  Also, in the absence
of a Chief Executive Officer (the Company has not had a CEO since January 1996),
the  Committee is charged  with the  oversight of the  Company's  business.  The
current  members of the Committee are Messrs.  Cloues,  Karabots and Russo.  Mr.
Cloues is Chairman of the Board and of the Committee and is compensated  for his
services in those  positions at the rate of $135,000 per year.  Mr.  Karabots is
Vice-Chairman of the Board and of the Committee,  and the Company pays a monthly
fee of $10,000 to a company that he owns for making him available to act in such
positions. These payments for Messrs. Cloues and Karabots are in addition to the

                                      -7-


other fees paid to them as directors and members of the  Compensation  and Human
Resources  Committee.  During the last fiscal year, the Executive  Committee met
four times on a formal basis and frequently on an informal basis

     The  Board  also  has an  Audit  Committee  and a  Compensation  and  Human
Resources  Committee.  For fiscal 2006,  the fee payable to members of the Audit
Committee for each Committee  meeting attended was $1,000.  For fiscal 2006, the
fee payable to members of the  Compensation  and Human  Resources  Committee for
each Committee meeting attended was $750.

     Each member of the Audit Committee is an independent  director,  as defined
by the Governance  Standards.  The Committee  operates  under a written  charter
adopted by the Board of Directors, most recently on July 13, 2004. The duties of
the Audit Committee include (i) appointing the Company's independent  registered
public  accounting firm,  approving the services to be provided by that firm and
its  compensation  and reviewing  that firm's  independence  and  performance of
services,  (ii)  reviewing  the scope and  results  of the  yearly  audit by the
independent  registered  public  accounting  firm, (iii) reviewing the Company's
system of internal  controls and procedures,  (iv) reviewing with management and
the  independent  registered  public  accounting  firm the Company's  annual and
quarterly financial statements,  (v) reviewing the Company's financial reporting
and accounting standards and principles,  and (vi) overseeing the administration
of the Guidelines.  This Committee reports regularly to the Board concerning its
activities. The current members of this Committee are Messrs. Coombs, Hansen and
Seidman  (Chairman),  each  of whom  has  been  determined  by the  Board  to be
independent  and  financially  literate  within the  meaning  of the  Governance
Standards.  The Board has also  determined  that Mr. Coombs,  who is a certified
public accountant,  qualifies as an audit committee  financial expert within the
meaning of Securities and Exchange Commission  regulations.  The Audit Committee
held five meetings during the last fiscal year.

     Under its charter,  adopted by the Board in July 2005, the Compensation and
Human Resources  Committee is responsible  for determining  salaries and bonuses
for the  executives of the Company and its  subsidiaries,  establishing  overall
compensation and benefit levels and fixing bonus pools for other employees,  and
making  recommendations  to the  Board  concerning  other  matters  relating  to
employees and regarding director compensation. The members of this Committee are
Messrs. Cloues,  Karabots (Chairman) and Russo, and it held five meetings during
the last fiscal year.

     For fiscal 2006, each  non-employee  director of the Company was paid a fee
of $20,000 in addition to fees paid to such  director as a member of one or more
Board Committees.  Additionally,  under the 2002  Non-Employee  Directors' Stock
Plan,  each  non-employee  director  receives a grant from the  Company of 1,250
shares of its Common Stock on each March 15 and September 15 as partial  payment
for services for the preceding six months. Regarding the fiscal 2006 grants, the
last  sales  prices  for the  Common  Stock on the New York  Stock  Exchange  on
September 15, 2005 and March 15, 2006 were $27.28 and $31.40.

     Also,  through the 2005 Annual Meeting of Shareholders,  the Company had in
effect the Non-Employee Directors Option Plan, under which following each Annual
Meeting each non-employee  director was granted an option covering 500 shares of
Common Stock of the Company.  The price per share  payable upon exercise of such
option was either (i) the mean  between  the highest  and lowest  reported  sale
price of the Common  Stock on the date of grant on the New York Stock  Exchange,

                                      -8-


or (ii) the price of the last sale of Common Stock on that date as quoted on the
New York Stock Exchange, whichever was higher. For the options granted following
the 2005 Annual Meeting, the exercise price is $24.88 per share. Options granted
under the Plan are first  exercisable  as to all or any  portion  of the  shares
covered thereby one year after the date of grant and expire five years after the
date of grant.  The  Board  terminated  the Plan  effective  following  the 2005
grants.

                    AMENDMENT TO CERTIFICATE OF INCORPORATION

     The Certificate of Incorporation of the Company provides for the By-Laws to
fix  the  size of the  Board  of  Directors,  subject  to a  maximum  of  twelve
directors. The size of the Board is presently fixed at seven directors. Although
the Board has the  authority  to amend the  By-Laws  to  increase  the number of
directors,  the  Certificate  of  Incorporation  at  present  permits  only  the
shareholders to fill vacancies created by such Board action.

     The Board of Directors believes that this limit on its authority interferes
with its ability to efficiently  manage the business and affairs of the Company.
Although the Board has no present  intention to seek  additional  directors,  it
believes  that the  Company's  business  and the enhanced  corporate  governance
responsibilities   of  the  Board,   as  well  as  the   possibility  of  future
acquisitions,  may create a future need or desire to expand the Board. The Board
believes that the current  requirement  that only the shareholders may elect the
additional directors with the attendant extension of the period for the election
process could  unnecessarily  delay the  implementation  of desired increases in
Board membership and might hamper the ability of the Board to convince  suitable
candidates to join the Board.

     The Board  therefore  is  proposing  an  amendment  to the  Certificate  of
Incorporation,  the  text of which  is  included  as  Appendix  A to this  Proxy
Statement,  allowing the Board to fill  vacancies  resulting from an increase in
its size.  The authority  proposed to be granted to the Board will not alter the
existing authority of the shareholders as well to fill such vacancies.

     If  the  shareholders  approve  the  proposed  amendment,  it  will  become
effective  upon the filing of a Certificate  of Amendment to the  Certificate of
Incorporation  with the Oklahoma  Secretary  of State which is intended  will be
done promptly after the Annual Meeting.

     The Board of  Directors  unanimously  recommends  a vote "for" the proposed
amendment to the Certificate of Incorporation.

                  APPROVAL OF ADOPTION OF THE AMREP CORPORATION
                          2006 EQUITY COMPENSATION PLAN

     On July 20,  2006,  the Board  adopted  the AMREP  Corporation  2006 Equity
Compensation Plan (the "Plan"),  subject to shareholder approval.  The Board has
directed  that the  proposal to approve its adoption of the Plan be submitted to
the Company's shareholders at the Annual Meeting.  Shareholder approval is being
sought  (i) in order  for the  shares  covered  by the Plan to meet the  listing
requirements  of  the  New  York  Stock  Exchange,  (ii)  so  that  compensation
attributable  to certain grants under the Plan may qualify for an exemption from
the $1 million deduction limit under section 162(m) of the Internal Revenue Code
of 1986 (the  "Code")  (see  discussion  of  "Federal  Income Tax  Consequences"
below), and (iii) in order for any incentive stock options granted thereunder to
meet the requirements of the Code.

                                      -9-


     The Board  believes that the Plan will further the  Company's  compensation
strategy.  The  Company's  ability to attract,  retain and  motivate top quality
employees and non-employee  directors is material to the Company's success.  The
Board  believes that the interests of the Company and its  shareholders  will be
advanced if the Company can offer its employees and  non-employee  directors the
opportunity to acquire or increase their  ownership  interests in the Company by
receiving grants under the Plan. The Company's only existing equity compensation
plan is the 2002 Non-Employee Directors' Stock Plan. This plan for the Company's
non-employee  directors  is  described  under  "The Board of  Directors  and its
Committees" above and "Equity  Compensation  Plan Information"  below and is not
affected by the  adoption  of the Plan.  However,  only 12,500  shares of Common
Stock remain  available for grant under the Directors'  Plan, 7,500 of which are
expected to be issued on September 15, 2006.

     The material  terms of the Plan are  summarized  below.  A copy of the full
text of the Plan is attached to this Proxy Statement as Appendix B. This summary
of the Plan is not  intended  to be a  complete  description  of the Plan and is
qualified in its  entirety by the actual text of the Plan to which  reference is
made.

Material Features of the Plan

     General.  The Plan provides that grants may be made in any of the following
forms: (i) incentive stock options,  (ii) nonqualified  stock options (incentive
stock options and  nonqualified  stock options are  collectively  referred to as
"options"),  (iii) stock awards, (iv) stock units, (v) stock appreciation rights
("SARs"), (vi) dividend equivalents and (vii) other stock-based awards.

     The Plan  authorizes  up to 400,000  shares of Common  Stock for  issuance,
subject to adjustment in certain circumstances as described below. If and to the
extent  options  and SARs  granted  under  the  Plan  terminate,  expire  or are
cancelled, forfeited, exchanged or surrendered without being exercised or if any
stock  awards,  stock  units  or  other  stock-based  awards  are  forfeited  or
terminated,  the shares subject to such grants will become  available  again for
purposes of the Plan.

     The Plan  provides  that the maximum  aggregate  number of shares of Common
Stock with  respect to which  grants  may be made to any  individual  during any
calendar year is 20,000 shares,  subject to adjustment as described  below.  All
grants under the Plan will be expressed in shares of Common Stock.

     If  approved  by the  shareholders,  the  Plan  will  become  effective  on
September 20, 2006 or, if later, the date of such approval.

     Administration.  The Plan will be administered and interpreted by the Board
of Directors or by a committee (the  "Committee")  unanimously  appointed by the
Board  from  among its  members,  provided  that (i) the Board  shall act as the
Committee in the absence of the  unanimous  appointment  of the Committee by the
Board and (ii) grants under the Plan to non-employee  directors shall be awarded
and  administered  only by the Board.  The  Committee  has the  authority to (i)
determine  the  individuals  to whom  grants  will be made under the Plan,  (ii)
determine the type,  size,  terms and conditions of the grants,  (iii) determine
when  grants  will be made  and  the  duration  of any  applicable  exercise  or
restriction   period,   including  the  criteria  for   exercisability  and  the
acceleration  of  exercisability,  (iv)  amend the terms and  conditions  of any

                                      -10-


previously  issued grant,  subject to the limitations  described  below, and (v)
deal with any other matters arising under the Plan.

     Eligibility  for  Participation.  All  employees  of the  Company  and  its
subsidiaries  and all  non-employee  directors  of the Company  are  eligible to
receive  grants  under the Plan.  As of July 14,  2006,  the date of the  Plan's
adoption  by the  Board,  approximately  1,300  employees  and six  non-employee
directors  were  eligible to receive  grants  under the Plan.  The  Committee is
authorized to select the persons to receive grants from among those eligible and
to  determine  the  number of shares of Common  Stock  that are  subject to each
grant.

     Types of Awards.

     Stock  Options.  The  Committee  may grant  options  intended to qualify as
     ---------------
"incentive stock options" within the meaning of section 422 of the Code ("ISOs")
or "nonqualified stock options" that are not intended to so qualify ("NQSOs") or
any  combination of ISOs and NQSOs.  Anyone  eligible to participate in the Plan
may receive a grant of NQSOs. Only employees of the Company and its subsidiaries
may receive a grant of ISOs.

     The Committee  will fix the exercise price per share of options on the date
of grant.  The exercise price of options  granted under the Plan may be equal to
or greater than the fair market value of the  underlying  shares of Common Stock
on the date of grant.  However,  if the  grantee of an ISO is a person who holds
more than 10% of the total  combined  voting power of all classes of outstanding
stock of the  Company,  the  exercise  price per share of an ISO granted to such
person must be at least 110% of the fair market value of a share of Common Stock
on the date of grant.  If the  aggregate  fair market  value of shares of Common
Stock,  determined  on the date of grant,  with  respect  to which  ISOs  become
exercisable  for the first time by a grantee  during any  calendar  year exceeds
$100,000, such ISOs, to the extent of such excess over $100,000, will be treated
as NQSOs.

     The Committee will determine the term of each option, but such term may not
exceed ten years from the date of grant;  however, if the grantee of an ISO is a
person who holds more than 10% of the  combined  voting  power of all classes of
outstanding stock of the Company,  the term of the ISO may not exceed five years
from the date of grant. The Committee will determine the terms and conditions of
options,  including when they become  exercisable.  The Committee may accelerate
the exercisability of any options.

     A grantee may  exercise an option by  delivering  notice of exercise to the
Company.  The grantee will pay the exercise price and any withholding  taxes for
the option:  (i) in cash,  (ii) unless the Committee  determines  otherwise,  by
delivering shares of Common Stock already owned by the grantee and having a fair
market  value on the date of  exercise  equal to the  exercise  price or to that
portion  thereof  not  paid in cash,  (iii)  by  payment  through  a  broker  in
accordance with the procedures  permitted by Regulation T of the Federal Reserve
Board, or (iv) by such other method as the Committee may approve.

     The  Committee  will  determine  under  what  circumstances  a grantee  may
exercise an option after  termination of employment or service,  but in no event
may this be later  than the  expiration  of the  option  term.  Generally,  if a
grantee  ceases to be  employed  by, or provide  service  to, the Company or any
subsidiary for any reason other than disability, death or termination for cause,
the  grantee's  options will  terminate 90 days  following the date on which the

                                      -11-


grantee  ceases to be  employed  by, or provide  service  to, the Company or any
subsidiary.  If a grantee's  employment or service ceases due to a disability or
death, the grantee's options will terminate 180 days following the date on which
the grantee ceases to be employed by, or provide  service to, the Company or any
subsidiary.  In each case described above, the Committee may specify a different
option  termination  date,  but in any event no later than the expiration of the
option term. If a grantee  ceases to be employed by, or provide  service to, the
Company or any  subsidiary on account of  termination  for cause,  the grantee's
options will terminate immediately.

     Stock Awards.  The  Committee may grant stock awards to anyone  eligible to
     -------------
participate   in  the  Plan.   The  Committee  may  require  that  grantees  pay
consideration  for the stock  awards  and may impose  restrictions  on the stock
awards.  If  restrictions  are  imposed  on stock  awards,  the  Committee  will
determine  whether  they will lapse over a period of time or  according  to such
other  criteria as the Committee  determines.  The Committee  will determine the
number of shares of Common  Stock  subject to the grant of stock  awards and the
other terms and  conditions of the grant.  The Committee  will determine to what
extent and under what conditions  grantees will have the right to vote shares of
Common Stock and to receive dividends paid on such shares during the restriction
period.  The Committee may determine  that a grantee's  entitlement to dividends
with respect to stock awards will be subject to the  achievement  of performance
goals or other conditions.

     Stock  Units.  The  Committee  may grant stock units to anyone  eligible to
     -------------
participate in the Plan.  Each stock unit provides the grantee with the right to
receive  an amount  based on the  value of a share of  Common  Stock at a future
date.  The  Committee  will  determine  the number of stock units to be granted,
whether stock units will become  payable  based on  achievement  of  performance
goals or other  conditions,  and the other terms and  conditions  applicable  to
stock  units.  Stock  units  may be  paid at the end of a  specified  period  or
deferred  to a date  authorized  by  the  Committee.  If a  stock  unit  becomes
distributable, it will be paid to the grantee in cash, in shares of Common Stock
or in a  combination  of cash and shares of Common  Stock,  as determined by the
Committee.

     SARs. The Committee may grant SARs to anyone eligible to participate in the
     -----
Plan. SARs may be granted in connection  with, or  independently  of, any option
granted  under the Plan.  Upon  exercise of an SAR,  the grantee will receive an
amount  equal to the excess of the fair market  value of the Common Stock on the
date of exercise over the base amount of the SAR. Payment will be made in shares
of Common Stock,  in cash or in a combination  of shares and cash, as determined
by the  Committee.  The  base  amount  of each  SAR  will be  determined  by the
Committee  and will be  equal to the per  share  exercise  price of the  related
option or, if there is no related  option,  an amount  that is at least equal to
the  value of a share  of  Common  Stock  on the  date of grant of the SAR.  The
Committee will  determine the terms and conditions of SARs,  including when they
become exercisable. The Committee may accelerate the exercisability of any SARs.
SARs may be exercised  during the period  specified by the  Committee,  but only
while the  grantee is employed  by or  providing  service to the Company and its
subsidiaries  or within a  specified  period of time after  termination  of such
employment or service, as described above with respect to stock options.

     Other Stock Based Awards. The Committee may grant other stock-based awards,
     -------------------------
which are grants other than  options,  stock  awards,  stock units or SARs.  The
Committee may grant other  stock-based  awards to anyone eligible to participate
in the  Plan.  These  grants  will be based on or  measured  by shares of Common
Stock,  and  will be  payable  in  cash,  in  shares  of  Common  Stock  or in a

                                      -12-


combination of cash and shares of Common Stock,  as determined by the Committee.
The terms and conditions for other stock-based  awards will be determined by the
Committee.

     Dividend  Equivalents.  The Committee  may grant  dividend  equivalents  in
     ----------------------
connection with stock units or other stock-based  awards.  Dividend  equivalents
are  payable  in cash or  shares of Common  Stock and may be paid  currently  or
accrued  as  contingent  obligations.  The  terms  and  conditions  of  dividend
equivalents will be determined by the Committee.

     Qualified Performance-Based Compensation. The Plan permits the Committee to
impose  objective  performance  goals that must be met with respect to grants of
stock awards,  stock units,  other  stock-based  awards or dividend  equivalents
granted to employees  under the Plan,  in order for the grants to be  considered
qualified  performance-based  compensation for purposes of section 162(m) of the
Code (see "Federal Income Tax Consequences"  below). Prior to, or soon after the
beginning of, the  performance  period,  the Committee will establish in writing
the performance goals that must be met, the applicable  performance  period, the
amounts to be paid if the performance goals are met and any other conditions.

     The performance  goals, to the extent designed to meet the  requirements of
section  162(m)  of the  Code,  will be  based  on one or more of the  following
measures:  stock price,  earnings per share, net earnings,  operating  earnings,
earnings  before  income  taxes,  EBITDA  (earnings  before  income tax expense,
interest expense, and depreciation and amortization expense),  return on assets,
shareholder  return,  return on equity,  growth in assets,  unit volume,  sales,
market share or strategic business criteria consisting of one or more objectives
based on meeting specified revenue goals,  market penetration goals,  geographic
business  expansion  goals,  cost targets or goals relating to  acquisitions  or
divestitures.

     If  dividend   equivalents  are  granted  as  qualified   performance-based
compensation  under section  162(m) of the Code, the grantee may not accrue more
than $50,000 of such dividend equivalents during any calendar year.

     Deferrals. The Committee may permit or require grantees to defer receipt of
the  payment  of cash or the  delivery  of  shares of Common  Stock  that  would
otherwise  be due to the  grantee in  connection  with any stock  units or other
stock-based  awards under the Plan.  The Committee  will establish the rules and
procedures,  consistent  with section 409A of the Code,  applicable  to any such
deferrals  and may  provide for  interest  or other  earnings to be paid on such
deferrals.

     Adjustment  Provisions.  If there is any  change  in the  number or kind of
shares of the Common  Stock by reason of a stock  dividend of greater  than 10%,
recapitalization,  stock  split,  combination  or  exchange  of shares,  merger,
reorganization, consolidation,  reclassification, change in par value, spin-off,
split-off,  or  split-up,  the limit on the number of shares of Common Stock any
individual  may  receive  pursuant  to grants in any year,  the number of shares
covered by  outstanding  grants,  the kind of shares to be issued under the Plan
and the price per share of such grants  shall be  appropriately  adjusted by the
Committee  to reflect  any  increase or decrease in the number or kind of issued
shares of Common  Stock in order to  preclude,  to the extent  practicable,  the
enlargement  or  dilution  of the rights and  benefits  under such  grants.  Any
fractional  shares  resulting from such adjustment will be eliminated.  Upon any
such event,  the Committee also has the discretion to  appropriately  adjust the
number of shares  available  for  grants so long as the action  taken  would not
disqualify options intended to be ISOs.

                                      -13-


     Change of Control.  In the event of a change of control of the Company,  as
defined in the Plan,  the Committee  may, but need not, in its sole  discretion,
take any or all of the following  actions:  (i) accelerate the exercisability of
all  outstanding  options and SARs in whole or in part;  (ii) determine that the
restrictions and conditions on all outstanding stock awards shall lapse in whole
or in part; (iii) determine that all stock units, dividend equivalents and other
stock-based  awards  are fully  vested  and shall be paid at no less than  their
target values,  if any, or in such amounts as the Committee may determine in the
case of awards without target values; (iv) require that grantees surrender their
options and SARs in exchange  for payment by the  Company,  in cash or shares of
Common Stock as determined by the Committee, in an amount equal to the amount by
which  the  then  fair  market  value of the  shares  subject  to the  grantee's
unexercised  options and SARs exceeds the  exercise  price of the options or the
base  amount  of  the  SARs,  as  applicable;  (v)  after  giving  grantees  the
opportunity to exercise their options and SARs, terminate any or all unexercised
options and SARs at such time as the Committee determines  appropriate;  or (vi)
determine  that  outstanding  options  and SARS that are not  exercised  will be
assumed  by, or replaced  with  comparable  options or rights by, the  surviving
corporation.

     Transferability  of Grants.  Only the grantee may  exercise  rights under a
grant during the  grantee's  lifetime.  A grantee may not transfer  those rights
except by will or the laws of descent and distribution;  provided, however, that
a  grantee  may  transfer  a grant  other  than an ISO  pursuant  to a  domestic
relations  order. The Committee may also provide,  in a grant agreement,  that a
grantee may transfer NQSOs to his or her family  members,  or one or more trusts
or other entities for the benefit of or owned by such family members, consistent
with applicable  securities  laws,  according to such terms as the Committee may
determine.

     Grantees Outside the United States.  If any individual who receives a grant
under the Plan is subject to taxation in a country other than the United States,
the Committee  may make the grant on such terms and  conditions as the Committee
determines appropriate to comply with the laws of the applicable country.

     No Repricing of Options.  Neither the Board nor the Committee can amend the
Plan or  options  previously  granted  under the Plan to permit a  repricing  of
options,  without prior shareholder approval.  Adjustments to the exercise price
or number of shares of Common Stock  subject to an option to reflect the effects
of a stock split or other corporate transaction will not constitute a repricing.

     Amendment and Termination of the Plan. The Board may amend or terminate the
Plan at any time,  subject to shareholder  approval if such approval is required
under  any  applicable  laws or  stock  exchange  requirements.  The  Plan  will
terminate on September 19, 2016,  unless the Plan is  terminated  earlier by the
Board or is extended by the Board with shareholder consent.

     Grants  Under the Plan.  No grants  have been made  under the Plan.  Grants
under the Plan are discretionary, so it is not currently possible to predict the
number of shares of Common Stock that will be granted or who will receive grants
under the Plan after the Annual Meeting.

     The  closing  price of the  Company's  Common  Stock on the New York  Stock
Exchange on July 31, 2006, was $37.37 per share.

                                      -14-


Federal Income Tax Consequences

     The federal income tax consequences of grants under the Plan will depend on
the type of grant. The following description provides only a general description
of the  application  of federal  income tax laws to grants under the Plan.  This
discussion is intended for the  information of  shareholders  considering how to
vote  at the  Annual  Meeting  and  not  as tax  guidance  to  grantees,  as the
consequences  may vary  with the  types of  grants  made,  the  identity  of the
grantees and the method of payment or  settlement.  The summary does not address
the effects of other federal taxes (including possible "golden parachute" excise
taxes) or taxes imposed under state, local or foreign tax laws.

     From the grantees'  standpoint,  as a general rule, ordinary income will be
recognized  at the time of delivery of shares of Common Stock or payment of cash
under the Plan.  Future  appreciation  on shares of Common Stock held beyond the
ordinary  income  recognition  event will be  taxable  as capital  gain when the
shares of Common  Stock are sold.  The tax rate  applicable  to the capital gain
will depend  upon how long the  grantee  holds the  shares.  The  Company,  as a
general rule,  will be entitled to a tax deduction that  corresponds in time and
amount to the ordinary  income  recognized by the grantee,  and the Company will
not be  entitled  to any tax  deduction  with  respect  to capital  gain  income
recognized by the grantee.

     Exceptions to these general rules arise under the following circumstances:

     (i) If shares of Common Stock, when delivered, are subject to a substantial
risk of forfeiture by reason of any employment or performance-related condition,
ordinary  income  taxation and the Company's tax deduction will be delayed until
the risk of forfeiture  lapses,  unless the grantee makes a special  election to
accelerate taxation under section 83(b) of the Code.

     (ii) If an employee  exercises a stock option that  qualifies as an ISO, no
ordinary income will be recognized,  and the Company will not be entitled to any
tax  deduction,  if shares of Common Stock  acquired  upon exercise of the stock
option  are held until the later of (A) one year from the date of  exercise  and
(B) two years from the date of grant.  However,  if the employee disposes of the
shares  acquired upon exercise of an ISO before  satisfying  both holding period
requirements,  the employee will recognize  ordinary income to the extent of the
difference  between the fair market  value of the shares on the date of exercise
(or the amount realized on the disposition, if less) and the exercise price, and
the Company will be entitled to a tax  deduction in that  amount.  The gain,  if
any, in excess of the amount  recognized as ordinary income will be long-term or
short-term capital gain, depending upon the length of time the employee held the
shares before the disposition.

     (iii) Although the exercise by an employee of a stock option that qualifies
as an ISO is not a taxable event for regular income tax purposes, the difference
between the exercise  price and the fair market value of the Common Stock at the
time of exercise is treated as an item of alternative minimum taxable income. In
general,  items of alternative minimum taxable income in excess of the exemption
amount (currently $62,500 for joint filers and $42,500 for single filers) may be
taxed at the rate of 26% (up to $175,000) or 28% (in excess of $175,000).

                                      -15-


     (iv) A grant may be subject to a 20% tax, in  addition  to ordinary  income
tax,  at the  time  the  grant  becomes  vested,  plus  interest,  if the  grant
constitutes  deferred  compensation  under  section  409A  of the  Code  and the
requirements of section 409A of the Code are not satisfied.

     Section   162(m)  of  the  Code   generally   disallows   a   publicly-held
corporation's tax deduction for compensation paid to its chief executive officer
or any of its four  other  most  highly  compensated  officers  in  excess of $1
million in any year. Qualified  performance-based  compensation is excluded from
the $1 million  deductibility  limit, and therefore  remains fully deductible by
the  corporation  that  pays  it.  Options  and  SARs  will  generally  meet the
requirements for qualified performance-based  compensation.  Stock awards, stock
units,  dividend equivalents and other stock-based awards granted under the Plan
will be designated as qualified performance-based  compensation if the Committee
conditions  such  grants on the  achievement  of specific  performance  goals in
accordance with the requirements of section 162(m) of the Code.

     The Company has the right to require  that  grantees  pay to the Company an
amount  necessary  for the Company to satisfy its  federal,  state and local tax
withholding  obligations  with respect to grants.  The Company may withhold from
other  amounts  payable  to a  grantee  an amount  necessary  to  satisfy  these
obligations.  The  Committee  may  permit a grantee  to  satisfy  the  Company's
withholding  obligation  with  respect to a grant paid in Common Stock by having
shares withheld, at the time the grant becomes taxable, provided that the number
of  shares  withheld  does  not  exceed  the  individual's   minimum  applicable
withholding tax rate for federal, state and local tax liabilities.

     The Board  unanimously  recommends a vote "for" approval of the adoption of
the 2006 Equity Compensation Plan.




                                      -16-



                             EXECUTIVE COMPENSATION

     The  Summary  Compensation  Table  below  sets  forth  certain  information
concerning the compensation of the Company's executive officers.*

                           SUMMARY COMPENSATION TABLE

                                                 Annual Compensation
                                           ----------------------------------
                                                                 Other Annual
                                                                 Compensation($)
Name and Principal Position        Year    Salary($)   Bonus($)    (a)(b)
---------------------------        ----    ---------   --------  ------------

James Wall                         2006    283,868       -    (c)   12,000
  Senior Vice President;           2005    281,831     50,000 (d)   10,732
  Chairman of the Board,           2004    277,572     35,000        4,552
  President and CEO of the
  Company's AMREP Southwest
  Inc. subsidiary

Michael P. Duloc                   2006    224,525       -    (c)    7,828
  Chief Operating Officer          2005    220,619     22,500 (d)    7,428
  of the Company's fulfillment     2004    217,042     12,500        4,298
  and distribution services
  businesses

Peter M. Pizza                     2006    177,970       -    (c)    7,518
  Vice President, Chief            2005    174,720     10,000 (d)    8,249
  Financial Officer and            2004    171,692     10,000        1,639
  Treasurer

Joseph S. Moran                    2006    167,211(e)    -    (c)      -
  Vice President, General          2005       -          -             -
  Counsel and Secretary            2004       -          -             -
_____________________________________
(a)  Includes  amounts  contributed by the Company to the Company's  Savings and
     Salary Deferral Plan.
(b)  Other  compensation  in the form of personal  benefits to the named persons
     has been omitted because it does not exceed the lesser of $50,000 or 10% of
     the total annual salary and bonus as to each.
(c)  No determination has yet been made with respect to bonuses for fiscal 2006.
(d)  The  determination to award bonuses for fiscal 2005 was made after the 2005
     Annual  Meeting and,  therefore,  not disclosed in the Proxy  Statement for
     that meeting.
(e)  Mr. Moran first joined the Company and became an executive  officer on June
     6, 2005.

Options

     No stock options were granted to or exercised by any of the officers  named
in the Summary  Compensation  Table during the fiscal year ended April 30, 2006.
No stock options were held by any of such officers at April 30, 2006.


_____________________________________
* Since January 1996, the Company has not had a CEO.


                                      -17-


Compensation and Human Resources Committee Report on Executive Compensation

     The  current  members of the  Company's  Compensation  and Human  Resources
Committee are Messrs. Cloues, Karabots and Russo.

                   Compensation Policy for Executive Officers
                   ------------------------------------------

     The Compensation and Human Resources  Committee's  compensation  policy for
executive  officers  is  to  pay  competitively,   while  balancing  pay  versus
performance  and  otherwise to be fair and  equitable in the  administration  of
compensation.  In determining the salary to be paid to a particular  individual,
the Compensation and Human Resources Committee applies these and other criteria,
while  also  using  its  best  judgment  of  compensation  applicable  to  other
executives  holding  comparable  positions  both within the Company and at other
companies.

     With respect to salaries,  bonuses and other compensation and benefits, the
decisions and  recommendations of the Compensation and Human Resources Committee
are  subjective and are not based on any list of specific  criteria.  We believe
that the compensation received by each of the executive officers for fiscal 2006
was reasonable.  The Company has not had a Chief Executive Officer since January
1996, when the employment of the then CEO was terminated due to disability,  and
senior management now operates under the supervision of the Executive  Committee
of the Board and its Chairman, who is also the Chairman of the Board.

     On September  20, 2005,  the  Compensation  and Human  Resources  Committee
approved  the  payment  of  bonuses  to  the  executive  officers  based  on the
Committee's  evaluation of their  performance  in fiscal 2005. The Committee has
not yet acted on bonuses for executive officers in respect of fiscal 2006.

     There have been no stock options granted to executive officers since fiscal
1995.

     Payments during fiscal 2006 to the Company's  executives as discussed above
were made with  regard  to the  provisions  of  Section  162(m) of the  Internal
Revenue  Code.  Section  162(m)  limits the  deduction  that may be claimed by a
"public  company" for  compensation  paid to certain  individuals to $1 million,
except  to  the  extent  that  any  excess  compensation  is  "performance-based
compensation".  It is the Compensation and Human Resources Committee's intention
that compensation  will not be awarded that exceeds the deductibility  limits of
Section 162(m).

                Bases for Chief Executive Officer's Compensation
                ------------------------------------------------
     Since January 1996, the Company has not had a CEO.

                                        Nicholas G. Karabots, Chairman
                                        Edward B. Cloues II
                                        Albert V. Russo
July 14, 2006

Compensation Committee Interlocks and Insider Participation

     On August 4, 1993,  pursuant to an agreement  with Nicholas G. Karabots and
two corporations he then owned,  the Company,  in exchange for 575,593 shares of
its Common  Stock,  acquired  various  rights to  distribute  magazines  for its
distribution   business.  The  distribution  rights  covered  various  magazines

                                      -18-


published by  unaffiliated  publishers,  as well as  magazines  published by Mr.
Karabots' companies. Mr. Karabots is a director,  Vice-Chairman of the Board and
of the Executive  Committee,  Chairman of the  Compensation  and Human Resources
Committee  and the  father-in-law  of Michael  P.  Duloc,  one of the  Company's
executive officers.

     The conduct of the Company's  magazine  distribution  business involves the
purchase  of  magazines  from  publishing  companies,  including  those owned or
controlled by Mr. Karabots,  and their resale to wholesalers.  During the fiscal
year ended  April 30,  2006,  the  purchases  of  magazines  from Mr.  Karabots'
companies  amounted to  approximately  $45.2  million.  The  Company  reports as
revenues only the spread  between the prices paid to  publishers  and the prices
received for copies sold to wholesaler customers.  The $45.2 million paid to Mr.
Karabots' companies represents 27.7% of the approximately $163 million which the
Company  paid  to all  publishers  in  fiscal  2006.  Consistent  with  industry
practice,  advance  payments  for  magazine  purchases  are made to  publishers,
including Mr. Karabots' companies, based upon estimates of the amounts that will
be due to them from the sales of their publications to the buying public. If the
actual  sales are less  than  estimated,  overadvances  will  result,  which the
publishers  are  obligated  to  repay  promptly,  without  interest.  The  total
overadvance  to Mr.  Karabots'  companies  at June 30,  2006  was  approximately
$90,000  and its  highest  amount  between  May 1,  2005 and  June 30,  2006 was
approximately $115,000.

     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.

     The Company also provides  fulfillment  services for  publishing  companies
owned or controlled by Mr. Karabots.  The fulfillment services 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.  For
fiscal 2006, the Company's  revenues from these fulfillment  services  contracts
were $332,100.

     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  were  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.

Performance Graph

     The following graph compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total return of the Standard & Poor's
500  Index  ("S&P 500  Index")  and with an index  comprised  of the stock of 27

                                      -19-


companies with market  capitalizations  similar to that of the Company ("Similar
Cap Issuers"),  for the five years ended April 30, 2006 (assuming the investment
of $100 in the  stock of the  Company,  the S&P 500 Index  and the  Similar  Cap
Issuers on April 30, 2001 and the  reinvestment of all  dividends).  The Company
cannot  identify an index of issuers  engaged in operations  similar to those in
which it is currently  engaged and therefore  has  determined to use the Similar
Cap Issuers for purposes of comparison.


                       2001     2002      2003      2004      2005      2006
                       ----     ----      ----      ----      ----      ----
AMREP CORP              100   205.13    241.03    452.79    649.02    1443.91
S&P 500 INDEX           100    87.37     75.75     93.08     98.98     114.23
SIMILAR CAP ISSUERS     100   143.54    158.80    258.86    274.79     414.67

     The Similar Cap Issuers are: Abigail Adams National  Bancorp,  Inc., Allied
Healthcare   Products,   Inc.,  American   Communities   Properties  Trust,  Ark
Restaurants  Corp.,  Bolt  Technology   Corporation,   Cambior  Inc.,   Champion
Industries, Inc., Clean Harbors, Inc., Devcon International Corp., First Mariner
Bancorp,  Focus  Enhancements,  Inc.,  Fortune  Industries,  Inc.,  Giga-tronics
Incorporated,   Goldleaf  Financial  Solutions,  Inc.,  HearUSA,  Inc.,  Hi-Tech
Pharmacal Co., Inc.,  Horizon Bancorp  (Indiana),  Ipix Corporation,  Mannatech,
Incorporated,  MFB Corp., Midsouth Bancorp,  Inc., New Brunswick Scientific Co.,
Inc.,  Perficient,  Inc.,  Schiff  Nutrition  International,  Inc.,  Smith Micro
Software, Inc., T-3 Energy Services, Inc. and Vitran Corporation Inc.

     As a result of changes in market capitalizations from year to year, none of
the  companies  comprising  the Similar Cap Issuer index in the  Company's  2005
Proxy  Statement  met the criteria for inclusion in the Similar Cap Issuer index
in this Proxy Statement.  The 2005 Similar Cap companies were:  Bankrate,  Inc.,
Cavalier  Homes,   Inc.,  D&K  Healthcare   Resources,   Inc.,  Deckers  Outdoor
Corporation,  DSG International Limited,  First Federal Bankshares,  Inc., First
National Lincoln Corporation (Maine), Glowpoint, Inc., Golden Enterprises, Inc.,
Horizon Health Corporation,  Hyperdynamics Corporation,  I.D. Systems, Inc., Key

                                      -20-


Technology,  Inc., Koss Corporation,  Lipid Sciences,  Inc., Mer  Telemanagement
Solutions Ltd.,  Mercury Air Group,  Inc., Merit Medical Systems,  Inc.,  NewMil
Bancorp,  Inc.,  Northway  Financial,  Inc.,  Oil-Dri  Corporation  of  America,
Perceptron,  Inc.,  Security Capital Corporation  (Delaware),  SIFCO Industries,
Inc., Sport Chalet, Inc., TeamStaff, Inc. and Zindart Limited.

Equity Compensation Plan Information

     The following table sets forth  information as of April 30, 2006 concerning
Common Stock of the Company which is issuable under its compensation plans.

                                                                                                     (C)
                                                  (A)                     (B)                Number of securities
                                          Number of securities     Weighted average       remaining available for
                                           to be issued upon       exercise price of        future issuance under
                                              exercise of             outstanding         equity compensation plans
                                          outstanding options,     options, warrants        (excluding securities
            Plan Category                 warrants and rights          and rights          reflected in column (A))
            -------------                 -------------------          ----------          ------------------------
Equity compensation plans approved by
shareholders                                    7,000 (a)                $18.56                       -
Equity compensation plans not
approved by shareholders                          -                         -                      12,500 (b)
                                                -----                                              ------

Total                                           7,000                                              12,500
                                                =====                                              ======
____________________________
(a)  Consists of shares  issuable upon exercise of  outstanding  options  issued
     under the  Non-Employee  Directors Option Plan. This Plan was terminated by
     the Board in fiscal 2006 and no further grants may be made.
(b)  Consists  of shares  available  for  issuance  under the 2002  Non-Employee
     Directors' Stock Plan.

     On December 5, 2002, the Board of Directors  adopted the AMREP  Corporation
2002  Non-Employee  Directors'  Stock Plan and reserved  65,000 shares of Common
Stock of the Company for issuance thereunder. Under this Plan, each non-employee
director  receives a grant from the Company of 1,250 shares on each March 15 and
September 15 as partial payment for services for the preceding six months.

Retirement Benefits

     The Company's  executive officers who were employees prior to March 1, 2004
participate  in a  Retirement  Plan (the  "Plan"),  which was amended  effective
January 1, 1998, and subsequently frozen effective March 1, 2004, so that in the
determination  of the benefit  payable,  a participant's  compensation  from and
after March 1, 2004 is not taken into account. Prior to the 1998 amendment,  the
Plan provided a monthly benefit payable at age 65 to employees with five or more
years  of  service  in an  amount  equal to  1.125%  of the  employee's  highest
consecutive  60-month  average monthly earnings up to a specified amount related
to the social  security wage base,  plus 1.5% of such earnings in excess of such
specified  amount,  multiplied  by years of service  not to exceed 35.  From and
after January 1, 1998 through February 29, 2004, each participant's  benefit was
the amount of the monthly  benefit  accrued for that  participant as of December
31,  1997  under  the  terms of the Plan  prior to the 1998  amendment,  plus an

                                      -21-


additional  benefit  determined by  establishing a cash balance  account for the
participant to which was allocated annually 2% of the participant's compensation
plus an annual  interest  credit of 5% of the amount in such  account.  The cash
balance  account may be  converted  to a life  annuity or may be taken in a lump
sum. After February 29, 2004, a participant's  benefit under the Plan is the sum
of (i) the actuarial  equivalent of the participant's cash balance account as of
February 29, 2004,  plus interest on the cash balance  account at the rate of 5%
per year, and (ii) the  participant's  monthly pension benefit under the Plan as
at December 31, 1997.

     Mr.  Wall has passed the normal  retirement  age of 65 under the Plan.  His
annual  retirement  benefit  under the Plan had he elected  to receive  the life
annuity pension at normal retirement age would have been $54,290.  Mr. Pizza has
nine  years of  credited  service  and Mr.  Duloc has twelve  years of  credited
service.  Assuming that (i) they continue to be employed  until age 65, and (ii)
they elect the life annuity form of pension,  their annual  retirement  benefits
are  estimated to be: Mr. Pizza - $5,623 and Mr. Duloc - $11,090.  Mr. Moran was
first employed by the Company after  February 29, 2004 and does not  participate
in the Plan.

Certain Transactions

     See  "Compensation  Committee  Interlocks  and Insider  Participation"  for
information concerning transactions involving Nicholas G. Karabots.

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's directors,  executive officers and holders of more than 10% of its
Common  Stock to file  initial  reports of  ownership  and reports of changes of
ownership of the Common Stock with the  Securities  and Exchange  Commission and
the New York Stock  Exchange.  The  related  regulations  require  copies of the
reports to be provided to the Company.

     Based upon a review of the copies of the  reports  received  by the Company
and certain written  representations  from the directors and executive officers,
the Company believes that for the fiscal year ended April 30, 2006, all required
Section 16(a) reports were filed on time.

                              AUDIT-RELATED MATTERS

     The consolidated  financial  statements of the Company and its subsidiaries
included in the Annual  Report to  Shareholders  for the fiscal year ended April
30, 2006 have been audited by McGladrey & Pullen, LLP, an independent registered
public accounting firm. No representative of McGladrey & Pullen, LLP is expected
to attend the Annual Meeting. The retention of an independent  registered public
accounting  firm  for  fiscal  2007  has  not yet  been  approved  by the  Audit
Committee.

Audit Committee Report

     The Audit  Committee  has  reviewed and  discussed  the  Company's  audited
financial statements with management,  which has primary  responsibility for the
financial  statements.  McGladrey & Pullen,  LLP, as the  Company's  independent
registered public accountants,  are responsible for expressing an opinion on the
conformity of the Company's  audited  financial  statements with U.S.  generally
accepted  accounting  principles.  The Committee has discussed  with McGladrey &
Pullen,  LLP the matters  that are  required to be  discussed  by  Statement  on

                                      -22-


Auditing  Standards No. 61 (Communication  With Audit  Committees).  McGladrey &
Pullen, LLP has provided to the Committee the written disclosures and the letter
required  by   Independence   Standards   Board  Standard  No.  1  (Independence
Discussions  with  Audit  Committees),  and the  Committee  has  discussed  with
McGladrey & Pullen, LLP that firm's independence. Based on these considerations,
the  Audit  Committee  has  recommended  to the  Board  of  Directors  that  the
consolidated financial statements audited by McGladrey & Pullen, LLP be included
in the Company's annual report on Form 10-K for fiscal 2006.

The foregoing  report is provided by the following  directors who constitute the
Audit Committee:

                                          Samuel N. Seidman, Chairman
                                          Lonnie A. Coombs
                                          Elmer F. Hansen, Jr.
July 14, 2006

Audit Fees

     The following table sets forth certain  information  concerning the fees of
McGladrey & Pullen, LLP and its affiliate, RSM McGladrey Inc., for the Company's
last two fiscal years.  The reported  fees,  except the Audit Fees,  are amounts
billed to the  Company in the  indicated  fiscal  years.  The Audit Fees are for
services for those fiscal years.


                                                 Fiscal Year Ended April 30,
                                                 ---------------------------
                                                 2006                   2005
                                                 ----                   ----
 Audit Fees (1)..........................      $129,501              $122,838
 Audit-Related Fees (2)..................        36,826                16,679
 Tax Fees (3)............................        47,117                41,656
 All Other Fees..........................         -                     -
___________________
(1)  Includes fees for the audit of the Company's  annual  financial  statements
     and for  review  of the  unaudited  financial  statements  included  in the
     Company's  quarterly  reports to the Securities and Exchange  Commission on
     Form 10-Q.
(2)  Includes fees for  consultation  related to preparation for  Sarbanes-Oxley
     Section 404  compliance  and for benefit  plan audits and, in fiscal  2006,
     also for advice on the accounting treatment of certain transactions.
(3)  Includes  fees for tax  compliance,  tax advice and tax planning  services.
     Such services  principally involved reviews of the Company's federal income
     tax returns and advice on the tax treatment of certain transactions.

Pre-Approval Policies and Procedures

     The Audit Committee  pre-approves  all audit services to be provided by the
independent  registered  public  accountants  and,  separately,   all  permitted
non-audit  services  to  be  performed  by  the  independent  registered  public
accountants.

                                  OTHER MATTERS

     The Board of  Directors  knows of no  matters  that will be  presented  for
consideration  at the Annual Meeting other than the matters  referred to in this
Proxy  Statement.  Should  any other  matters  properly  come  before the Annual

                                      -23-


Meeting,  it is the intention of the persons named in the accompanying  proxy to
vote such proxy in accordance with their best judgment.

                             SOLICITATION OF PROXIES

     The Company will bear the cost of this solicitation of proxies. In addition
to solicitation of proxies by mail, the Company may reimburse  brokers and other
nominees for the expense of forwarding proxy materials to the beneficial  owners
of stock held in their names.  Directors,  officers and employees of the Company
may solicit proxies on behalf of the Board of Directors but will not receive any
additional compensation therefor.

                              SHAREHOLDER PROPOSALS

     From  time to time,  shareholders  present  proposals  which  may be proper
subjects for inclusion in the Proxy Statement and for consideration at an annual
meeting. Shareholders who intend to present proposals at the 2007 Annual Meeting
and who wish to have such proposals  included in the Company's  Proxy  Statement
for the 2007 Annual  Meeting must be certain that such proposals are received by
the Company's Secretary at the Company's executive offices, 212 Carnegie Center,
Suite 302,  Princeton,  New Jersey  08450,  not later than April 16, 2007.  Such
proposals must meet the  requirements  set forth in the rules and regulations of
the Securities and Exchange  Commission in order to be eligible for inclusion in
the Proxy  Statement.  For any proposal  that is not  submitted for inclusion in
next year's Proxy Statement but is, instead,  sought to be presented directly at
the 2007  Annual  Meeting,  Securities  and  Exchange  Commission  rules  permit
management  to vote  proxies in its  discretion  if the Company does not receive
notice of the proposal prior to the close of business on July 1, 2007.

                                            By Order of the Board of Directors

                                            Joseph S. Moran, Secretary
Dated:  August 14, 2006



                                      -24-




                                                                      APPENDIX A

             PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION

     Paragraph (b) of Article SEVENTH of the Certificate of Incorporation  shall
be amended in its entirety to read as follows:

          (b) Newly  created  directorships  resulting  from any increase in the
     number of  directors  and  vacancies  on the Board of  Directors  occurring
     otherwise  than by  removal  may be  filled  by the  affirmative  vote of a
     majority of the remaining directors then in office, even though less than a
     quorum of the Board of Directors,  or by a sole remaining  director,  or by
     the shareholders. A vacancy caused by removal of a director shall be filled
     by the shareholders. Any director elected in accordance with the provisions
     of this  Paragraph (b) shall hold office for the remainder of the full term
     of the class of directors in which the new  directorship was created or the
     vacancy  occurred  and until  such  director's  successor  shall  have been
     elected and qualified.  If the number of directors is changed, any increase
     or  decrease  shall  be  apportioned  among  the  classes  by the  Board of
     Directors so as to maintain the number of directors in each class as nearly
     equal as possible. No decrease in the number of directors  constituting the
     Board of Directors shall shorten the term of any incumbent director.



                                      A-1


























                      [this page intentionally left blank]



                                                                      APPENDIX B

                                AMREP CORPORATION

                          2006 EQUITY COMPENSATION PLAN
                          -----------------------------

     The purpose of the AMREP  Corporation  2006 Equity  Compensation  Plan (the
"Plan") is to provide (i) employees of AMREP  Corporation.  (the  "Company") and
its subsidiaries and (ii) non-employee  members of the Board of Directors of the
Company  with the  opportunity  to receive  grants of incentive  stock  options,
nonqualified stock options, stock appreciation rights, stock awards, stock units
and other stock-based  awards. The Company believes that the Plan will encourage
the participants to contribute materially to the growth of the Company,  thereby
benefitting the Company's shareholders, and will align the economic interests of
the participants with those of the shareholders.

     Section 1. Definitions

     The following terms shall have the meanings set forth below for purposes of
the Plan:

     (a) "Board" shall mean the Board of Directors of the Company.

     (b) "Cause"  shall mean,  except to the extent  specified  otherwise by the
Committee,  a finding by the Committee  that the Grantee (i) has breached his or
her  employment  or service  contract  with the  Employer,  (ii) has  engaged in
disloyalty to the Employer,  including, without limitation, fraud, embezzlement,
theft,  commission of a felony or proven  dishonesty,  (iii) has disclosed trade
secrets or  confidential  information of the Employer to persons not entitled to
receive  such  information,  (iv)  has  breached  any  written  non-competition,
non-solicitation  or  confidentiality  agreement  between  the  Grantee  and the
Employer or (v) has engaged in such other behavior  detrimental to the interests
of the Employer as the Committee determines.

     (c) "Change of Control" shall be deemed to have occurred upon:

          (i) A liquidation or  dissolution of the Company or a sale  (excluding
     transfers to  subsidiaries)  of all or  substantially  all of the Company's
     assets;

          (ii) As a result  of a  tender  offer,  stock  purchase,  other  stock
     acquisition, merger, consolidation, recapitalization, reverse split or sale
     or transfer  of assets,  any person or group (as such terms are used in and
     under Section 13(d) of the Exchange Act) who is not at the date of adoption
     of this Plan by the Board,  the  beneficial  owner (as defined in Rule 13-d
     under the Exchange Act),  directly or  indirectly,  of more than 15% of the
     outstanding  Company  Stock  becomes  the  beneficial  owner (as  similarly
     defined), directly or indirectly, of securities of the Company representing
     25% or more of the outstanding  common stock of the Company or the combined
     voting power of the Company's then outstanding securities; or

          (iii) During any period of two consecutive years,  individuals who, at
     the beginning of such period,  constitute the Board cease for any reason to
     constitute  at  least a  majority  thereof,  unless  the  election,  or the
     nomination  for  election  by  the  Company's  shareholders,  of  at  least
     two-thirds of the directors who were not directors at the beginning of such
     period was approved by a vote of at least  two-thirds of the directors then

                                      B-1


     still in office who were either directors at the beginning of the period or
     who,  in  connection  with  their  election  or  nomination,  received  the
     foregoing two-thirds approval.

     (d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (e) "Committee" shall mean the committee  described in Section 2 designated
by the Board to administer the Plan.

     (f) "Company"  shall mean AMREP  Corporation,  an Oklahoma  corporation and
shall include its successors.

     (g) "Company Stock" shall mean common stock of the Company.

     (h)  "Disability" or "Disabled"  shall mean a Grantee's  becoming  disabled
within the meaning of section  22(e)(3)  of the Code,  within the meaning of the
Employer's  long-term disability plan applicable to the Grantee, or as otherwise
determined by the Committee.

     (i) "Dividend  Equivalent"  shall mean an amount  determined by multiplying
the number of shares of Company Stock  subject to a Grant by the per-share  cash
dividend paid by the Company on its outstanding  Company Stock, or the per-share
fair market value (as  determined by the  Committee) of any dividend paid on its
outstanding Company Stock in consideration other than cash.

     (j) "Employee" shall mean an employee of the Company or a subsidiary of the
Company.

     (k)  "Employed  by, or  providing  service  to,  the  Employer"  shall mean
employment  or  service  as an  Employee  or member  of the Board (so that,  for
purposes of exercising  Options and SARs and satisfying  conditions with respect
to Stock  Awards  and  Performance  Units,  a Grantee  who has served as both an
Employee and a director shall not be considered to have terminated employment or
service  until the  Grantee  ceases  to be both an  Employee  and  member of the
Board).

     (l) "Employer" shall mean the Company and each of its subsidiaries.

     (m)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (n) "Exercise Price" shall mean the purchase price of Company Stock subject
to an Option.

     (o) "Fair Market Value" shall mean:

          (i) If the  Company  Stock is  publicly  traded,  then the Fair Market
     Value  per share  shall be  determined  as  follows:  (x) if the  principal
     trading market for the Company Stock is a national  securities  exchange or
     Nasdaq,  the last  reported  sale price thereof on the relevant date or (if
     there were no trades on that date) the latest  preceding  date upon which a
     sale was reported, or (y) if the Company Stock is not principally traded on
     any such exchange or on Nasdaq,  the mean between the last  reported  "bid"
     and "asked"  prices on a share of Company  Stock on the relevant  date,  as

                                      B-2


     reported by the OTC  Bulletin  Board or, if shares are not  reported on the
     OTC Bulletin Board, on pinksheets.com.

          (ii) If the  Company  Stock is not  publicly  traded  or, if  publicly
     traded,  is not  subject  to  reported  transactions  or "bid"  or  "asked"
     quotations as set forth above,  the Fair Market Value per share shall be as
     determined by the Committee.

     (p) "Grant" shall mean a grant of Options,  SARs, Stock Awards, Stock Units
or Other Stock-Based Awards under the Plan.

     (q) "Grant  Instrument"  shall mean the agreement that sets forth the terms
of a Grant, including any amendments.

     (r) "Grantee" shall mean an Employee or Non-Employee  Director who receives
a Grant under the Plan.

     (s) "Incentive Stock Option" shall mean an option to purchase Company Stock
that is intended to meet the requirements of section 422 of the Code.

     (t) "Non-Employee  Director" shall mean a member of the Board who is not an
Employee.

     (u)  "Nonqualified  Stock Option" shall mean an option to purchase  Company
Stock that is not intended to meet the requirements of section 422 of the Code.

     (v) "Option"  shall mean an Incentive  Stock Option or  Nonqualified  Stock
Option granted under the Plan.

     (w) "Other Stock-Based Award" shall mean any Grant based on, measured by or
payable in Company Stock, as described in Section 10.

     (x) "SAR" shall mean a stock  appreciation right with respect to a share of
Company Stock.

     (y) "Stock  Award"  shall mean an award of Company  Stock,  with or without
restrictions.

     (z) "Stock Unit" shall mean a unit that represents a hypothetical  share of
Company Stock.

     Section 2. Administration

     (a) Committee.  The Plan shall be administered and interpreted by the Board
         ---------
or by a Committee  unanimously  appointed  by the Board from among its  members,
provided  that (i) the Board  shall act as the  Committee  in the absence of the
unanimous  appointment  of the  Committee by the Board and (ii) grants under the
Plan to  Non-Employee  Directors shall be awarded and  administered  only by the
Board.  The Committee,  when other than the full Board,  shall consist of two or
more persons who are "outside  directors" as defined under section 162(m) of the
Code, and related Treasury regulations,  and "non-employee directors" as defined
under Rule 16b-3 under the Exchange Act. The Committee may delegate authority to

                                      B-3


one or more subcommittees, as it deems appropriate. To the extent that the Board
or  a  subcommittee  administers  the  Plan,  references  in  the  Plan  to  the
"Committee" shall be deemed to refer to the Board or such subcommittee.

     (b) Committee Authority. The Committee shall have the sole authority to (i)
         -------------------
determine  the  individuals  to whom grants  shall be made under the Plan,  (ii)
determine  the  type,  size and  terms  of the  grants  to be made to each  such
individual,  (iii)  determine  the  time  when the  grants  will be made and the
duration  of any  applicable  exercise  or  restriction  period,  including  the
criteria for exercisability  and the acceleration of exercisability,  (iv) amend
the terms of any previously  issued grant,  subject to the provisions of Section
18 below, and (v) deal with any other matters arising under the Plan.

     (c)  Committee  Determinations.  The  Committee  shall  have full power and
          -------------------------
authority to administer  and interpret the Plan, to make factual  determinations
and to adopt or amend such rules,  regulations,  agreements and  instruments for
implementing  the Plan and for the conduct of its business as it deems necessary
or advisable,  in its sole discretion.  The Committee's  interpretations  of the
Plan and all determinations  made by the Committee pursuant to the powers vested
in it  hereunder  shall be  conclusive  and  binding on all  persons  having any
interest  in the Plan or in any  awards  granted  hereunder.  All  powers of the
Committee shall be executed in its sole discretion,  in the best interest of the
Company, not as a fiduciary,  and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.

     Section 3. Grants

     Awards  under the Plan may  consist of grants of Options  as  described  in
Section 6, Stock  Awards as  described in Section 7, Stock Units as described in
Section  8, SARs as  described  in  Section 9 and  Other  Stock-Based  Awards as
described in Section 10. All Grants shall be subject to the terms and conditions
set forth  herein and to such other terms and  conditions  consistent  with this
Plan as the Committee  deems  appropriate and as are specified in writing by the
Committee to the  individual in the Grant  Instrument.  All Grants shall be made
conditional upon the Grantee's  acknowledgement,  in writing or by acceptance of
the Grant, that all decisions and determinations of the Committee shall be final
and binding on the Grantee, his or her beneficiaries and any other person having
or claiming an interest under such Grant.  Grants under a particular  Section of
the Plan need not be uniform as among the Grantees.

     Section 4. Shares Subject to the Plan

     (a) Shares  Authorized.  Subject to  adjustment  as  described  below,  th
         ------------------e
aggregate  number of shares of Company  Stock that may be issued or  transferred
under the Plan is 400,000  shares.  Shares issued or transferred  under the Plan
may be authorized but unissued  shares of Company Stock or reacquired  shares of
Company Stock,  including shares purchased by the Company on the open market for
purposes of the Plan.  If and to the extent  Options or SARs  granted  under the
Plan  terminate,  expire or are canceled,  forfeited,  exchanged or  surrendered
without  having  been  exercised  or if any Stock  Awards,  Stock Units or Other
Stock-Based  Awards are  forfeited  or  terminated,  the shares  subject to such
Grants shall again be available for purposes of the Plan.

                                      B-4


     (b) Individual  Limits.  All Grants  under the  Plan shall be  expressed in
         ------------------
shares of Stock.  The maximum  aggregate  number of shares of Company Stock that
shall be subject  to Grants  made  under the Plan to any  individual  during any
calendar year shall be 20,000 shares, subject to adjustment as described below.

     (c) Adjustments.  If there is any change in the number or kind of shares of
         -----------
the Company Stock  outstanding by reason of (i) a stock dividend of greater than
ten percent (10%), recapitalization,  stock split, or combination or exchange of
shares,   (ii)   a   merger,   reorganization,   or   consolidation,   (iii)   a
reclassification  or change in par  value,  or (iv) a  spin-off,  split-off,  or
split-up,  the  maximum  number of shares of Company  Stock that any  individual
participating  in the Plan may be  granted  in any  year,  the  number of shares
covered by outstanding  Grants,  the kind of shares issued or transferred  under
the Plan and the price per share of such Grants shall be appropriately  adjusted
by the Committee to reflect any increase or decrease in the number of, or change
in the kind of,  issued  shares of  Company  Stock to  preclude,  to the  extent
practicable,  the  enlargement  or  dilution of rights and  benefits  under such
Grants;  provided,  however,  that any  fractional  shares  resulting  from such
adjustment shall be eliminated.  The Committee may also make or provide for such
adjustment in the number of shares  specified in Section 4(a) as the  Committee,
in  its  sole  discretion,  may  determine  to be  appropriate  to  reflect  any
transaction or event described in this Section 4(c); provided, however, that any
such  adjustment  will be made if and only to the extent that it would not cause
any Option intended to qualify as an Incentive Stock Option not so qualify.  Any
adjustments determined by the Committee shall be final, binding and conclusive.

     Section 5. Eligibility for Participation

     (a) Eligible  Persons.  All Employees  (including,  for all purposes of the
         -----------------
Plan, an Employee who is a member of the Board) and Non-Employee Directors shall
be eligible to participate in the Plan.

     (b) Selection of Grantees.  The  Committee  shall  select the Employees and
         ---------------------
Non-Employee  Directors  to  receive  Grants and shall  determine  the number of
shares of Company  Stock  subject to a  particular  Grant in such  manner as the
Committee determines.

     Section 6. Options

     The  Committee may grant  Options to an Employee or  Non-Employee  Director
upon such terms as the Committee deems appropriate. The following provisions are
applicable to Options:

     (a) Number of Shares. The Committee shall determine the number of shares of
         ----------------
Company  Stock that will be subject  to each Grant of Options to  Employees  and
Non-Employee Directors.

     (b) Type of Option and Price.
         ------------------------

          (i) The Committee may grant  Incentive  Stock Options or  Nonqualified
     Stock Options or any  combination  of the two, all in  accordance  with the
     terms and  conditions  set forth  herein.  Incentive  Stock  Options may be
     granted  only to  employees  of the  Company  or its  parent or  subsidiary
     corporations,  as defined in section  424 of the Code.  Nonqualified  Stock
     Options may be granted to Employees and Non-Employee Directors.

                                      B-5


          (ii) The Exercise Price of Company Stock subject to an Option shall be
     determined  by the  Committee  and may be equal to or greater than the Fair
     Market Value of a share of Company Stock on the date the Option is granted;
     provided,  however, that an Incentive Stock Option may not be granted to an
     Employee who, at the time of grant,  owns stock possessing more than 10% of
     the total combined voting power of all classes of stock of the Company,  or
     any parent or subsidiary  corporation of the Company, as defined in section
     424 of the Code,  unless the Exercise Price per share is not less than 110%
     of the Fair Market Value of a share of Company  Stock on the date of grant.

     (c) Option Term. The Committee shall determine the term of each Option. The
         -----------
term of any Option  shall not exceed ten years from the date of grant.  However,
an  Incentive  Stock  Option that is granted to an Employee  who, at the time of
grant, owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, or any parent or subsidiary  corporation of
the  Company,  as defined in section  424 of the Code,  may not have a term that
exceeds five years from the date of grant.

     (d) Exercisability  of  Options.   Options  shall  become  exercisable  in
         ---------------------------
accordance with such terms and  conditions,  consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument. The Committee
may accelerate the exercisability of any or all outstanding  Options at any time
for any reason.

     (e) Termination of Employment, Disability or Death.
         ----------------------------------------------

          (i) Except as provided  below,  an Option may only be exercised  while
     the Grantee is employed  by, or  providing  service to, the  Employer as an
     Employee  or  member of the  Board.  Except as  otherwise  provided  by the
     Committee,  any of the Grantee's Options that are not otherwise exercisable
     as of the date on which the Grantee  ceases to be  employed  by, or provide
     service to, the Employer shall terminate as of such date.

          (ii) In the event that a Grantee  ceases to be employed by, or provide
     service to, the  Employer for any reason  other than  Disability,  death or
     termination  for Cause,  any Option which is otherwise  exercisable  by the
     Grantee shall terminate  unless  exercised within 90 days after the date on
     which the  Grantee  ceases to be  employed  by, or provide  service to, the
     Employer  (or within such other  period of time as may be  specified by the
     Committee),  but in any event no later than the date of  expiration  of the
     Option term.

          (iii) In the event the Grantee  ceases to be  employed  by, or provide
     service  to,  the  Company on  account  of a  termination  for Cause by the
     Employer, any Option held by the Grantee shall terminate as of the date the
     Grantee ceases to be employed by, or provide  service to, the Employer.  In
     addition,  notwithstanding  any other  provisions of this Section 6, if the
     Committee   determines  that  the  Grantee  has  engaged  in  conduct  that
     constitutes  Cause at any  time  while  the  Grantee  is  employed  by,  or
     providing  service to, the Employer or after the Grantee's  termination  of
     employment  or service,  any Option held by the Grantee  shall  immediately
     terminate and the Grantee shall automatically forfeit all shares underlying
     any  exercised  portion  of an Option  for which  the  Company  has not yet
     delivered  the  share  certificates,  upon  refund  by the  Company  of the
     Exercise Price paid by the Grantee for such shares. Upon any exercise of an
     Option,  the Company may withhold  delivery of share  certificates  pending
     resolution  of an  inquiry  that  could  lead to a finding  resulting  in a
     forfeiture.

                                      B-6


          (iv) In the event the  Grantee  ceases to be  employed  by, or provide
     service to, the Employer because the Grantee is Disabled,  any Option which
     is otherwise  exercisable by the Grantee shall terminate  unless  exercised
     within 180 days after the date on which the  Grantee  ceases to be employed
     by, or provide  service to, the  Employer  (or within such other  period of
     time as may be specified by the Committee),  but in any event no later than
     the date of expiration of the Option term.

          (v) If the Grantee dies while  employed  by, or providing  service to,
     the  Employer or within 90 days after the date on which the Grantee  ceases
     to be employed or provide service on account of a termination  specified in
     Section  6(e)(ii)  above (or  within  such  other  period of time as may be
     specified by the  Committee),  any Option that is otherwise  exercisable by
     the Grantee shall terminate unless exercised within 180 days after the date
     on which the Grantee  ceases to be employed by, or provide  service to, the
     Employer  (or within such other  period of time as may be  specified by the
     Committee),  but in any event no later than the date of  expiration  of the
     Option term.

     (f)  Exercise of Options.  A Grantee may exercise an Option that has become
          -------------------
exercisable,  in whole or in part,  by  delivering  a notice of  exercise to the
Company.  The Grantee shall pay the Exercise Price for an Option as specified by
the Committee (w) in cash,  (x) unless the Committee  determines  otherwise,  by
delivering shares of Company Stock owned by the Grantee and having a Fair Market
Value  on the  date of  exercise  at least  equal  to the  Exercise  Price or by
attestation  (on a form  prescribed by the  Committee) to ownership of shares of
Company  Stock having a Fair Market Value on the date of exercise at least equal
to the  Exercise  Price,  (y) by  payment  through a broker in  accordance  with
procedures  permitted by Regulation T of the Federal  Reserve  Board,  or (z) by
such other method as the Committee may approve.  Shares of Company Stock used to
exercise an Option shall have been held by the Grantee for the requisite  period
of time necessary to avoid adverse  accounting  consequences to the Company with
respect  to the  Option.  Payment  for the  shares to be  issued or  transferred
pursuant to the Option, and any required  withholding taxes, must be received by
the Company by the time  specified  by the  Committee  depending  on the type of
payment  being made,  but in all cases prior to the issuance or transfer of such
shares.

     (g) Limits on Incentive  Stock Options.  Each Incentive  Stock Option shall
         ----------------------------------
provide  that,  if the  aggregate  Fair Market Value of the Company Stock on the
date of the grant with respect to which  Incentive Stock Options are exercisable
for the first time by a Grantee during any calendar year,  under the Plan or any
other  stock  option  plan of the  Company  or a parent or  subsidiary,  exceeds
$100,000,  then the Option, as to the excess, shall be treated as a Nonqualified
Stock Option.  An Incentive  Stock Option shall not be granted to any person who
is not an Employee of the Company or a parent or subsidiary  corporation (within
the meaning of section 424(f) of the Code) of the Company.

     Section 7. Stock Awards

     The Committee may issue or transfer  shares of Company Stock to an Employee
or Non-Employee  Director under a Stock Award,  upon such terms as the Committee
deems appropriate. The following provisions are applicable to Stock Awards:

     (a) General  Requirements.  Shares of Company  Stock issued or  transferred
         ---------------------
pursuant to Stock Awards,  subject to the requirements of applicable law, may be
issued or transferred for consideration or for no consideration,  and, in either

                                      B-7


case,  subject  to  restrictions  or  no  restrictions,  as  determined  by  the
Committee. The Committee may, but shall not be required to, establish conditions
under which  restrictions  on Stock  Awards shall lapse over a period of time or
according to such other criteria as the Committee deems appropriate,  including,
without  limitation,   restrictions  based  upon  the  achievement  of  specific
performance  goals. The period of time during which the Stock Awards will remain
subject  to  restrictions  will be  designated  in the Grant  Instrument  as the
"Restriction Period."

     (b) Number of Shares. The Committee shall determine the number of shares of
         ----------------
Company  Stock to be issued or  transferred  pursuant  to a Stock  Award and the
restrictions applicable to such shares.

     (c) Requirement  of  Employment  or Service.  If the  Grantee  ceases to be
         ---------------------------------------
employed by, or provide service to, the Employer  during a period  designated in
the Grant Instrument as the Restriction Period, or if other specified conditions
are not met,  the Stock Award shall  terminate  as to all shares  covered by the
Grant as to which the restrictions have not lapsed,  and those shares of Company
Stock must be immediately  returned to the Company.  The Committee may, however,
provide  for  complete or partial  exceptions  to this  requirement  as it deems
appropriate.

     (d) Restrictions on Transfer and Legend  on Stock  Certificate.  During the
         ----------------------------------------------------------
Restriction  Period,  a  Grantee  may not  sell,  assign,  transfer,  pledge  or
otherwise  dispose of the shares of a Stock Award  except  under  Section  15(a)
below.  Unless  otherwise  determined by the Committee,  the Company will retain
possession of certificates  for shares of Stock Awards until all restrictions on
such shares have lapsed.  Each certificate for a Stock Award, unless held by the
Company, shall contain a legend giving appropriate notice of the restrictions in
the Grant.  The Grantee  shall be entitled to have the legend  removed  from the
stock  certificate   covering  the  shares  subject  to  restrictions  when  all
restrictions  on such shares have lapsed.  The Committee may determine  that the
Company will not issue  certificates  for Stock Awards until all restrictions on
such shares have lapsed.

     (e) Right to Vote and to Receive Dividends. Unless the Committee determines
         --------------------------------------
otherwise,  during the Restriction  Period,  the Grantee shall have the right to
vote shares of Stock Awards and to receive any dividends or other  distributions
paid on such  shares,  subject to any  restrictions  deemed  appropriate  by the
Committee,   including,   without   limitation,   the  achievement  of  specific
performance goals.

     (f) Lapse of Restrictions.  All restrictions  imposed on Stock Awards shall
         ---------------------
lapse  upon  the  expiration  of  the  applicable  Restriction  Period  and  the
satisfaction of all conditions,  if any, imposed by the Committee. The Committee
may determine,  as to any or all Stock Awards, that the restrictions shall lapse
without regard to any Restriction Period.

     Section 8. Stock Units

     The  Committee  may grant Stock Units,  each of which shall  represent  one
hypothetical  share of Company Stock, to an Employee or  Non-Employee  Director,
upon such terms and conditions as the Committee deems appropriate. The following
provisions are applicable to Stock Units:

                                      B-8


     (a)  Crediting of Units.  Each Stock Unit shall  represent the right of the
          ------------------
Grantee to  receive a share of  Company  Stock or an amount of cash based on the
value of a share of Company Stock, if and when specified conditions are met. All
Stock  Units  shall be  credited  to  bookkeeping  accounts  established  on the
Company's records for purposes of the Plan.

     (b) Terms of Stock  Units.  The  Committee  may grant  Stock Units that are
         ---------------------
payable if specified  performance  goals or other  conditions  are met, or under
other  circumstances.  Stock  Units  may  be  paid  at the  end  of a  specified
performance  period  or other  period,  or  payment  may be  deferred  to a date
authorized by the Committee.  The Committee  shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock Units.

     (c)  Requirement  of  Employment  or Service.  If the Grantee  ceases to be
          ---------------------------------------
employed by, or provide  service to, the Employer  prior to the vesting of Stock
Units,  or if other  conditions  established  by the  Committee are not met, the
Grantee's Stock Units shall be forfeited.  The Committee may,  however,  provide
for complete or partial exceptions to this requirement as it deems appropriate.

     (d) Payment  With Respect to Stock  Units.  Payments  with respect to Stock
         -------------------------------------
Units shall be made in cash,  Company Stock or any combination of the foregoing,
as the Committee shall determine.

     Section 9. Stock Appreciation Rights

     The  Committee  may grant  SARs to an  Employee  or  Non-Employee  Director
separately or in tandem with any Option. The following provisions are applicable
to SARs:

     (a) General  Requirements.  The  Committee may grant SARs to an Employee or
         ---------------------
Non-Employee  Director  separately  or in tandem  with any Option  (for all or a
portion of the applicable Option). Tandem SARs may be granted either at the time
the  Option  is  granted  or at any time  thereafter  while the  Option  remains
outstanding;  provided, however, that, in the case of an Incentive Stock Option,
SARs may be granted only at the time of the Grant of the Incentive Stock Option.
The Committee  shall establish the base amount of the SAR at the time the SAR is
granted.  The base  amount of each SAR shall be equal to the per share  Exercise
Price of the related Option or, if there is no related  Option,  an amount equal
to or greater than the Fair Market  Value of a share of Company  Stock as of the
date of Grant of the SAR.

     (b) Tandem SARs. In the case of tandem SARs,  the number of SARs granted to
         -----------
a Grantee that shall be exercisable  during a specified  period shall not exceed
the number of shares of Company  Stock that the  Grantee may  purchase  upon the
exercise  of the related  Option  during such  period.  Upon the  exercise of an
Option,  the SARs relating to the Company  Stock covered by such exercise  shall
terminate.  Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.

     (c) Exercisability. An SAR shall be exercisable during the period specified
         --------------
by the  Committee in the Grant  Instrument  and shall be subject to such vesting
and  other  restrictions  as  may be  specified  in the  Grant  Instrument.  The
Committee may accelerate the  exercisability  of any or all outstanding  SARs at
any time  for any  reason.  SARs may only be  exercised  while  the  Grantee  is
employed  by, or  providing  service to, the  Employer or during the  applicable
period after  termination  of employment or service as described in Section 6(e)

                                      B-9


above. A tandem SAR shall be exercisable  only during the period when the Option
to which it is related is also exercisable.

     (d) Value of SARs. When a Grantee exercises SARs, the Grantee shall receive
         -------------
in  settlement  of  such  SARs  an  amount  equal  to the  value  of  the  stock
appreciation for the number of SARs exercised. The stock appreciation for an SAR
is the amount by which the Fair Market Value of the underlying  Company Stock on
the date of exercise of the SAR exceeds the base amount of the SAR as  described
in subsection (a).

     (e) Form of Payment.  The appreciation in an SAR shall be paid in shares of
         ---------------
Company Stock, cash or any combination of the foregoing,  as the Committee shall
determine.  For purposes of calculating the number of shares of Company Stock to
be received,  shares of Company Stock shall be valued at their Fair Market Value
on the date of exercise of the SAR.

     Section 10. Other Stock-Based Awards

     The Committee may grant Other Stock-Based  Awards,  which are awards (other
than those described in Sections 6, 7, 8 and 9 of the Plan) that are based on or
measured by Company Stock,  to any Employee or  Non-Employee  Director,  on such
terms and conditions as the Committee shall determine.  Other Stock-Based Awards
may be  awarded  subject  to the  achievement  of  performance  goals  or  other
conditions and may be payable in cash,  Company Stock or any  combination of the
foregoing, as the Committee shall determine.

     Section 11. Dividend Equivalents

     The Committee may grant Dividend Equivalents in connection with Stock Units
or Other  Stock-Based  Awards.  Dividend  Equivalents  may be paid  currently or
accrued as contingent  cash  obligations and may be payable in cash or shares of
Company Stock,  and upon such terms as the Committee may  establish,  including,
without limitation, the achievement of specific performance goals.

     Section 12. Qualified Performance-Based Compensation

     The  Committee  may  determine  that  Stock  Awards,   Stock  Units,  Other
Stock-Based  Awards and  Dividend  Equivalents  granted to an Employee  shall be
considered  "qualified  performance-based  compensation" under section 162(m) of
the Code. The following  provisions shall apply to Grants of Stock Awards, Stock
Units,  Other  Stock-Based  Awards  and  Dividend  Equivalents  that  are  to be
considered  "qualified  performance-based  compensation" under section 162(m) of
the Code:

     (a) Performance Goals.
         -----------------

          (i) When  Stock  Awards,  Stock  Units,  Other  Stock-Based  Awards or
     Dividend Equivalents that are to be considered "qualified performance-based
     compensation" are granted, the Committee shall establish in writing (A) the
     objective  performance  goals that must be met, (B) the performance  period
     during which the performance  will be measured,  (C) the threshold,  target
     and maximum amounts that may be paid if the performance  goals are met, and
     (D)  any  other  conditions  that  the  Committee  deems   appropriate  and
     consistent with the Plan and Section 162(m) of the Code.

                                      B-10


          (ii) The business  criteria may relate to the Grantee's  business unit
     or the  performance of the Company and its  subsidiaries as a whole, or any
     combination  of  the  foregoing.   The  Committee   shall  use  objectively
     determinable  performance  goals  based  on one or  more  of the  following
     criteria:  stock  price,  earnings  per  share,  net  earnings,   operating
     earnings,  earnings before income taxes, EBITDA (earnings before income tax
     expense,  interest  expense,  and depreciation  and amortization  expense),
     return on assets,  shareholder return,  return on equity, growth in assets,
     unit  volume,  sales  or  market  share,  or  strategic  business  criteria
     consisting of one or more  objectives  based on meeting  specified  revenue
     goals, market penetration goals,  geographic business expansion goals, cost
     targets or goals relating to acquisitions or divestitures.

     (b)  Establishment  of Goals. The Committee shall establish the performance
          -----------------------
goals in writing either before the beginning of the performance period or during
a period  ending no later than the earlier of (i) 90 days after the beginning of
the performance  period or (ii) the date on which 25% of the performance  period
has been completed,  or by such other date as may be required or permitted under
applicable  regulations  under section 162(m) of the Code. The performance goals
shall satisfy the requirements for "qualified  performance-based  compensation,"
including the  requirement  that the  achievement of the goals be  substantially
uncertain at the time they are  established and that the goals be established in
such a way  that a third  party  with  knowledge  of the  relevant  facts  could
determine  whether and to what extent the  performance  goals have been met. The
Committee shall not have discretion to increase the amount of compensation  that
is payable upon achievement of the designated performance goals.

     (c)  Announcement  of Grants.  The Committee shall certify and announce the
          -----------------------
results for each  performance  period to all Grantees after the  announcement of
the Company's financial results for the performance period. If and to the extent
that the Committee  does not certify that the  performance  goals have been met,
the grants of Stock Awards,  Stock Units,  Other Stock-Based Awards and Dividend
Equivalents for the performance  period shall be forfeited or shall not be made,
as   applicable.   If   Dividend   Equivalents   are   granted   as   "qualified
performance-based  compensation" under section 162(m) of the Code, a Grantee may
not accrue more than $50,000 of such  Dividend  Equivalents  during any calendar
year.

     Section 13. Deferrals

     The  Committee  may  permit or  require a Grantee  to defer  receipt of the
payment of cash or the  delivery of shares that would  otherwise  be due to such
Grantee in connection with any Stock Units or Other  Stock-Based  Awards. If any
such deferral  election is permitted or required,  the Committee shall establish
rules and  procedures  for such  deferrals and may provide for interest or other
earnings to be paid on such  deferrals.  The rules and  procedures  for any such
deferrals shall be consistent  with  applicable  requirements of section 409A of
the Code.

     Section 14. Withholding of Taxes

     (a)  Required  Withholding.  All Grants  under the Plan shall be subject to
          ---------------------
applicable   federal   (including   FICA),   state  and  local  tax  withholding
requirements.  The  Employer  may  require  that the  Grantee  or  other  person
receiving  or  exercising  Grants pay to the Employer the amount of any federal,
state or local taxes that the  Employer is required to withhold  with respect to
such  Grants,  or the Employer may deduct from other salary or wages paid by the
Employer the amount of any withholding taxes due with respect to such Grants.

                                      B-11


     (b) Election to Withhold Shares. If the Committee so permits, a Grantee may
         ---------------------------
elect to satisfy the  Employer's  tax  withholding  obligation  with  respect to
Grants paid in Company  Stock by having shares valued at their Fair Market Value
withheld  up to an amount  that does not exceed the tax  withholding  obligation
determined at the Grantee's minimum applicable  withholding tax rate for federal
(including  FICA),  state and local tax  liabilities.  The election must be in a
form and  manner  prescribed  by the  Committee  and may be subject to the prior
approval of the Committee.

     Section 15. Transferability of Grants

     (a)  Nontransferability  of  Grants.  Except as  provided  below,  only the
          ------------------------------
Grantee may  exercise  rights  under a Grant during the  Grantee's  lifetime.  A
Grantee  may not  transfer  those  rights  except  (i) by will or by the laws of
descent and  distribution  or (ii) with respect to Grants  other than  Incentive
Stock Options,  pursuant to a domestic relations order. When a Grantee dies, the
personal representative or other person entitled to succeed to the rights of the
Grantee  may  exercise  such  rights.  Any such  successor  must  furnish  proof
satisfactory to the Company of the successor's  right to receive the Grant under
the Grantee's will or under the applicable laws of descent and distribution.

     (b) Transfer of Nonqualified Stock Options.  Notwithstanding the foregoing,
         --------------------------------------
the Committee may provide,  in a Grant  Instrument,  that a Grantee may transfer
Nonqualified  Stock  Options to family  members,  or one or more trusts or other
entities  for the  benefit of or owned by family  members,  consistent  with the
applicable  securities  laws,  according  to such  terms  as the  Committee  may
determine;  provided that the Grantee receives no consideration for the transfer
of an Option and the transferred Option shall continue to be subject to the same
terms and  conditions as were  applicable to the Option  immediately  before the
transfer.

     Section 16. Consequences of a Change of Control

     In the event of a Change of Control the Committee may, but need not, in its
sole discretion,  take any or all of the following  actions:  (i) accelerate the
exercisability  of the  outstanding  Options and SARs in whole or in part;  (ii)
determine that the restrictions and conditions on outstanding Stock Awards shall
lapse  in whole  or in  part;  (iii)  determine  that  all  Stock  Units,  Other
Stock-Based  Awards and Dividend  Equivalents are fully vested and shall be paid
at no less than their target values, if any, or in such amounts as the Committee
may determine in the case of such Awards  without  target  values;  (iv) require
that  Grantees  surrender  their  outstanding  Options  and  SARs  as of a  date
specified by the  Committee in exchange for one or more payments by the Company,
in cash or Company Stock as determined by the  Committee,  in an amount equal to
the amount by which the then Fair  Market  Value of the shares of Company  Stock
subject to the Grantee's unexercised Options and SARs exceeds the Exercise Price
of the Options or the base amount of the SARs, as  applicable;  (v) after giving
Grantees  an  opportunity  to  exercise  their  outstanding  Options  and  SARs,
terminate any or all unexercised  Options and SARs at such time as the Committee
deems appropriate;  or (vi) determine that outstanding Options and SARs that are
not exercised shall be assumed by, or replaced with comparable options or rights
by,  the  surviving  corporation  (or a parent or  subsidiary  of the  surviving
corporation).

                                      B-12


     Section 17. Requirements for Issuance or Transfer of Shares

     No Company  Stock shall be issued or  transferred  in  connection  with any
Grant  hereunder  unless  and  until all legal  requirements  applicable  to the
issuance  or  transfer  of such  Company  Stock have been  complied  with to the
satisfaction  of the Committee.  The Committee shall have the right to condition
any  Grant  on  the  Grantee's  undertaking  in  writing  to  comply  with  such
restrictions on his or her subsequent disposition of the shares of Company Stock
as  the  Committee   shall  deem  necessary  or  advisable,   and   certificates
representing  such  shares may be  legended  to reflect  any such  restrictions.
Certificates  representing  shares of Company Stock issued or transferred  under
the Plan may be subject to such  stop-transfer  orders and other restrictions as
the Committee deems appropriate to comply with applicable laws,  regulations and
interpretations, including any requirement that a legend be placed thereon.

     Section 18. Amendment and Termination of the Plan

     (a)  Amendment.  The  Board may  amend or  terminate  the Plan at any time;
          ---------
provided,  however,  that the Board shall not amend the Plan without shareholder
approval if such  approval is required in order to comply with the Code or other
applicable law, or to comply with applicable stock exchange requirements.

     (b) No Repricing Without Shareholder Approval.  Notwithstanding anything in
         -----------------------------------------
the Plan to the contrary,  the Committee  may not reprice  Options,  nor may the
Board amend the Plan to permit repricing of Options,  unless the shareholders of
the Company  provide  prior  approval for such  repricing.  An  adjustment to an
Option  pursuant to Section  4(c) above shall not  constitute a repricing of the
Option.

     (c)  Shareholder  Re-Approval  Requirement.  If Stock Awards,  Stock Units,
          -------------------------------------
Other  Stock-Based  Awards or Dividend  Equivalents  are  granted as  "qualified
performance-based  compensation"  under  Section  12  above,  the  Plan  must be
reapproved by the shareholders no later than the first shareholders meeting that
occurs in the fifth year following the year in which the shareholders previously
approved the provisions of Section 12, if required by section 162(m) of the Code
or the regulations thereunder.

     (d)  Termination of Plan. The Plan shall  terminate on the day  immediately
          -------------------
preceding  the tenth  anniversary  of its  effective  date,  unless  the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the shareholders.

     (e)  Termination  and Amendment of  Outstanding  Grants.  A termination  or
          --------------------------------------------------
amendment  of the Plan that  occurs  after a Grant is made shall not  materially
impair  the  rights of a Grantee  unless  the  Grantee  consents  or unless  the
Committee acts under Section 19(f) below.  The termination of the Plan shall not
impair the power and authority of the Committee  with respect to an  outstanding
Grant.  Whether  or not the Plan has  terminated,  an  outstanding  Grant may be
terminated  or amended  under Section 19(f) below or may be amended by agreement
of the Company and the Grantee consistent with the Plan.

     (f) Effective  Date of the Plan. The Plan shall be effective as of the date
         ---------------------------
on which the shareholders approve the Plan.

                                      B-13


     Section 19. Miscellaneous

     (a) Grants in Connection with Corporate Transactions and Otherwise. Nothing
         --------------------------------------------------------------
contained in the Plan shall be construed to (i) limit the right of the Committee
to make Grants under the Plan in connection with the  acquisition,  by purchase,
lease,  merger,  consolidation  or  otherwise,  of the business or assets of any
corporation,  firm or  association,  including  Grants to employees  thereof who
become Employees,  or (ii) limit the right of the Company to grant stock options
or make other awards  outside of the Plan.  The Committee may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger,  consolidation,  acquisition  of stock or  property,  reorganization  or
liquidation  involving the Company,  in substitution for a stock option or stock
awards grant made by such corporation.  Notwithstanding  anything in the Plan to
the contrary,  the Committee may establish  such terms and conditions of the new
Grants as it deems appropriate,  including setting the Exercise Price of Options
or the base price of SARs at a price  necessary  to retain for the  Grantee  the
same economic value as the prior options or rights.

     (b) Governing  Document.  The Plan shall be the  controlling  document.  No
         -------------------
other statements,  representations,  explanatory materials or examples,  oral or
written,  may amend the Plan in any manner.  The Plan shall be binding  upon and
enforceable against the Company and its successors and assigns.

     (c) Funding of the Plan. The Plan shall be unfunded.  The Company shall not
         -------------------
be required  to  establish  any  special or  separate  fund or to make any other
segregation of assets to assure the payment of any Grants under the Plan.

     (d) Rights of  Grantees.  Nothing in the Plan shall  entitle any  Employee,
         -------------------
Non-Employee  Director  or other  person to any  claim or right to be  granted a
Grant under the Plan.  Neither the Plan nor any action taken  hereunder shall be
construed as giving any individual any rights to be retained by or in the employ
of the Employer or any other employment rights.

     (e) No Fractional  Shares.  No fractional  shares of Company Stock shall be
         ---------------------
issued or  delivered  pursuant  to the Plan or any  Grant.  Except as  otherwise
provided  under the Plan,  the Committee  shall  determine  whether cash,  other
awards or other  property  shall be  issued  or paid in lieu of such  fractional
shares  or  whether  such  fractional  shares  or any  rights  thereto  shall be
forfeited or otherwise eliminated.

     (f) Compliance with Law. The Plan, the exercise of Options and SARs and the
         -------------------
obligations  of the Company to issue or transfer  shares of Company  Stock under
Grants shall be subject to all applicable laws and regulations, and to approvals
by any  governmental  or regulatory  agency as may be required.  With respect to
persons  subject  to  section 16 of the  Exchange  Act,  it is the intent of the
Company  that the Plan  and all  transactions  under  the Plan  comply  with all
applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In
addition,  it is the intent of the Company that  Incentive  Stock Options comply
with the  applicable  provisions  of  section  422 of the Code,  that  Grants of
"qualified performance-based compensation" comply with the applicable provisions
of section 162(m) of the Code and that, to the extent applicable,  Grants comply
with the  requirements of section 409A of the Code. To the extent that any legal
requirement of section 16 of the Exchange Act or section 422,  162(m) or 409A of
the Code as set forth in the Plan ceases to be required  under section 16 of the

                                      B-14


Exchange Act or section  422,  162(m) or 409A of the Code,  that Plan  provision
shall cease to apply.  Any  provision  that would cause the Plan or any Grant to
fail to satisfy  section  409A of the Code  shall have no force or effect  until
amended  to  comply  with  section  409A of the  Code  (which  amendment  may be
retroactive to the extent  permitted by section 409A of the Code and may be made
by the Company  without the consent of  Grantees).  The Committee may revoke any
Grant if it is  contrary  to law or  modify a Grant to bring it into  compliance
with any valid and mandatory government regulation.

     (g) Employees  Subject to Taxation Outside the United States.  With respect
         --------------------------------------------------------
to  Grantees  who are  believed  by the  Committee  to be subject to taxation in
countries  other than the United  States,  the Committee may make Grants on such
terms  and  conditions,  consistent  with  the  Plan,  as  the  Committee  deems
appropriate  to  comply  with  the  laws of the  applicable  countries,  and the
Committee  may  create  such  procedures,  addenda  and  subplans  and make such
modifications as may be necessary or advisable to comply with such laws.

     (h) Governing Law. The validity, construction, interpretation and effect of
         -------------
the Plan and Grant  Instruments  issued  under the Plan  shall be  governed  and
construed by and determined in accordance  with the laws of New Jersey,  without
giving effect to the conflict of laws provisions thereof.







                                      B-15





    PROXY                       AMREP CORPORATION                      PROXY

                       SOLICITED BY BOARD OF DIRECTORS FOR
                       2006 ANNUAL MEETING OF SHAREHOLDERS

                     The Conference Center at Normandy Farm
               Route 202 and Morris Road, Blue Bell, Pennsylvania
                    September 20, 2006, 9:00 A.M. Local Time

     The undersigned  hereby  appoints Lonnie A. Coombs and Peter M. Pizza,  and
each of them acting alone, with full power of substitution,  proxies to vote the
Common Stock of the  undersigned at the 2006 Annual Meeting of  Shareholders  of
AMREP Corporation, and any continuation or adjournment thereof, for the election
of directors,  approval of an amendment to the Certificate of Incorporation  and
approval of the  adoption of the 2006 Equity  Compensation  Plan as set forth in
the Notice of 2006 Annual  Meeting of  Shareholders  and Proxy  Statement of the
Board of Directors, and upon all other matters which come before said meeting or
any continuation or adjournment thereof.

     Receipt  of  the  Notice  of  2006  Annual  Meeting  of  Shareholders   and
accompanying Proxy Statement of the Board of Directors is acknowledged.

     Unless  otherwise  specified,  this proxy will be voted FOR the election of
directors, FOR approval of the amendment to the Certificate of Incorporation and
FOR approval of the adoption of the 2006 Equity  Compensation  Plan as set forth
in the Proxy Statement.

                         (Continued and to be dated and signed on reverse side.)






        PLEASE MARK, DATE SIGN
        AND MAIL YOUR PROXY                          [X]
        PROMPTLY IN THE ENVELOPE            Votes MUST be indicated
        PROVIDED.                           (x) in Black or Blue ink.


     A vote FOR each ITEM is recommended by the Board of Directors.


                                                                                                       FOR     AGAINST     ABSTAIN
1.       ELECTION OF TWO (2) DIRECTORS.                              2.  APPROVAL OF AMENDMENT
                                                                         TO THE CERTIFICATE OF        [  ]      [  ]         [  ]
                                                                         INCORPORATION


FOR all      [  ]    WITHHOLD AUTHORITY   [  ]   * EXCEPTIONS   [  ]
nominees             to vote for all
listed below         nominees listed
                     below
Nominees: Edward B. Cloues II, James Wall                            3.  APPROVAL OF ADOPTION OF
                                                                         THE 2006 EQUITY              [  ]      [  ]         [  ]
                                                                         COMPENSATION PLAN
(INSTRUCTION:  To  withhold  authority  to vote for
any individual  nominee,  mark the "Exceptions" box
and  write  that   nominee's   name  in  the  space
provided below.)

*Exceptions ____________________________________________


                                                                           To change your address, please mark this box. [ ]


                                           If stock is held in the name of more than one person, all holders should sign.
                                           Sign  exactly  as name or  names  appear  at left. Persons  signing in a fiduciary
                                           capacity  should  include  their title as such.


                                       ______________________________              _____________________________
                                       Date     Share owner sign here              Co-Owner sign here