THE DELTONA CORPORATION
--------
NOTICE OF ANNUAL MEETING
May 18, 1999
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April 16, 1999
To the Stockholders:
THIS IS NOTICE of the Annual Meeting of Stockholders of THE DELTONA CORPORATION.
The meeting will be held at The Hilton Hotel, Director's Room, 3600 SW 36th
Avenue, Ocala, Florida on May 18, 1999, at 9:30 o'clock in the morning, Eastern
Standard Time. The purposes of the meeting are as follows:
1. To elect five (5) directors to serve until the next Annual Meeting
of Stockholders and until their respective successors are elected
and qualified.
2. To consider a proposal to appoint James Moore & Co., P.L. as the
Company's auditors for the fiscal year ending December 31, 1999,
subject to the discretion of the Board of Directors.
3. To transact any other business that is properly brought before the
meeting, or any adjournment of the meeting.
The transfer books will not be closed. Our 1998 Form 10K (Annual Report),
including audited financial statements as of December 31, 1998, accompanies this
Notice of Meeting and the attached Proxy Statement. A list of all stockholders
of record as of April 14, 1999, the record date for the Annual Meeting, will be
available from April 20, 1999 through May 14, 1999 for any stockholder to
examine at our Miami office, 999 Brickell Avenue, Suite 700, Miami, Florida,
33131 and at our headquarters in Ocala at 8014 SW 135th Street Road, Ocala,
Florida 34473.
By Order of the Board of Directors,
/S/ Sharon J. Hummerhielm
SHARON J. HUMMERHIELM
Executive Vice President
and Corporate Secretary
Please fill in, date and sign the enclosed Proxy
and return it promptly in the enclosed envelope.
<PAGE>
THE DELTONA CORPORATION
8014 SW 135th Street Road
Ocala, Florida 34473
PROXY STATEMENT
The Proxy is solicited on behalf of the Board of Directors of The Deltona
Corporation (the "Company"). The Proxy will be used at the Annual Meeting of
Stockholders to be held at The Hilton Hotel, Director's Room, 3600 SW 36th
Avenue, Ocala, Florida on May 18, 1999 at 9:30 in the morning, 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 16,
1999.
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 19, 1999, the
Company had outstanding 13,544,277 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 14, 1999 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 five
nominees for director and for the appointment of the independent public
accountants.
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 is 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 (a) filing a
written revocation with the Office of the Corporate Secretary, at 999 Brickell
Avenue, Suite 700, Miami, Florida 33131; (b) executing a later-dated Proxy; or
(c) voting in person by ballot at the Meeting.
DIRECTORS AND EXECUTIVE OFFICERS
Directors of the Company
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. The present Board of Directors is: Antony Gram
(Chairman of the Board), Christel DeWilde, George W. Fischer, Rudy Gram and
Thomas B. McNeill. Each of the current members of the Board has been nominated
for re-election at the 1999 Annual Meeting. The accompanying form of Proxy will
be voted "FOR" the election of all five 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 as of March 19, 1999 with
respect to each of them is set forth below, in alphabetical order. 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.
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Principal Occupation and Year First
Name and Age Other Information Elected Director
- ------------ ----------------- ----------------
Christel DeWilde, 36 Financial Analyst for Antony Gram since 1998
(b)(d) February 1995. Prior to joining Mr. Gram,
Ms. DeWilde was Chief Financial Officer
of the Sab Wabco Group, Brussels, Belgium
from December 1992 to February 1995. From
May 1991 to December 1992, Ms. DeWilde was
audit manager for Marcel Asselberghs & Co.,
member firm of Arthur Andersen & Co.
George W. Fischer, 58 Mr. Fischer is retired. From March 1980 1992
(b)(c) through 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
Philadelphia, Pennsylvania area. From 1975
through 1995, he also served as President
of H.E.C.Fischer, Inc., a closely held real
estate company.
Antony Gram, 56 Chairman of the Board of Directors and 1992
(a),(c),(d), (e) 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. From October 2, 1998 through the
present he has also served as President 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, 35 Vice President, Swan Development Corporation 1995
(c), (e) based in St. Augustine, Florida
Thomas B.McNeill,64 Retired as Partner, Mayer, Brown & Platt; 1975
(b),(d) Chicago, Illinois. The law firm of Mayer, Brown
& Platt was retained by the Company to perform
legal services on the Company's behalf during
1993 through the present.
Current Committee Members & Affiliations:
(a) Member, Executive Committee.
(b) Member, Audit Committee.
(c) Member, Executive Compensation Committee.
(d) Member, Nominating Committee.
(e) Rudy Gram is the son of Antony Gram.
Additional Information Concerning the Board of Directors
Currently, Messrs. Fischer, McNeill and Rudy Gram 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.
Mr. Antony Gram and Mrs. Christel DeWilde do not receive a monthly Director's
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.
2
<PAGE>
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 1998.
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
1998.
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 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. 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
two meetings during 1998.
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 1998, 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, 1999 will be considered by the Nominating Committee for nomination at the
2000 Annual Meeting.
During 1998, the Board of Directors held nine 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 or she 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 73.23% of the Company's Common Stock since he is the beneficial owner
of Yasawa Holdings, N.V.("Yasawa")(which holds 52.41% of the Common Stock of the
Company as of March 19, 1999), as well as the holder of a majority equity
interest in Wilbury International N.V., a Netherlands Antilles corporation
("Wilbury"), which owns all of the issued and outstanding stock of Selex
International B.V. ("Selex) (which holds 20.82% of the Common Stock of the
Company as of March 19, 1999). See "Ownership of Voting Securities of the
Company."
Mr. Rudy Gram, a member of the Committee, a member of the Board of
Directors and a candidate for re-election to the Board of Directors, is the son
of Mr. Antony Gram. See "Ownership of Voting Securities of the Company."
From June 19, 1992 through November 4, 1997, the Company had entered into
loan agreements with Selex , Yasawa and related parties. 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.
On November 4, 1997 at the 1997 Annual Meeting, the Company's stockholders
approved an Agreement between the Company and its lenders that would
substantially reduce the Company's outstanding debt obligation of $25.3 million
(the "Agreement"). The Agreement, consummated effective December 30, 1997,
resulted in a reduction in the Company's outstanding debt obligation through the
conveyance of all remaining land inventory and obligations in the Company's St.
Augustine Shores Subdivision and the issuance of approximately 6.8 million
shares of Common Stock at $1.00 per share
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(par value). Additionally, the lenders purchased $7.5 million in contracts
receivable from the Company to generate working capital and further reduce the
debt obligation. Specifically:
1. Selex sold its remaining debt ($2,664,736), including the Empire note,
to Yasawa and the Company owes no further duty or obligation to Selex, which
provided the Company a release. The debt purchased by Yasawa was satisfied
through Yasawa's purchase of 2,664,736 shares of Common Stock issued by the
Company at a per share conversion price of One Dollar ($1.00), which is equal to
par value.
2. Swan Development Corporation ("Swan") had previously acquired $5,529,501
of the Company's debt from Selex. This $5,529,501 was satisfied through the
Company's conveyance of all of the Company's remaining land inventory and
obligations in its St. Augustine Shores Subdivision to Swan . The price, based
upon appraised value, was adjusted to take into account the development
obligations on sold lots assumed by Swan.
3. Scafholding B.V. ("Scafholding"), an affiliate of Selex and Yasawa,
purchased approximately $7.5 million in contracts receivable from the Company at
seventy-five percent (75%) of face value with recourse for non- performing
contracts. This sale generated approximately $5.6 million, $1,982,457 of which
was used to reduce outstanding debt to Yasawa. The balance has been used by the
Company to pay a portion of the delinquent real estate taxes, to implement its
marketing programs, to initiate development of TimberWalk and to meet the
Company's working capital requirements.
4. A $4,144,602 portion of the Company's debt to Yasawa was satisfied
through Yasawa's purchase of 4,144,602 shares of Common Stock issued by the
Company at a per share conversion price of One Dollar ($1.00), which is equal to
par value.
Through Yasawa's acquisition of the 6,809,338 shares of Common Stock of the
Company referenced above, Mr. Antony Gram's beneficial ownership increased from
3,109,703 shares to 9,919,041 shares (73.23% of the outstanding shares of Common
Stock of the Company as of December 31, 1998).
Prior to November 4, 1997 and independent of the Agreement outlined above,
Selex and Yasawa agreed to forgive $2,050,818 in accrued interest on the
Company's debt to them.
As part of the Agreement, if the Company elects to do so, Scafholding
agreed to purchase contracts receivable at 65% of face value, with recourse, to
meet the Company's ongoing capital requirements. Scafholding purchased the
following contracts receivables from the Company to generate working capital for
the Company:
Approximate Contracts
Date of Purchase Receivable Amount Purchased
---------------- ---------------------------
June 30, 1998 $200,100
July 15, 1998 $115,200
July 31, 1998 $179,900
August 31, 1998 $250,400
September 10, 1998 $153,400
September 29, 1998 $497,100
As of December 31, 1998, the Company's outstanding debt to Scafholding was
$1,130,000 , secured by a first lien on the Company's receivables; the Company's
outstanding debt to Yasawa was $6,670,000 secured by a second lien on the
Company's receivables and a mortgage on all of the Company's property. As of
December 31, 1998, loans outstanding from Yasawa and Scafholding to the Company
totaled $7,800,000. The terms of repayment of this debt have been restructured
to provide for monthly payments of principal in the amount of $100,000 payable
monthly in cash or with contracts receivable at 100% of face value, plus
interest payable monthly on the declining balance at the rate of 9.6% per annum
in cash or with contracts receivable at 65% of face value. Yasawa and
Scafholding did not require the Company to make interest payments for the period
September 1, 1998 to December 31, 1998. As of December 31, 1998, the total
amount of interest accrued is approximately $258,000. Effective January 1, 1999,
Yasawa and Scafholding agreed to reduce the annual percentage rate for their
existing loans to the Company from 9.6% to 6% per annum.
4
<PAGE>
From October 9, 1998 through the present, Swan has advanced the Company
funds to meet its working capital requirements. The Company's outstanding debt
to Swan, which is secured by a third lien on the Company's receivables, was
$765,000 and $5,690,000 as of December 31, 1998 and March 26, 1999,
respectively. The Company signed a promissory note to Swan in March 1999 which
provides that funds advanced by Swan will be paid back by the Company monthly in
contracts receivables at 90% of face value, with recourse. There will be no
interest for the first six months after an advance of money is received from
Swan by the Company; thereafter the interest shall be 6% per annum on the
outstanding balance of the advance. The amount of each monthly payment will vary
and will be dependent upon the amount of contracts receivable in the Company's
portfolio, excluding contracts receivable held as collateral for prior
receivable sales. Pursuant to the terms of the promissory note, the Company is
required to transfer to Swan monthly as debt repayment all current contracts
receivable in the Company's portfolio in excess of the aggregate sum of
$500,000. Funds advanced by Swan were used by the Company to pay approximately
$2,567,000 in outstanding real estate taxes for unsold properties with the
balance to meet the Company's working capital requirements.
During 1998, the Company transferred 14 lots and 4 tracts of land to Swan.
In return, Swan built an office complex on part of the land for use by the
Company for a period of 54 months, renewable thereafter. The Company valued the
land transferred at approximately $440,000 and recorded the net present value of
the use of the office complex of approximately $375,000 as prepaid rent. The
difference between the net present value of the rent and the cost of the land of
approximately $290,000 is recorded as deferred profit at December 31, 1998.
The Company has an agreement with Scafholding and Citony Development
Corporation for the servicing of their receivable portfolios. During 1998, the
Company received approximately $82,000 in revenue pursuant to these agreements.
Executive Officers of the Company
The table below sets forth the executive officers of the Company as of
March 19, 1999 (officers, not assistant officers, compensated in excess of
$40,000 in 1998 and the Chairman of the Board), their ages and their principal
occupations during the past five years. Each has been appointed to serve in the
capacities indicated until their successors are appointed and qualified, subject
to their earlier resignation or removal by the Board of Directors.
Principal Occupation
Name and Age During the Past Five Years
------------ --------------------------
Antony Gram, 56.......... Chairman of the Board of Directors and Chief Executive
Officer of the Company since July 13, 1994. From
June 19, 1992 through April 6, 1994, Mr. Gram served
as Vice Chairman of the Board of Directors of the
Company. Since October 2, 1998, Mr. Gram has also
served as President 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.
Sharon J.Hummerhielm,49.. Mrs. Hummerhielm, who joined the Company in March,
1975. She was appointed Executive Vice President and
Corporate Secretary on October 2, 1998 after having
served as Vice President-Administration and Corporate
Secretary since May 1995. Prior thereto, she served
as Vice President-Administration (January 1993 through
May 22,1995)and Vice President-Regulatory and Customer
Affairs (January, 1987 - December, 1992).
Donald O. McNelley,54.... Mr. McNelley, has been Treasurer of the Company since
since May 23, 1995. He originally joined the Company
in 1971 and was Senior Vice President and Chief
Financial Officer from January 1988 - August 1990. He
temporarily left the Company's employ in August 1990
to become Senior Vice President of James Cable
Partners LP("James"). He left James in August 1991 and
was self employed until he rejoined the Company in
May 1994.
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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, since October 2, 1998 he has serves as
President of the Company without compensation. The Securities and Exchange
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. No current officer of the Company was paid in excess of $100,000 in
salary during the year ending December 31, 1998. The table set forth below,
discloses the annual compensation paid to Antony Gram (Chairman of the Board,
Chief Executive Officer and President), Earle D. Cortright (former President and
Chief Operating Officer) and David M. Harden (former Senior Vice President) for
the three years ended December 31, 1998.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Long Term
Compensation Compensation
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Awards Payouts
------------------------ -------------
Name and Fiscal Salary Bonus Other Annual SARs/Restricted Stock LTIP All Other
Principal Year ($) ($) Compensation Stock Awards Options Payouts Compensation
Position (a) (#) ($)
- ---------------------------------------------------------------------------------------------------------
Antony Gram, 1998 -- -- -- -- -- -- --
Chairman of the 1997 -- -- -- -- -- -- --
Board, President 1996 -- -- -- -- -- -- --
& CEO
E.Cortright,Jr. 1998 $150,000 -- -- -- -- -- $200,000(b)
Former President 1997 $200,000 -- -- -- -- -- --
& COO(resigned 1996 $200,000 -- -- -- -- -- --
effec. 10/1/98)
David M. Harden, 1998 $ 67,500 -- -- -- -- -- $36,488(c)
Former Sr.V.P. 1997 $ 90,000 -- -- -- -- -- --
(resigned effec. 1996 $ 90,000 -- -- -- -- -- --
10/1/98)
<FN>
-------
(a) In accordance with the rules of the Commission, amounts totaling
less than the lower of $50,000 or 10% of the total annual salary
and bonus have been omitted.
(b) Mr. Cortright resigned as President and Chief Operating Officer
of the Company effective October 1, 1998. The salary shown
above for 1998 is that portion earned between January 1 and
October 1, 1998. Mr. Cortright received the sum of $400,000 as
compensation for termination of his Employment Agreement:
$200,000 of which was paid in October 1998 and the remaining
$200,000, which was paid in January 1999.
(c) On September 29, 1998, David M. Harden and the Company agreed to
terms for his resignation as Senior Vice President - Marketing
Administration of the Company effective October 1, 1998. Mr. Harden
will receive the sum of $114,963 as compensation for termination of
his Employment Agreement: $20,663.00, which was paid on October 1,
1998 and the balance payable in semi-monthly installments of $4,100
on the 1st and 15th of each month until paid for in full. In
addition, in February 1999, Mr. Harden received reimbursement for
the actual costs paid by him for closing on the sale of his Miami
residence, $16,000, and is entitled to receive reimbursement for the
actual costs paid by him for closing on the sale of an alternative
home (not to exceed the sum of $14,000).
</FN>
</TABLE>
Employment Contracts
One executive officer, Mrs. Hummerhielm, is employed pursuant to an
employment agreement which provides that if her employment is terminated due to
death, payment of compensation to their beneficiary continues for six months
and, if employment is otherwise terminated by the Company without cause (defined
as gross misconduct), she is entitled to receive one year's compensation,
payable in twenty-four equal semi-monthly installments. For purposes of this
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agreement, compensation includes salary, car allowances, vacation pay, fringe
benefits, benefit plans, perquisites and other like items.
On September 29, 1998, Earle D.Cortright,Jr. and the Company agreed to
terms for his resignation as President of the Company effective October 1, 1998.
Mr. Cortright received the sum of $400,000 as compensation for termination of
his Employment Agreement: $200,000 of which was paid in October 1998 and the
remaining $200,000 paid in January 1999.
On September 29, 1998, David M. Harden and the Company agreed to terms for
his resignation as Senior Vice President - Marketing Administration of the
Company effective October 1, 1998. Mr. Harden will receive the sum of $114,963
as compensation for termination of his Employment Agreement: $20,663.00, which
was paid on October 1, 1998 and the balance payable in semi-monthly installments
of $4,100 on the 1st and 15th of each month until paid for in full. In addition,
in February 1999, Mr. Harden received reimbursement for the actual costs paid by
him for closing on the sale of his Miami residence, $16,000, and is entitled to
receive reimbursement for the actual costs paid by him for closing on the sale
of an alternative home (not to exceed the sum of $14,000).
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
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. In prior years, the total executive compensation
program of the Company consisted of both cash and equity based compensation and
was comprised of three key elements: salary, an annual bonus and a long term
incentive plan that provides for both incentive awards and stock options. With
the exception of one stock option granted in 1993, no awards were made under the
1987 Stock Incentive Plan (the "Stock Plan") other than the initial awards which
were fully earned at the end of 1989. On December 31, 1996, the Stock Plan
terminated pursuant to its terms. Although the Annual Executive Bonus Plan (the
"Bonus Plan") is still in effect, due to the financial performance of the
Company during the past seven years, and the fact that the Company has undergone
two changes in control since January 1, 1990, no awards were made under the
Bonus Plan since 1990.
Salary
------
Salaries paid to executive officers (other than the Chief Executive Officer
and 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 President are determined by the
Committee, subject to ratification by the Board of Directors and are based upon
the Committee's subjective evaluation of contributions to the Company,
performance and salaries paid by competitors to their Chief Executive Officer
and President. Since January 1995, 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
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
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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
ranges from 10% to 100% of annual salary, depending upon their position and
anticipated contribution to the Company). 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 1998.
Long Term Incentive Program
---------------------------
Presently,there are no long-term cash and equity incentives provided
through any Stock Plan. The previous Stock Plan terminated, pursuant to its
terms, on December 31, 1996. Under the prior Stock Plan, incentive shares were
awarded to those executive officers and other key employees who, in the opinion
of the Committee, were in positions which enabled them to make significant
contributions to the long-term performance and growth of the Company. The extent
to which incentive share awards were earned was 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.
Chief Executive Officer Compensation
------------------------------------
Since July 13, 1994, Antony Gram has served as Chairman of the Board and
Chief Executive Officer of the Company. In October 1998, he also was appointed
to the position of President. 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 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 Company's development of future business plans.
Executive Compensation Committee
George W. Fischer, Chairman
Antony Gram
Rudy Gram
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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 Yasawa (52.41%), Selex (20.82%) and Antony Gram, through his
holdings in Selex and Yasawa (73.23%).
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
7,098,975 shares of the Common Stock of the Company, Mr. Gram is deemed to be
the beneficial owner of an aggregate of 9,919,041 shares of Common Stock of the
Company (73.23%).
The following table sets forth information, as of March 19, 1999,
concerning the beneficial ownership by all directors and nominees, by each of
the executive officers named in the Summary Compensation Table (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.
Amount and Nature Percent
of Beneficial Ownership(a) of Class
-------------------------- --------
Current Directors and/or Nominees:
George W. Fischer.......... 35,000 - Direct *
Antony Gram ............... 9,919,041 - Indirect 73.23%
Rudy Gram.................. 91,000 - Direct *
Thomas B. McNeill ......... 200 - Direct *
Christel DeWilde........... -0- *
Executive Officers named in Summary Compensation Table:
Antony Gram................ 9,919,041 - Indirect 73.23%
All executive officers and directors
as a group, consisting of 7 persons
(including those listed above).........10,045,441 74.17%
- -------------------
* Represents holdings of less than 1%.
(a) Except for Antony Gram, who beneficially owns 73.23% 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.
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. 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, 1998, all
Section 16(a) filing requirements were satisfied.
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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, MG COMPOSITE INDEX AND MG GROUP INDEX
[GRAPHIC OMITTED]
ASSUMES $100 INVESTED ON JANUARY 1, 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 James Moore
& Co., P.L. as auditors of the financial statements of the Company for the
fiscal year ending December 31, 1999, 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 James Moore & Co., P.L. 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 James Moore & Co., P.L.
Representatives of James Moore & Co., P.L. 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.
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PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next
Annual Meeting should be received by The Deltona Corporation, 8014 SW 135th
Street Road, Ocala, FL 34473, no later than December 31, 1999, in order to be
considered for inclusion in the Company's 2000 Annual Meeting Proxy Statement.
By Order of the Board of Directors
/s/ Sharon J. Hummerhielm
SHARON J. HUMMERHIELM
Executive Vice President &
Corporate Secretary
April 16, 1999
Please mark, sign and return
the enclosed Proxy promptly.
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