UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 12 (a) of
The
Securities Exchange Act of 1934
Filed
by
the Registrant [x]
Filed
by
a Party other than the Registrant [ ]
Check
the
appropriate box:
[
]
Preliminary Proxy Statement
[
]
Confidential, for Use of the Commission Only (as permitted by
Rule
14a-6 (e)
(2))
[x]
Definitive Proxy Statement
[
]
Definitive Additional Materials
[
]
Soliciting Material Pursuant to S240.14a-12
CONSOLIDATED-TOMOKA
LAND CO.
(Name
of
registrant as specified in its charter)
Payment
of Filing Fee (check the appropriate box):
[
x] No
fee required.
[
] Fee
computed on table below per Exchange Acts Rules 14a-6 (i) (1)
and 0-11.
| 1. |
Title
of each class of securities to which transaction
applies:
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| 2. |
Aggregate
number of securities to which transaction
applies:
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| 3. |
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was
determined):
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| 4. |
Proposed
maximum aggregate value of
transaction:
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| 5. |
Total
fee paid:
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NOTE:
COVER PAGE ADDED TO ORIGINAL FILING.
THIS
IS THE ONLY REVISION TO THE FILING.
CONSOLIDATED-TOMOKA
LAND CO.
Post
Office Box 10809
Daytona
Beach, Florida 32120-0809
NOTICE
OF
ANNUAL MEETING OF SHAREHOLDERS
April
25,
2007
To
the
Shareholders:
The
annual meeting of shareholders of Consolidated-Tomoka Land Co., a Florida
corporation (the "Company"), will be held at the LPGA International Clubhouse,
1000 Champions Drive, Daytona Beach, Florida, on Wednesday, April 25, 2007,
at
ten o'clock in the morning for the following purposes:
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1.
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To
elect two directors to serve for a one-year term expiring at the
annual
meeting of shareholders to be held in 2008 and to elect three directors
to
serve for a three-year term expiring at the annual meeting of shareholders
to be held in 2010.
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2.
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To
transact such other business as may properly come before the meeting
or
any adjournment thereof.
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Shareholders
of record at the close of business on March 1, 2007, are entitled to notice
of,
and to participate in and vote at the meeting.
A
complete list of shareholders as of the record date will be available for
shareholders' inspection at the Corporate Offices at 1530 Cornerstone Boulevard,
Suite 100, Daytona Beach, Florida, for at least ten days prior to the
meeting.
By
Order
of the Board of Directors
Linda
Crisp
Corporate
Secretary
Daytona
Beach, Florida
March
23,
2007
All
shareholders are requested to date and sign the enclosed proxy and return it
promptly in the accompanying envelope.
This
proxy is revocable by you at any time before it is exercised by notifying the
corporate secretary of the Company in writing or by submitting a properly
executed, later-dated proxy. Signing a proxy will not affect your right either
to attend the meeting and vote your shares in person or to give a later
proxy.
A
COPY OF
THE COMPANY'S MOST RECENT FORM 10-K ANNUAL REPORT FILED WITH THE SECURITIES
AND
EXCHANGE COMMISSION WILL BE FURNISHED, WITHOUT CHARGE, TO ANY SHAREHOLDER UPON
WRITTEN REQUEST DIRECTED TO THE COMPANY'S SECRETARY, POST OFFICE BOX 10809,
DAYTONA BEACH, FLORIDA 32120-0809.
CONSOLIDATED-TOMOKA
LAND CO. PROXY STATEMENT
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1
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1
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4
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5
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9
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11
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11
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11
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16
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17
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18
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18
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19
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19
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20
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21
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21
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21
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22
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24
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24
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24
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24
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Charter
of Audit Committee
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Charter
of Compensation and Stock Option Committee
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Charter
of Corporate Governance Committee
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CONSOLIDATED-TOMOKA
LAND CO.
PROXY
STATEMENT
This
proxy statement and the enclosed form of proxy are being sent to the
shareholders of Consolidated-Tomoka Land Co., a Florida corporation (the
“Company”), on or about March 23, 2007, in connection with the solicitation by
the Board of Directors of the Company (the “Board of Directors” or “Board”) of
proxies to be used at the annual meeting of shareholders to be held on
Wednesday, April 25, 2007 (and at any adjournment or adjournments thereof),
for
the purposes set forth in the accompanying notice of annual meeting.
Shareholders who execute proxies retain the right to revoke them at any time
before they are exercised by sending written notice to the secretary of the
Company, by submitting a properly executed, later-dated proxy, or by attending
the annual meeting and electing to vote in person.
The
cost
of preparing, assembling, and mailing material in connection with this
solicitation will be borne by the Company.
At
the
close of business on March 1, 2007, there were 5,715,885 shares of common stock,
$1 par value, of the Company outstanding. Each holder of common stock of record
on that date is entitled to one vote for each share held by such shareholder
on
every matter submitted to the meeting. The Company’s Articles of Incorporation
and Bylaws do not provide for cumulative voting for the election of directors,
which is permitted but not required by Florida law.
See
“Security Ownership of Certain Beneficial Owners and Management” below for
information as to the beneficial ownership of common stock of the Company as
of
March 1, 2007, by each director of the Company and by all directors and
executive officers as a group.
The
Company’s Articles of Incorporation divide the Board of Directors into three
classes, as nearly equal as possible. At the 2007 annual meeting of
shareholders, three Class I directors and two Class II directors are to be
elected. The Class I directors are to be elected to hold office until the annual
meeting of shareholders to be held in 2010, or until their successors are duly
elected and qualified, and the Class II directors are to be elected to hold
office until the annual meeting of shareholders to be held in 2008, or until
their successors are duly elected and qualified.
All
properly executed and returned proxies will be voted for the election of the
persons named below who have been recommended to the Board of Directors by
the
Corporate Governance Committee as nominees for Class I and Class II unless
authority to do so is withheld.
All
nominees for Class I, John C. Adams, Jr., Bob D. Allen, and John C. Myers,
III,
are currently directors. The nominees for Class II, William H. Davison and
James
E. Jordan, have been nominated to replace Byron E. Hodnett and Robert F. Lloyd,
who will retire effective at the annual meeting of shareholders in April. Each
nominee has indicated his willingness to serve if elected. If any nominee should
be unable to serve, which is not now anticipated, the proxy will be voted for
such other persons as shall be determined by the persons named in the proxy
in
accordance with their judgment.
The
election of Messrs. Adams, Allen, Davison, Jordan, and Myers will require the
affirmative vote of the holders of a plurality of the shares present or
represented at the meeting. The Board of Directors of the Company recommends
a
vote “for” the election of Messrs. Adams, Allen, and Myers in Class I, and
Messrs. Davison and Jordan in Class II.
Proxies
solicited by the Board will be so voted unless shareholders specify in their
proxies a contrary choice. Abstentions will be treated as shares represented
at
the meeting, but not voting, so they will have no effect on the outcome of
the
voting to elect directors. Broker non-votes will not be considered shares
represented at the meeting.
Additional
information concerning the nominees and the directors appears
below.
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Name,
Age and Principal Occupation
As
of January 31, 2007
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Director
Since
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Class
and Expiration of Term
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Other
Public Companies Where Serving as a Board Member
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John
C. Adams, Jr. - age 70(1)(3)
Retired
in 2006 as executive vice president of Brown & Brown, Inc. (an
insurance agency).
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1977
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I
2007
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None
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Bob
D. Allen - age 72(1)
Chairman
of the Board since April 1998.
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1990
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I
2007
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None
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William
H. Davison - age 63
Chairman
of the Board, president and chief executive officer of SunTrust Bank,
East
Central Florida.
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Nominee
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II
2008
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None
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Gerald
L. DeGood - age 64(3)
Consultant
since June 1999; partner in Arthur Andersen LLP from 1974 to June
1999.
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2004
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III
2009
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Bairnco
Corporation (a designer, manufacturer and seller of engineered materials
and replacement products and services)
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James
E. Gardner - age 68(2)(4)
Retired
in 2000 as president and chief executive officer of ITT Community
Development Corporation.
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2005
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III
2009
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None
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James
E. Jordan - age 62
Retired
in 2005 as managing director of Arnhold and S. Bleichroeder Advisers,
LLC
(a privately owned asset management company).
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Nominee
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II
2008
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First
Eagle Funds (a fund company offering a non-diversified domestic fund
and a
non-diversified international fund)
Florida
East Coast Industries, Inc. (a holding company engaged in railroad
and
real estate business through its wholly owned subsidiaries)
JZ
Equity Partners, PLC (a public mezzanine fund traded on the London
Stock
Exchange)
Leucadia
National Corporation (a diversified holding company engaged in a
variety
of businesses, including manufacturing, healthcare services,
telecommunications, real estate activities, winery operations and
residual
banking and lending activities)
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William
H. McMunn - age 60(1)
President
of the Company since January 2000 and chief executive officer since
April
2001,
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1999
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II
2008
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None
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John
C. Myers, III - age 60(2)(4)
President
and chief executive officer of the Reinhold Corporation (a privately
owned
family corporation with Florida land holdings, forestry, an ornamental
tree nursery and other investments), since 1993.
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2006
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I
2007
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None
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William
J. Voges - age 52(3)
President
and chief executive officer since 1997, and general counsel since
1990 of
The Root Organization (a private investment company with diversified
holdings, including real estate).
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2001
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III
2009
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None
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| (1) |
Member
of the Executive Committee, which held no meetings in 2006. The Executive
Committee has the authority during intervals between meetings of
the Board
of Directors to exercise power on matters designated by the
Board.
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| (2) |
Member
of the Compensation and Stock Option
Committee.
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| (3) |
Member
of the Audit Committee.
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| (4) |
Member
of the Corporate Governance
Committee.
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In
2006,
the Company provided the following annual compensation to non-employee
directors:
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Name
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Fees
Earned or Paid in Cash ($)
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Change
in Pension Value and Nonqualified Deferred Compensation Earnings
($)
(1)
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Total
($)
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John
C. Adams, Jr.
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28,500
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2,405
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30,905
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Bob
D. Allen
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71,000
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0
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71,000
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Gerald
L. DeGood
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36,000
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0
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36,000
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James
E. Gardner
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21,000
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277
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21,277
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Byron
E. Hodnett
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23,000
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0
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23,000
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Robert
F. Lloyd
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24,000
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0
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24,000
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John
C. Myers, III
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14,500
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0
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14,500
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David
D. Peterson(2)
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11,000
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0
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11,000
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William
J. Voges
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27,000
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741
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27,741
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(1)
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Amounts
consist of above-market earnings during fiscal 2006 on compensation
that
was deferred prior to fiscal 2006 under the Director Deferred Compensation
Plan.
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(2)
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Retired
as a member of the Board of Directors on April 26,
2006.
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Cash
Compensation
Each
non-employee director of the Company is paid an annual retainer of $15,000,
payable quarterly, in compensation for service as a director, plus $1,500 for
each board meeting attended. In addition, Mr. Allen, as Chairman of the Board,
received an annual fee of $50,000, payable quarterly. Members of the Board’s
Executive, Compensation and Stock Option, and Corporate Governance Committees
also received $1,000 for each committee meeting attended, and Audit Committee
members received $1,500 for each committee meeting attended, except that the
Chairmen of the Executive, Compensation and Stock Option, and Corporate
Governance Committees received $2,000 per meeting attended, and the Audit
Committee Chairman received $3,000 for each committee meeting attended.
Beginning in 2007, the annual fee for the Chairman of the Board was reduced
to
$40,000, payable quarterly, and the fee for the Audit Committee Chairman was
increased to $4,000 per meeting.
Director
Deferred Compensation Plan
Under
the
Consolidated-Tomoka Land Co. Unfunded Deferred Compensation Plan effective
July
1, 1981 (the “Director Deferred Compensation Plan”), directors are eligible to
defer receipt of all or a portion of their fees earned for service on the Board
of Directors and its committees. Deferred compensation accrues interest annually
at the average rate of return earned by the Company on its short-term
investments, which was 6.98% in 2006. Participants will generally receive their
funds in substantially equal annual installments over a 10-year period
commencing after the director attains age 70 or ceases to be a director,
whichever occurs first. Three directors currently participate in the Director
Deferred Compensation Plan.
The
Company regularly monitors developments in the area of corporate governance.
The
Company has taken steps to comply with the Sarbanes-Oxley Act of 2002 and the
recent changes to the corporate governance and listing requirements of the
American Stock Exchange.
Independent
Directors
The
Board
of Directors annually determines the independence of directors. No director
is
considered independent unless the Board has affirmatively determined that the
director does not have a relationship that would interfere with the exercise
of
independent judgment in carrying out his responsibilities as a director.
Generally, a director is not considered independent if the director (or in
some
cases, members of the director’s immediate family) has, or in the past three
years has had, certain material relationships or affiliations with the Company,
its external or internal auditors, or other companies that do business with
the
Company.
The
Board
has determined that the following directors, who constitute a majority of the
members of the Company’s Board of Directors, are independent pursuant to Section
121A of the American Stock Exchange Company Guide:
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· John
C. Adams, Jr.
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· Byron
E. Hodnett
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· Bob
D. Allen
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· Robert
F. Lloyd
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· Gerald
L. DeGood
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· John
C. Myers, III
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· James
E. Gardner
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· William
J. Voges
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The
Board
has also determined that director nominees William H. Davison and James E.
Jordan are independent. In determining Mr. Davison’s independence, the Board
considered his position at SunTrust Bank, East Central Florida Division, and
the
Company’s transactions with SunTrust Bank, further described under the heading
“Certain Relationships and Related Party Transactions” at page 11 below. The
Board affirmatively determined that Mr. Davison does not have a relationship
that would interfere with his exercise of independent judgment in carrying
out
his responsibilities as a director because Mr. Davison is an officer of a
different division of SunTrust from that which administers the loan facilities
of the Company and has no involvement with such transactions (either on a direct
or indirect basis).
The
Company’s independent directors hold a formal meeting quarterly, separate from
management and non-independent directors.
Director
Attendance at Meetings
During
2006, the Board of Directors held one regular and three special meetings. All
members of the Board of Directors attended more than 75% of all of the meetings
of the Board and all committees on which they served during 2006.
The
policy of the Company is to encourage members of the Board of Directors to
attend the annual meeting of shareholders. All directors attended last year’s
annual meeting.
Audit
Committee
The
Audit
Committee, which held six meetings in 2006, provides assistance to the Board
of
Directors in fulfilling its oversight responsibilities with respect to the
integrity of the Company’s financial statements, the Company’s compliance with
legal and regulatory requirements, the qualifications, independence and
performance of the Company’s independent auditor, the Company’s systems of
internal controls over financial reporting established by management and the
Board, and the Company’s auditing, accounting and financial reporting processes
generally. KPMG LLP, the Company’s independent auditors, reports directly to the
Audit Committee.
The
Audit
Committee acts under a written charter adopted by the Board of Directors, which
was amended January 24, 2007, and is attached to this proxy statement
as
Exhibit
A.
All
members of the Audit Committee are independent under the listing standards
of
the American Stock Exchange and Rule 10A-3 promulgated under the Securities
Exchange Act of 1934. All Audit Committee members possess the level of financial
literacy required by the listing standards of the American Stock Exchange.
Mr.
DeGood, as chairman of the Audit Committee, meets the current standard of
requisite financial management expertise as required by the American Stock
Exchange and is an “audit committee financial expert” as defined by the rules
adopted by the Securities and Exchange Commission.
The
Audit
Committee has adopted Policies and Procedures for Complaints and Concerns
Regarding Accounting, Internal Accounting Controls, and Auditing Matters to
enable confidential and anonymous reporting to the Audit Committee.
Compensation
and Stock Option Committee
The
Compensation and Stock Option Committee, which held one meeting in 2006, assists
the Board of Directors in discharging its responsibilities relating to the
compensation of the Company’s chief executive officer and other officers and key
employees, reviews and discusses with management the Company’s “Compensation
Discussion and Analysis” set forth below, and administers the 2001 Stock Option
Plan.
The
Compensation and Stock Option Committee has primary responsibility for
determining the compensation philosophy of the Company and recommending to
the
Board of Directors for approval the compensation for the named executive
officers. The Chairman of the Board of Directors aids the Compensation and
Stock
Option Committee by providing annual recommendations regarding the performance
and compensation of Mr. McMunn, the President and Chief Executive Officer of
the
Company. Mr. McMunn provides annual recommendations regarding the compensation
of the other named executive officers and all other managers whose annual total
compensation exceeds $75,000. The Compensation and Stock Option Committee has
not engaged any consultant or advisor in connection with its compensation
recommendations, but it does have the
authority to retain a compensation consultant or advisor.
The
Compensation and Stock Option Committee acts under a written charter adopted
by
the Board of Directors, which was amended January 24, 2007, and is attached
to
this proxy statement as Exhibit
B.
The
Compensation and Stock Option Committee of the Board of Directors consists
solely of independent directors under the listing standards of the American
Stock Exchange.
Corporate
Governance Committee
The
Corporate Governance Committee, which held one meeting during 2006, was formed
to perform the functions of a nominating committee and recommends to the Board
individuals qualified to become members of the Board based on criteria approved
by the Committee and nominees for the Board for annual meetings of the
shareholders. All members of the Corporate Governance Committee are independent
under the listing standards of the American Stock Exchange.
The
Corporate Governance Committee operates under a formal charter that governs
its
duties and standards of performance. A copy of the charter is attached to this
proxy statement as Exhibit
C.
Consideration
of Director Nominees
The
Corporate Governance Committee will consider recommendations from shareholders
for nominations for candidates for membership on the Board of Directors. To
recommend a candidate to the Committee, shareholders should submit
recommendations in writing to the Company’s Secretary at Post Office Box 10809,
Daytona Beach, Florida 32120-0809. A nominating recommendation must be
accompanied by the following information concerning each recommending
shareholder: (a) the name and address, including telephone number, of the
recommending shareholder; (b) the number of the Company’s shares owned by the
recommending shareholder and the time period for which such shares have been
held; (c) if the recommending shareholder is not a shareholder of record, a
statement from the record holder of the shares verifying the holdings of the
shareholder and a statement from the recommending shareholder of the length
of
time that the shares have been held. (Alternatively, the shareholder may furnish
a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the
Securities and Exchange Commission reflecting the holdings of the shareholder,
together with a statement of the length of time that the shares have been held);
and (d) a statement from the shareholder as to whether the shareholder has
a
good faith intention to continue to hold the reported shares through the date
of
the Company’s next annual meeting of shareholders.
In
addition, a nominating recommendation must be accompanied by the following
information concerning the proposed nominee: (a) the name, business address
and
residence address of the proposed nominee; (b) the principal occupation or
employment of the proposed nominee; (c) the class or series and number of shares
of capital stock of the Company, if any, which are owned beneficially and of
record by the proposed nominee; and (d) any other information regarding the
proposed nominee that would be required to be included in a proxy statement
or
other filings required to be made in connection with the solicitations of
proxies for election of directors pursuant to Section 14 of the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder, had
the proposed nominee been nominated by the board of directors of the
corporation. The nominating recommendation must also describe all relationships
between the proposed nominee, his immediate family, and the recommending
shareholder, including management of any corporate shareholder, and any
agreements or understandings between the recommending shareholder and the
nominee regarding the nomination. The recommending shareholder must furnish
a
statement supporting its view that the proposed nominee possesses the minimum
qualifications prescribed by the Committee for nominees, and briefly describing
the contributions that the nominee would be expected to make to the board and
to
the governance of the Company. The statement should include whether, in the
view
of the shareholder, the nominee, if elected, would represent all shareholders
and not serve for the purpose of advancing or favoring any particular
shareholder or other constituency of the Company. The nominating recommendation
must be accompanied by the consent of the proposed nominee to be interviewed
by
the Corporate Governance Committee (and the recommending shareholder must
furnish the proposed nominee’s contact information for this purpose), and, if
nominated and elected, to serve as a director of the Company. If a
recommendation is submitted by a group of two or more shareholders, the
information regarding recommending shareholders must be submitted with respect
to each shareholder in the group.
The
Corporate Governance Committee has established specific, minimum qualifications
that must be met by a Committee-recommended nominee. Under these criteria,
a
majority of the Board should be independent under the listing standards of
the
American Stock Exchange. In addition, a nominee should demonstrate high ethical
standards and integrity in his or her personal and professional dealings and
be
willing to act on and remain accountable for boardroom decisions; should have
the ability to provide wise, thoughtful counsel on a broad range of issues;
should possess high intelligence and wisdom and apply it in decision making;
should be financially literate; should value board and team performance over
individual performance; should be open to other opinions and willing to listen;
should approach others assertively, responsibly and supportively and raise
tough
questions in a manner that encourages open discussion; should have a history
of
achievements that reflect high standards for themselves and others; should
be
committed to seeking exceptional performance of the Company, both in absolute
terms and relative to its peers; and should have the ability to commit
sufficient time and attention to the activities of the Company.
Prior
to
identifying and evaluating nominees for director, the Corporate Governance
Committee assesses the size and membership of the Board and determines whether
any vacancies are to be expected. In the event of any vacancies, the Committee
considers potential candidates for director, which may come to the Committee’s
attention through current Board members, shareholders, professional search
firms, or other persons. In addition to the specific, minimum qualifications
described above, the Committee seeks to ensure that the Board as a whole will
possess the following specific qualities or skills: expertise in management
or
oversight of financial accounting and control; a record of making sound business
decisions; cognizance of current general management trends and “best practices;”
relevant knowledge specific to the industries in which the Company operates;
ability and willingness to motivate and require high-performance by management;
and capability of questioning, approving, and monitoring the Company’s strategic
plans, providing insight and directional focus. The Committee meets to review
and report to the Board on possible candidates for membership and annually
recommends a slate of nominees to the Board with respect to nominations for
the
Board at the annual meeting of shareholders.
The
nomination of Mr. Davison was recommended by Robert F. Lloyd, a director of
the
Company. The nomination of Mr. Jordan was recommended by David Winters of
Wintergreen Advisers, a shareholder of the Company.
Codes
of Ethics
The
Company has adopted a Code of Ethics for Principal Executive Officers and Senior
Financial Officers, violations of which may be reported to the Audit Committee.
The Company will provide a copy of this code to any person without charge upon
request. Any such request should be made in writing to the Company’s Secretary
at Post Office Box 10809, Daytona Beach, Florida 32120-0809.
The
Company has adopted a Code of Business Conduct and Ethics that includes
provisions ranging from legal compliance to conflicts of interest. All employees
and directors are subject to this code.
Communication
with the Board of Directors
Individuals
may communicate with the Board of Directors by writing to Bob D. Allen, Chairman
of the Board, Consolidated-Tomoka Land Co., Post Office Box 10809, Daytona
Beach, Florida 32120-0809.
Policies
and Procedures for Approval of Related Person Transactions
The
Board
of Directors has adopted a written Related Party Transaction Policy and
Procedures establishing guidelines with respect to the approval of Related
Party
Transactions. The policy applies to any transaction in which the Company is
a
participant, any related party has a direct or indirect interest and the amount
involved exceeds $120,000. The Audit Committee will review the material facts
of
all related party transactions that require approval and either approve or
disapprove of the entry into the transaction. In determining whether to approve
a related party transaction, the Audit Committee will take into account, among
other factors it deems appropriate, whether the related party transaction is
on
terms no less favorable than terms generally available to an unaffiliated
third-party under the same or similar circumstances and the extent of the
related party’s interest in the transaction.
Security
Ownership of Certain Beneficial Owners
As
of
March 1, 2007, the following stockholders were beneficial owners of more than
five percent of the outstanding shares of common stock of the Company. The
information below is as reported in filings with the Securities and Exchange
Commission. The Company is not aware of any other beneficial owner of more
than
5% of the shares of the Company’s common stock.
|
Name
and Address of Beneficial Owner
|
Shares
Beneficially Owned
|
Percent
of Class Owned
|
|
Barrington
Capital Group, LP(1)
888
Seventh Avenue, 17th Floor
New
York, NY 10019
|
390,700
|
6.8%
|
|
Pico
Holdings, Inc (2)………………………………………………………………..
875
Prospect Street, Suite 301
LaJolla,
CA 92307-4264
|
310,000
|
5.4%
|
|
Third
Avenue Management LLC(3)
622
Third Avenue, 32nd Floor
New
York, NY 10017
|
627,215
|
11.0%
|
|
Wintergreen
Advisers, LLC, et. al. (4)
333
Route 46, 2nd Floor
Mountain
Lakes, NJ 07046
|
1,025,252
|
17.9%
|
| (1) |
Registered
investment adviser with offices at the above address. Information
derived
from Amendment No. 2 to Schedule 13D dated September 26, 2006, filed
with
the Securities and Exchange
Commission.
|
| (2) |
A
parent company with offices at the above address. Information derived
from
Schedule 13G, dated February 7, 2005, filed with the Securities and
Exchange Commission.
|
| (3) |
Registered
investment adviser with offices at the above address. Information
derived
from Schedule 13G/A dated February 14, 2007, filed with the Securities
and
Exchange Commission.
|
| (4) |
Wintergreen
Advisers, LLC (a registered investment adviser with offices at the
above
address) has sole voting and dispositive power with respect to these
shares, and Wintergreen Fund, Inc. (a registered investment company)
has
shared voting and dispositive power with respect to 557,610 of these
shares. Information derived from Amendment No. 5 to Schedule 13D
dated
February 22, 2007, filed with the Securities and Exchange Commission,
and
Form 4 dated March 1, 2007, filed with the Securities and Exchange
Commission
|
Security
Ownership of Management
The
following table contains information at March 1, 2007 on the beneficial
ownership of the shares of common stock of the Company for each director and
director nominee, each executive officer named in the Summary Compensation
Table, and by all directors, director nominees and executive officers of the
Company as a group, and the percentage of the aggregate of such shares to all
of
the outstanding shares of common stock the Company.
|
Name
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class Owned
|
|||||
|
Sole
|
Shared
|
Total(5)
|
|||||
|
John
C. Adams, Jr.
|
10,000
|
(1)
|
--
|
10,000
|
(1)
|
*
|
|
|
Bob
D. Allen
|
4,034
|
--
|
4,034
|
*
|
|||
|
Robert
F. Apgar
|
--
|
8,603
|
8,603
|
*
|
|||
|
William
H. Davison
|
--
|
--
|
--
|
||||
|
Gerald
L. DeGood
|
494
|
--
|
494
|
*
|
|||
|
James
E. Gardner
|
250
|
--
|
250
|
*
|
|||
|
James
E. Jordan
|
--
|
--
|
--
|
||||
|
William
H. McMunn
|
4,200
|
(2)
|
58,387
|
62,587
|
(2)
|
1.0%
|
|
|
John
C. Myers, III
|
100
|
--
|
100
|
--
|
|||
|
Bruce
W. Teeters
|
25,955
|
(2)(3)
|
--
|
25,955
|
(2)(3)
|
*
|
|
|
William
J. Voges
|
1,730
|
489
|
(4)
|
2,219
|
(4)
|
*
|
|
|
Directors,
Director Nominees, and Executive Officers as a Group (11
persons)
|
46,763
|
(2)
|
67,479
|
114,242
|
(2)
|
2.0%
|
|
* Less
than
1%.
| (1) |
Does
not include 4,000 shares held in trust for Mr. Adams’ wife who has sole
voting and disposition power over these
shares.
|
| (2) |
Includes
shares subject to options that are currently exercisable within 60
days of
March 1, 2007 as follows: Mr. McMunn, 4,000 shares; Mr. Teeters,
1,600
shares; and the executive officers as a group, 5,600 shares.
|
| (3) |
Includes
200 shares held by Mr. Teeters’ wife who has sole voting and disposition
over these shares.
|
| (4) |
Includes
200 shares held jointly with his wife, for which Mr. Voges does not
have
voting power.
|
William
H. Davison, a nominee for director, is Chairman, President, and Chief Executive
Officer of SunTrust Bank, East Central Florida. The Company and SunTrust Bank
are parties to a Master Loan and Security Agreement dated July 1, 2002, for
a
term loan in the maximum amount of $8,000,000; the largest aggregate amount
of
indebtedness outstanding on this loan at any time since January 1, 2006 was
$7,297,593 and interest payable on this loan during 2006 was $535,571. The
outstanding balance on this loan at December 31, 2006 was $7,061,531. This
loan
is secured by approximately 3,000 acres of the Company’s lands. The Company and
SunTrust Bank are also parties to a Master Loan and Security Agreement dated
May
31, 2002, for an unsecured line of credit in the maximum of $10,000,000; the
largest aggregate amount of indebtedness outstanding on this line of credit
at
any time since January 1, 2006 was $1,943,000 and interest payable on this
loan
during 2006 was $7,671. There was no outstanding balance on this line of credit
at December 31, 2006. The Company had a letter of credit outstanding at December
31, 2006 in the amount of $3,270,939, which reserved capacity under the line
of
credit. The Company and SunTrust are also parties to an International Swap
Dealers Association, Inc. Master Agreement dated April 8, 2002 with respect
to
an interest rate swap with regard to the $8,000,000 term loan described above.
The Company believes that these loans were made in the ordinary course of
business, were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable loans with
persons not related to the lender, and did not involve more than the normal
risk
of collectibility or present other unfavorable features.
The
sections which follow provide extensive information pertaining to the
compensation of the executive officers of the Company. This information is
introduced in the Compensation Committee Discussion and Analysis set forth
below, which describes the policies and components of the Company’s Compensation
Program.
This
section provides an overview and analysis of the Company’s compensation program
and policies. Following this section is a series of tables containing specific
information pertaining to the compensation earned in 2006 by the following
individuals, referred to throughout this proxy as the Company’s “named executive
officers:”
| · |
William
H. McMunn, President and Chief Executive
Officer
|
| · |
Bruce
W. Teeters, Senior Vice President - Finance and
Treasurer
|
| · |
Robert
F. Apgar, Senior Vice President - General Counsel and Assistant
Secretary
|
The
discussion below is intended to put the information contained in the tables
into
context with the Company’s overall compensation program.
Compensation
Philosophy and Objectives
The
Company’s executive compensation program is designed to attract and retain
executive officers by aligning their interests with the Company’s short-term and
long-term performance goals. This program has been structured to motivate
executive officers to achieve those goals and to create long-term allegiance
to
the Company. The executive compensation program rewards executive officers
for
both short-term and long-term performance, both on an individual basis and
a
company wide basis.
The
Company’s compensation philosophy is intended to balance short-term performance
incentives through salary and bonus with long-term performance through stock
options with tandem stock appreciation rights and pension plan contributions.
The Company endeavors to provide compensation programs that:
| · |
are
competitive;
|
| · |
will
attract well-qualified employees who have the ability and desire
to
implement the Company’s strategy for achieving short-term and long-term
performance goals;
|
| · |
will
motivate employees to achieve performance goals set by the
Company;
|
| · |
will
create long-term allegiance to the Company;
and
|
| · |
will
result in enhanced long-term shareholder
value.
|
Role
of Compensation Committee and Executive Officers in Compensation
Decisions
The
Compensation and Stock Option Committee has primary responsibility for
determining the compensation philosophy of the Company and recommending to
the
Board of Directors for approval the compensation for the named executive
officers. While the Compensation and Stock Option Committee reviews the total
compensation paid to each of the named executive officers, it views each element
of the Company’s compensation program to be distinct. The Company has not
adopted any formal or informal policy for allocating compensation between
short-term and long-term or between cash and non-cash. The Compensation and
Stock Option makes these allocation decisions each year based on recent
performance and Company objectives.
The
Chairman of the Board of Directors aids the Compensation and Stock Option
Committee by providing annual recommendations regarding the compensation of
Mr.
McMunn, the President and Chief Executive Officer of the Company. Mr. McMunn
provides annual recommendations regarding the performance and compensation
of
the other named executive officers and all other managers whose total annual
compensation exceeds $75,000. The Compensation and Stock Option Committee has
not engaged any consultant or advisor in connection with its compensation
recommendations.
Compensation
Components
Base
Salary.
The
base salaries of the named executive officers are set annually in January
following a review of the prior year’s performance of the normal
responsibilities associated with the named executive’s job description. While
the Company does not benchmark base salaries against any particular peer group,
it endeavors to establish base salaries that are competitive with similar
positions in the Company’s geographic location.
Mr.
McMunn’s base salary was increased by approximately 4% to $283,470 for 2007.
This increase reflected the Compensation and Stock Option Committee’s
determination that both a cost of living and merit increase to base salary
was
appropriate to remain competitive with companies of similar size in the Central
Florida market and to reflect Mr. McMunn’s performance of the normal duties
associated with his position. The base salaries of the other named executive
officers were also increased by 4% for 2007 to $246,048 for Mr. Teeters
and
$177,840 for Mr. Apgar as a result of the same determinations by the
Compensation and Stock Option Committee.
Cash
Bonus.
The
Compensation and Stock Option Committee has the discretion to recommend the
payment of cash bonuses for annual performance by the named executive officers
as reflected by the Company’s overall profitability and the named executive
officer’s individual contributions to that profitability. The following items
are considered in determining whether to award a cash bonus: earnings per share
(“EPS”); earnings before depreciation, amortization and deferred taxes
(“EBDDT”); and individual accomplishments that contributed to EPS and EBDDT
during the year. While no formal policy on cash bonuses has been adopted by
the
Company and the amount to be awarded is discretionary, the Compensation and
Stock Option Committee has set a maximum percentage of base salary that a named
executive officer is eligible to receive in any annual cash bonus (with the
relative maximum based on the ability to impact profitability in such person’s
position), as follows: 200% for the Chief Executive Officer and 100% for other
named executive officers.
Mr.
McMunn was awarded a cash bonus of $169,000, or approximately 62% of base
salary, for 2006 performance. In awarding this bonus, the Compensation and
Stock
Option Committee considered: the Company’s relatively solid short-term
performance in a difficult real estate market; a significant increase in the
EBDDT for the year; Mr. McMunn’s efforts, through interaction with elected and
appointed officials at the city, county and state levels, to protect Company
lands from restrictive regulation, preserve entitlements, and position the
lands
to maximize financial returns to shareholders in future years; his role in
negotiating agreements with the city, county, and other developers to plan
the
future expansion and financing of the road system impacting Company lands;
his
participation in planning and financing an effort to defeat several ballot
initiatives proposed by county government that could have had an adverse affect
on the Company’s lands; and his assumption of the Chairmanship of the Florida
Association of Community Developers, a state-wide industry advocacy group,
which
articulates the industry’s positions on issues and proposed state legislation.
Mr. McMunn is also charged with developing long-range visioning and strategic
corporate planning.
Mr.
Teeters, the Senior Vice President-Finance and Treasurer of the Company, was
awarded a cash bonus of $86,400, or approximately 37% of base salary, for 2006
performance. In awarding this bonus, the Compensation and Stock Option Committee
considered the responsibilities arising out of Mr. Teeters’ position as the
Chief Financial Officer and his involvement in real estate sales and the
purchase of income properties through the tax deferred exchange program.
Responsibilities also include investor relations and participation in the
Company’s long-range strategic planning.
Mr.
Apgar, Senior Vice President-General Counsel and Assistant Secretary of the
Company, was awarded a cash bonus of $67,200, or approximately 28% of base
salary, for 2006 performance. In awarding this bonus, the Compensation and
Stock
Option Committee considered Mr. Apgar’s role as General Counsel (with emphasis
on Securities and Exchange Commission matters and government relations), his
involvement with real estate contracts and review of all documents related
to
the purchase of income properties. He also participates in the long-range
strategic planning for the Company.
Many
of
the same factors related to the Company’s performance in 2006 that were used to
evaluate Mr. McMunn were also considered in evaluating Mr. Teeters and Mr.
Apgar.
Stock
Option Compensation.
The
Company grants stock options and tandem stock appreciation rights (“tandem
SARs”) to align named executive officer incentives with shareholders over the
long-term because stock options and tandem SARs have value only if the Company’s
stock price increases over time. This is the Company’s primary vehicle for
providing long-term incentive compensation to and retention of the named
executive officers and other key managers.
The
Company’s shareholders approved the 2001 Stock Option Plan in April 2001. This
Plan provides for the grant of non-qualified and qualified stock options to
purchase shares of common stock of the Company at a per share exercise price
equal to the fair market value of such shares on the date of grant. The
Company’s stock options are typically exercisable as to no more than one-fifth
of the total number of shares covered by the option during each twelve month
period commencing twelve months after the date of grant and expire after 10
years. In addition, each stock option grant includes a tandem SAR, exercisable
only to the extent that the related stock option is exercisable. Upon the
exercise of a tandem SAR, the holder is entitled to receive the value of the
SAR, calculated by subtracting the excess of the fair market value of the common
stock over the exercise price of the related option from the quotient obtained
by dividing such amount by one minus the holders' personal income tax rate.
The
tandem SAR is payable upon exercise in cash or common stock, at the discretion
of the Compensation and Stock Option Committee. The tandem SAR can be exercised
only until the later of the end of (a) the 90-day period following the exercise
of the related stock option or (b) the 10-day period beginning on the third
business day after the date on which the Company releases its official financial
data for the quarter in which the related stock option was
exercised.
The
2001
Stock Option Plan does not specify when stock options and tandem SARs are
granted. Historically, stock options and tandem SARs have been granted annually
in January based on the prior year’s performance. The release of material
non-public information is not timed for the purpose of affecting the values
of
stock options and tandems SARs. At the time of granting stock options and tandem
SARs, the Compensation and Stock Option Committee is aware of the Company’s
financial results for the prior fiscal year but does not adjust the size of
the
grants to reflect possible market reaction to such results.
The
2001
Stock Option Plan reserved 500,000 shares for stock option grants. It was
anticipated that the shares would be granted over an estimated eight to ten
year
period with grants awarded covering approximately 10% of the shares per year
with adjustments based on the number of participants in the plan and their
overall performance. Stock option grants are generally determined by evaluating
the number of shares remaining under the 2001 Stock Option Plan and the number
of years remaining until expiration of such plan. After the January 2007 grants,
there are approximately 118,000 shares remaining to be awarded with eleven
participants in the plan. For 2006, the President and Chief Executive Officer
received approximately 32% of the total shares granted, approximately 23% were
granted to the other named executive officers, and approximately 45% were
granted to all other participants.
Pension
Plan.
The
Company maintains the Retirement Plan for Employees of Consolidated-Tomoka
Land
Co. (the “Pension Plan”), a defined benefit pension plan for the benefit of
Company employees, including the named executive officers. Benefits are based
upon an employee’s cumulative years of service and average compensation for the
five most highly-compensated years during the employee’s final 10 years of
employment. The benefit formula generally provides for a life annuity benefit.
The Company believes that this plan recognizes long-term performance on behalf
of the Company and motivates employees to remain with the Company.
401(k)
Plan.
Employees (including the named executive officers) may participate in the
Company’s 401(k) plan, a tax-qualified retirement plan maintained to provide the
opportunity to further provide for retirement through tax-deferred employee
contributions. The 401(k) plan permits eligible employees to defer compensation
up to the maximum limit set annually by the Internal Revenue Service, subject
to
certain limitations imposed by the Internal Revenue Code. The employees’
elective deferrals are immediately vested and non-forfeitable in the 401(k)
Plan. The Company makes a safe harbor contribution of 3% of annual compensation
for all eligible employees which is immediately vested and subject to
limitations imposed by the Internal Revenue Code. No matching contributions
have
been made to the named executive officers.
Deferred
Compensation.
Under
the Consolidated-Tomoka Land Co. Unfunded Deferred Compensation Plan effective
October 25, 1982 (the “Executive Deferred Compensation Plan”), the named
executive officers are eligible to defer receipt of all or a portion of their
cash compensation. The deferred compensation accrues interest annually at the
average rate of return earned by the Company on its short-term investments,
which was 6.98% in 2006. Participants will generally receive their funds in
a
lump sum or in 10 annual installments commencing after retirement or termination
of employment, at the option of the Compensation and Stock Option Committee,
unless otherwise agreed upon by the participants at the time of commencement
of
participation in the plan. The Executive Deferred Compensation Plan allows
participants to save for retirement in a tax-effective manner at minimal cost
to
the Company.
Health
and Welfare Benefits.
The
Company provides to each named executive officer medical and dental insurance
coverage as well as long-term disability and life insurance. Dependent coverage
is paid by the employee.
The
Company has a current policy regarding post-retirement benefit programs for
certain healthcare and life benefits for eligible retired employees. All
full-time employees become eligible to receive a life benefit up to a maximum
of
$5,000 if they retire after reaching age 55 with 20 or more years of service,
and this program is non-contributory. The retired employee will also receive
a
supplemental medicare benefit if he or she retires at age 65 with 20 or more
years of service. Retirees in Volusia County, Florida, must enroll in the local
Florida Health Care Plan, a Federally qualified HMO, and the Company pays up
to
$25 of their monthly premium. Retired employees in Highlands County received
a
supplemental medicare policy for which the Company pays up to $120 per month.
The post-retirement supplemental medicare benefit premium is contributory with
retiree contributions adjusted annually as the premiums change.
Perquisites.
The
Company provides named executive officers with a paid club membership at LPGA
International, based on the belief that the use of such facilities in the course
of their employment is in the Company’s interest and will further our business
purposes. Named executive officers are also provided with an automobile,
including gasoline and car maintenance, except for Mr. Apgar, who elected to
take a salary adjustment in lieu of an automobile. Mr. McMunn and Mr. Teeters
pay for personal use of their vehicles. All of the named executive officers
pay
for their non-business related restaurant expenses at LPGA
International.
Other
Matters
Stock
Ownership.
Stock
ownership guidelines for the named executive officers have not been
adopted.
Employment
Agreements.
The
Company does not have employment agreements with any employees.
Severance
Benefits.
No
Company employees have severance agreements and the Company has not established
a severance policy. Under the 2001 Stock Option Plan, all unvested stock options
and tandem SARs become vested upon the occurrence of a change in
control.
Tax
and Accounting Implications
Deductibility
of Executive Compensation.
The
Compensation and Stock Option Committee reviews and considers the deductibility
of executive compensation under Section 162(m) of the Internal Revenue Code,
which provides that the Company may not deduct compensation of more than
$1,000,000 that is paid to certain individuals. Based on current levels of
compensation, no executive officer is expected to receive compensation for
2006
or 2007 services that would be non-deductible under Section 162(m). Accordingly,
the compensation and Stock Option Committee has not considered any revisions
to
its policies and programs in response to this provision of law.
Nonqualified
Deferred Compensation.
On
October 22, 2004, the American Jobs Creation Act of 2004 was signed into law,
changing the tax rules applicable to nonqualified deferred compensation
arrangements. While the final regulations have not become effective yet, the
Company believes it is operating in good faith compliance with the statutory
provisions which were effective January 1, 2005.
The
Compensation and Stock Option Committee has reviewed and discussed the
Compensation Discussion and Analysis with management. Based on such review
and
discussion with management, the Committee has recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in this
proxy statement and incorporated by reference in the Company’s annual report on
Form 10-K for the year ended December 31, 2006. Submitted by the Compensation
and Stock Option Committee: Robert F. Lloyd, Chairman, James E. Gardner, Byron
E. Hodnett, and John C. Myers, III.
The
following table sets forth the annual, long-term and other compensation for
the
named executive officers during the last fiscal year, as well as the total
annual compensation for each such individual for the last fiscal
year.
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Option
Awards
($)(1)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings($)(2)
|
All
Other
Compensation
($)
|
Total
($)
|
|
William
H. McMunn
President
and Chief Executive Officer
|
2006
|
272,568
|
169,000
|
171,520
|
54,659
|
10,965(3)
|
678,712
|
|
Bruce
W. Teeters
Senior
Vice President-
Finance
and Treasurer
|
2006
|
236,580
|
86,400
|
68,608
|
82,348
|
7,865(4)
|
481,801
|
|
Robert
F. Apgar
Senior
Vice President-
General
Counsel and Assistant Secretary
|
2006
|
171,000
|
67,200
|
68,608
|
53,668
|
4,660
(5)
|
365,136
|
| (1) |
Amounts
consist of both the value of stock options awarded and the value
of tandem
SARs granted pursuant to the Company’s 2001 Stock Option Plan as follows:
Mr. McMunn, $111,480 (stock options) and $60,040 (tandem SARs); Mr.
Teeters, $44,592 (stock options) and $24,016 (tandem SARs); and Mr.
Apgar,
$44,592 (stock options) and $24,016 (tandem SARs). See Note 10 (Stock
Option Plan) in the Notes to Consolidated Financial Statements included
in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2006, for the relevant assumptions used to determine the valuation
of
stock option and tandem SAR awards.
|
| (2) |
Amounts
consist of above-market earnings during fiscal 2006 on compensation
that
was deferred prior to January 1, 2007, under the Executive Deferred
Compensation Plan and the change in the actuarial present value of
the
named executive officer’s earned benefit under the Company’s Pension Plan
during fiscal 2006 as follows: Mr. McMunn, $51,209 (change in pension
value) and $3,450 (above-market earnings); Mr. Teeters, $80,318 (change
in
pension value) and $2,030 (above-market earnings); and Mr. Apgar,
$50,488
(change in pension value) and $3,180 (above-market earnings).
|
| (3) |
This
amount reflects life insurance premiums paid by the Company in the
amount
of $1,059 for term life insurance, LPGA Club membership fees of $3,600,
and use of a Company vehicle valued at
$6,306.
|
| (4) |
This
amount reflects life insurance premiums paid by the Company in the
amount
of $1,059 for term life insurance for Mr. Teeters, LPGA
Club membership fees of $3,600, and use of a Company vehicle valued
at
$3,206.
|
| (5) |
This
amount reflects life insurance premiums paid by the Company in the
amount
of $1,059 for term life insurance for Mr. Apgar and LPGA membership
fees
of $3,600.
|
Stock
option awards and tandem stock appreciation rights (“SARs”) are granted to the
named executive officers pursuant to the 2001 Stock Option Plan. The exercise
price of stock options is based on the mean between the high and the low price
at closing on the date of the grant. The stock options vest over a five-year
period, and all expire after ten years.
|
Name
|
Grant
Date(1)
|
All
Other
Option
Awards: Number of Securities Underlying Options (#)(2)
|
Exercise
or Base Price of Option Awards ($/Sh)
|
Closing
Price on Grant Date
($/Sh)
|
|
William
H. McMunn
|
1/24/07
|
20,000
|
77.245
|
78.75
|
|
Bruce
W. Teeters
|
1/24/07
|
8,000
|
77.245
|
78.75
|
|
Robert
F. Apgar
|
1/24/07
|
6,000
|
77.245
|
78.75
|
|
(1)
|
Stock
options and tandem SARs were also granted on January 25, 2006, for
the
year-ended December 31, 2005. On that date, Mr. McMunn received 20,000
stock options and tandem SARs, Mr. Teeters received 8,000 stock options
and tandem SARs, and Mr. Apgar received 8,000 stock options and tandem
SARs. The exercise price for these options was $67.27, which was
the mean
between the high and the low price at closing on the date of the
grant.
|
|
(2)
|
Tandem
SARs were granted with each stock option award. The value of these
stock
option awards and tandem SARs is reported in the Summary Compensation
Table above.
|
The
following table sets forth certain information with respect to all unexercised
stock options previously awarded to the named executive officers as of December
31, 2006.
|
Option
Awards
|
||||||
|
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable(1)
|
Option
Exercise
Price
($)
|
Option
Expiration Date
|
||
|
William
H. McMunn
|
0
|
4,000
|
20.05
|
1/23/2012
|
||
|
0
|
8,000
|
20.12
|
1/22/2013
|
|||
|
0
|
12,000
|
31.64
|
1/28/2014
|
|||
|
0
|
16,000
|
42.87
|
1/27/2015
|
|||
|
0
|
20,000
|
67.27
|
1/25/2016
|
|||
|
Bruce
W. Teeters
|
0
|
1,600
|
20.05
|
1/23/2012
|
||
|
0
|
3,200
|
20.12
|
1/22/2013
|
|||
|
0
|
4,800
|
31.64
|
1/28/2014
|
|||
|
0
|
6,400
|
42.87
|
1/27/2015
|
|||
|
0
|
8,000
|
67.27
|
1/25/2016
|
|||
|
Robert
F. Apgar
|
0
|
1,200
|
20.05
|
1/23/2012
|
||
|
|
0
|
3,200
|
20.12
|
1/22/2013
|
||
|
|
0
|
4,800
|
31.64
|
1/28/2014
|
||
|
0
|
6,400
|
42.87
|
1/27/2015
|
|||
|
0
|
8,000
|
67.27
|
1/25/2016
|
|||
|
(1)
|
Stock
options become exercisable in five equal annual installments beginning
on
the first anniversary of the grant date. Tandem SARs were granted
with
each stock option award.
|
The
following table sets forth certain information with respect to the options
exercised by the named executive officers during the fiscal year ended December
31, 2006.
|
Option
Awards
|
||
|
Name
|
Number
of Shares Acquired on Exercise (#)(1)
|
Value
Realized on Exercise ($)(2)
|
|
William
H. McMunn
|
11,534
|
1,060,431
|
|
Bruce
W. Teeters
|
4,590
|
419,400
|
|
Robert
F. Apgar
|
4,511
|
454,899
|
|
(1) Amounts
represented in this column include the exercise of tandem
SARs.
(2) Amounts
consist of both the value realized on the exercise of stock options
and
the value realized on the exercise of the corresponding tandem SAR
as
follows: Mr. McMunn, $689,280 (stock option) and $371,151 (tandem
SAR);
Mr. Teeters, $274,592 (stock option) and $144,808 (tandem SAR); and
Mr.
Apgar, $299,162 (stock option) and $155,737 (tandem SAR).
|
||
The
Company maintains two programs to provide retirement income to eligible
employees and the named executive officers: the Company’s 401(k) plan (a
tax-qualified retirement plan) and the Pension Plan. The following table sets
forth benefits that named executive officers have accumulated under the Pension
Plan.
|
Name(1)
|
Plan
Name
|
Number
of Years Credited Service (#)
|
Present
Value of Accumulated Benefit ($)(2)
|
|
William
H. McMunn
|
Retirement
Plan for Employees of Consolidated- Tomoka Land Co.
|
15
|
375,476
|
|
Bruce
W. Teeters
|
Retirement
Plan for Employees of Consolidated- Tomoka Land Co.
|
26
|
728,776
|
|
Robert
F. Apgar
|
Retirement
Plan for Employees of Consolidated- Tomoka Land Co.
|
15
|
369,352
|
(1) The
named
executive officers are all fully vested under the Pension Plan.
|
(2)
|
See
Note 8 (Pension Plan) in the Notes to Consolidated Financial Statements
included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2006 for the relevant assumptions used to determine
the
present value of each named executive officer’s accumulated benefit under
the Plan.
|
All
employees who have attained the age of 21 and completed one year of service
participate in the Pension Plan. Pension benefits are accrued annually in an
amount equal to 1.2% of the employee’s final average earnings up to their
covered compensation line plus 1.8% of the employee’s final average earnings in
excess of their covered compensation line multiplied by the employee’s years of
credited service to a maximum of 35 years. An employee’s “covered compensation
line” equals the average of their actual past social security wage bases for the
35 calendar years preceding the employee’s social security retirement age. An
employee’s “final average earnings” is the employee’s average annual
compensation for the five consecutive years of highest earnings during the
final
ten consecutive years of employment. The elements of compensation considered
in
this determination include all earnings that make up the employee’s social
security wage base, as limited by federal law.
The
benefit formula generally provides for a life annuity or joint annuity benefit.
The benefits for the named executive officers shown above are not payable in
a
lump sum. If the employee chooses to receive their pension payments as a joint
benefit, a reduced pension benefit will be payable to the employee for life,
and, if the employee dies first, 50% or more of the benefit will be payable
to
the joint payee for the rest of his or her life. The employee may also choose
a
social security adjustment benefit option where, if the employee retires before
age 65, the employee receives a higher benefit before social security payments
are expected to begin, and smaller payments thereafter, or the single life
annuity, where a pension payment will be payable to the employee for life.
All
of the named executive officers are currently eligible for early retirement
under the Pension Plan based on the early retirement age of 55 thereunder.
If
an
employee retires early, the employee’s accrued pension will be reduced to
reflect the longer period over which the employee will receive pension benefits.
No payments were made pursuant to the Pension Plan in 2006.
The
table
below sets forth information regarding the named executive officers’ current
earnings on deferred compensation under the Executive Deferred Compensation
Plan.
|
Name
|
Executive
Contributions in Last Fiscal Year
($)(1)
|
Aggregate
Earnings in Last Fiscal Year
($)(2)
|
Aggregate
Balance at Last Fiscal Year-End
($)
|
|
William
H. McMunn
|
50,000
|
22,092
|
342,016
|
|
Bruce
W. Teeters
|
0
|
13,001
|
199,259
|
|
Robert
F. Apgar
|
20,250
|
20,365
|
318,904
|
|
(1)
|
Amounts
for Mr. McMunn in this column were reported in the Summary Compensation
Table for the fiscal year 2005 contained in the Company’s proxy statement
for the 2006 annual meeting of shareholders under the column entitled
“Bonus,” $12,000 of the amounts for Mr. Apgar in this column were reported
in the Summary Compensation Table above under the column entitled
“Salary”
and $8,250 of such amounts were reported in the Summary Compensation
Table
for the fiscal year 2005 contained in the Company’s proxy statement for
the 2006 annual meeting of shareholders under the column entitled
“Bonus.”
|
|
(2)
|
Amounts
include above-market earnings reported in the Summary Compensation
Table
under the column entitled “Change in Pension Value and Nonqualified
Deferred Compensation Earnings” as follows: Mr. McMunn, $3,450; Mr.
Teeters, $2,030; and Mr. Apgar,
$3,180.
|
Under
the
Executive Deferred Compensation Plan, the named executive officers and key
employees of the Company may elect to defer receipt of all or a portion of
their
cash compensation until such time as the participant ceases to be an officer
or
key employee. The deferred compensation accrues interest annually at the average
rate of return earned by the Company on its short-term investments, which was
6.98% in 2006. Participants will generally receive their funds in a lump sum
or
in 10 annual installments commencing after retirement or termination of
employment, at the option of the Compensation and Stock Option Committee, unless
otherwise agreed upon by the participants at the time of commencement of
participation in the Executive Deferred Compensation Plan.
The
Company does not have employment agreements, change in control agreements or
severance agreements with any of its executive officers. Benefits payable upon
termination of a named executive officer include benefits accrued under the
Pension Plan, described under “Retirement Benefits” above, and deferred
compensation and earnings thereon, described under “Nonqualified Deferred
Compensation” above. Upon a change in control, stock options and tandem SARs
would become fully vested pursuant to the 2001 Stock Option Plan. The following
table sets forth the benefit that would have been realized by each named
executive officer for outstanding stock options and tandem SARs as of December
31, 2006, if a change in control had occurred on such date:
|
Name
|
Benefit
|
After
Change in Control(1)(2)
|
|
William
H. McMunn
|
Unvested
Stock Option Awards
|
$2,602,831
|
|
Bruce
W. Teeters
|
Unvested
Stock Option Awards
|
$1,041,132
|
|
Robert
F. Apgar
|
Unvested
Stock Option Awards
|
$1,008,917
|
|
(1)
|
The
amounts in this column include both the value of unvested stock options
awarded and the value of unvested tandem SARs granted pursuant to
the
Company’s 2001 Stock Option Plan as follows: Mr. McMunn, $1,691,840 (stock
option value) and $910,991 (SAR value); Mr. Teeters, $676,736 (stock
option value) and $364,396 (SAR value); and Mr. Apgar, $655,796 (stock
option value) and $353,121 (SAR value).
|
|
(2)
|
Values
are calculated as if a change in control had taken place on December
29,
2006, using the closing market price per share of the Company’s stock on
that date of $72.40.
|
James
E.
Gardner, Byron E. Hodnett, Robert F. Lloyd, and John C. Myers, III, served
on
the Compensation and Stock Option Committee in 2006. None of these directors
have served as an officer or employee of the Company or any of its subsidiaries
or had any relationship requiring disclosure under SEC rules.
The
Audit
Committee assists the Board of Directors in fulfilling its oversight
responsibilities with respect to the integrity of the Company’s financial
statements, the Company’s compliance with legal and regulatory requirements, the
qualifications, independence and performance of the Company’s independent
auditors, the Company’s systems of internal controls over financial reporting
established by management and the Board, and the Company’s auditing, accounting
and financial reporting processes generally.
Among
other things, the Audit Committee contracts with the independent auditors to
audit the financial statements of the Company; inquires as to the independence
of the auditors, and obtains at least annually the auditors’ written statement
describing their independent status; meets with the independent auditors, with
and without management present, to discuss their examination, their evaluation
of the Company’s internal controls, and the overall quality of the Company’s
financial reporting; and investigates any matter brought to its attention within
the scope of its duties, with the power to retain outside counsel for this
purpose, as deemed necessary by the Audit Committee.
In
connection with the preparation and filing of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2006:
| (1) |
The
Audit Committee reviewed and discussed the audited financial statements
with management.
|
| (2) |
The
Audit Committee discussed with the independent auditors the matters
required to be discussed by the statement on Auditing Standards 61,
as
amended.
|
| (3) |
The
Audit Committee discussed with the independent auditors the auditor’s
independence, including the matters in the written disclosures and
the
letter provided by the independent auditors as required by the
Independence Standards Board Standard No.
1.
|
| (4) |
The
Audit Committee reviewed and discussed with management and the independent
auditors the Company’s audited financial statements for the year ended
December 31, 2006, and reports on the effectiveness of internal
controls over financial reporting contained in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2006, including a
discussion of the reasonableness of significant judgments and the
clarity
of disclosures in the financial
statements.
|
Based
on
the review and discussions referred to above, the Audit Committee recommended
to
the Board of Directors of the Company that the audited financial statements
be
included in the Annual Report on Form 10-K for the year ended December 31,
2006.
Submitted
by the Audit Committee: Gerald L. DeGood, Chairman, John C. Adams, Jr., and
William J. Voges.
The
Company has selected the firm of KPMG LLP to serve as the independent auditors
for the Company for the current fiscal year ending December 31, 2007. That
firm
served as the Company’s independent auditors for its fiscal year ended December
31, 2006. Representatives of KPMG LLP are expected to be present at the annual
meeting of shareholders, and will have the opportunity to make a statement
if
they desire to do so and are expected to be available to respond to
questions.
Auditor
Fees
The
following table represents fees billed by KPMG LLP for professional services
for
fiscal 2006 and 2005, by category as described in the notes to the table. All
fees were pre-approved by the Audit Committee.
|
2006
|
2005
|
|
|
$
|
$
|
|
|
Audit
Fees(1)
|
102,500
|
141,200
|
|
Audit-Related
Fees
|
-0-
|
-0-
|
|
Tax
Fees(2)
|
61,820
|
184,200
|
|
All
Other Fees
|
-0-
|
-0-
|
| (1) |
Aggregate
fees billed for professional services rendered by KPMG LLP for the
audit
of the Company’s annual financial statements, review of interim financial
statements included in the Company’s Quarterly Reports on Form 10-Q and
other services normally provided in connection with the Company’s
statutory and regulatory filings or engagements by year.
|
| (2) |
Aggregate
fees billed for professional services rendered by KPMG LLP for tax
compliance, tax advice and tax planning, including preparation of
tax
forms, including federal and state income tax returns, and income
tax
consulting services.
|
Pre-approval
Policy
The
Audit
Committee has adopted a Pre-approval Policy (“Policy”) governing the
pre-approval of all audit and non-audit services performed by the independent
auditor in order to ensure that the performance of such services does not impair
the auditor’s independence.
According
to the Policy, the Audit Committee will annually review and pre-approve the
audit services that may be provided by the independent auditor and the fees
to
be paid for those services during the following year, and may from time-to-time
review and pre-approve audit-related services, tax services and all other
services to be provided by the independent auditor. The term of any pre-approval
is 12 months from the date of pre-approval, unless the Audit Committee
specifically provides for a different period. For pre-approval, the Audit
Committee will consider whether the service is consistent with the SEC’s rules
on auditor independence, as well as whether the independent auditor is in the
best position to provide the service for reasons such as its familiarity with
the Company’s business, people, culture, accounting system, risk profile and
other factors. All such factors will be considered as a whole, with no single
factor being determinative.
The
Audit
Committee may delegate pre-approval authority to one or more of its members.
The
member or members to whom such authority is delegated will report any
pre-approval decisions to the Audit Committee at its next scheduled meeting.
The
Committee does not delegate its responsibilities to pre-approve services
performed by the independent auditor to management.
Pre-approval
fee levels or budgeted amounts for all services to be provided by the
independent auditor will be established periodically by the Audit Committee.
Any
proposed services exceeding these levels will require separate pre-approval
by
the Audit Committee.
Requests
or applications to provide services that require pre-approval by the Audit
Committee will be submitted to the Audit Committee by both the independent
auditor and the Chief Financial Officer and must include (1) a joint statement
as to whether, in their view, the request or application is consistent with
the
SEC's rules on auditor independence, and (2) with respect to each proposed
pre-approved service, detailed back-up documentation regarding the specific
service to be provided. Requests or applications for services to be provided
by
the independent auditor that do not require separate approval by the Audit
Committee will be submitted to the Treasurer and will include a description
of
the services to be rendered. The Treasurer will determine whether such services
are included within the list of services that have previously received the
pre-approval of the Audit Committee. The Audit Committee will be informed on
a
timely basis of any such services rendered by the independent
auditor.
Section
16(a) of the Securities Exchange Act of 1934 requires directors, executive
officers, and persons who beneficially own more than 10% of the Company’s common
stock to file with the SEC and American Stock Exchange initial reports of
beneficial ownership and reports of changes in beneficial ownership of the
Company’s common stock. Directors, executive officers, and beneficial owners of
more than 10% of the Company’s common stock are required by SEC rules to furnish
the Company with copies of all such reports. To the Company’s knowledge, based
solely upon a review of the copies of such reports furnished to the Company
and
written representations from directors and executive officers that no other
reports were required, the Company believes that Section 16(a) filing
requirements applicable to all directors and executive officers were reported
timely during the fiscal year ended December 31, 2006.
Shareholders
are hereby notified that if they wish a proposal to be included in the Company’s
proxy statement and form of proxy relating to the 2008 annual meeting, a written
copy of their proposal must be received at the principal executive offices
of
the Company no later than November 1, 2007. Proposals submitted outside the
provisions of Rule 14a-8 will be considered untimely if submitted after February
7, 2008. To ensure prompt receipt by the Company, proposals should be sent
certified mail, return receipt requested. Proposals must comply with the proxy
rules relating to shareholder proposals in order to be included in the Company’s
proxy materials.
The
Company’s Annual Report to Shareholders for the fiscal year ended December 31,
2006, accompanies this proxy statement. Additional copies may be obtained by
writing to the Company at P.O. Box 10809, Daytona Beach, Florida 32120-0809.
The
Company’s Annual Report and Proxy are also available on the company’s website at
www.consolidatedtomoka.com.
The
Board
of Directors of the Company does not intend to bring any other matters before
the meeting, and it does not know of any proposals to be presented to the
meeting by others. If any other matters properly come before the meeting,
however, the persons named in the accompanying proxy will vote thereon in
accordance with their best judgment.
CONSOLIDATED-TOMOKA
LAND CO.
AUDIT
COMMITTEE CHARTER
Role
and Purpose
There
shall be a committee of the Board of Directors to be known as the “Audit
Committee.” The purpose of the Audit Committee is to provide assistance to the
Board of Directors in fulfilling its oversight responsibilities with respect
to
(1) the integrity of the Company’s financial statements, (2) the Company’s
compliance with legal and regulatory requirements, (3) the qualifications,
independence and performance of the Company’s independent auditor, (4) the
Company’s systems of internal controls regarding finance and accounting
established by management and the Board, and (5) the Company’s auditing,
accounting and financial reporting processes generally. In so doing, it is
the
responsibility of the Audit Committee to maintain free and open means of
communication between the Board, the independent auditors and management.
The
Company’s independent auditors, in their capacity as independent public
accountants, shall be responsible to the Board of Directors and the Audit
Committee as representatives of the shareholders.
Composition
Members
of the Audit Committee shall be elected annually by the full Board and shall
hold office until the earlier of (1) the election of their respective
successors, (2) the end of their service as a director of the Company (whether
through resignation, removal, expiration of term, or death), or (3) their
resignation from the Committee. The chairperson of the Committee may be selected
by the Board of Directors or, if it does not do so, the Committee members
may
elect a chairperson by vote of a majority of the full Committee.
The
Audit
Committee shall be composed entirely of independent directors. The membership
of
the Committee shall consist of at least three directors, each of whom shall
satisfy the independence, financial literacy and experience requirements
of the
Securities Exchange Act of 1934 and the American Stock Exchange, as in effect
from time to time. The chairperson of the Committee shall satisfy the
financially sophistication requirements of the American Stock Exchange. At
least
one member of the committee shall be an “audit committee financial expert” (as
such term may be defined by the Securities and Exchange
Commission).
Authority
and Resources
The
Committee has the sole authority to hire and fire independent auditors and
to
approve any significant non-audit relationship with the independent
auditors.
The
Committee shall have the authority to retain outside legal, accounting or
other
advisors, as it determines necessary to carry out its duties. The Committee
shall determine the extent of funding necessary for payment of compensation
to
the independent auditor for the purpose of rendering or issuing an audit
report
and to any independent legal, accounting or other advisors retained to advise
the Committee. The Committee shall preapprove all auditing services and
permissible non-audit services (including the fees and terms thereof) to
be
performed for the Company by its independent auditor, subject to the de minimus
exceptions for non-audit services described in the Securities Exchange Act
of
1934
and
the rules promulgated thereunder which are approved by the Committee prior
to
the completion of the audit. The Committee may form and delegate authority
to
subcommittees consisting of one or more members when appropriate, including
the
authority to grant preapprovals of audit and permitted non-audit services,
provided that decisions of such subcommittee to grant preapprovals shall
be
presented to the full Committee at its next scheduled meeting.
Audit
Committee Charter
Duties
and Responsibilities
In
carrying out its responsibilities, the Audit Committee believes its policies
and
procedures should remain flexible, in order to best react to changing conditions
and to ensure that the corporate accounting and reporting practices of the
Company are in accordance with all requirements and are of the highest
quality.
The
Audit
Committee’s duties and responsibilities shall be to:
Financial
Statement and Disclosure Matters
| · |
Discuss
the annual audited financial statements and quarterly financial statements
with management and the independent
auditor.
|
| · |
Periodically
discuss with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation
of
the Company's financial statements, including any significant changes
in
the Company's selection or application of accounting principles,
any
difficulties encountered in the course of audit work, including any
restrictions on the scope of activities or access to required information,
any major issues as to the adequacy of the Company’s internal control over
financial reporting and any special steps adopted in light of material
control deficiencies.
|
| · |
Review
and discuss with management and the independent auditor management’s
report on internal control over financial reporting and the independent
auditor's attestation report on management’s assessment of the Company’s
internal control over financial reporting prior to the filing of
the
Company's Form 10-K.
|
| · |
Review
disclosures made to the Committee by the Company's Chief Executive
Officer
and Chief Financial Officer during their certification process for
the
Form 10-K and Form 10-Q about any significant deficiencies in the
design
or operation of internal control over financial reporting or material
weaknesses therein and any fraud involving management or other employees
who have a significant role in the Company's internal control over
financial reporting.
|
| · |
Discuss
with the independent auditor the following
matters:
|
| § |
Methods
used to account for significant unusual
transactions.
|
| § |
Effects
of significant accounting policies in controversial or emerging areas
for
|
which
there is a lack of authoritative guidance or consensus.
| § |
Processes
used by management in formulating particularly sensitive accounting
estimates and the basis for the independent auditor’s conclusions
regarding the reasonableness of those
estimates.
|
| § |
Material
audit adjustments proposed and immaterial adjustments not recorded
by
management.
|
| § |
Auditor’s
judgments about the quality of the Company’s accounting
principles.
|
| § |
Disagreements
with management over the application of accounting principles, the
basis
for management’s accounting estimates, and the disclosures in the
financial statements.
|
| § |
All
critical accounting policies and practices
used.
|
| § |
All
alternative accounting and disclosure treatments of material financial
information within generally accepted accounting principles (GAAP)
that
have
|
Audit
Committee Charter
Duties
and Responsibilities
Financial
Statement and Disclosure Matters Continued
| § |
been
discussed with management, including the ramifications of the use
of such
alternative treatments and disclosures and the treatment preferred
by the
independent auditor.
|
| § |
Other
material written communications between the independent auditor and
management.
|
| · |
Periodically
discuss with management and the independent auditor the quality and
adequacy of the Company's internal control over financial reporting,
any
special steps adopted in light of material control deficiencies and
the
adequacy of disclosures about changes in internal control over financial
reporting.
|
| · |
Review
with the independent auditor and management the coordination of audit
efforts to assure completeness of coverage, reduction of redundant
efforts, and the effective use of audit
resources.
|
Oversight
of Relationship with Independent Auditor
| · |
Be
directly responsible for the selection and appointment, retention,
compensation, termination and oversight of the work of the Company’s
independent auditor, including the approval of all audit engagement
fees
and terms and resolution of disagreements between management and
the
independent auditor regarding financial
reporting.
|
| · |
On
an annual basis, review and discuss with the independent auditor
all
relationships between the independent auditor and the Company in
order to
evaluate the independent auditor’s continued independence. The Committee
shall ensure annual receipt of a formal written statement from the
independent auditor consistent with the standards set by the Independence
Standards Board and shall discuss with the independent auditor all
relationships or services that may affect auditor independence or
objectivity.
|
| · |
Review
all reports required to be submitted by the independent auditor to
the
committee under the Securities Exchange Act of
1934.
|
| · |
Evaluate
the independent auditor’s qualifications, performance and independence,
including the review and evaluation of the lead partner of the independent
auditor, and taking into account the opinions of management, and
present
its conclusions with respect to the independent auditor to the full
Board
of Directors.
|
| · |
Obtain
from the independent auditor assurance that Section 10A(b) of the
Exchange
Act has not been implicated.
|
General
| · |
Provide
an open avenue of communication between the independent auditor,
management and the Board of Directors.
|
| · |
Meet
periodically with the independent auditor and management in separate
executive sessions to discuss any matters that the Committee or these
groups believe should be discussed privately with the Audit
Committee.
|
Audit
Committee Charter Oversight
of Relationship with Independent Auditor Continued
| · |
Recommend
to the Board of Directors policies for the Company's hiring of current
or
former employees of the independent
auditor.
|
| · |
Establish
procedures for (1) the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting
controls
or auditing matters and (2) the confidential, anonymous submission
by
employees of the Company of concerns regarding questionable accounting
or
auditing matters.
|
| · |
Prepare
the report required by the Securities and Exchange Commission to
be
included in the Company’s annual proxy statement and any other committee
reports required by applicable securities laws or stock exchange
listing
requirements or rules.
|
| · |
Develop,
and periodically review and recommend to the Board of Directors
appropriate changes to, policies and procedures regarding related
party
transactions.
|
| · |
Administer
the Company’s policies and procedures regarding related party transactions
and review all such transactions as required by the rules of the
American
Stock Exchange.
|
| · |
Meet
as circumstances require, but at least on a quarterly
basis.
|
| · |
Report
regularly to the Board of Directors, by means of written or oral
reports,
submission of minutes of Committee meetings or otherwise, from time
to
time or whenever it shall be called upon to do so, including a review
of
any issues that arise with respect to the quality or integrity of
the
Company’s financial statements, the Company’s compliance with legal or
regulatory requirements or the performance and independence of the
Company’s independent auditor.
|
| · |
Inquire
of management and the independent auditor about significant risks
or
exposures and assess the steps management has taken to minimize such
risk.
|
| · |
Discuss
with the Company's General Counsel legal matters that may have had
a
material impact on the financial statements or the Company's compliance
policies.
|
| · |
Review
and update this Charter annually.
|
Interpretations
and Determinations
The
Committee shall have the power and authority to interpret this Charter and
make
any determinations as to whether any act taken has been taken in compliance
with
the terms hereof.
Limitations
While
the
Audit Committee has the responsibilities and powers set forth in this Charter,
it is not the duty of the Audit Committee to plan or conduct audits or to
determine that the Company's financial statements and disclosures are complete
and accurate and are in accordance with generally accepted accounting principles
and applicable rules and regulations. These are the responsibilities of
management and the independent auditor.
Adopted
July 23, 2003 Amended April 27, 2005 Amended January 24, 2007
CONSOLIDATED-TOMOKA
LAND CO.
COMPENSATION
COMMITTEE CHARTER
Role
and Purpose
The
purpose of the compensation committee (the “Committee”) of the board of
directors of Consolidated-Tomoka Land Co. (the “Company”) is to assist the board
of directors in discharging its responsibilities relating to the compensation
of
the Company’s chief executive officer and other officers, to review and discuss
with management the Company’s “Compensation Discussion and Analysis” to be
included in the Company’s annual proxy statement, and to produce an annual
report on executive compensation for inclusion in the Company’s proxy statement
in accordance with applicable rules and regulations.
Composition
Members
of the Committee shall be elected annually by the full board and shall hold
office until the earlier of (1) the election of their respective successors,
(2)
the end of their service as a director of the Company (whether through
resignation, removal, expiration of term, or death), or (3) their resignation
from the Committee. The chairperson of the Committee may be selected by the
board of directors or, if it does not do so, the Committee members may elect
a
chairperson by vote of a majority of the full Committee.
The
Committee shall be composed entirely of independent directors. The membership
of
the Committee shall consist of at least three directors, each of whom shall
satisfy the independence requirements of the American Stock Exchange. The
selection of the members of the Committee shall be made in accordance with
Section 162 of the Internal Revenue Code (or any successor to Section 162(m)
as
in effect from time to time), and income tax regulations promulgated thereunder
as in effect from time to time, and Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 (or any successor to Rule 16b-3 as in effect from time
to
time).
The
committee may form and delegate authority to subcommittees when
appropriate.
Duties
and Responsibilities
The
Committee's duties and responsibilities shall be to:
| · |
Review
and approve corporate goals and objectives relevant to the compensation
of
the Chief Executive Officer and all other officers and employees
of the
Company earning salaries in excess of an amount to be set by the
Committee
from time to time, and recommend to the board of directors for
determination the compensation of the Chief Executive Officer and
those
other officers and employees based on this
evaluation.
|
| · |
Make
recommendations to the board of directors with respect to incentive
compensation plans and equity-based
plans.
|
Compensation
Committee Charter Duties
and Responsibilities Continued
| · |
Review
and discuss with management the Company’s disclosure to be made in the
Compensation Discussion and Analysis and recommend to the board of
directors that the Compensation Discussion and Analysis be included
in the
Company’s proxy statement or other such report as may be required in
compliance with then currently applicable Securities and Exchange
Commission rules and regulations and relevant listing
authority.
|
| · |
Produce
an annual report on executive compensation for inclusion in the Company’s
proxy statement in accordance with applicable rules and regulations,
including a statement indicating whether the Committee has reviewed
and
discussed the Compensation Discussion and Analysis with management,
and
whether, based on such review and discussion, the Committee recommended
to
the board that the Compensation Discussion and Analysis be included
in the
Company’s annual proxy statement or other applicable
filings.
|
| · |
If
a compensation consultant assists in the evaluation of director,
Chief
Executive Officer or other officer compensation, the Committee shall
have
sole authority to retain or terminate the consulting firm, including
sole
authority to approve the firm’s fees and other retention
terms.
|
| · |
Report
to the board of directors, by means of written or oral reports, submission
of minutes of Committee meetings or otherwise, from time to time
or
whenever it shall be called upon to do
so.
|
Resources
The
committee shall have the authority to retain outside legal, accounting or other
advisors, including compensation consultants, as it determines necessary to
carry out its duties, and shall have authority to approve such advisors’ fees
and other retention terms.
Interpretations
and Determinations
The
committee shall have the power and authority to interpret this Charter and
make
any determinations as to whether any act taken has been taken in compliance
with
the terms hereof
Evaluation
The
committee shall annually evaluate the functions of the Committee and the
adequacy of the Committee’s Charter.
Adopted
January 28, 2004 Amended January 24, 2007
CONSOLIDATED-TOMOKA
LAND CO.
GOVERNANCE
COMMITTEE CHARTER
Role
and Purpose
The
purpose of the governance committee (the "Committee") of the board of directors
of Consolidated-Tomoka Land Co. (the "Company") is to recommend to the board
of
directors (1) individuals qualified to become members of the board of directors
(based on criteria approved by the Committee) and the director nominees for
the
next annual meeting of the shareholders of the Company or at any such time
that
there is a vacancy on the board, and (2) recommend to the Board the corporate
governance guidelines appropriate for the Company.
Composition
The
Committee shall consist of at least three directors, each of whom shall satisfy
the independence requirements of the American Stock Exchange. Members of
the
Committee shall be elected annually by the full board and each member shall
hold
office until the earlier of (1) the election of that member’s successor, (2) the
end of that member’s service as a director of the Company (whether through
resignation, removal, expiration of term, or death), or (3) that member’s
resignation from the Committee. The chairperson of the Committee may be selected
by the board of directors or, if it does not do so, the Committee members
may
elect a chairperson by vote of a majority of the full Committee. The Committee
may form and delegate authority to subcommittees when appropriate.
Director
Nominee Criteria
Individuals
should meet the following specific minimum qualifications to be considered
for
board membership:
| $ |
Independence
- A
majority of the board of directors should be independent, as defined
from
time to time by the American Stock Exchange listing
standards.
|
| $ |
Integrity
and Accountability
-
Directors must demonstrate high ethical standards and integrity and
be
accountable for their board decisions and
actions.
|
| $ |
Judgment
-
Directors should be able to provide thoughtful counsel on a broad
range of
issues.
|
| $ |
Financial
Literacy
-
All board members should have financial literacy sufficient to monitor
the
Company’s financial performance.
|
Governance
Committee Charter
Director
Nominee Criteria Continued
| $ |
Openness
-
Board members should be willing to listen and be open to the consideration
of other opinions, as well as the ability to communicate their own
ideas.
|
| $ |
Performance
Standards
-
Directors should be committed to Company achievement of exceptional
performance standards to benefit customers, shareholders, employees,
and
its communities.
|
| $ |
Time
Commitment
-
Directors must have the willingness and ability to commit sufficient
time
and attention to the activities of the
Company.
|
In
addition to the specific minimum qualifications listed above, the Committee
will
consider a range of desirable core competencies as beneficial to the board.
The
board as a whole should possess the following specific qualities or
skills:
| $ |
Accounting
and Finance
-
The board should include directors with expertise in management or
oversight of financial accounting and
control.
|
| $ |
Business
Judgement
-
Directors should have a record of making sound business
decisions.
|
| $ |
Management
Knowledge
-
Board members should be cognizant of current general management trends
and
“best practices.”
|
| $ |
Industry
Knowledge -
It is desirable for one or more board members to have relevant knowledge
specific to the industries in which it
operates.
|
| $ |
Leadership
-
The board should include directors who can and will motivate and
require
high-performance by management.
|
| $ |
Strategy
and Vision
-
Directors should be capable of questioning, approving, and monitoring
the
Company’s strategic plans, providing insight and directional
focus.
|
Duties
and Responsibilities
The
Committee's duties and responsibilities shall be to:
| $ |
Review
and update, from time to time, the criteria set forth in this charter
for
the board of directors and its members.
|
Governance
Committee Charter
Duties
and Responsibilities Continued
| $ |
Review
and report on possible candidates for membership on the board of
directors
consistent with the Committee’s criteria for selecting new directors and
establish a process for identifying and evaluating such
nominees.
|
| $ |
Establish
a policy as to whether the Committee will consider recommendations
of
director nominees by shareholders and, if it will consider such
recommendations, establish procedures for shareholders to submit
recommendations.
|
| $ |
Annually
recommend a slate of nominees to the board of directors with respect
to
nominations for the board at the annual meeting of
shareholders.
|
| $ |
Review
compliance, including conflicts of interest and code of ethics, and
recommend changes as necessary.
|
| $ |
Report
to the board of directors, by means of written or oral reports, submission
of minutes of Committee meetings or otherwise, from time to time
or
whenever it shall be called upon to do
so.
|
| $ |
Review
this charter annually for possible
revision.
|
Process
for Selecting Directors
The
Committee will evaluate all director candidates brought to its attention
by all
sources in accordance with the minimum and specific criteria described in
the
charter.
Resources
The
Committee shall have the authority to obtain advice and seek assistance from
outside legal, accounting or other advisors, including search firms, as it
determines necessary to carry out its duties. The Committee shall have sole
authority to retain and terminate any search firm to be used to identify
director candidates and to retain and terminate any compensation consultant
used
to assist establishing director compensation, including sole authority to
approve such each search firm’s fees and other retention terms.
Interpretations
and Determinations
The
Committee shall have the power and authority to interpret this Charter and
make
any determinations as to whether any act taken has been taken in compliance
with
the terms hereof.
Dated:
February 13, 2004