THE DELTONA CORPORATION

Transcription

1 THE DELTONA CORPORATION NOTICE OF ANNUAL MEETING May 3, 1990 To the Stockholders: NoTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of THE DELTONA CORPORATION will be held in the Ballroom of the Grand Bay Hotel, 2669 S. Bayshore Drive, Miami, Florida, on the 3rd day of May, 1990, at 10:00 o'clock in the forenoon, local time, for the following purposes: 1. To elect directors to serve until the next Annual Meeting of Stockholders and until their respective successors shall have been elected and shall have qualified. 2. To consider a proposal to appoint Deloitte & Touche as auditors for the fiscal year ending December 28, 1990, subject to the discretion of the Board of Directors. 3. To transact such other business as may properly come before the meeting, or any adjournment thereof. The transfer books will not be closed. The 1989 Annual Report of the Company, including audited financial statements as of December 29, 1989, accompanies this Notice of Meeting and the attached Proxy Statement. A list of all stockholders of record as of March 23, 1990, the record date for the Annual Meeting, will be available for examination by any stockholder at the main office of the Company, 3250 S.W. Third Avenue, Miami, Florida, during the ten-day period preceding the date of the meeting. By Order of the Board of Directors, MICHELLE R. GARBIS Secretary March 29, 1990 Please fill in, date and sign the enclosed Proxy and return it promptly in the enclosed envelope.

2 THE DELTONA CORPORATION 3250 S.W. Third Avenue Miami, Florida PROXY STATEMENT The accompanying Proxy is solicited by and on behalf of the Board ofdirectors ofthe Deltona Corporation, a Delaware corporation (the "Company"), for use at the Annual Meeting of Stockholders to be held in the Ballroom of the Grand Bay Hotel, 2669 S. Bayshore Drive, Miami, Florida, on the 3rd day of May, 1990, at 10:00 o'clock in the forenoon, local time, and any adjournment or adjournments thereof. The Proxy Statement and accompanying Proxy will be first sent to stockholders of the Company on or about March 29, The Company has one class of voting securities consisting of 15,000,000 shares of Common Stock of the par value of $1 per share. On March 23, 1990, the Company had outstanding 5,660,967 shares of Common Stock (excluding 24,478 shares held in treasury). Each share of Common Stock is entitled to one vote and holders of a majority of the outstanding shares of Common Stock present in person o~ by proxy constitute a quorum. Only holders of Common Stock of record at the close of business on March 23, 1990 shall be entitled to notice of and to vote at the meeting. Each Proxy executed and returned by a stockholder will be voted as directed, and may be revoked at any time except as to any matter or matters upon which, prior to such"" revocation, a vote shall have been cast pursuant to the authority conferred by such Proxy. It is expected that the matters set forth below will be considered at the meeting and action taken thereon. ELECTION OF DIRECTORS The entire Board of Directors is elected annually to hold office until the next Annual Meeting of Stockholders and until their respective successors are duly elected and qualified. On February 28, 1990, the Board of Directors of the Company reached an agreement with Empire of Carolina, Inc. ("Empire"), the owner of 35.52% of the outstanding Common Stock of the Company, whereby, among other things: (i) the Board of Directors of the Company was increased by two directors; (ii) Harold H. Dubner and Howard I. Weiss, both nominees of Empire, were elected to fill the additional directorships; (iii) Maurice A. Halperin, Chairman of the Board of Empire, was named a Co-Chairman of the Company's Board; and (iv) Empire agreed to vote its shares of Common Stock for all of the nominees listed below. Empire presently holds, and, if all of the nominees are elected, will continue to hold, four of the ten seats on the Company's Board of Directors. The accompanying form of Proxy will be voted FOR the election of all nominees if no direction to the contrary is given. the Board of Directors has no reason to believe that any nominee will decline or be unable to serve as a director. If any nominee should, however, become unavailable for election for any reason, the accompanying Proxy will be voted for such other person as the Board of Directors may select or, alternatively, the Board of Directors may reduce the number of directors to be elected at the meeting. All of the nominees are presently members of the Board of Directors. The names of the nominees and certain information with respect to each of them is set forth below. Unless otherwise indicated, each nominee has held the position shown, or has been associated with the named employer in the executive capacity shown, for more than the past five years. Name and Age William R. A vella, (a) Principal Occupation and Other Information Year First Elected Director President and Chief Executive Officer of the Company 1986 since July From May 1985 to March 1986, Mr. Avella served as President and Chief Executive Officer of Service America Corporation, a contract food service company. Prior thereto, he served as Chairman of the Board (April 1980 to May 1985) and President and Chief Executive Officer (April 1978 to May 1980) of General Development Corporation, a company engaged in the development and sale of Florida real estate. From April 1980 to May 1985, Mr. Avella served concurrently as President and Chief Executive Officer of Servomation Corporation, the predecessor of Service America Corporation. Other Directorships: American Global Lines, Inc., parent of American Hawaii Cruises, Inc.

3 Name and Age Neil E. Bahr, (a),( c) Herbert J. Dickson, 64 (b),(c),(e) Harold H. Dubner, George V. Flagg, 48 (b),( d),(f) Barry S. Halperin, 38 (b),(e),(f),(h) Principal Occupation and Other Information Retired; President of Deltona Land & Investment Corp. ("DL&IC"), a subsidiary of the Company, from September 1974 through December Other Directorships: Chairman of the Advisory Board of Directors of First Florida Bank, N.A., Collier County offices. Chairman and Chief Executive Officer of Fortune Financial Services, Inc., a finance company in Atlanta, Georgia, since May From September 1982 to April 1987, Mr. Dickson served as a management consultant in Atlanta, Georgia. Other Directorships: American Business Products, Inc.; Blount, Inc.; Fortune Financial Services, Inc.; Martin Industries, Inc. President and Chief Executive Officer of Industrial Development Corp., a closely held company primarily engaged in commercial and industrial real estate development in Florida, since 1972 and the owner/developer of hotels, motels and shopping centers. Dr. Dubner is a retired physician who formerly served as Executive Director of Presbyterian St. Luke's Hospital in Chicago, Illinois. President of The National Guardian Corporation, a company based in Greenwich, Connecticut engaged in security and alarm services, since May 1986, and Executive Vice President/Chief Financial Officer of The National Guardian Corporation from September 1985 to May Mr. Flagg served as Senior Vice President and Chief Financial Officer of Allegheny Beverage Corporation, a diversified company engaged in the contract cleaning, furniture, laundromat and food service business, from May 1985 to September From May 1980 to May 1985, he served as Executive Vice President-Finance & Administration and as a director of Servomation Corporation. Other Directorships: The National Guardian Corporation; Master Protection Enterprises. President of Empire, a company engaged in the design, manufacture and marketing of toys, seasonal decorative items and buttons, since May Mr. Halperin has also served as Chief Operating Officer of AmBrit, Inc. (" AmBrit"), a company engaged in the manufacture, marketing and distribution of frozen novelty products and the manufacture of chocolate and confectionary products, since July 1989, and as Chief Operating Officer of Clabir Corporation ("Clabir"), a holding company whose principal asset is 58% of the shares of AmBrit, since July Since 1977, Mr. Halperin has also served as President of Halco Industries, Inc., a closely held company primarily engaged in private investments. Other Directorships: AmBrit, Clabir and Empire. 2 Year First Elected Director 1983(g) Principal Occupation Year First Name and Age and Other Information Elected Director Maurice A. Halperin, Co-Chairman of the Board of the Company since Febru (a),(c),(f),(h) ary 1990 and Chairman of the Board and Chief Executive Officer of Empire since March Since June 1989, Mr. Halperin has served as Chairman of the Board of AmBrit and Clabir, and since July 1989, he has also served as President and Chief Executive Officer of Clabir and as Chief Executive Officer of AmBrit. Thomas B. McNeill, (b),(d),(e) Edgar M. Moore, 49 (a),(c),(d) Other Directorships: AmBrit, Clabir and Empire. Partner, Mayer, Brown & Platt, Chicago, Illinois. The law firm of Mayer, Brown & Platt has been retained by the Company to perform legal services on the Company's behalf during 1989 and Co-Chairman of the Board of the Company sine~ February 1990, having served as Chairman of the Board of the Company since October Additionally, Mr. Moore has served as President of Regional Investment Corporation, a holding company based in Tallahassee, Florida, since January Mr. Moore has also served as president and director of the law firm of Moore, Williams, Bryant, Peebles & Gautier P.A., Tallahassee, Florida since November From January 1984 to November 1988, Mr. Moore was president and a director of the law firm of Moore, Williams & Bryant, P.A. The law firm of Moore, Williams, Bryant, Peebles & Gautier P.A. has been retained by the Company to perform legal services on the Company's behalf during 1989 and Other Directorships: Regional Investment Corporation and its five wholly-owned subsidiaries, including Andrew Jackson Savings Bank; Tallahassee Memorial Regional Medical Center. Howard I. Weiss, Partner in the law firm of Weiss & Handler, P.A., Boca 1990 Raton, Florida. (a) Member, Executive Committee. (b) Member, Audit Committee. (c) Member, Executive Compensation Committee. (d) Member, Nominating Committee. (e) Member, Stock Option Plan Committee. (f) Member, Negotiating Committee. (g) Mr. Bahr has also served as a director of the Company from December 1964 until September 1974 when he resigned to devote all of his time to his duties as President of DL&IC. (h) Maurice A. Halperin is the father of Barry S. Halperin. Additional Information Concerning the Board of Directors Directors who are employees of the Company receive no additional compensation for their service as directors. In 1989, directors who were not employees of the Company were paid an annual retainer of $8,750, in advance, at the meeting of the Board of Directors held following the Annual Meeting of Stockholders, as well as a fee of $750 for each Board meeting attended and $250 for each committee meeting attended. When a committee meeting was held on a day other than the day of a Board meeting, the per-meeting fee payable to a non-employee director serving on such committee was $750, rather than $250. The Chairman of the Board

4 I I 'I ' \ received an additional fee of $1,000 for each Board meeting which he chaired and non-employee directors who served as committee chairmen received an additional fee of $250 for each committee meeting which they chaired. Beginning in 1990, with the first meeting of the Board of Directors held following this meeting, the annual retainer to be paid to non-employee directors is being increased to $9,500. Also, as of January 1, 1990, non-employee directors serving on committees of the Board are paid a fee of $750 for each committee meeting attended, regardless of the day of the meeting, and non-employee directors serving as committee chairmen "receive an additional fee of $500 for each committee meeting which they chair. The Board of Directors has several standing committees: an Executive Committee, an Audit Committee, an Executive Compensation Committee, a Nominating Committee and a Stock Option Plan Committee. The Executive Committee, of which Mr. Moore is Chairman, exercises certain powers of the Board of Directors during the intervals between meetings of the Board and held five meetings during The Audit Committee, of which Mr. McNeill is Chairman, confers with the independent auditors of the Company and otherwise reviews the adequacy of internal controls, reviews the scope and results of the audit, assesses the accounting principles followed by the Company, and recommends the selection of the independent auditors. There were three meetings of the Audit Committee during The Executive Compensation Committee, of which Mr. Bahr is Chairman, reviews the methods and means by which management is compensated, studies and recommends new methods of compensation, and reviews the standards of compensation for management. In addition, the Executive Compensation Committee administers the Annual Executive Bonus Plan and the 1987 Stock Incentive Plan. See "Executive Compensation-Compensation and Benefit Plans." During 1989, there were two meetings of the Executive Compensation Committee. The Nominating Committee, of which Mr. Moore is Chairman, recommends to the Board of Directors nominees to fill additional directorships that may be created and to fill vacancies that may exist on the Board of Directors. There was one meeting of the Nominating Committee during The Nominating Committee will consider nominees recommended by stockholders. Recommendations by stockholders should be submitted to the Secretary of the Company and should identify the nominee by name and provide detailed background information. The Nominating Committee is comprised entirely of non-employee directors of the Company. The Stock Option Plan Committee, of which Mr. Dickson is Chairman, administers the Company's 1982 Employees' Incentive Stock Option Plan, including the granting of options thereunder. The Stock Option Plan Committee did not meet during On June 12, 1989, the Board of Directors appointed a Special Committee, chaired by Mr. Dickson, to consider the future business plans and strategies for the Company, including whether the Company should be sold. The Special Committee was designed to be comprised of disinterested directors and, as such, included all of the directors except for the two representatives of Empire serving on the Company's Board and the President of the Company. During 1989, the Special Committee held seven meetings. On February 28, 1990, the Board of Directors dissolved the Special Committee and appointed a Negotiating Committee, chaired by Mr. M. Halperin, to negotiate for the sale of the Company. During 1989 the Board of Directors held twelve meetings. Each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all committees on which he served. Barry S. Halperin, President of Empire, and his father, Maurice A. Halperin, Chairman of the Board and Chief Executive Officer of Empire, together hold approximately 75% of the outstanding voting securities of Empire, which, in turn, holds approximately 35.52% of the outstanding Common Stock of the Company. On February 7, 1989, Empire agreed to provide the Company with a $5,000,000 line of credit at 2% above the prime rate charged by Wachovia Bank and Trust Company, secured by a first mortgage on certain properties owned by the Company in the vicinity of Marco Island, and the Company received a $5,000,000 letter of credit as security for Empire's commitment. The maximum amount outstanding under this line of credit in 1989 was $2,942,589. On November 7, 1989, the loan was paid off and the letter of credit cancelled. 4 OWNERSHIP OF VOTING SECURITIES OF THE COMPANY The following table sets forth, as of February 28, 1990, certain information with respect to the beneficial ownership of the Company's Common Stock by each person known to the Company to be the beneficial owner of more than 5% of the Common Stock of the Company and by each of the Company's directors and nominees and all officers and directors of the Company as a group. Number of Shares (a) Percent of Class William R. A vella ,750(b) (f) Neil E. Bahr.... 4,121 (f) Herbert J. Dickson (f) Harold H. Dubner.... George V. Flagg.... 4,000 (f) Barry S. Halperin.... (c) (c) Maurice A. Halperin.... (c) (c) Thomas B. McNeill (f) Edgar M. Moore.... Howard I. Weiss.... All officers and directors as a group ,727(d) 2.98% Empire of Carolina, Inc South Federal Highway 2,010, % Deerfield Beach, Florida Dimensional Fund Advisors Inc ,900(e) 1299 Ocean Avenue, Suite % Santa Monica, California (a) Information with respect to beneficial ownership is based upon information furnished by each stockholder or contained in filings made with the Securities and Exchange Commission. Beneficial ownership involves sole voting and investment power, except as indicated. (b) Includes 14,400 shares which may be acquired by Mr. Avella within 60 days upon exercise of employee stock options. (c) Barry S. Halperin, President of Empire, and his father, Maurice A. Halperin, Chairman of the Board and Chief Executive Officer of Empire, together beneficially own, directly or indirectly, approximately 75% of the outstanding voting securities of Empire which, in turn, holds 35.52% of the outstanding Common Stock of the Company. (d) Includes 58,900 shares which may be acquired by such officers and directors within 60 days upon exercise of employee stock options. Does not include 2,010,566 shares held by Empire (see note (c) above). (e) Includes 159,800 shares which are voted by officers of DFA Investment Dimensions Group Inc., an open-end investment company. Such officers also serve as officers of Dimensional Fund Advisors Inc. (f) Less than 1%. In 1985, the Company sold 4,000,000 shares of 10% Cumulative Preferred Stock and a Company stock warrant and utility stock warrants to Topeka Group Incorporated ("Topeka"), a subsidiary of Minnesota Power & Light Company ("MPL"), for $22,000,000. Under the Company stock warrant, Topeka could use the Preferred Stock to acquire Common Stock. The utility stock warrants enabled Topeka to exchange the Preferred Stock valued at its liquidation preference plus accumulated dividends and interest (the "Exchange Value") for the common stock of the Company's utility subsidiaries valued at book value at the end of the quarter prior to exercise, with the Company to receive preferred stock in one utility for any excess. The warrants were mutually exclusive, and Topeka was required to exercise the Company stock warrant if the utility stock warrants were not exercised. Topeka also acquired 339,366 shares of Common Stock from the Company in The Exchange Value of the Preferred Stock was $31,288,000 at June 6, The net book value of the utility subsidiaries at March 31, 1989 was estimated to be approximately $35,900,000. On June 6, 1989, Topeka exercised the utility stock warrants, decreasing the percentage of Deltona's voting securities held by Topeka from 45% to 6% and simultaneously increasing the percentage of Deltona's voting securities held by Empire from 17% to 29.95%. In February 1990, Topeka sold its remaining Common Stock to Empire. 5

5 ' Prior to Topeka's exercise of the utility stock warrants, the Company had filed a complaint in the United States District Court for the Southern District of Florida against Topeka on May 1, 1989, requesting a declaratory judgment to the effect that the Company's utility subsidiaries, following their acquisition by Topeka, would be obligated to pay for and provide water and sewer hook-ups to utility customers in the Company's real estate developments within the same time periods that such services were provided by the utility subsidiaries in the past, that the Company not be required to convey to Topeka certain real estate needed for present or future use by the utility subsidiaries at less than their fair market value, and that obligations under existing tax sharing agreements between the Company and the utilities be honored. The Company subsequently asked for leave to amend its complaint against Topeka to add counts asserting (1) rescission of the November 1985 agreement between the Company and Topeka, (2) Topeka's tortious interference with Deltona's agreements with its customers and (3) Topeka's breach of fiduciary duty in connection with the General Development Corporation merger proposal in 1988, and requesting compensatory and punitive damages in excess of $30 million. In November 1989, the Company and Topeka agreed to resolve this litigation, with Topeka's utility companies agreeing to furnish water and sewer service to the future residents of the Company's communities as an investment of the utility companies, the Company receiving $7,000,000 in full settlement of all other claims and issues (including any utility preferred stock to which it was entitled as a result of the exercise of the utility stock warrants), and Topeka receiving various utility assets, including title to approximately 80 parcels of real estate needed for its utility operations. As a result of the exercise of the utility stock warrants and the settlement, the Company recorded a gain of approximately $1,670,000, net of tax, on the disposition of its discontinued utility operations. EXECUTIVE COMPENSATION The following table sets forth all cash compensation paid or to be paid by the Company during or in respect of 1989 to each of the five most highly paid executive officers of the Company and to all executive officers of the Company as a group. Name of Individual or Number of Persons in Group William R. Avella Earle D. Cortright, Jr... Capacities in Which Served President and Chief Executive Officer Executive Vice President and Chief Operating Officer James M. Stackpoole... Senior Vice President-Marketing and Community Management Donald 0. McNelley... Senior Vice President-Finance and Administration and Chief Financial Officer Michelle R. Garbis..... Senior Vice President and Corporate Secretary All executive officers as a group, consisting of 17 persons (including those. 5 listed above).... Salaries Other Cash Compensation Attributable to 1989(a) $ 270,000 $261,089 $ 146,000 $152,238 $ 120,000 $ 60,300 $ 103,000 $ 70,600 $ 100,000 $ 68,800 $1,282,216(b) $914,836(b) (a) Includes bonuses paid under the Annual Executive Bonus Plan described below to the named individuals and group for services rendered during 1989, as well as reimbursement of certain personal expenses. (b) Not including any cash compensation paid or to be paid to an executive officer of the Company for any portion of 1989 during which the person did not serve as an executive officer of the Company. The five named executive officers are employed pursuant to agreements effective January 1, 1989, which continue through December 31, 1990, and are subject to automatic renewal for successive one-year periods thereafter unless notice of intent not to renew is given by the Company 60 days prior to any such year. The agreements provide for the executive officers to be paid their current annual salaries (subject to adjustment) and for the furnishing of certain benefits, such as the payment of an automobile allowance. All of the agreements provide that, during their initial two-year term, they can be terminated by the Company only due to the employee's death or for cause and, if terminated due to death, payment of salary to the employee's beneficiary continues for one year following termination. If employment is terminated by the Company for any other reason, such termination is deemed to be without cause. If employment is terminated without cause, regardless of whether or not the agreement itself is otherwise in effect, the employee is entitled to receive a lump sum payment at termination equal to two years' salary, unless the Company breaches the agreement by terminating employment without cause prior to December 31, 1990, in which case the lump sum payment is equal to two 6 years' salary plus the salary remaining to be paid for the contract term; in addition, the employee is entitled to payment of an automobile allowance and certain insurance benefits for one year. Such lump sum payment and be.nefits would ~e due if employment is terminated by the Company at any time within a two-year period followmg a change m control of the Company (unless termination is due to gross misconduct). Under these agreements and all agreements and benefit plans described below, a "change in control" is (a) an acquisition by any person, other than Topeka or its parent, MPL, of 35% of the voting securities of the Company if the Board of Directors determines that a change in control has occurred or is likely to occur; or (b) a change in the majority of the Board of Directors of the Company which is not recommended or approved by the incumbent Board. As of the date hereof, the Board has not determined that a change in control has occurred or is likely to occur for this purpose as a result ofthe acquisition by Empire of more than 35% of the Company's Common Stock. Six other executive officers have agreements providing for payment of a lump sum amount equal to six months' to one year's salary if the individual's employment is terminated at any time within a one year period following a change in control of the Company (unless termination is due to gross misconduct) or if the individual resigns his employment within a six month period following a change in co]}trol of the Company. The Company's agreements with one former executive officer also provided for payment of $139,819 for severance and vested benefits under the 1987 Stock Incentive Plan as a result of his not being employed by Topeka after Topeka acquired the Company's utility subsidiaries and for payment of $82,300 in consulting fees through December 31, Two other executive officers have agreements with the Company providing for them to be paid a lump sum amount equal to six months' salary in the event of the termination of their employment for any reason other than for cause or resignation. The agreement with one of these individuals also provides for payment of additional compensation based upon property sales of the Company. The lump sum amounts payable under the agreements described above, exclusive of payments due in respect of benefits or compensation and benefit plans described below, to Messrs. A vella, Cortright, Stackpoole, McNelley, Mrs. Garbis and eight other executive officers (as a group) are $600,000, $320,000, $260,000, $224,000, $216,000 and $347,000, respectively, in the event of the termination of their employment. Compensation and Benefit Plans Under an Annual Executive Bonus Plan (the "Bonus Plan"), all executive officers of the Company (except those officers who are otherwise entitled to receive additional compensation) and all managerial employees who meet certain eligibility criteria determined by their level of responsibility are eligible to participate. The Bonus Plan provides for participants to earn bonuses of up to 150% of the base bonus for which they are eligible (expressed as a percentage of annual salary), except that the maximum bonus payable to the President is limited to 100% of his annual salary. Bonuses are earned based upon the success of the Company, or of the subsidiary or division for which the participant is responsible, in achieving its debt-to-equity and/or net income goals. The Bonus Plan provides for the acceleration of the determination and payment of bonuses thereunder in the event of the termination of employment of a participant following a change in control of the Company. Bonuses determined in respect of 1989 are included in other cash compensation shown above. The 1987 Stock Incentive Plan (the "Stock Plan") combines the features of a stock option plan and a performance unit plan, by providing for the issuance of up to 500,000 shares of Common Stock through the granting of stock options and the award of incentive shares. Employees eligible to participate in the Stock Plan are selected by the Executive Compensation Committee (the "Committee") from those executive officers and other key employees who, in the opinion of the Committee, are in positions which enable them to make significant contributions to the long-term performance and growth of the Company. The extent to which incentive share awards are earned is determined at the end of a three-year award cycle, based upon the achievement of a net income goal set forth in the three-year business plan adopted by the Board of Directors of the Company prior to or during the first year of the cycle, and are paid, in the discretion of the Committee, in cash or in shares of Common Stock of the Company, on or before the May 1 following the end of the three-year cycle. The Stock Plan provides for the acceleration of the determination and payment of awards thereunder in the event of a change in control of the Company. Incentive shares awarded in November 1986 were fully earned as of the end of 1989 and the following shares and cash amounts were distributed pursuant to the Stock Plan: Mr. Avella-21,350 shares and $49,300; Mr. Cortright-10,640 shares and $24,569; Mr. Stackpoole-9,030 shares and $20,852; Mr. McNelley and Mrs. Garbis-7,840 shares and $18,104, each; and four other executive officers-an aggregate of 23,240 shares and $53,664. As of February 28, 1990, 79,940 shares had been issued under the Stock Plan and no additional awards or options were outstanding. 7

6 The Company also has a 1982 Employees' Incentive Stock Option Plan (the "1982 Plan") under which options to purchase 150,000 shares of the Company's Common Stock may be granted by the Stock Option Plan Committee. As of February 28, 1990, options for 3,000 shares had been exercised, options for 107,350 shares were outstanding, and 39,650 shares remained available for grant. All employees are eligible to receive options under the 1982 Plan, which are "incentive stock options" under Section 422A of the Internal Revenue Code of The exercise price of options granted under both the 1982 Plan and the Stock Plan cannot be less than the fair market value of the Company's Common Stock on the date of the grant. Options under the two plans may be granted for periods of up to five years and become exercisable in 20% cumulative annual increments (but no option may be exercised within 60 days of its grant). While no options were granted in 1989, one executive officer acquired 1,200 shares having a net value (fair market value less option exercise price) of $1,9 50 through the exercise of options previously granted under the 1982 Plan. APPOINTMENT OF AUDITORS The Board of Directors recommends that the stockholders appoint Deloitte & Touche as auditors of the financial statements of the Company for the fiscal year ending December 28, 1990, subject to the discretion of the Board. If the stockholders do not vote for such appointment, the Board of Directors will reconsider the appointment of such auditors. If Deloitte & Touche are unable to serve, or the Board, in its discretion, determines that it is in the best interest of the Company that such accountants do not serve as auditors of the financial statements of the Company, the Board shall appoint other auditors to replace Deloitte & Touche. One of the predecessor firms of Deloitte & Touche, Deloitte Haskins & Sells, had been the auditors for the Company since Representatives of Deloitte & Touche will attend the meeting and will be given the opportunity to make a statement at the meeting if they desire to do so. Such representatives will be available during appropriate portions of the meeting to respond orally to appropriate questions. OTHER MATTERS As of the date of this Proxy Statement, the only business which the management expects to be presented at the meeting is that set forth above. If any other matters are properly brought before the meeting, or any adjournments thereof, it is the intention of the persons named in the accompanying form of Proxy to vote the Proxy on such matters in accordance with their judgment. The management of the Company has engaged the professional services of Morrow & Co., 345 Hudson Street, New York, New York 10014, to assist employees of the Company in soliciting Proxies. The material features of the contract call for Morrow & Co. to solicit Proxies by mail and, where necessary, by cables, telegrams and telephone calls. The estimated cost of these services is $3,500, plus reimbursement of amounts paid to banks and brokers for communication with their customers whose shares are held in nominee or street name. The cost of solicitation of the Proxies will be borne by the Company. PROPOSALS OF STOCKHOLDERS Proposals of stockholders intended to be presented at the next Annual Meeting must be received by the Office of the Secretary, The Deltona Corporation, 3250 S.W. Third Avenue, Miami, Florida 33129, no later than November 29, 1990, in order to be considered for inclusion in the Company's 1991 Annual Meeting proxy statement. By Order of the Board of Directors MICHELLE R. GARB IS Secretary March 29, 1990 Please mark, sign and return the enclosed Proxy promptly 8