THE DELTONA CORPORATION
________
NOTICE OF ANNUAL MEETING
MAY 21, 1996
________
April 19, 1996
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 21st day of
May, 1996, 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, 1996,
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 1995 Annual Report
of the Company, including audited financial statements as of
December 31, 1995, accompanies this Notice of Meeting and the
attached Proxy Statement. A list of all stockholders of record as
of April 17, 1996, the record date for the Annual Meeting, will be
available for examination by any stockholder at the main office of
the Company, 999 Brickell Avenue, Suite 700, Miami, Florida, 33131
during the ten-day period preceding the date of the meeting.
By Order of the Board of Directors,
SHARON J. HUMMERHIELM
Vice President and Corporate
Secretary
PLEASE FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
<PAGE>
THE DELTONA CORPORATION
999 BRICKELL AVENUE, SUITE 700
MIAMI, FLORIDA 33131
____________
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 21st day of May, 1996, 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
19, 1996.
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 22, 1996, the Company had outstanding 6,729,142 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 17,
1996 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 six nominees for
director. 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 Corporate Secretary, at 999
Brickell Avenue, Suite 700, Miami, Florida 33131, 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. Since
the 1995 Annual Meeting, four members of the Board of Directors
elected at the meeting voluntarily resigned their seats on the
Board: Marcellus H. B. Muyres, Leonardus G. M. Nipshagen, Cornelis
van de Peppel and Cornelis L. J. J. Zwaans. They were replaced by
two new members appointed by the Board to serve out the remaining
terms of the resigning members: Earle D. Cortright, Jr., President
and Chief Operating Officer of the Company, and Rudy Gram, son of
the Chairman of the Board Antony Gram. In addition, the Board
amended the By-Laws of the Company to reduce the minimum number of
Directors constituting a full Board from five to three.
On June 19, 1992, the Company completed a transaction with
Selex International, B.V., a Netherlands corporation ("Selex"),
formerly known as Selex Sittard B.V., 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."
(1)
<PAGE>
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. As stated above, all of the original Selex
designee's, with the exception of Antony Gram, are no longer
members of the Board.
Each of the present six directors has been nominated for
re-election at the 1996 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
NAME AND PRINCIPAL OCCUPATION AND ELECTED
AGE OTHER INFORMATION DIRECTOR
___________ __________________________ _________
<S> <C> <C>
Neil E. Bahr, 70 Vice Chairman of the Board 1983(e)
(a),(b), (e) Directors of the 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.
Earle D. President and Chief Operating 1995
Cortright, Jr., Officer of The Deltona
55 Corporation since April 1990.
(a), (d)
George W. Mr. Fisher is retired. From 1992
Fischer, 55 March 1980 through December
(b), (c) December 1995 he was President
of CPS Industries, Inc.,
a privately held company
primarily engaged in owning
and operating a chain of
beauty salons in the Philadel-
phia, Pennsylvania area.
From 1975 through 1995 he also
served as President of H.E.C.
Fischer, Inc., a closely held
real estate company.
</TABLE>
(2)
<PAGE>
<TABLE>
<CAPTION>
YEAR
FIRST
NAME AND PRINCIPAL OCCUPATION AND ELECTED
AGE OTHER INFORMATION DIRECTOR
___________ __________________________ _________
<S> <C> <C>
Antony Gram, 53 Chairman of the Board of 1992
(a), (c), (d), (f) Directors and Chief Executive
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.
Rudy Gram, 32 Sales Manager for Gramyco, a 1995
(c), (f) a scaffolding company, Based
in Belgium.
Thomas B. Partner, Mayer, Brown & Platt; 1975
McNeill, 61 Chicago, Illinois. The law firm
(b), (d) of Mayer, Brown & Platt was
retained by the Company to
perform legal services on the
Company's behalf during 1992
and 1993.
<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) Rudy Gram is the son of Antony Gram.
</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. Antony Gram, Rudy
Gram and Cortright 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.
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 Antony Gram is Chairman,
exercises certain powers of the Board of Directors during the
intervals between meetings of the Board and met once during 1995.
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 three meetings of the Audit Committee during 1995.
The Executive Compensation Committee is chaired by Mr.
Fischer, who serves on no similar committee of any other company.
While the other members of the Committee, Messrs. Antony Gram and
Rudy Gram, may serve together as directors of other companies, none
serves as a member of any other compensation committee. The
(3)
<PAGE>
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 one
meeting during 1995.
The Nominating Committee, of which Mr. McNeill 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 1995 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, 1996 will be
considered by the Nominating Committee for nomination at the 1997
Annual Meeting.
During 1995, the Board of Directors held three 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. Fischer, Chairman, and Messrs. Antony Gram and
Rudy Gram.
Mr. Antony 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. Antony Gram is deemed to be the
beneficial owner of 46.21% of the Company's Common Stock since he
is the beneficial owner of Yasawa Holdings, N.V. ("Yasawa") (which
holds 4.3% of the Common Stock of the Company as of March 22,
1996), 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 41.9% of the Common Stock
of the Company as of March 22, 1996). See "Ownership of Voting
Securities of the Company."
Mr. Rudy Gram, a member of the Committee, was appointed
November 30, 1995. Mr. Rudy Gram is the son of Mr. Antony Gram.
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 22, 1996, the Company was in
default of the First Selex Loan inasmuch as accrued interest in the
amount of $42,000 remained unpaid.
(4)
<PAGE>
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 Development Corporation
("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 (the "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. Antony
Gram. The consummation of these agreements, which are further
described below, was conditioned upon the acquisition by Mr. Gram
of the Company's outstanding bank loan.
On December 4, 1992, Mr. 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 Mr. 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, Mr. 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 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 22, 1996); 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, when
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
(5)
<PAGE>
December 31, 1997. As of March 22, 1996, $5,948,000 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"). Interest under the Second Selex Loan was 11%
per annum, deferred until December 31, 1993, and principal was 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.
The Second Selex Loan was satisfied on May 22, 1995 through the
closing of the Second Conquistador Acquisition, discussed below.
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. The Second Conquistador Acquisition, discussed below,
closed on May 22, 1995, provided a reduction of the debt due and
payable under the Third Selex Loan. As of March 22, 1996,
$1,371,000 in principal had been repaid under the Third Selex Loan.
As of March 22, 1996, the remaining principal balance of $3,825,000
and accrued interest of $76,000 remained unpaid and in default.
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 to the Company under the Second Yasawa Loan
to enable the Company to pay certain essential expenses, including
payment of certain real estate taxes, and effectuate settlements
with the Company's principal creditors. As of March 22, 1996, an
aggregate amount of $4,012,000 had been advanced to the Company
under the Second Yasawa Loan and the principal balance of
$4,341,000 and accrued interest of $73,000 remains unpaid.
On May 22, 1995, the Company closed a transaction with
Conquistador (the "Second Conquistador Acquisition") for the sale
of an administration building and a multi-family site in the
Company's St. Augustine Shores community as well as the remaining
lot inventory in the Company's FeatherNest 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. In a
separate transaction which also closed on the same date, the
Company sold to Conquistador (the "Third Conquistador
Acquisition") four single family residential lots in the St.
Augustine Shores community for $100,000 in cash. These
transactions were accounted for in accordance with generally
accepted accounting principals for these types of related party
transactions. Accordingly, the resulting gain of $1,900,000 was
treated as a contribution of capital and recorded directly to
capital surplus.
As previously stated, Messrs. Muyres and Zwaans also serve as
directors and executive officers of M&M First Coast Realty ("M&M").
The Company had leased certain office space to M&M at its St.
Augustine Shores community pursuant to a Lease Agreement dated
August 10, 1990. A payment of approximately $21,300 in delinquent
rental payments was made on May 22, 1995 upon the closing of the
Second Conquistador Acquisition, which included the sale of the St.
Augustine Administration Building to which the lease pertained.
At December 31, 1995, $4,200,000 of accrued interest due to
Selex, Yasawa and their affiliates was capitalized as non-interest
bearing principal. Through March 22, 1996, $1,140,000 in
principal was repaid under the First Selex Loan through the
exercise of the above described Option, the Second Selex Loan was
repaid in full, $1,371,000 in principal was repaid under the Third
Selex Loan, and $135,900 in principal and $346,000 in accrued
(6)
<PAGE>
interest was repaid under the Yasawa loan. As of March 22, 1996,
the Company had loans outstanding from Selex, Yasawa and their
affiliates in the aggregate amount of approximately $20,757,000,
including interest, all of which are in default, including
approximately $8,349,600, which is owed to Selex, including accrued
and unpaid interest of approximately $145,900 (10% per annum on the
First Selex Loan, 11% per annum on the Third Selex Loan and 12% per
annum on the Empire Note assigned to Selex); approximately
$10,361,800, which is owed to Yasawa, including accrued and unpaid
interest of approximately $192,500 (11% per annum on the Yasawa
Loan and 8% per annum on the Second Yasawa Loan); and approximately
$2,046,000, which is owed to an affiliate of Yasawa, including
accrued and unpaid interest of approximately $41,000 (12% per
annum). The loans from Selex, Yasawa and their affiliates are
secured by substantially all of the assets of the Company.
On March 10, 1994, the Company was advised that Selex filed an
Amendment to its Schedule 13D filed with the Securities and
Exchange Commission ("Commission"). In the Amendment, Selex
reported that it, together with Yasawa and their affiliates, were
uncertain as to whether they would provide any further funds to the
Company. The Amendment further stated that Selex, Yasawa and their
affiliates were seeking third parties to provide financing for the
Company and that as part of any such transaction, they would be
willing to sell or restructure all or a portion of their loans and
Common Stock in the Company.
The Company has stated in previous filings with the Commission
and elsewhere herein that the obtainment of additional funds to
implement its marketing program and achieve the objectives of its
business plan is essential to enable the Company to maintain
operations and continue as a going concern. Since December, 1992,
the Company has been dependent on loans and advances from Selex,
Yasawa and their affiliates in order to implement its marketing
program and assist in meeting its working capital requirements. As
previously stated, during the last nine months of 1993, Selex,
Yasawa and their affiliates loaned the Company an aggregate of
$4,400,000 pursuant to the Third Selex Loan. Funds advanced under
the Third Selex Loan enabled the Company to commence implementation
of the majority of its marketing program in the third quarter of
1993. The full benefits of the program were not realized in 1993
and the Company was unable to secure financing in 1994 to meet its
working capital requirements and continue its marketing program.
Commencing in 1994, Yasawa advanced additional funds (the "Second
Yasawa Loan") totalling $4,012,000 as of December 31, 1995, to meet
the Company's minimum working capital requirements, to pay $750,000
in delinquent real estate taxes, to pay settlements with certain
trade creditors and to settle certain litigation.
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 Development
Corporation ("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.
(7)
<PAGE>
OWNERSHIP OF VOTING SECURITIES OF THE COMPANY
Based upon information furnished to the Company or contained
in filings made with the Commission, 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 (41.9%)
and, Antony Gram, through his holdings in Selex and Yasawa
(46.21%).
All of the issued and outstanding stock of Selex, Gerrit van
den Veenstraat 70, Amsterdam, The Netherlands, is owned by Wilbury
a majority of which is, in turn, owned by Antony Gram. Antony
Gram, Chairman of the Board of Directors and Chief Executive
Officer of the Company, as the largest shareholder of Wilbury,
holding a majority 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
(46.21%).
The following table sets forth information, as of March 22,
1996, concerning the beneficial ownership by all directors and
nominees, by each of the executive officers named in the Summary
Compensation Table beginning on Page 9 (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 Commission,
and the information is not necessarily indicative of beneficial
ownership for any other purpose.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
OF BENEFICIAL PERCENT
OWNERSHIP(A) OF CLASS
---------------- --------
<S> <C> <C>
Directors:
Neil E. Bahr....... 4,121 - Direct *
Earle D.
Cortright, Jr..... 18,706 - Direct *
George W. Fischer.. 15,000 - Direct *
Antony Gram........ 3,109,703 - Indirect 46.21%
Rudy Gram.......... -0-
Thomas B. McNeill.. 200 - Direct *
Executive Officers named
in Summary Compensation
Table:
Earle D.
Cortright, Jr..... 18,706 - Direct *
Antony Gram........ 3,109,703 - Indirect 46.21%
All executive officers
and directors as a group,
consisting of 9 persons
(including those listed
above)................... 3,147,930 46.78%
<FN>
________________________
* Represents holdings of less than 1%.
(a) Except for Antony Gram, who beneficially owns 46.21% 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.
</FN>
</TABLE>
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 Commission 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.
(8)
<PAGE>
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, 1995, 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. 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, 1995, one executive officer of
the Company was paid an annual salary and bonus in excess of
$100,000. Accordingly, the table set forth below, discloses the
annual compensation paid to Mr. Antony Gram for the years ended
December 31, 1994 and 1995, and to Mr. Cortright for the three
years ended December 31, 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL LONG TERM
COMPENSATION COMPENSATION
- ------------------------------------------------------------------------------
AWARDS PAYOUTS
------------- -------
OTHER SARS/ ALL
NAME AND FISCAL SALARY BONUS ANNUAL RES- STOCK LTIP OTHER
PRINCIPAL YEAR ($) ($)(A) COMPEN- TRICTED OP- PAY- COMPEN-
POSITION SATION STOCK TIONS OUTS SATION
(B) AWARDS (#)(C) ($)
- -------- ----- ------- ------ ------ ------ ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Antony Gram 1995 -- -- -- -- -- -- --
Chairman of 1994 -- -- -- -- -- -- --
the Board &
Chief Execu-
tive Officer
(7/13/94 to
present)
E.D. 1995 $200,000 $100,000(d) -- -- -- -- --
Cortright,Jr. 1994 $209,615 (d) -- -- -- -- $100,000(d)
President & 1993 $200,000 $ 50,000 -- -- -- -- --
Chief Operat-
ing Officer)
<FN>
_______
(a) The amounts disclosed in this column represent, in the case of
Mr. Cortright, $50,000 which was paid to him in 1993 pursuant
to the special bonus 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 1993 or 1994, 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. 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, 1995.
(d) This amount reflects the last two installments of Mr.
Cortright's special bonus remaining to be paid at the end of
1994, which were paid in 1995. See "Employment Contracts."
</FN>
</TABLE>
(9)
<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 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 and paid in 1995 and
$50,000 due and paid in 1995 (the "Special Bonus"). 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 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.
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.
(10)
<PAGE>
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 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
the present, the only salary increases which were granted occurred in June 1992
at which time Mr. Cortright, and three other executive officers of the Company
were granted salary increases (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) and in May 1995,
at which time Mr. Harden, Mrs. Hummerhielm and Mr. McNelley were granted salary
increases.
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
(11)
<PAGE>
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 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 1995. 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.
The only bonus paid in 1995 and 1993 was to Mr. Cortright, pursuant to his
employment agreement described above. No bonus was paid in 1994. 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 award 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 installment due in June 1994 was not paid
until 1995. The final scheduled 1995 installment, was paid in 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
------------------------------------
Since July 13, 1994, Antony Gram has served as Chairman of the Board and
Chief Executive Officer of the Company. 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 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
(12)
<PAGE>
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
George W. Fischer, Chairman
Antony Gram
Rudy Gram
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, MG COMPOSITE INDEX AND MG GROUP INDEX
[INSERT GRAPH]
ASSUMES $100 INVESTED ON JANUARY 1, 1991; DIVIDEND REINVESTED FISCAL YEAR ENDING
DECEMBER 31, 1995; THE COMPANY'S STOCK CEASED TRADING 4/6/94 ON NEW YORK AND
PACIFIC STOCK EXCHANGES.
(13)
<PAGE>
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, 1996, 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.
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 Corporate Secretary, The Deltona
Corporation, 999 Brickell Avenue, Suite 700, Miami, Florida 33131, no later
than December 31, 1996, in order to be considered for inclusion in the Company's
1997 Annual Meeting proxy statement.
By Order of the Board of Directors
SHARON J. HUMMERHIELM
April 19, 1996 Vice President and Corporate
Secretary
PLEASE MARK, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
(14)
