UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): May 15, 2008
Consolidated-Tomoka
Land Co.
(Exact
name of registrant as specified in its charter)
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Florida
(State
or other jurisdiction of incorporation)
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0-5556
(Commission
File Number)
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59-0483700
(IRS
Employer Identification No.)
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1530
Cornerstone Boulevard, Suite 100
Daytona
Beach, Florida
(Address
of principal executive offices)
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32117
(Zip
Code)
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Registrant’s
telephone number, including area code: (386)
274-2202
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Not
Applicable
(Former
name or former address, if changed since last report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
8.01. Other Events.
On May
15, 2008, Consolidated-Tomoka Land Co. (the “Company”) issued a press release
regarding a letter sent to David Winters of Wintergreen Advisers, LLC, a
shareholder of the Company, in response to a letter from Mr. Winters to the
Company dated April 21, 2008. A copy of the Company’s press release
is attached hereto as Exhibit 99.1.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Date: May
15, 2008
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Consolidated-Tomoka
Land Co.
By: /s/ William H.
McMunn
William H. McMunn
President and Chief Executive Officer
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For
Immediate Release
Consolidated-Tomoka
Land Co.
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Date:
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May
15, 2008
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Contact:
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Bruce
W. Teeters, Sr. Vice President
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Phone:
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(386)
274-2202
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Facsimile:
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(386)
274-1223
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CONSOLIDATED-TOMOKA
LAND CO. BOARD RESPONDS TO
WINTERGREEN
ADVISERS, LLC
DAYTONA
BEACH, FLORIDA - Consolidated-Tomoka Land Co. (AMEX–CTO) sent the following
letter to Mr. David J. Winters of Wintergreen Advisers, LLC:
VIA
FEDERAL EXPRESS
May 14,
2008
Wintergreen
Advisers, LLC
Attn: David
J. Winters
333 Route
46 West, Suite 204
Mountain
Lakes, New Jersey 07046
RE: Your
Letter of April 21, 2008
Dear Mr.
Winters:
The board
of directors (the “Board”) of Consolidated-Tomoka Land Co. (“CTLC”)
asked that I respond to your letter of April 21, 2008, that requested a
postponement of the 2008 Annual Meeting of Shareholders (the “Annual Meeting”)
until such time as Wintergreen Advisers, LLC (“Wintergreen”) was satisfied that
certain director nominees to be voted on at the Annual Meeting (the “Director
Nominees”) were independent.
The Board
carefully balanced the merits of your request against what it believes to be in
the best interest of CTLC and all of its shareholders and concluded that the
best interest of CTLC and its shareholders would not be served by postponing the
meeting. The Board reached its decision based in part on the
following:
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•
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As
of the date of your letter, over 62% of our stock had already been voted
electronically or directed by proxy to be voted by management in favor of
the Director Nominees.
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•
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Excluding
the shares beneficially owned by Wintergreen, 97% of the shares to be
voted by our shareholders were directed to be voted in favor of the
election of the Director Nominees.
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•
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The
timing of your request did not allow CTLC the opportunity to respond to
your concerns in such a manner as to fully inform all shareholders of
CTLC’s response prior to the Annual
Meeting.
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•
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Given
the overwhelming support of the other shareholders, the Board determined
that postponing the meeting would result in an inappropriate and
unnecessary diversion of CTLC’s resources and management
attention.
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•
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Your
letter did not present any information regarding Mr. Davison’s fitness to
serve as an independent director that had not already been considered and
discussed by the Board and the Governance Committee of the Board (the
“Governance Committee”). The Governance Committee and the Board thoroughly
discussed each of the issues raised in your letter with Mr. Davison and
concluded that Mr. Davison satisfactorily addressed each of those concerns
in 2007. Based on these discussions, the Governance Committee and the
Board affirmatively determined that Mr. Davison did not have a
relationship that would interfere with his exercise of independent
judgment in carrying out the responsibilities of a director of CTLC and
was therefore independent, as required under the applicable rules and
regulations of the Securities Exchange Commission (the “SEC”) and the
American Stock Exchange (“AMEX”).
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•
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Wintergreen
did not raise any questions regarding Mr. Davison’s qualifications last
year when it voted in favor of his election as an independent director at
CTLC’s 2007 Annual Meeting of
Shareholders.
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•
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Your
letter did not present any information regarding Mr. Olivari’s fitness to
serve as an independent director that had not already been considered and
discussed by the Board and the Governance Committee. The
Governance Committee and the Board thoroughly discussed the issues raised
in your letter with Mr. Olivari and concluded that Mr. Olivari
satisfactorily addressed each of those concerns. Based on these
discussions, the Governance Committee and the Board affirmatively
determined that Mr. Olivari did not have a relationship that would
interfere with his exercise of independent judgment in carrying out the
responsibilities of a director of CTLC and was therefore independent, as
required under the applicable rules and regulations of the SEC and
AMEX.
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•
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James
Jordan, a former director of CTLC and former member of the Governance
Committee nominated by Wintergreen, stated in a Board meeting that he
agreed with the Governance Committee’s determination that Mr. Olivari was
fully qualified to serve as a
director.
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•
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Postponing
the Annual Meeting would divert valuable time and resources of CTLC and as
such would be harmful to CTLC during a period when the real estate
environment requires that the Board and management focus their attention
on protecting shareholder value and positioning CTLC to take advantage of
any future real estate rebound.
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•
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The
Board believes its corporate governance practices and procedures are
adequate and in material compliance with all applicable laws, rules, and
regulations.
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In order
to address your concerns regarding the process by which the Board affirmatively
determined that Mr. Olivari and Mr. Davison did not have any relationship that
would interfere with their exercise of independent judgment in carrying out the
responsibilities of a director of CTLC, we would first like to generally
describe the repurchase covenants recorded in the sales of CTLC lands to Halifax
Hospital and SunTrust. As a customary business practice, we require
that our purchasers, by covenant, agree to start construction by certain dates,
typically within two years after closing. If they fail to do so, we have the
option to repurchase the property at its original sale price. We do
this for two principal reasons: (i) to prevent a speculative purchaser from
acquiring our raw land for resale in competition with us; and (ii) to add value
to our remaining land by having quality development adjacent to
it. The repurchase decision is made based on an analytical
comparison between the original purchase price and then current market values
and market conditions. The greater the potential upside for our
shareholders, the greater the likelihood that we will repurchase the property if
construction has not commenced.
In
affirmatively determining that Mr. Olivari did not have a relationship that
would interfere with his exercise of independent judgment in carrying out the
responsibilities of a director of CTLC, the Board considered the fact that Mr.
Olivari is a member of the Halifax Medical Center Foundation Board (the
“Foundation”) and of the Audit Finance Committee (the “Audit Committee”) of the
Halifax Hospital Medical Center (the “Hospital”). The Foundation is a
charitable organization that raises funds to support the Hospital,
which purchased our land. The Audit Committee is an advisory
board of local professionals that reviews the Hospital’s
financials. The Foundation Board and the Audit Committee do not set
Hospital policy and do not exercise any control over the day-to-day operations
of the Hospital or its board, whose members are appointed by the Governor
of Florida.
Mr.
Olivari was appointed to the Foundation board in July 2006 and to the Audit
Committee in May 2006. He is not a member of the board of the
Hospital. CTLC sold the hospital site to the Hospital in December
2003. As such, the Hospital’s construction obligations and CTLC’s
repurchase rights were memorialized in deed covenants recorded more than two
years before Mr. Olivari was appointed to either volunteer
committee.
The
original construction commencement date of December 10, 2005 for the first
building was modified to December 2006 by an amendment to the covenants dated
July 18, 2005 and recorded November 30, 2005. CTLC has had many
conversations with Hospital management about its construction
plans. After several meetings with no significant progress, we
decided, in November 2007, to make a formal demand that the Hospital commence
construction which, under the covenants, gave the Hospital until November 29,
2008, to start construction. All of these events occurred prior to
any consideration of the nomination of Mr. Olivari to our Board. We
met with the senior management of the Hospital late last year and were to be
provided development plans by the Hospital in the first quarter of
2008. Having not received those plans, we recently reminded the
Hospital of the consequences of their failure to commence
construction.
If the
Hospital fails to commence construction of the first building our repurchase
rights are limited to the parcel at the corner of LPGA Boulevard and
Williamson Boulevard, consisting of approximately twenty-one and one-half (21½)
developable acres out of a total of approximately 102 developable acres
purchased. It is speculative, at best, to assume that the Hospital
will not honor its contractual obligations and what action CTLC might take if
the Hospital fails to commence construction. If future events
necessitate further Board action, Mr. Olivari will recuse himself from the
consideration of or voting upon such actions, consistent with Board
practice. Based on the facts and circumstances herein set
forth, the Board determined that Mr. Olivari’s positions with the Foundation and
the Hospital would not interfere with his exercise of independent judgment in
carrying out the responsibilities of a director of CTLC.
Mr.
Davison was elected as a director in 2007 and re-elected 2008. The
loans referenced in your letter were made in 2002 and the SunTrust purchase,
with our repurchase rights, was closed in 2004, long before Mr. Davison’s
nomination as a director. We also exercised our repurchase rights
prior to Mr. Davison’s nomination as a director, although the actual closing of
the repurchase did not occur until after his election as a
director. Based on these facts and circumstances, as well as those
facts and circumstances described in our 2008 Proxy Statement, the Board
determined in 2007 and again in 2008 that Mr. Davison’s position with SunTrust,
from which he retired in September 2007, would not interfere with his exercise
of independent judgment in carrying out the responsibilities of a director of
CTLC.
In
response to your concerns regarding Wintergreen’s Board member recommendations,
in our 2008 Proxy Statement we briefly noted that while considering Mr. Adolpho
Henriques, Mr. Henriques disclosed to the Governance Committee that he had a
pre-existing commitment to another board that conflicted with CTLC’s Board
meeting dates. To elaborate, upon learning of this conflict, the
Board worked with Mr. Henriques to determine if he could move his meeting
conflict, and we also discussed moving our Board meetings forward or back a day
to accommodate him to resolve the conflict. However, after several
conversations with Mr. Henriques, he withdrew from consideration.
Regarding
Wintergreen’s additional Board member recommendations, in your letter of
February 6, 2008, you both asked the Board to expand its membership to twelve
and recommended three candidates for director. This letter contained
brief resumes of your three nominees but did not provide contact information for
those nominees or meet CTLC’s various other requirements for shareholder
submissions of nominees for director pursuant to our policies and procedures for
shareholder recommendations of candidates for election as director, which
policies and procedures were described in our 2007 Proxy
Statement. The Governance Committee discussed consideration of these
three candidates and reviewed your February 6, 2008 letter, at which time the
Governance Committee concluded that these three individuals were nominated
specifically to fill the three new director positions that would have been
created if the Board was expanded. The Board chose not to expand its
membership at that time, however, as was explained in our March 10, 2008
letter. After receipt of your letter of April 21, 2008, however, the
Governance Committee realized that you intended for these candidates to be
considered for our current Board vacancy. The Governance Committee
wrote to advise you of the procedure to submit one or more of those nominees for
consideration. The Board suggests that you provide the Governance
Committee with complete resumes of any nominee that you wish to nominate for the
open Board position and that you more fully comply with the director nomination
procedures outlined in our 2008 Proxy Statement under “Consideration of Director
Nominees,” which procedures are the same as those that you followed for your
nominations of James Jordan and Adolfo Henriques.
Please
also recall that I sent you a letter dated March 20, 2008, requesting a meeting
with you. Subsequently, I talked with your secretary and Fred T. Perlstadt, your
Chief Financial Officer, but, to date, a meeting has not been
scheduled. For your convenience, I offered to meet in your New Jersey
office. My intention is to have an open discussion with you to
improve the working relationship between Wintergreen and CTLC and discuss
matters of mutual concern. I still believe such a meeting would be
productive for Wintergreen and CTLC.
The goal
of our Board and management is to build and optimize long-term shareholder value
and we believe that our business plan is doing that. The Board
has asked me to continue efforts to meet with you. I hope that we can
schedule such a meeting soon.
Sincerely,
/s/William H. McMunn
William
H. McMunn
President
and Chief Executive Officer
cc: Mr.
John C. Adams
Mr. William H. Davison
Mr. Gerald L. DeGood
Mr. James E. Gardner
Mr. William L. Olivari
Mr. John C. Myers, III
Mr. William J. Voges
About
Consolidated-Tomoka Land Co.
Consolidated-Tomoka
Land Co. (the "Company") is a Florida-based company primarily engaged in
converting Company owned agricultural lands into a portfolio of income
properties strategically located throughout the Southeast, and the development,
management and sale of targeted real estate properties. Visit our
website at www.ctlc.com
###
“Safe Harbor”
Certain
statements contained in this press release (other than statements of historical
fact) are forward-looking statements. The words “believe,”
“estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,”
“plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions
and variations thereof identify certain of such forward-looking statements,
which speak only as of the dates on which they were
made. Forward-looking statements are made based upon management’s
expectations and beliefs concerning future developments and their potential
effect upon the Company. There can be no assurance that future
developments will be in accordance with management’s expectations or that the
effect of future developments on the Company will be those anticipated by
management.
The
Company wishes to caution readers that the assumptions which form the basis for
forward-looking statements include many factors that are beyond the Company’s
ability to control or estimate precisely. These risks and
uncertainties include, but are not limited to, the strength of the real estate
market in the City of Daytona Beach in Volusia County, Florida; our ability to
successfully execute acquisition or development strategies; any loss of key
management personnel; changes in local, regional and national economic
conditions affecting the real estate development business and income properties;
the impact of environmental and land use regulations; the impact of competitive
real estate activity; variability in quarterly results due to the unpredictable
timing of land sales; the loss of any major income property tenants; and the
availability of capital. Additional information concerning these and
other factors that could cause actual results to differ materially from those
forward-looking statements is contained from time to time in the Company’s
Securities and Exchange Commission filings, including, but not limited to, the
Company’s Annual Report on Form 10-K. Copies of each filing may be obtained from
the Company or the SEC.
While the
Company periodically reassesses material trends and uncertainties affecting its
results of operations and financial condition, the Company does not intend to
review or revise any particular forward-looking statement referenced herein in
light of future events.