THE DELTONA CORPORATION
________
NOTICE OF ANNUAL MEETING
MAY 23, 1995
________
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of THE
DELTONA CORPORATION will be held at The Biltmore Hotel, 1200 Anastasia
Avenue, Coral Gables, Florida, on the 23rd day of May, 1995, at 9:30 o'clock in
the forenoon, local time, for the following purposes:
1. To elect directors to serve until the next Annual Meeting of
Stockholders and until their respective successors shall have been
elected and shall have qualified.
2. To consider a proposal to appoint Deloitte & Touche as auditors for
the fiscal year ending December 31, 1995, subject to the discretion
of the Board of Directors.
3. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
The transfer books will not be closed. The 1994 Annual Report of the
Company, including audited financial statements as of December 31, 1994,
accompanies this Notice of Meeting and the attached Proxy Statement. A list of
all stockholders of record as of April 7, 1995, the record date for the Annual
Meeting, will be available for examination by any stockholder at the main office
of the Company, 3250 S.W. Third Avenue, Miami, Florida, during the ten-day
period preceding the date of the meeting.
By Order of the Board of Directors,
SHARON J. HUMMERHIELM
SHARON J. HUMMERHIELM
Vice President and Assistant Secretary
April 10, 1995
PLEASE FILL IN, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
<PAGE>
THE DELTONA CORPORATION
3250 S.W. THIRD AVENUE
MIAMI, FLORIDA 33129
____________
PROXY STATEMENT
____________
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of The Deltona Corporation, a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders to be held at The Biltmore Hotel,
1200 Anastasia Avenue, Coral Gables, Florida on the 23rd day of May, 1995, at
9:30 o'clock in the forenoon, local time, and any adjournment or adjournments
thereof. The Proxy Statement and accompanying Proxy will be first sent to
stockholders of the Company on or about April 10, 1995.
This Proxy Statement differs in form and contents from the Company's prior
proxy statements, reflecting recent changes to the Securities and Exchange
Commission's rules on executive compensation disclosure.
The Company has one class of voting securities consisting of 15,000,000
shares of Common Stock of the par value of $1 per share. On March 24, 1995, the
Company had outstanding 6,704,839 shares of Common Stock (excluding 12,228
shares held in treasury). Each share of Common Stock is entitled to one vote
and the holders of a majority of the issued and outstanding shares of Common
Stock present in person or by proxy constitutes a quorum. Only holders of
Common Stock of record at the close of business on April 7, 1995 shall be
entitled to notice of and to vote at the Meeting. The vote of a plurality of
the shares represented, in person or by proxy, at the Meeting is
required to elect the eight nominees for directors. The appointment of the
independent public accountants, as well as any other matter properly brought
before the Meeting must be approved by the affirmative vote of the holders of a
majority of the shares
represented, in person or by proxy, at the Meeting.
The automated system administered by the Company's transfer agent tabulates
the votes. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting at the Meeting or any
adjournment thereof. Each are tabulated separately; however, neither
abstentions nor broker non-votes are counted
for purposes of determining whether a proposal has been approved.
Each Proxy executed and returned by a stockholder will be voted as
directed, and may be revoked at any time before it is voted by filing with the
Office of the Assistant Secretary, at 3250 S.W. Third Avenue, Miami, Florida
33129, a written revocation or by
executing a later-dated Proxy or by voting in person by ballot at the Meeting.
ELECTION OF DIRECTORS
The entire Board of Directors is elected annually to hold office until the
next Annual Meeting of Stockholders and until their respective successors are
duly elected and qualified. On June 19, 1992, the Company completed a
transaction with Selex International B.V., a Netherlands corporation ("Selex")*,
which resulted in a change in control of the Company. Under the transaction,
Selex loaned the Company $3,000,000 collateralized by a first mortgage on
certain of the Company's property in its St.
Augustine Shores, Florida community (the "Selex Loan"). See "Compensation
Committee Interlocks and Insider Participation."
________________________
* On December 28, 1992, Selex Sittard B.V. changed its name to Selex
International B.V.
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In conjunction with the Selex Loan: (i) Empire of Carolina, Inc. ("Empire")
sold Selex its 2,220,066 shares of the Company's Common Stock (37.3% of the
outstanding shares of Common Stock of the Company, based upon the number of
shares of the Company's Common Stock outstanding as of December 25, 1992) and
assigned Selex its $1,000,000 Note from the Company, with interest accrued
thereon; (ii) Maurice A. Halperin, Chairman of the Board of Empire and former
Chairman of the Board of the Company, forgave payment of the $200,000 salary due
him for the period of April 1990 through April 1991, which was in arrears; and
(iii) certain changes occurred in the composition of the Company's Board of
Directors. Namely, the six directors serving on the Company's Board who were
previously designated by Empire resigned and four Selex designees (Messrs.
Marcellus H.B. Muyres, Antony Gram, Cornelis van de Peppel, and Cornelis
L.J.J. Zwaans) were elected to serve as directors in their stead. Marcellus
H.B. Muyres was appointed Chairman of the Board and Chief Executive
Officer of the Company. These directors, as well as Leonardus G.M. Nipshagen, a
Selex designee, were then elected as directors at the Company's 1992 Annual
Meeting.
Each of the present eight directors, including the five Selex designees,
has been nominated for re-election at the 1995 Annual Meeting. The accompanying
form of Proxy will be voted FOR the election of all nominees if no direction to
the contrary is given. The Board of Directors has no reason to believe that any
nominee will decline or be unable to serve as a director. If any nominee
should, however, become unavailable for election for any reason, the
accompanying Proxy will be voted for such other person as
the Board of Directors may select or, alternatively, the Board of Directors may
reduce the number of directors to be elected at the Meeting.
The names of the nominees and certain information with respect to each of
them is set forth below. Unless otherwise indicated, each nominee has held the
position shown, or has been associated with the named employer in the executive
capacity shown, for more than the past five years.
<TABLE>
<CAPTION>
YEAR
FIRST
PRINCIPAL OCCUPATION AND ELECTED
NAME AND AGE OTHER INFORMATION OFFICER
_______________ __________________________________________________ ______
<S> <C> <C>
Neil E. Bahr, 69 Vice Chairman of the Board of Directors of the 1983(e)
(a),(b),(c) Company since June 19, 1992. Although otherwise
retired, Mr. Bahr has served as President of Deltona
Land & Investment Corp. ("DL&IC"), a subsidiary of
the Company, from September, 1974 through
December, 1985.
George W. Fischer,
54 President of CPS Industries, Inc., a privately held 1992
(b) company primarily engaged in owning and operating a
chain of beauty salons in the Philadelphia,
Pennsylvania area since March, 1980. Since 1975
Mr. Fischer has
also served as President of H.E.C. Fischer, Inc., a
closely held real estate company.
Other Directorships: Guaranty Bancshares Corp.
Antony Gram, 52 Chairman of the Board of Directors and Chief Executive 1992
(a),(c) Officer of the Company since July 13, 1994. From June
19, 1992 through April 6, 1994, Mr. Gram served as a
Vice Chairman of the Board of Directors of the
Company. For more than the past five years, Mr. Gram
has served as Managing Director of Gramyco, a
scaffolding company, based in Belgium.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
YEAR
FIRST
PRINCIPAL OCCUPATION AND ELECTED
NAME AND AGE OTHER INFORMATION OFFICER
______________ ____________________________________________________ _______
<S> <C> <C>
Thomas B. McNeill,
60 Partner, Mayer, Brown & Platt; Chicago, Illinois. 1975
(b),(d) The law firm of Mayer, Brown & Platt was retained
by the Company to perform legal services on the
Company's behalf during 1992 and 1993.
Marcellus H.B.
Muyres, 46 Vice Chairman of the Board of Directors of the 1992
(a),(c) Company since July 13, 1994. From June 19, 1992
through July 12, 1994, Mr. Muyres served as Chairman
of the Board and Chief Executive Officer of the
Company. For more than the past five years, Mr.
Muyres has served as Managing Director of Muypro &
Meganck N.V., a holding company based in Belgium,
whose interests include construction and development.
For the past three years, Mr. Muyres has also served
as Managing Director of Marcel Muyres International
Holding B.V., a holding company based in Holland,
whose interests include construction and development.
Since November 10, 1988, Mr. Muyres has also served
as Secretary and Director of Swan Development
Corporation, a Florida-based development company
("Swan"), since October 3, 1989, as Secretary /
Treasurer and a Director of Conquistador Development
Corp., a company engaged in the business of
developing, constructing and selling condominiums in
St. Augustine Shores, Florida ("Conquistador"), and
since August 6, 1990, as President and a Director of
M&M First Coast Realty Corporation, a real estate
brokerage based in St. Augustine Shores, Florida
("M&M"). (f)
Other Directorships: Swan, Conquistador and M&M
Leonardus G.M.
Nipshagen, 51 For more than the past five years, Mr. Nipshagen 1992
(d) been an investor in, and management consultant to,
various companies in Holland, Canada, Curacao and
Hong Kong, including IBG Nederland B.V., a holding
company based in Holland.
Cornelis
van de Peppel, 47 For more than the past five years, Mr. van de Peppel 1992
(d) has been an investor in, and management consultant
to, various companies in Holland. In addition, he has
served as Managing Director of Voit International
Warsaw, a medical supply and finance company
operating in Poland.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
YEAR
FIRST
PRINCIPAL OCCUPATION AND ELECTED
NAME AND AGE OTHER INFORMATION OFFICER
_______________ _______________________________________________ _______
<S> <C> <C>
Cornelis L.J.J.
Zwaans, 49 For more than the past five years, Mr. Zwaans 1992
(a),(c) has served as Managing Director of Zwaans, N.V., a
company based in Belgium, which is engaged in the
import, sale and rental of construction equipment.
Since November 10, 1988, Mr. Zwaans has also served
as President and a Director of Swan, since
October 3, 1989, as President and a Director of
Conquistador, and since August 6, 1990, as Secretary,
Treasurer and a Director of M&M. (f)
Other Directorships: Swan, Conquistador and M&M
<FN>
____________________________
(a) Member, Executive Committee.
(b) Member, Audit Committee.
(c) Member, Executive Compensation Committee.
(d) Member, Nominating Committee.
(e) Mr. Bahr also served as a director of the Company from December, 1964
until September, 1974 when he resigned to devote all of his time to
his duties as President of DL&IC.
(f) Messrs. Muyres and Zwaans are brothers-in-law.
</FN>
</TABLE>
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
Messrs. Bahr, Fischer and McNeill (Audit Committee) receive
a fee of $1,000 per month for services as a Director of the
Company and are reimbursed for travel and related costs incurred
with respect to committee and board meetings. Messrs. Gram,
Muyres, Nipshagen, van de Peppel and Zwaans do not receive a
monthly Directors fee; however, they are reimbursed for travel
and related costs incurred with respect to committee and board
meetings and other Company business activities.
In August 1994, the Directors with outstanding fees and/or
expenses agreed to forgive 50% of the amounts due them. The
following sets forth the amounts forgiven by those Directors:
Neil E. Bahr $ 6,500
George Fischer 6,500
Thomas B. McNeill 6,500
Marcellus H. B. Muyres 9,585
Cornelis L. J. J. Zwaans 4,981
---------
Total $ 34,066
=========
The Board of Directors has several standing committees: an
Executive Committee, an Audit Committee, an Executive
Compensation Committee and a Nominating Committee.
The Executive Committee, of which Mr. Muyres is Chairman,
exercises certain powers of the Board of Directors during the
intervals between meetings of the Board and met once during 1994.
4
<PAGE>
The Audit Committee, of which Mr. McNeill is Chairman,
confers with the independent auditors of the Company and
otherwise reviews the adequacy of internal controls, reviews the
scope and results of the audit, assesses the accounting
principles followed by the Company, and recommends the selection
of the independent auditors. There were two meetings of the Audit
Committee during 1994.
The Executive Compensation Committee is chaired by Mr. Bahr,
who retired from the Company in December, 1985 and who serves on
no similar committee of any other company. While the other
members of the Committee, Messrs. Gram, Muyres and Zwaans, serve
together as directors of other companies, none serves as a member
of any other compensation committee. The Committee reviews the
methods and means by which management is compensated, studies and
recommends new methods of compensation, and reviews the standards
of compensation for management. In addition, the Executive
Compensation Committee administers the Annual Executive Bonus
Plan and the 1987 Stock Incentive Plan. No member of the
Committee is eligible to participate in any of the Company's
compensation and benefit plans. See "Compensation Committee
Report." The Executive Compensation Committee held no meetings
during 1994.
The Nominating Committee, of which Mr. van de Peppel is
Chairman, recommends to the Board of Directors nominees to fill
additional directorships that may be created and to fill
vacancies that may exist on the Board of Directors. There was
one meeting of the Nominating Committee during 1994 held as part
of a Board of Directors meeting. The Nominating Committee will
consider nominees recommended by stockholders. Recommendations
by stockholders should be submitted to the Secretary of the
Company and should identify the nominee by name and provide
detailed background information. Recommendations received by
December 31, 1995 will be considered by the Nominating Committee
for nomination at the 1996 Annual Meeting.
During 1994, the Board of Directors held ten meetings. Each
director attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and the total number
of meetings held by all committees on which he served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee (the "Committee") is
comprised of Mr. Bahr, Chairman, and three of the Selex
directors, namely, Messrs. Gram, Muyres and Zwaans.
Mr. Bahr, Chairman of the Committee and Vice Chairman of the
Board, retired from the Company in December, 1985. From the
Company's incorporation in September, 1962 until his retirement,
Mr. Bahr served as an officer of the Company and/or its
subsidiaries. He presently does not serve as a director or as a
member of the compensation committee of any other company.
Mr. Gram, a member of the Committee, has served as Chairman
of the Board and Chief Executive Officer of the Company, and
thus, as an executive officer of the Company, since
July 13, 1994. Additionally, Mr. Gram is deemed to be the
beneficial owner of 46.38% of the Company's Common Stock since he
is the beneficial owner of Yasawa (which holds 4.31% of the
Common Stock of the Company as of March 24, 1995), as well as the
holder of a seventy-four percent equity interest in Wilbury
International N.V., a Netherlands Antilles corporation
("Wilbury"), which owns all of the issued and outstanding stock
of Selex (which holds 42.06% of the Common Stock of the Company
as of March 24, 1995). See "Ownership of Voting Securities of
the Company."
Mr. Muyres, Vice Chairman of the Board of the Company, and a
member of the Committee, served as Chairman of the Board and
Chief Executive Officer, and thus, as an officer of the Company,
from June 19, 1992 through July 12, 1994. As previously stated,
Mr. Muyres serves as a director and executive officer of Swan,
Conquistador and M&M, companies of which Mr. Zwaans, also a
member of the Committee, serves as a director and executive
officer. Mr. Zwaans also serves as a Managing Director of Selex.
As previously stated, all of the issued and outstanding stock of
Selex is owned by Wilbury. Wilbury is, in turn, owned by Messrs.
Gram and
5
<PAGE>
Muyres, with Mr. Gram, as the largest shareholder of Wilbury,
being treated as the beneficial owner of all of the Company's
Common Stock held by Selex. See "Ownership of Voting Securities
of the Company."
On June 19, 1992, Selex loaned the Company the sum of
$3,000,000 pursuant to the First Selex Loan. The First Selex
Loan is collateralized by a first mortgage on certain of the
Company's unsold, undeveloped property in its St. Augustine
Shores, Florida community. The Loan matures on June 15, 1996 and
provides for principal to be repaid at 50% of the net proceeds
per lot for lots requiring release from the mortgage, with the
entire unpaid balance becoming due and payable at the end of the
four year term. It initially bears interest at the rate of 10%
per annum, with payment of interest deferred for the initial 18
months of the Loan and interest payments due quarterly
thereafter. As part of the Selex transaction, Selex was granted
an option, approved by the holders of a majority of the
outstanding shares of the Company's Common Stock at the Company's
1992 Annual Meeting, which, as modified, enabled Selex to convert
the First Selex Loan, or any portion thereof, into a maximum of
600,000 shares of the Company's Common Stock at a per share
conversion price equal to the greater of (i) $1.25 or (ii) 95% of
the market price of the Company's Common Stock at the time of
conversion, but in no event greater than $4.50 per share (the
"Option"). On February 17, 1994, Selex exercised the Option, in
full, at a conversion price of $1.90 per share, such that
$1,140,000 in principal was repaid under the First Selex Loan
through such conversion. As of March 24, 1995, the Company was
in default of the First Selex Loan inasmuch as accrued interest
in the amount of $716,700 (including $673,800 due December 31,
1994) remained unpaid.
One million dollars of the proceeds from the First Selex
Loan was used by the Company to acquire certain commercial and
multi-family properties at the Company's St. Augustine Shores
community at their net appraised value, from Mr. Muyres and
certain entities affiliated with Messrs. Zwaans and Muyres.
Namely, (i) $416,000 was used to acquire 48 undeveloped
condominium units (twelve 4 unit building sites) and 4 completed
(and rented) condominium units from Conquistador, in which
Messrs. Zwaans and Muyres serve as directors, as well as
President and Secretary/Treasurer, respectively; (ii) $485,000
was used to acquire 4 commercial lots from Swan, in which Messrs.
Zwaans and Muyres also serve as directors, as well as President
and Secretary, respectively; and (iii) approximately $99,000 was
used to reacquire, from Mr. Muyres, all of his rights, title and
interest in that certain contracts with the Company for the
purchase of a commercial tract in St. Augustine Shores, Florida.
None of the commercial and multi-family property acquired by the
Company from Mr. Muyres and certain entities affiliated with
Messrs. Zwaans and Muyres collateralizes the First Selex Loan.
In March, 1994, Conquistador exercised its right to repurchase
certain multi-family property from the Company (which right had
been granted in connection with the June, 1992 Selex transaction)
at a price of $312,000, of which $260,000 was paid in cash to the
Company and $52,000 was applied to reduce interest due to Selex
under the Second Selex Loan ("First Conquistador Acquisition").
On December 2, 1992, the Company entered into various
agreements relating to certain of its assets and the
restructuring of its debt with Yasawa, which is beneficially
owned by Mr. Gram. The consummation of these agreements, which
are further described below, was conditioned upon the acquisition
by Gram of the Company's outstanding bank loan.
On December 4, 1992, Gram entered into an agreement with the
lenders, pursuant to which he acquired the bank loan of
approximately $25,150,000 (including interest and fees) for a
price of $10,750,000. In conjunction with such transaction, the
lenders transferred to Gram the warrants which they held that
entitled the holder to purchase an aggregate of 277,387 shares of
the Company's Common Stock at an exercise price of $1.00 per
share. Immediately after the acquisition of the bank loan, Gram
transferred all of his interest in the bank loan, including the
warrants, to Yasawa.
On December 11, 1992, the Company consummated the December
2, 1992 agreements with Yasawa. Under these agreements, Yasawa,
its affiliates and the Company agreed as follows: (i) the Company
sold certain property at its Citrus Springs community to an
affiliate of Yasawa in exchange for approximately $6,500,000 of
debt reduction credit; (ii) an affiliate of Yasawa and the
Company entered into a joint venture agreement with respect
6
<PAGE>
to the Citrus Springs property, providing for the Company to
market such property and receive an administration fee from the
venture (in March, 1994, the Company and the affiliate agreed to
terminate the venture); (iii) the Company sold certain contracts
receivable at face value to an affiliate of Yasawa for debt
reduction credit of approximately $10,800,000; (iv) the Company
sold the Marco Shores Country Club and Golf Course to an
affiliate of Yasawa for an aggregate sales price of $5,500,000,
with the affiliate assuming an existing first mortgage of
approximately $1,100,000 and the Company receiving debt reduction
credit of $2,400,000, such that the Company obtained cash
proceeds from this transaction of $2,000,000, which amount was
used for working capital; (v) an affiliate of Yasawa agreed to
lease the Marco Shores Country Club and Golf Course to the
Company for a period of approximately one year; (vi) an affiliate
of Yasawa and the Company agreed to amend the terms of the
warrants to increase the number of shares issuable upon their
exercise from 277,387 shares to 289,637 shares and to adjust the
exercise price to an aggregate of approximately $314,000; (vii)
Yasawa exercised the warrants in exchange for debt reduction
credit of approximately $314,000; (viii) Yasawa released certain
collateral held for the bank loan; (ix) an affiliate of Yasawa
agreed to make an additional loan of up to $1,500,000 to the
Company, thus providing the Company with a future line of credit
(all of which was drawn and outstanding as of March 24, 1995);
and (x) Yasawa agreed to restructure the payment terms of the
remaining $5,106,000 of the bank loan as a loan from Yasawa (the
"Yasawa Loan").
The Yasawa Loan bears interest at the rate of 11% per annum,
with payment of interest deferred until December 31, 1993, at
which time only accrued interest became payable. Commencing
January 31, 1994, principal and interest became payable monthly,
with all unpaid principal and accrued interest being due and
payable on December 31, 1997. During 1994, an assignment of a
mortgage receivable and miscellaneous sales of collateral reduced
the Yasawa Loan to $4,764,600 as of December 31, 1994. As of
March 24, 1995, $5,418,300 in principal and accrued interest was
in default under the Yasawa Loan.
On April 30, 1993 Selex loaned the Company an additional
$1,000,000 collateralized by a first mortgage on certain of the
Company's property in its Marion Oaks, Florida community (the
"Second Selex Loan"). The Second Selex Loan bears interest at
11% per annum, with interest deferred until December 31, 1993.
The Second Selex Loan provides for principal to be repaid at
$3,000 per lot for lots requiring release from the mortgage, with
the entire unpaid principal balance and interest accruing from
January 1, 1994 to April 30, 1994 due and payable on April 30,
1994. Although Selex had certain conversion rights under the
Second Selex Loan in the event the Company sold any Common Stock
or Preferred Stock prior to payment in full of all amounts due to
Selex under the Second Selex Loan, such rights were voided as of
December 31, 1993. As of March 24, 1995, $39,000 in principal
and $52,000 in accrued interest had been repaid under the Second
Selex Loan, but accrued interest of $154,600 due under the Loan
as of March 24, 1995, as well as the principal balance of
$961,000, remained unpaid and in default. The Second
Conquistador Acquisition, discussed below, will, when closed,
satisfy the debt due and payable under the Second Selex Loan.
From July 9, 1993 through December 31, 1993, Selex loaned
the Company an additional $4,400,000 collateralized by a second
mortgage on certain of the Company's property on which Selex
and/or Yasawa hold a first mortgage pursuant to a Loan Agreement
dated July 14, 1993 and amendments thereto (the "Third Selex
Loan"). The Third Selex Loan bears interest at 11% per annum,
with interest deferred until December 31, 1993. Principal is to
be repaid at $3,000 per lot for lots requiring release from the
mortgage, with the entire unpaid principal balance and interest
accruing from January 1, 1994 to April 30, 1994 due and payable
on April 30, 1994. As of March 24, 1995, $37,600 in principal
had been repaid under the Third Selex Loan, but accrued interest
of $742,600 due under the Loan as of March 24, 1995, as well as
the principal balance of $4,362,400, remained unpaid and in
default. The Second Conquistador Acquisition, discussed below,
will, when closed, provide a reduction of the debt due and
payable under the Third Selex Loan.
In February, 1994, Yasawa loaned the Company an additional
amount of approximately $514,900 at an interest rate of 8% per
annum (the "Second Yasawa Loan"). Since May, 1994, additional
amounts were advanced
7
<PAGE>
to the Company under the Second Yasawa Loan to enable the Company
to pay certain essential expenses and effectuate settlements with
the Company's principal creditors. As of March 24, 1995, an
aggregate amount of $2,242,000 had been advanced to the Company
under the Second Yasawa Loan and accrued interest of $115,600
remained unpaid.
The Company has approved a Purchase and Sale Agreement with
Conquistador Development Corporation ("Second Conquistador
Acquisition") for the sale of an administration building and
multi-family site in the Company's St. Augustine Shores community
as well as the remaining lot inventory in the Company's Feather
Nest community at Marion Oaks in consideration for the
satisfaction of $2,599,300 of principal and accrued interest on
the Second and Third Selex Loans. The amount of debt reduction
is equivalent to the amount of Mr. Marcel Muyres' participation
in those loans as of January 31, 1995. In a separate
transaction, Conquistador Development Corporation and the Company
approved a Purchase and Sale Agreement ("Third Conquistador
Acquisition") for the sale of four single family residential lots
in the St. Augustine Shores community for $100,000 in cash. The
Second and Third Conquistador Acquisitions are anticipated to
close by April 30, 1995.
As previously stated, Messrs. Muyres and Zwaans also serve
as directors and executive officers of M&M. The Company has
leased certain office space to M&M at its St. Augustine Shores
community pursuant to a Lease Agreement dated August 10, 1990.
Although the aggregate annual rental payments under such Lease
are less than $60,000, as of March 24, 1995, M&M was in default
of its obligations under the Lease inasmuch as delinquent rental
payments (including reimbursement for real estate taxes) of
approximately $21,260 remain unpaid. Payment of delinquent
rental payments will be made upon closing of the Second
Conquistador Acquisition.
Interest due to Selex, Yasawa and their affiliates as of
December 31, 1994 in the aggregate amount of $2,899,500 remained
unpaid and in default as of March 24, 1995. Through March 24,
1995, $1,140,000 in principal was repaid under the First Selex
Loan through the exercise of the above described Option, $39,000
in principal and $52,000 in accrued interest was repaid under the
Second Selex Loan, $37,600 in principal was repaid under the
Third Selex Loan, and $133,900 in principal and $346,000 in
accrued interest was repaid under the Yasawa loan. As of March
24, 1995, the Company had loans outstanding from Selex, Yasawa
and their affiliates in the aggregate amount of approximately
$19,999,400, including interest, all of which are in default,
including approximately $10,359,600, which is owed to Selex,
including accrued and unpaid interest of approximately $2,176,200
(10% per annum on the First Selex Loan, 11% per annum on the
Second and Third Selex Loans and 12% per annum on the $1,000,000
Empire Note assigned to Selex); approximately $7,776,000, which
owed to Yasawa, including accrued and unpaid interest of
approximately $769,200 (11% per annum on the Yasawa Loan and 8%
per annum on the Second Yasawa Loan); and approximately
$1,864,000, which is owed to an affiliate of Yasawa, including
accrued and unpaid interest of approximately $364,000 (12% per
annum). The loans from Selex, Yasawa and their affiliates are
secured by substantially all of the assets of the Company.
The lease between an affiliate of Yasawa and the Company
with respect to the Marco Shores Country Club and Golf Course was
terminated on December 31, 1993. At the time of termination, an
approximate amount of $34,200 was due to the Company from the
Yasawa affiliate, which amount was paid in 1994.
In December 1992, the Company and Citony (an affiliate of
Yasawa) entered into a joint venture agreement with respect to
Citony's Citrus Springs property, providing for the Company to
market the property and receive an administration fee from the
venture. The Company and Citony agreed to terminate the venture
in March 1994; however, the Company is providing certain
assistance to Citony during the transition period. At the time
of termination, $265,000 was due to the Company by Citony for
marketing costs incurred as well as administrative services
provided, which amount was paid in 1994.
8
<PAGE>
OWNERSHIP OF VOTING SECURITIES OF THE COMPANY
Based upon information furnished to the Company or contained
in filings made with the Securities and Exchange Commission
("SEC"), the Company believes that the only persons who
beneficially own more than five percent (5%) of the shares of the
Common Stock of the Company are Selex (42.06%) and, Antony Gram,
through his holdings in Selex and Yasawa (46.37%).
All of the issued and outstanding stock of Selex, Gerrit van
den Veenstraat 70, Amsterdam, The Netherlands, is owned by
Wilbury which is, in turn, owned by Messrs. Muyres and Gram.
Antony Gram, Chairman of the Board of Directors and Chief
Executive Officer of the Company, as the largest shareholder of
Wilbury, holding a seventy-four percent equity interest in that
corporation, is treated as the beneficial owner of all of the
Company's Common Stock held by Selex. In addition, Mr. Gram
beneficially owns Yasawa. Since Yasawa is the direct owner of
289,637 shares of the Common Stock of the Company, Mr. Gram is
deemed to be the beneficial owner of an aggregate of 3,109,703
shares of Common Stock of the Company (46.38%).
The following table sets forth information, as of March 24,
1995, concerning the beneficial ownership by all directors and
nominees, by each of the executive officers named in the Summary
Compensation Table beginning on Page 10 (the "Summary
Compensation Table") and by all directors and executive officers
as a group. The number of shares beneficially owned by each
director or executive officer is determined under the rules of
the SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNERSHIP(A) OF CLASS
-------------------------- ---------
<S> <C> <C>
Directors:
Neil E. Bahr................ 4,121 - Direct *
George W. Fischer .......... 15,000 - Direct *
Thomas B. McNeill .......... 200 - Direct *
Marcellus H.B. Muyres....... (b) (b)
Antony Gram................. 3,109,703 - Indirect 46.38%
Leonardus G.M. Nipshagen.... (b) (b)
Cornelis van de Peppel...... (b) (b)
Cornelis L.J.J. Zwaans...... (b) (b)
Executive officers named
in Summary Compensation Table:
Marcellus H.B. Muyres...... (b) (b)
Earle D. Cortright, Jr..... 18,706 - Direct *
Bruce M. Weiner (removed
April, 1994) 2,000 - Direct *
Michelle R. Garbis
(removed August, 1994) 2,000 - Direct *
Joseph Mancilla, Jr.
(removed July, 1994) 100 - Direct *
All executive officers
and directors as a group,
consisting of 14 persons
(including those
listed above)................ 3,152,030 47.01%
<FN>
________________________
* Represents holdings of less than 1%.
(a) Except for Antony Gram, who beneficially owns 46.38% of the Common
Stock of the Company, no current director, nominee or executive
officer beneficially owns more than 1% of the Company's
outstanding shares.
(b) Does not include the 2,820,066 shares held by Selex.
</FN>
</TABLE>
9
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF
1934
The Securities Exchange Act of 1934 requires the Company's
directors, its executive officers and any persons holding more
than ten percent of the Company's Common Stock to report their
initial ownership of the Company's Common Stock and any
subsequent changes in that ownership to the SEC and the New York
Stock Exchange. Under the Section 16(a) rules, the Company is
required to disclose in this Proxy Statement any failure to file
such required reports by their prescribed due dates.
To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written
representations that no other reports were required during the
fiscal year ended December 31, 1994, all Section 16(a) filing
requirements were satisfied.
EXECUTIVE COMPENSATION
Due to the Company's liquidity situation, Antony Gram has
served as Chairman of the Board and Chief Executive Officer of
the Company since July 13, 1994 without compensation. Likewise,
Marcellus H.B. Muyres served as Chairman of the Board and Chief
Executive Officer without compensation from June 1992 through
July 12, 1994. The Commission's rules on executive compensation
disclosure require, however, that the Summary Compensation Table
which appears below, depict the compensation for the past three
years of the Company's chief executive officer and its four most
highly compensated executive officers whose annual salary and
bonuses exceed $100,000. During the fiscal year ended December
31, 1994, four executive officers of the Company were paid an
annual salary and bonus in excess of $100,000, with one of such
officers not being employed until July 15, 1992 and one not being
employed until March 15, 1993. Accordingly, the table set forth
below, discloses the annual compensation paid to Mr. Gram for the
year ended December 31, 1994, to Mr. Weiner for the two years
ended December 31, 1994, and to Mrs. Garbis and Messrs.
Cortright, Mancilla and Muyres for the three years ended December
31, 1994.
Summary Compensation Table
--------------------------------
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------ ------------
- -----------------------------------------------------------------------------
AWARDS PAYOUTS
---------------------------------
OTHER OTHER SARS/
NAME AND FISCAL SALARY BONUS ANNUAL RESTRICTED STOCK LTIP ALL OTHER
PRINCIPAL YEAR ($) ($)(A) COMPEN- STOCK OPTIONS PAY- COMPEN-
POSITION SATION AWARDS (#)(C) OUTS SATION
(B) ($)
__________ _____ ______ ______ _______ __________ _______ ____ _________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
M.H.B. Muyres 1994 -- -- -- -- -- -- --
Chairman of the1993 -- -- -- -- -- -- --
Board & Chief 1992 -- -- -- -- -- -- --
Executive
Officer (6/19/92-
7/12/94)
Antony Gram 1994 -- -- -- -- -- -- --
Chairman of the
Board & Chief
Executive
Officer (7/13/94
to present)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------ ------------
- -----------------------------------------------------------------------------
AWARDS PAYOUTS
---------------------------------
OTHER OTHER SARS/ ALL
NAME AND FISCAL SALARY BONUS ANNUAL RESTRICTED STOCK LTIP OTHER
PRINCIPAL YEAR ($) ($)(A) COMPEN- STOCK OPTIONS PAY- COMPEN-
POSITION SATION AWARDS (#)(C) OUTS SATION
(B) ($)
_________ ______ ______ ______ _______ __________ _______ ____ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E.D.
Cortright,Jr. 1994 $209,615 (d) -- -- -- -- $100,000 (d)
President & 1993 $200,000 $50,000 -- -- -- --
Chief 1992 $181,231 $50,000 -- -- -- --
Operating
Officer
B.M.Weiner 1994 $ 72,917 -- -- -- 20,000 -- --
Exec. Vice 1993 $262,500 -- -- -- shares -- --
President
(since 3/15/93
- -removed
7/12/94)
M.R. Garbis 1994 $ 61,554 -- -- -- -- -- $102,500
Sr. Vice Pres. 1993 $115,000 -- -- -- -- -- --
& Corp. Sec. 1992 $112,150 -- -- -- -- -- --
(since 7/74
- -removed
8/22/94)
J. Mancilla Jr.
Sr. Vice 1994 $ 34,711 -- -- -- -- -- --
Presdent 1993 $150,000 -- -- -- -- -- --
& General 1992 $ 62,500 $50,000-- -- -- -- --
Counsel
(since 7/15/92-
removed
7/12/94)
<FN>
________
(a) The amounts disclosed in this column represent, in the case of Mr.
Cortright, $50,000 which was paid to him in 1992 and 1993 pursuant to the
special bonus provided for in his employment contract, and, in the case of Mr.
Mancilla, $50,000 which was paid to him upon the settlement of certain
litigation, as provided for in his employment contract. See "Employment
Contracts." Although the Company maintains an Annual Executive Bonus Plan
(the "Bonus Plan"), in which all executive officers of the Company are eligible
to participate, due to the Company's financial position and its liquidity
situation, no bonus awards have been made under the Bonus Plan to any executive
officer of the Company since 1990.
(b) In accordance with the rules of the Commission, amounts relating to 1992
or 1993, if any, and amounts totalling less than the lower of $50,000 or 10%
of the total annual salary and bonus have been omitted.
(c) The Company has a 1987 Stock Incentive Plan (the "Stock Plan") which
combines the features of a stock option plan and a performance unit plan.
The only option granted under the Stock Plan since 1990 was to Mr. Weiner, as
discussed below. The option expired unexercised following Weiner's removal as
an officer of the Company. Due to the Company's financial condition, no awards
have been paid under the Stock Plan except for those initial awards
which were earned at the end of 1989. There are no options outstanding under the
Stock Plan as of December 31, 1994.
(d) This amount reflects the last two installments of Mr. Cortright's special
bonus remaining to be paid. See "Employment Contracts."
</FN>
</TABLE>
11
<PAGE>
EMPLOYMENT CONTRACTS
In June, 1992, the Company obtained $8,000,000 additional
financing through a $13,500,000 sale of certain of the Company's
contracts receivable. The agreement with respect to such sale
requires that the Company maintain, in effect, certain employment
agreements with Mr. Cortright, Mrs. Garbis, and certain other
executive officers of the Company.
Pursuant to the requirements of such agreement, Mr.
Cortright entered into a five-year employment agreement which
continues through June 19, 1997. Such agreement is subject to
automatic renewal for successive one-year periods unless notice
of intent not to renew is given by the Company 60 days prior to
the end of the applicable contract term. The agreement provides
for Mr. Cortright to be paid his current annual salary of
$200,000 (subject to such increases as may be mutually agreed
upon) and for the furnishing of certain benefits, such as payment
of an automobile allowance. The agreement contains "non compete"
provisions which preclude Mr. Cortright from engaging, in any
manner, or from being employed, in any capacity, in any business
which could be deemed to be competitive with the Company in
Florida, New York, New Jersey and Ohio during the five year term
of his agreement, if his employment is terminated or
constructively terminated by the Company or if he resigns his
employment from the Company. Because of such non-compete
provisions and to compensate Mr. Cortright for his exceptional
services in conjunction with the completion of the restructuring
of the Company's bank debt and the securing of financing for the
Company through the above-mentioned contracts receivable sale and
the Selex Loan, Mr. Cortright's agreement also provides for the
payment of a $200,000 bonus, $50,000 of which was paid upon the
signing of his agreement and the completion of the foregoing
transactions, $50,000 of which was paid in June, 1993 (and is
included in the Summary Compensation Table set forth above),
$50,000 of which was due in June, 1994, which Mr. Cortright has
agreed to extend to October 1995 so as to eliminate the default
on his contract, and $50,000 being payable on June, 1995 so long
as he continues to serve as President and Chief Operating Officer
of the Company (the "Special Bonus"), with payment of the unpaid
portion of the Special Bonus accelerated in the event of the
termination or constructive termination of his employment or the
agreement without cause or due to his death or medical
disability. Additionally and as a consequence of such
non-compete provisions, Mr Cortright's employment agreement
provides that if his employment is terminated or constructively
terminated by the Company, without cause (defined as gross
misconduct), during its initial term or any renewal term, he is
entitled to receive a lump sum payment at termination equal to
any salary remaining to be paid him for the contract term (but,
in no event, less than for an additional two years); in addition,
he is entitled to payment of an automobile allowance and certain
insurance benefits for such period. For purposes of Mr.
Cortright's agreement, "constructive termination" includes,
among other things: (i) the assignment of duties inconsistent
with Mr. Cortright's status as President and Chief Operating
Officer or a substantial alteration in his responsibilities if
such assignment and/or alteration is not acceptable to him, (ii)
relocation of the Company's principal place of business to a
location other than Orlando, Florida (unless such other location
is mutually agreed upon), (iii) failure of the Company to
maintain compensation plans in which Mr. Cortright participates
or to continue providing certain other existing employee
benefits, or (iv) any disability commencing after a "change in
control" which is continuous for six months. Mr. Cortright's
agreement with the Company further provides that if his
employment is terminated due to death or medical disability (as
distinguished from a disability following a change in control),
payment of salary to him or his beneficiary shall continue for
two years following termination. Under this agreement, the
agreement with Mrs. Garbis described below, and the benefit plans
described in the Compensation Committee Report, a "change in
control" is (a) an acquisition of 35% of the voting securities of
the Company if the Board of Directors determines that a change in
control has occurred or is likely to occur; or (b) a change in
the majority of the Board of Directors of the Company which is
not recommended or approved by the incumbent Board. On June 11,
1992, the Board determined that the acquisition by Selex of more
than 35% of the Company's Common Stock from Empire, accompanied
by its control of the Board, would constitute a change in control
of the Company.
Mrs. Garbis was employed pursuant to a renewal of her
employment agreement with the Company which, as renewed,
continues through December 31, 1994. Such agreement was subject
to automatic renewal for successive one-year periods unless
notice of intent not to renew is given by the Company sixty days
prior to the end
12
<PAGE>
of each year. The agreement provides for Mrs. Garbis to be paid
her current annual salary of $115,000 (subject to such increases
as the Company may determine) and for the furnishing of certain
benefits, such as payment of an automobile allowance. The
agreement provided that if employment is terminated due to death,
payment of salary to her beneficiary continues for one year
following termination. In addition, if employment is terminated
by the Company without cause, regardless of whether or not the
agreement itself is effect, she is entitled to receive a lump sum
payment at termination equal to two years' salary; she is also
entitled to payment of an automobile allowance and certain
insurance benefits for one year. Such payments and benefits
would be due if employment is terminated by the Company at any
time within a two-year period following a change in control of
the Company (unless termination is due to gross misconduct). In
August, 1994 Mrs. Garbis filed suit against the Company alleging
breach of her employment agreement by reason of non-payment of
compensation, seeking damages under the agreement in excess of
$280,000. Mrs. Garbis and the Company have reached a resolution
and settlement of the claim. Mrs. Garbis has been removed as an
officer of the Company and her employment was terminated.
Two other executive officers, Mr. Harden and Mrs.
Hummerhielm, are employed pursuant to employment agreements which
provide that if their employment is terminated due to death,
payment of salary to their beneficiary continues for six months
and, if employment is otherwise terminated by the Company without
cause (defined as gross misconduct), they are entitled to receive
one year's salary, payable in twenty-four equal semi-monthly
installments.
Mr. Mancilla, Jr., who was appointed Senior Vice President
and General Counsel of the Company, effective July 15, 1992, was
employed pursuant to an employment agreement with the Company
which continued through July 15, 1994 (the initial term), was to
be automatically renewed at that time for an additional year (the
initial renewal term), and thereafter was subject to automatic
renewal for successive one-year periods (subsequent renewal
terms) unless notice of intent not to renew was given by the
Company sixty days prior to the applicable expiration date. The
agreement provided for Mr. Mancilla to be paid an annual salary
of $150,000 (subject to such increases as might be mutually
agreed upon), for the furnishing of certain benefits, such as
payment of an automobile allowance, and for payment of a bonus
(the "Bonus") of $50,000 upon the settlement of certain
litigation. The Bonus was paid in 1992 following court approval
of the settlement of such litigation, and is included in the
Summary Compensation Table set forth above. The agreement
further provided that if Mr. Mancilla's employment were
terminated or constructively terminated by the Company, without
cause (defined as gross misconduct), he would be entitled to
receive a lump-sum payment at termination equal to two years'
salary (one year's salary if termination occurred during the
initial renewal term or any subsequent renewal term), together
with any salary remaining to be paid for the contract term (but,
in no event, more than for an additional year); he would also be
entitled to payment of an automobile allowance and certain
insurance benefits for a period of not less than one year. For
the purposes of Mr. Mancilla's agreement, "constructive
termination" was defined as the assignment of duties inconsistent
with his status as Senior Vice President and General Counsel or a
substantial alteration in his responsibilities. Mr. Mancilla's
agreement with the Company further provided that if his
employment were terminated due to death, his beneficiary would be
entitled to receive a sum equal to the aggregate of one year's
salary. In May, 1994, Mr. Mancilla filed suit against the Company
alleging breach of his employment agreement by reason of non-
payment of compensation, seeking damages under the agreement in
excess of $391,500. He was subsequently removed as an officer of
the Company and his employment was terminated for non-
performance.
In 1993, the Company recruited Bruce M. Weiner, an
individual with over twenty years of experience in the sale and
marketing of Florida real estate, to develop, implement and
oversee a marketing program which would strengthen the Company's
marketing organization, rebuild its retail land sales business
and provide for the Company's successful re-entry into the single
family housing business. Effective March 15, 1993, the Company
entered into a three-year employment agreement with Mr. Weiner.
The agreement provided for Mr. Weiner to be paid an annual salary
of $350,000 (subject to reduction or repayment, as discussed
below, in the event that the overall annual objectives of the
Company's marketing program were not substantially achieved) and
for the furnishing of certain benefits, such as payment of an
automobile allowance. The agreement further provided for Mr.
Weiner to be paid an annual bonus if the annual overall
objectives of the marketing program were met in an
13
<PAGE>
amount equal to the greater of: (i) one half of one percent of
the Company's net retail land sales revenue for the preceding
fiscal year (pro-rated for the Company's 1993 fiscal year) and
one quarter of one percent of revenues from house sale closings
during the Company's preceding fiscal year; or (ii) five percent
of the annual pre-tax profits of the Company for the preceding
fiscal year. Such bonus was to have been payable, net of
applicable taxes, in incentive shares or other form of stock
equivalents as may be determined, valued at a price of $4.00 per
share unit. On the other hand, if the annual overall objectives
of the marketing program were not met by Mr. Weiner in any given
year, he was responsible for either repaying to the Company an
amount equal to five percent of the operating losses of the
Company for the preceding year or subject to a fifty percent
reduction in salary until an amount equal to five percent of the
operating loss had been recovered by the Company. In the event,
however, that Mr. Weiner was precluded from meeting the annual
overall objectives due to strikes, unforeseen governmental action
or intervention, war, hurricane striking employer's communities
or other similar acts of God, or the failure of the Company to
fund or otherwise fulfill its obligations under the marketing
program, then no such repayment or salary adjustment would be
required. Additionally, the maximum amount of salary repayment
or adjustment was limited to $50,000 per year (pro-rated to
$39,584 for the Company's 1993 fiscal year, based upon the salary
payments made to Mr. Weiner during 1993). In conjunction with
Mr. Weiner's employment and his agreement, Mr. Weiner was awarded
an option to purchase 20,000 shares of the Company's Common Stock
under the provisions of the 1987 Stock Incentive Plan. In the
event that Mr. Weiner earned the bonus provided for in his
agreement with respect to the Company's 1994 fiscal year, it was
anticipated that any net bonus payable would first be applied by
the Company to exercise the shares in respect of which Mr. Weiner
was granted said option. Mr. Weiner's agreement further provided
that if his employment were terminated without cause (defined as
gross misconduct or the failure to achieve certain specific
objectives set forth in his agreement), he would be entitled to
receive a lump-sum payment upon termination equal to the salary
remaining to be paid him for the term of his agreement, unless
termination was due to death, in which case his beneficiary would
be entitled to receive a sum equal to one month's salary for each
month of his employment during the first twelve months of
employment, and thereafter, a sum equal to the aggregate of one
year's salary. Mr. Weiner failed to achieve both the specific
objectives set forth in his agreement for 1993 and the annual
overall objectives of the marketing program during 1993. On
April 28, 1994, Mr. Weiner filed suit against the Company
alleging breach of his agreement by reason of non-payment of
compensation, seeking damages under the agreement in excess of
$744,000. He was subsequently removed as an officer of the
Company and his employment was terminated for non-performance.
Due to the Company's liquidity situation, the Company was
unable to pay its executive officers the compensation due them
for the months of March, 1994 and April, 1994. The executive
officers employed pursuant to an employment agreement notified
the Chairman of the Board, the Vice Chairmen of the Board and the
Chairman of the Executive Compensation Committee, on April 1,
1994, that the Company's failure to remit the compensation due
constituted a breach of their respective agreements and that
while they were willing to continue their efforts, for a limited
time, to assist the Company in resolving its problems, they were
not waiving their rights to enforce any remedies available under
their respective agreements. Although the Company was in default
of certain compensation due Mr. Cortright, Mr. Harden and Mrs.
Hummerhielm, none of such officers instituted legal action with
respect to such defaults. In December 1994, Mr. Harden and Mrs.
Hummerhielm were paid the compensation due them for the months of
March and April, 1994 eliminating the defaults on their
contracts. Mr. Cortright was also paid past due compensation for
March and April 1994 and agreed to reschedule the $50,000 payment
on his special bonus to October 1995 so as to eliminate a default
on his contract.
COMPENSATION COMMITTEE REPORT
COMPENSATION PHILOSOPHY
It is the goal of the Company and this Committee to align
all compensation, including executive compensation, with business
objectives and both individual and corporate performance, while
simultaneously
14
<PAGE>
attracting and retaining employees who contribute to the
long-term success of the Company. The Company attempts, within
its resources, to pay competitively and for performance and
management initiative, while striving for fairness in the
administration of its compensation program.
EXECUTIVE COMPENSATION PROGRAM
Since it has long been the policy of the Company to
encourage and enable employees upon whom it principally depends
to acquire a personal proprietary interest in the Company, the
total executive compensation
program of the Company consists of both cash and equity based
compensation and has been comprised of three key elements:
salary, an annual bonus and a long term incentive plan that
provides for both incentive awards and stock options.
While each of these elements is discussed below, it is
important to note that due to the financial performance of the
Company during the past five years, and the fact that the Company
has undergone two changes in control since January 1, 1990, no
awards have been made under the Annual Executive Bonus Plan (the
"Bonus Plan") since 1990 and with the exception of the one stock
option granted in 1993, no awards have been made under the long
term incentive program other than the initial awards which were
fully earned at the end of 1989. In particular, the Committee
has been reticent to grant additional equity based awards, lest
it jeopardize the utilization of the Company's net operating loss
carryforward for federal income tax purposes. This situation is
re-examined annually.
SALARY
------
Salaries paid to executive officers (other than the Chief
Executive Officer and the President) are based upon the
recommendations of the President, derived from his subjective
assessment of the nature of the position, competitive salaries
and the contribution, experience and Company tenure of the
executive officer. The President reviews all salary
recommendations with the Committee, which is responsible for
approving or disapproving such recommendations. Salaries paid to
the Chief Executive Officer (if any) and the President are
determined by the Committee, subject to ratification by the Board
of Directors and are based upon the Committee's subjective
evaluation of their contribution to the Company, their
performance and salaries paid to competitors to their chief
executive officer and chief operating officer. Prior to January
1, 1990, the President's assessment and the Committee's
subsequent approval or disapproval also took into consideration
data from comparable industry salary surveys, such as that
prepared by Stephens and Associates. From 1990 through March 31,
1994, the only salary increases which were granted occurred in
June 1992 at which time Mr. Cortright, Mrs. Garbis and two other
executive officers of the Company were granted salary increases.
Such increases were granted in connection with the efforts of
these officers in securing over $10,000,000 in new financing for
the Company and resolving various regulatory matters with the
State of Florida.
ANNUAL INCENTIVE PROGRAM
------------------------
Although business exigencies and the Company's liquidity
situation have required the Company to temporarily suspend the
granting of awards under the Stock Plan and the Bonus Plan, and
to award bonuses only in certain limited instances where the
bonus directly relates to the accomplishment of certain specified
corporate and financial objectives, it is the intention of the
Committee that an executive's annual compensation consist of a
base salary and an annual bonus under the Bonus Plan. All
executive officers of the Company (except those who are otherwise
entitled to receive additional compensation) and all managerial
employees who meet certain eligibility criteria determined by
their level of responsibility, are eligible to participate in the
Bonus Plan. The Bonus Plan provides for executives to earn
bonuses of up to 150% of the base bonus for which they are
eligible (which generally ranges from 10% to 75% of annual
salary, depending upon their position and anticipated
contribution to the Company), with the maximum bonus payable to
the president being limited to 100% of his annual salary. Such
bonuses are earned based upon the success of the Company, or of
the subsidiary or division for which the individual
15
<PAGE>
is responsible, in achieving its debt-to-equity and/or net income
goals. Typically, under the Bonus Plan, awards are determined in
advance of a fiscal year, at which time the net income and/or
debt-to-equity goals for the year are also established.
Thereafter, at the conclusion of the year, the awards are
adjusted up or down and paid, based upon the achievements of the
specified objectives and individual job performance. The Bonus
Plan provides for the determination and payment of bonuses
thereunder in the event of the termination of employment of a
participant following a change of control of the Company. No
bonuses were awarded, earned by, or paid to, any executive
officer of the Company under the Bonus Plan during or in respect
to 1994. Further, since no bonus awards have been outstanding to
any executive officer of the Company for the past three years,
the change in control resulting from the Selex transaction did
not result in the acceleration of the determination and payment
of bonuses under the Bonus Plan.
No bonus was paid in 1994. The only bonus paid in 1993 was
to Mr. Cortright pursuant to his employment agreement described
above. In 1992, Mr. Cortright was instrumental in securing over
$10,000,000 in new financing for the Company through the sale of
contracts receivable and the Selex transaction, as well as for
resolving certain regulatory matters with the State of Florida.
His contribution was recognized by the awards of a $200,000 bonus
(an amount equal to one year's salary). To avoid straining the
Company's liquidity situation, it was determined that his
employment agreement would provide for that bonus to be paid in
four annual installments, the second of which was paid in 1993.
The installment due in June 1994 was not paid, having been
deferred until 1995. The remaining installment is due to be paid
June 1995. See "Employment Contracts".
LONG TERM INCENTIVE PROGRAM
---------------------------
Additional long-term cash and equity incentives are provided
through the Stock Plan. Under the Stock Plan, incentive shares
are awarded to those executive officers and other key employees
who, in the opinion of the Committee, are in positions which
enable them to make significant contributions to the long-term
performance and growth of the Company. The extent to which
incentive share awards are earned is determined at the end of the
three-year award cycle, based upon the achievement of a net
income goal set forth in the three-year business plan adopted by
the Board of Directors of the Company prior to or during the
first year of the cycle. Awards are paid, in the discretion of
the Committee, in cash or in shares of Common Stock of the
Company, on or before the May 1st following the end of the three
year cycle.
CHIEF EXECUTIVE OFFICER COMPENSATION
------------------------------------
Marcellus H.B. Muyres, who served as Chairman of the Board
and Chief Executive Officer of the Company from June 19, 1992
through July 12, 1994, served without compensation in accordance
with his representation to the Committee and the Board that he
would not draw a salary until the Company's liquidity situation
permitted the payment of appropriate compensation. From June
1992 through August 31, 1994, Mr. Muyres received no compensation
for his services as Chairman of the Board and Chief Executive
Officer. As a director and executive officer of the Company, Mr.
Muyres was entitled to reimbursement of expenses, including
travel and transportation expenses, incurred on the Company's
behalf. From June 1992 through August 19, 1994, Mr. Muyres
incurred expenses aggregating approximately $39,112. On August
31, 1994, approximately $19,170.44 remained due and payable and
Mr. Muyres agreed to forgive 50% of the amount due settling for a
payment of $9,585.22. As of March 24, 1995, $6,081 is owed to
Mr. Muyres, which will be satisfied upon the closing of the
Second Conquistador Acquisition.
On July 13, 1994, Antony Gram was appointed Chairman of the
Board and Chief Executive Officer of the Company, with Mr. Muyres
agreeing to serve as a Vice Chairman of the Board. As Chairman
and Chief Executive Officer, Mr. Gram has been given the
responsibility of resolving the financial and legal difficulties
facing the Company and developing an alternative business plan to
enable the Company to continue as a going concern. During the
process of resolving such difficulties and developing such plan,
Mr. Gram has agreed to serve without
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compensation, with the understanding that all ordinary, necessary
and reasonable expenses incurred by him in the performance of his
duties, including travel and temporary living expenses, will be
reimbursed by the Company and with the further understanding that
the Committee and the Board will thereafter consider establishing
an appropriate salary to be paid him for his services.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
----------------------------------------------------
Section 162(m) of the Internal Revenue Code, enacted in
1993, generally disallows a tax deduction to public companies for
compensation over $1,000,000 paid to the corporation's Chief
Executive Officer and four other mostly highly compensated
executives officers. Qualifying performance-based compensation
will not be subject to the deduction limit if certain
requirements are met. The compensation currently paid to the
Company's Chief Executive Officer and highly compensated
executive officers does not approach the $1,000,000 threshold,
and the Company does not anticipate approaching such threshold in
the foreseeable future. Nevertheless, the Company intends to
take the necessary action to comply with the Code limitations.
FUTURE COMPENSATION TRENDS
--------------------------
The Committee anticipates undertaking a review of all
compensation programs and policies of the Company, and making
appropriate modifications and revisions, in conjunction with the
development of an alternative business plan for the Company.
Executive Compensation Committee
Neil E. Bahr, Chairperson
Antony Gram
Marcellus H.B. Muyres
Cornelis L.J.J. Zwaans
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PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative
total shareholder return on the Company's Common Stock, based on
the market price of the Common Stock, with the cumulative total
return of companies on the Media General Financial Services
Composite Index and the Media General Peer Group (real estate
subdividers and developers) Index.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG THE DELTONA CORPORATION,
MEDIA GENERAL INDEX AND PEER GROUP INDEX
[INSERT GRAPH]
ASSUMES $100 INVESTED ON JANUARY 1,
1990; DIVIDEND REINVESTED MARCH
1994; THE COMPANY'S STOCK CEASED
TRADING 4/6/94 ON NEW YORK AND
PACIFIC STOCK EXCHANGES.
APPOINTMENT OF AUDITORS
The Board of Directors recommends that the stockholders
appoint Deloitte & Touche as auditors of the financial statements
of the Company for the fiscal year ending December 31, 1995,
subject to the discretion of the Board. If the stockholders do
not vote for such appointment, the Board of Directors will
reconsider the appointment of such auditors. If Deloitte &
Touche are unable to serve, or the Board, in its discretion,
determines that it is in the best interest of the Company that
such accountants do not serve as auditors of the financial
statements of the Company, the Board shall appoint other auditors
to replace Deloitte & Touche. One of the predecessor firms of
Deloitte & Touche, Deloitte Haskins & Sells, had been the
auditors for the Company since 1966.
Representatives of Deloitte & Touche will attend the meeting
and will be given the opportunity to make a statement at the
meeting if they desire to do so. Such representatives will be
available during appropriate portions of the meeting to respond
orally to appropriate questions.
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OTHER MATTERS
As of the date of this Proxy Statement, the only business
which the management expects to be presented at the meeting is
that set forth above. If any other matters are properly brought
before the meeting, or any adjournments thereof, it is the
intention of the persons named in the accompanying form of Proxy
to vote the Proxy on such matters in accordance with their
judgment.
The cost of soliciting proxies will be borne by the Company.
In addition to the use of the mails, proxies may be solicited
personally or by telephone or telegraph by officers, directors
and certain employees of the Company who will not be specially
compensated for such solicitation.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the
next Annual Meeting should be received by the Office of the
Assistant Secretary, The Deltona Corporation, 3250 S.W. Third
Avenue, Miami, Florida 33129, no later than December 31, 1995, in
order to be considered for inclusion in the Company's 1996 Annual
Meeting proxy statement.
By Order of the Board of Directors
SHARON J. HUMMERHIELM
SHARON J. HUMMERHIELM
Vice President and Assistant
Secretary
April 10, 1995
PLEASE MARK, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
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