<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Major Realty Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Major Realty Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
MAJOR REALTY CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 7, 1996
Notice is hereby given that the Annual Meeting of Stockholders of
Major Realty Corporation, a Delaware corporation (the "Company"), will be held
at The Peabody Hotel, 9801 International Drive, Orlando, Florida 32819 on the
mezzanine level on November 7, 1996, at 10:00 a.m., Eastern Standard Time, for
the following purposes:
(1) To elect a Board of Directors to hold office until the 1997
annual meeting and the election and qualification of their
successors;
(2) To ratify the appointment of Coopers & Lybrand L.L.P. as the
independent auditors to examine the Company's consolidated
financial statements for fiscal year 1996; and
(3) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on October 7,
1996, will be entitled to vote at the meeting or any adjournment thereof. A
list of stockholders entitled to notice of and to vote at the meeting will be
available 10 days in advance of the meeting at the Company's offices at 5728
Major Boulevard, Suite 306, Orlando, Florida 32819.
By Order of the Board of Directors,
Gregory C. Yadley
Secretary
Orlando, Florida
October 8, 1996
YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY,
IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE
MEETING. IN THE EVENT A STOCKHOLDER WISHES TO ATTEND THE MEETING, SUCH PERSON
MAY, IF DESIRED, REVOKE HIS OR HER PROXY AND VOTE HIS OR HER SHARES IN PERSON.
IF YOUR SHARES ARE HELD IN STREET NAME BY A BROKERAGE, YOUR BROKER WILL SUPPLY
YOU WITH A PROXY TO BE RETURNED TO THE BROKERAGE. IT IS IMPORTANT THAT YOU
RETURN THE FORM TO THE BROKERAGE AS QUICKLY AS POSSIBLE SO THAT THE BROKERAGE
MAY VOTE YOUR SHARES. YOU MAY NOT VOTE YOUR SHARES IN PERSON AT THE MEETING
UNLESS YOU OBTAIN A POWER OF ATTORNEY OR LEGAL PROXY FROM YOUR BROKER
AUTHORIZING YOU TO VOTE THE SHARES, AND YOU PRESENT THIS POWER OF ATTORNEY OR
PROXY AT THE MEETING.
<PAGE> 3
---------------
PROXY STATEMENT
---------------
MAJOR REALTY CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 7, 1996
-----------------
INTRODUCTION
This Proxy Statement is being provided to stockholders of Major Realty
Corporation, a Delaware corporation (the "Company"), and relates to the Annual
Stockholders' Meeting to be held at 10:00 a.m. on November 7, 1996, at The
Peabody Hotel, 9801 International Drive, Orlando, Florida 32819 on the
mezzanine level and at any adjournments thereof (the "Annual Meeting" or the
"Meeting"). This Proxy Statement and the accompanying proxy are being
solicited by the Board of Directors of the Company and are being mailed to
stockholders on or about October 8, 1996. The executive offices of the Company
are located at 5728 Major Boulevard, Suite 306, Orlando, Florida 32819, and the
Company's telephone number is (407) 351-1111.
Only holders of record of shares of the Company's common stock, par
value $0.01 per share (the "Common Stock"), at the close of business on October
7, 1996, will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. As of October 7, 1996, there were 6,893,378 shares of
Common Stock outstanding and entitled to vote. Stockholders of record on
October 7, 1996, are entitled to one vote per share on any matter that may
properly come before the Annual Meeting. The presence, either in person or by
properly executed proxy, of the holders of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum at the Meeting.
Following the original mailing of proxy solicitation materials,
directors and officers and other employees of the Company may solicit, without
additional compensation, or may engage others to solicit, proxies by any
appropriate means, including personal interview, mail, telephone and telegraph.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries that are record holders of the Company's Common Stock
to forward proxy solicitation materials to the beneficial owners of such shares
and the Company will reimburse such record holders for their reasonable
expenses incurred in connection therewith. The cost of soliciting proxies will
be borne by the Company.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by (i)
filing with the Secretary of the Company, at or before the Annual Meeting, a
written notice of revocation bearing a later date than the proxy, (ii) duly
executing a subsequent proxy relating to the same shares and delivering it to
the Secretary of the Company at or before the Annual Meeting, or (iii)
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute a revocation of a proxy).
<PAGE> 4
Shares represented by duly executed proxy, unless previously revoked,
will be voted at the Annual Meeting in accordance with the instructions of the
stockholder thereon if the proxy is received by the Company by 9:00 a.m. on
November 7, 1996. A proxy may be revoked at any time before it is exercised by
written notice received by the Secretary of the Company at the Company's
executive offices at 5728 Major Boulevard, Suite 306, Orlando, Florida 32819
prior to the Annual Meeting or by a properly executed proxy bearing a later
date than the earlier proxy. Stockholders attending the meeting may withdraw
their proxies and vote in person. Shares cannot be voted at the meeting unless
the registered owner is present or represented by proxy.
PROPOSAL 1 - ELECTION OF DIRECTORS
At the Annual Meeting, stockholders will be asked to elect a Board of
five (5) Directors to hold office until the 1997 annual meeting and the
election and qualification of their successors. The following table sets forth
information regarding the nominees for election to the Company's Board of
Directors. The shares represented by properly executed proxies will be voted
in accordance with the specifications made therein. PROXIES WILL BE VOTED FOR
THE ELECTION OF SUCH NOMINEES UNLESS THE SPECIFICATION IS MARKED ON THE PROXY
INDICATING THAT THE AUTHORITY TO DO SO IS WITHHELD. If a nominee is unable to
serve, or, for good cause, will not serve, the proxy confers discretionary
authority to the persons named therein to vote with respect to the election of
any person to the Board. The nominees receiving a plurality of votes cast at
the Meeting will be elected to the Board of Directors.
<TABLE>
<CAPTION>
Position with Company, Principal
Name Age Occupation and Other Directorships
---- --- ----------------------------------
<S> <C> <C>
Jay A. Bielfield 50 Mr. Bielfield has served as a Director since September 1992.
Mr. Bielfield is an employee and a member of the board of
directors of Little Caesar Enterprises, Inc. He also is a
director of Detroit Tigers, Inc. and Acceptance Insurance
Companies Inc. Mr. Bielfield is an Alternate Governor of the
National Hockey League on behalf of the Detroit Red Wings,
Inc.
Geoffrey A. Button 47 Mr. Button has served as a Director since October 1989. He is
an independent real estate and financing consultant. From
1985 to December 1995, he served as executive director of
Wyndham Investments Limited, the property holding company of
the Allied Domecq Pension Funds, with which he had been
associated since 1973. Mr. Button is a director of Duke
Realty Investments Inc. and Sector Communications Inc.
</TABLE>
-2-
<PAGE> 5
<TABLE>
<CAPTION>
Position with Company, Principal
Name Age Occupation and Other Directorships
---- --- ----------------------------------
<S> <C> <C>
Kenneth C. Coon 46 Mr. Coon has served as a Director since July 1993. He has
been chairman, president, chief executive officer and a
director of Acceptance Insurance Companies Inc., a 33.1%
stockholder owner of the Company, since December 1992, and
served as interim chief executive officer of Acceptance prior
to that time, beginning in February 1992. He has been
president and a director of Acceptance's insurance
subsidiaries since their formation or acquisition.
Michael R. McCarthy 45 Mr. McCarthy has served as a Director since July 1993. He has
been chairman and a director of McCarthy & Co., a firm engaged
in the investment banking business in Omaha, Nebraska, since
it was organized in 1986. He is also a director and chairman
of McCarthy Group, Inc., which is the parent of McCarthy & Co.
and a director of Acceptance Insurance Companies Inc.
David L. Treadwell 42 Mr. Treadwell has served as Chairman, Chief Executive Officer
and a Director since March 1992. He has served as president
of Heritage Network, Incorporated, which provides management
services for publishing, residential home building and other
investment related businesses, since January 1991. Since
1986, Mr. Treadwell also has served as president of Heritage
Development Company, a real estate portfolio management and
development company. Mr. Treadwell is a member of the
community board of Old Kent Bank-Southeast, Trenton, Michigan,
and a director of Acceptance Insurance Companies Inc.
</TABLE>
The Board of Directors is responsible for direction of the overall
affairs of the Company. During the year ended December 31, 1995, the Board of
Directors met a total of six times. All of the directors except Geoffrey
Button attended at least 75% of the total meetings of the Board of Directors,
and of any committee on which they served, held during the period in which they
served as directors or members of any such committees.
Audit Committee. The Audit Committee has authority to recommend to
the Board the independent public accountants to serve as auditors, review with
the independent auditors the annual audit plan, the consolidated financial
statements, the auditors' report and their evaluation
-3-
<PAGE> 6
and recommendations concerning the Company's internal controls, and approve the
types of professional services for which the Company may retain independent
auditors. Currently, Messrs. Coon and McCarthy are the members of the Audit
Committee. This committee did not meet during 1995.
Compensation and Options Committee. This Committee reviews the
compensation of the executive officers of the Company, makes recommendations to
the Board of Directors regarding such compensation and administers the stock
option plan described herein in accordance with its terms. The members of the
Compensation and Stock Option Committee are Messrs. Bielfield, and Button.
This committee did not meet during 1995.
EXECUTIVE OFFICERS
The table below sets forth the executive officers of the Company.
Officers normally are appointed annually by the Board of Directors and serve at
the pleasure of the Board.
<TABLE>
<CAPTION>
Position with Company, Principal
Name Age Occupation and Other Directorships
---- --- ----------------------------------
<S> <C> <C>
David L. Treadwell 42 Chairman of the Board, Director and Chief Executive Officer. (See
"Election of Directors" above for biographical information.)
</TABLE>
David L. Treadwell, Chairman of the Board of Directors, serves as the
Company's Chief Executive Officer pursuant to an Employee Lease Agreement (the
"Agreement") with Mr. Treadwell's primary employer, Heritage Network,
Incorporated ("Heritage"). The Agreement, which commenced on March 27, 1992,
and has been amended four times, requires Mr. Treadwell to devote such time to
his duties as Chief Executive Officer as he and the Board of Directors
determine to be necessary.
Under the fourth amendment to the Agreement, effective April 1, 1996,
the annual fee to Heritage was reduced from $100,000 to $25,000 per annum,
payable monthly, and a success fee of .5% with respect to a merger or sale by
the Company of all or substantially all of its assets, with a maximum success
fee of $75,000. Heritage is responsible for all of Mr. Treadwell's salary and
bonus, if any, all administrative employment matters, such as the payment of
all federal, state and local employment taxes and providing workers'
compensation coverage, and all non-obligatory fringe benefit programs, such as
health insurance, holidays and vacation. The Company pays Mr. Treadwell's
reasonable travel expenses, including transportation to and from his home city
of Southgate, Michigan.
During 1994 and 1995, certain amounts due under the Agreement were
deferred to assist the Company's cash flow, with interest at the rate of twelve
percent (12%) on deferred amounts. During 1995, the Company paid Heritage
$25,000 and accrued $75,000 under the deferral agreement. During 1994, the
Company paid Heritage $44,000. On February 13, 1996, the
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<PAGE> 7
Company paid Heritage $142,000, which included the deferred payment due as of
December 31, 1995, in the amount of $131,000 and interest accrued in the amount
of $11,000 as of the same date.
The fourth amendment to the Agreement extended the lease term until
March 31, 1997. Either party may terminate the Agreement at any time, with or
without cause, upon 30 days' notice. The Agreement will automatically
terminate in the event that Mr. Treadwell ceases to be employed by Heritage or
he ceases to serve as Chief Executive Officer of the Company, either
voluntarily, due to his illness, incapacity or death, or his removal as Chief
Executive Officer by the Board of Directors of the Company.
As part of the original Agreement, Mr. Treadwell was granted the right
to purchase from the Company 100,000 shares of the common stock of the Company,
par value $0.01 per share, for $2.7679 per share. Options to purchase 50,000
shares vested on March 27, 1993, and options to purchase the remaining 50,000
shares vested on March 27, 1994. These options terminate upon Mr. Treadwell's
resignation as Chief Executive Officer of the Company or upon termination of
the Agreement. Mr. Treadwell has 10 days following termination of the
Agreement to exercise the options granted to him. On June 14, 1994, Mr.
Treadwell was granted options to purchase an additional 100,000 shares of the
Company's common stock for $2.00 per share. These options expired unexercised
on June 30, 1995.
EXECUTIVE COMPENSATION
The following table is a summary of the compensation paid by the
Company to Mr. Treadwell for 1995, 1994, and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term
Compensation
Awards
Name and Principal Position Year Salary ($) Bonus($) Options (#)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
David L. Treadwell 1995 100,000(1)
Chairman of the Board and Chief 1994 100,000(1) 100,000(2)
Executive Officer 1993 100,000(1)
</TABLE>
(1) This amount was paid or has been accrued to Heritage Network,
Incorporated, for Mr. Treadwell's services as Chief Executive Officer
pursuant to an Employee Lease Agreement, which provides for Mr.
Treadwell's services to the Company.
(2) Options to purchase 100,000 shares were granted on June 14, 1994.
These options expired unexercised on June 30, 1995.
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<PAGE> 8
The following table details aggregated stock option exercises in 1995
and stock option values as of December 31, 1995, for unexercised stock options
held by the Company's executive officers:
AGGREGATED STOCK OPTION EXERCISES IN 1995
AND STOCK OPTION VALUES AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised in-
Options the-Money Options
at FY-End at FY-End
Shares Acquired Value Realized (#) Exercisable/ ($) Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David L. Treadwell 0 N/A 100,000/-0- N/A (1)
</TABLE>
(1) At fiscal year end, December 31, 1995, the closing price of the Common
Stock was $1.9375 per share, based on the closing sale price on the
Nasdaq Small Cap Market System.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company are paid $2,500 for
each meeting of the Board of Directors attended in person and $500 for each
committee meeting attended in person, except that no separate compensation is
paid for attendance at a committee meeting held on the same day as, or within
one day of, a Board of Directors' meeting. Reasonable out-of-pocket expenses
related to the Directors' attendance at all meetings or incurred in connection
with their duties as a Director or committee member are also reimbursed by the
Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table provides information as of September 1, 1996,
unless otherwise indicated, with respect to beneficial ownership of the
Company's common stock by each person known by the Company to be the beneficial
owner of more than 5% of its outstanding common stock.
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<PAGE> 9
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
------------------------------------ -------------------- ----------------
<S> <C> <C>
Acceptance Insurance 2,280,500(1) 33.1%
Companies Inc.
Suite 600 North
222 South 15th Street
Omaha, NE 68102
FMR Corp. 680,000(2) 9.87%
82 Devonshire Street
Boston, MA 02109
George F. Valassis 671,641(3) 9.7%
2000 North Woodward
Suite 200
Bloomfield Hills, MI 48304
Allied Domecq Pension Funds 445,370(4) 6.46%
Wyndham Court
Pritchard Street
Bristol, England BS2 8RH
</TABLE>
______________________________
(1) According to Amendment No. 24 to Schedule 13D dated March 8, 1993,
filed by Acceptance Insurance Companies Inc. ("Acceptance") and
Acceptance Insurance Company ("AIC"), a wholly-owned subsidiary of
Acceptance, amending a Schedule 13D previously filed by Samelson Real
Estate Partners, Inc. and Acceptance Insurance Holdings, Inc., AIC is
shown as beneficially owning 2,280,500 shares of the Common Stock.
(2) According to Amendment No. 8 to Schedule 13G dated February 14, 1996,
filed by FMR Corp. Edward C. Johnson 3d, and Abigail P. Johnson,
Fidelity Management & Research Company, and Fidelity Capital
Appreciation Fund. FMR Corp. has sole dispositive power with respect
to 680,000 shares through its wholly-owned subsidiary, Fidelity
Management and Research Company, which acts as an investment adviser
to various investment companies that beneficially own the shares of
Common Stock. The power to vote or direct the voting of the 680,000
shares owned by the investment companies lies with the Boards of
Trustees of the investment companies, each of which also has sole
dispositive power with respect to the shares owned by it. One
investment company, Fidelity Capital Appreciation Fund, owns 680,000
shares, or 9.87% of the outstanding shares of common stock. Mr.
Johnson is Chairman of the Board and a controlling person of FMR
Corp., and, according to the Schedule 13G, has sole dispositive power
with respect to 680,000 shares.
(3) According to Amendment No. 2 to Schedule 13D dated April 12, 1990,
filed by George F. Valassis.
(4) According to the Schedule 13D dated November 5, 1993, filed by
Tamanda II Corporation ("Tamanda"), Denmark Street (Bristol) Pension
Trust Limited ("Denmark Street") and Allied-Lyons Pension Funds,
consisting of Allied-Lyons Pension Fund and Allied-Lyons Executives
Pension Fund (the "Pension Funds"). Tamanda, a wholly-owned subsidiary
of Denmark Street, is the record owner of all of the shares of Common
Stock. The Pension Funds, through their subsidiaries, own all of the
capital stock of Denmark Street and, accordingly, the Pension Funds may
be deemed to be the controlling persons of Tamanda and Denmark Street.
Each of Tamanda, Denmark Street and the Pension Funds have shared power
to vote or direct the vote of and to dispose or direct the
disposition of all of the shares of Common Stock. Geoffrey A. Button,
a director of the Company, was a director and Vice President of Tamanda
until December 1, 1995. Until such date, he also served as the
executive director of Wyndham Investments Limited, which
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<PAGE> 10
is owned by and serves as a property holding company for the Pension
Funds. (The Allied-Lyons funds are now known as the Allied Domecq
funds.)
The following table provides information as of September 1, 1996,
unless otherwise indicated, with respect to the beneficial ownership of the
Company's Common Stock by (i) each Director of the Company individually, (ii)
the Company's executive officers, (iii) all Directors and officers of the
Company as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership (1) of Class
------------------- ------------------------ --------
<S> <C> <C>
Jay A. Bielfield (2)(3) 2,400 *
Little Caesar
International, Inc.
2211 Woodward Avenue
Detroit, MI 48201-3400
Geoffrey A. Button (4) 50,000 *
3 Addison Grove
London W41EP England
Kenneth C. Coon (5) 1,000 *
Acceptance Insurance
Companies Inc.
Suite 600 North
222 South 15th Street
Omaha, NE 68102
Michael R. McCarthy (3)(6) 5,500 *
McCarthy & Co.
1125 South 103rd Street
Suite 450
Omaha, NE 68124
David L. Treadwell (3)(7) 100,000 1.4%
Heritage Network
One Heritage Place
Suite 400
Southgate, MI 48195
All Directors and Officers 158,900 2.3%
as a Group (5 Persons)
</TABLE>
- ---------------
* Less than one percent.
(1) This column sets forth shares of common stock which are deemed to be
"beneficially owned" by the persons named in the table under Rule
13d-3 of the Securities and Exchange Commission. Each of the persons
named in the table have sole voting and investment power with respect
to all shares beneficially owned by them except as otherwise described
in the following footnotes.
(2) Includes 2,400 shares held in an individual retirement account.
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<PAGE> 11
(3) Does not include 2,280,500 shares held by Acceptance Insurance
Companies Inc. ("Acceptance"), representing approximately 33% of the
outstanding shares, beneficial ownership of which is disclaimed.
Although beneficial ownership of the shares owned by Acceptance is
disclaimed, as a director of Acceptance, he may be deemed to share
voting and investment power with respect to such shares of common
stock with Acceptance.
(4) Represents options granted to Mr. Button in fiscal year 1990 under the
1990 Plan to purchase 50,000 shares of Common Stock.
(5) Does not include 2,280,500 shares held by Acceptance Insurance
Companies Inc. ("Acceptance"), representing approximately 33% of the
outstanding shares. Mr. Coon is Chairman, President, Chief Executive
Officer and a Director of Acceptance. Although Mr. Coon disclaims
beneficial ownership of the shares owned by Acceptance, as Chairman,
President, Chief Executive Officer and a Director of Acceptance, he
may be deemed to share voting and investment power with respect to
such shares of common stock with Acceptance.
(6) McCarthy & Co. d/b/a LongView Capital Management, a registered
investment advisor, shares authority to vote and to sell 5,500 shares
of MAJR common stock, which securities are held in a discretionary
investment managed account at First National Bank of Omaha fbo James
P. Wands.
(7) Represents options granted to Mr. Treadwell in 1992, to purchase
100,000 shares, 50,000 of which vested on March 27, 1993, and 50,000
of which vested on March 27, 1994.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Under the
securities laws of the United States, the Company's directors, its executive
(and certain other) officers, and any persons holding more than ten percent of
the Company's common stock are required to report their ownership of the
Company's common stock and any changes in that ownership to the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc., and
the Company. To the Company's knowledge, based solely upon a review of the
forms and certificates filed with the Company by such persons, all such Section
16(a) filing requirements were complied with during fiscal year 1995 by all
persons who were Directors, officers or holders of more than 10% of the
Company's Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
A description of the relationships and affiliations of the directors,
officers and holders of more than 5% of the Common Stock of the Company with
the parties identified in this section are contained in the last paragraph of
this section.
On March 25, 1992, the Company entered into a loan agreement (the
"Loan Agreement") with Valassis Enterprises, L.P. ("Enterprises"), a Delaware
limited partnership controlled by George Valassis, a 9.7% shareholder of the
Company. Pursuant to the Loan Agreement, Enterprises made loans in the
aggregate amount of $3 million, secured by a second mortgage on substantially
all of the Company's property. The outstanding principal amount of the loan,
plus accrued but unpaid interest, was convertible at the option of Enterprises
into Common Stock of the Company during a 30-day period in 1996, which has now
expired, at a price of $2.7679 per share. One of the conditions to
Enterprises' execution of the Loan Agreement was the termination of a
Management and Advisory Agreement (the "Advisory Agreement") with The Major
Group, Inc. ("Major Group"), a 51% owned subsidiary of Acceptance Insurance
Companies Inc. ("Acceptance"), the Company's principal shareholder. Charlotte
Drake Apartments, Inc.
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<PAGE> 12
("Apartments"), a Maryland corporation and affiliate of Geoffrey Button, a
Director of the Company, and Allied Domecq Pension Funds, a 6.46% shareholder
of the Company, participated in Enterprises' loan to the Company pursuant to
arrangements between it and Enterprises. There was no contractual relationship
between the Company and Apartments. At December 31, 1994, the amount
outstanding on the Enterprises loan, including interest, was $279,000.
In connection with a settlement and termination of the Advisory
Agreement with Major Group, on March 25, 1992, The Company executed two secured
promissory notes (the "Major Group Notes") in favor of Major Group in the
aggregate amount of $1,514,581. The Major Group Notes were convertible into
the common stock of the Company, $0.01 par value per share, provided for an
interest rate of 12% per annum, and a term of five years. Major Group was a
co-mortgagee of a second mortgage on substantially all of the Company's
property with Enterprises. The second Major Group Note, for $514,581, was
secured by a third mortgage on the same property. The two Major Group Notes
were assigned by Major Group to Acceptance, with the Company's consent on
September 25, 1992.
On February 1, 1995, the Company entered into a loan arrangement with
Acceptance whereby Acceptance acquired the Company's promissory note and
mortgage to Enterprises (which had a balance of approximately $282,000 on such
date) and provided additional funds which were used to repay the Major Group
Notes held by Acceptance in the aggregate amount of approximately $103,000,
fund the Company's required interest reserve with its primary lender
($770,000), pay real estate taxes in the amount of $326,597, pay loan closing
and extension costs of $75,000, and provide working capital of approximately
$43,000. The aggregate indebtedness to Acceptance in connection with these
transactions was $1,600,000, represented by a single promissory note due
January 31, 1996, which provided for interest, at the rate of twelve percent
(12%) per annum, to accrue and be paid at maturity. The note was secured by a
second mortgage on substantially all of the Company's property.
On October 18, 1995, Acceptance acquired the Company's promissory note
and mortgage to PNC Bank, Kentucky, Inc. ("PNC"), in the amount of $4,316,881.
Immediately thereafter, the Company entered into a $5,064,144 loan restructure
arrangement with Acceptance with respect to the indebtedness already owed to
Acceptance and that indebtedness acquired from PNC. The aggregate indebtedness
of the restructured loan is represented by a single promissory note, due May 1,
1998, unless there is a change in control of the Company prior to such time, in
which event the maturity of the loan will be accelerated. The interest rate on
the restructured loan is prime plus 1.5%, and interest is payable quarterly in
arrears. Subject to the Company's right to prepay the note, the outstanding
principal amount of the note (or any portion thereof), plus accrued but unpaid
interest, is convertible into common stock of the Company at the option of
Acceptance at any time upon 20 days prior notice, based upon a price per share
equal to the average closing price of the common stock during the 30-day period
immediately preceding the date of Acceptance's notice of its election to
convert. The Company's indebtedness to Acceptance is secured by a first
mortgage on substantially all of the Company's property, including the certain
notes and mortgages payable to the Company from third parties.
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<PAGE> 13
The Company did not make the approximately $128,000 quarterly interest
payment due to Acceptance on its $5.1 million mortgage note on April 1, 1996,
and has obtained permission from Acceptance to defer the quarterly interest
payments due in 1996 in the event the Company's cash flow is insufficient to
make such payments, pending the receipt of funds from the sale of additional
properties or other sources. All such deferred interest payments must be paid
no later than January 2, 1997.
Acceptance beneficially owns 33.1% of the common stock of the Company.
Messrs. Bielfield, Coon, McCarthy and Treadwell are directors of Acceptance.
George F. Valassis, a 9.7% stockholder of the Company, is a 23.1% stockholder
of Acceptance. By virtue of such positions with or interests in Acceptance,
such persons may have a material indirect interest in the transactions
described above between the Company and Acceptance. Apartments and Lakes
Holding are wholly owned by Tamanda Corporation, a Maryland corporation which
is in turn wholly owned indirectly by the Allied Domecq Pension Funds. Until
December 1, 1995, Mr. Button was a director and vice president and secretary of
Apartments and Lakes Holding and a director and vice president of Tamanda. He
also served as the executive director of Wyndham Investments Limited, which is
owned by and serves as a property holding company for the Allied Domecq Pension
Funds.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
Subject to stockholder ratification, the Board of Directors has
reappointed the firm of Coopers & Lybrand L.L.P. as the independent auditors to
make an examination of the consolidated financial statements of the Company for
fiscal year 1996. Coopers & Lybrand L.L.P. has audited the Company's
consolidated financial statements for fiscal years 1989 through 1995.
The vote of a majority of the Common Stock represented at the Meeting
and entitled to vote on this matter will be necessary to ratify the appointment
of Coopers & Lybrand L.L.P. as the independent auditors for the Company. THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR SUCH RATIFICATION.
If the stockholders do not ratify this appointment, other independent auditors
will be approved by the Board of Directors upon the recommendation of the Audit
Committee without further shareholder action.
Representatives of Coopers & Lybrand L.L.P. are expected to be present
at the Annual Meeting and will have the opportunity to make a statement if they
desire and to respond to questions.
UNLESS MARKED OTHERWISE, ALL PROXIES WILL BE VOTED FOR
THE RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P.
AS THE COMPANY'S INDEPENDENT AUDITORS
-11-
<PAGE> 14
OTHER BUSINESS WHICH MAY PROPERLY
COME BEFORE THE MEETING
The Company's management knows of no business which may come before
the Annual Meeting except that indicated above. However, if other business is
brought before the Annual Meeting, the persons acting under the enclosed form
of proxy may vote thereunder in accordance with their best judgment.
PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting must be received by the Company by June 6, 1997, in order to be
included in the Company's proxy statement and form of proxy for the 1997 Annual
Meeting of Stockholders.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KSB, without
exhibits, is attached hereto. A copy of any exhibit will be furnished by the
Company upon receipt of a written request therefore accompanied by a check or
money order, made payable to Major Realty Corporation, in an amount equal to
the number of pages in the exhibit times $0.20, to cover the cost of
reproduction and mailing. Interested shareholders may contact the Company at
(407) 351-1111 to determine the number of pages in an exhibit.
REGISTRAR AND TRANSFER AGENT
Registrar and Transfer Company, Cranford, New Jersey, serves as the
Company's registrar and transfer agent.
By order of the Board of Directors,
Gregory C. Yadley, Secretary
Orlando, Florida
October 8, 1996
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<PAGE> 15
Appendix
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
MAJOR REALTY CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 7, 1996
The undersigned hereby appoints David L. Treadwell and Gregory C.
Yadley, and each of them, proxies with power of substitution to each, for and
in the name of the undersigned to vote as designated below, all shares of
Common Stock of Major Realty Corporation (the "Company") which the undersigned
would be entitled to vote at the Annual Meeting of Stockholders of the Company
to be held on November 7, 1996, at 10:00 a.m. Eastern Standard Time, and at
any adjournments thereof.
--------------
Please be sure to sign and date | Date |
this Proxy in the box below. | |
- -----------------------------------------------------------
| |
| |
|__Stockholder sign above__Co-holder (if any) sign above___
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<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS. FOR WITHHOLD FOR ALL
EXCEPT
/ / / / / /
JAY A. BIELFIELD, GEOFFREY A. BUTTON,
KENNETH C. COON, MICHAEL R. MCCARTHY
AND DAVID L. TREADWELL
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- ----------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. FOR AGAINST ABSTAIN
as the independent auditors to examine the Company's financial / / / / / /
statements for fiscal year 1996.
3. In their discretion, on such other matters as may properly come before
the meeting.
</TABLE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF ALL NOMINEES LISTED FOR DIRECTOR AND FOR PROPOSAL 2.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Detach above card, sign, date and mail in postage paid envelope provided.
MAJOR REALTY CORPORATION
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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