SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 24)
Consolidated-Tomoka Land Co.
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(Name of Issuer)
Common Stock, par value $1.00 per share
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(Title of Class of Securities)
210226106
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(CUSIP Number)
David J. Winters
Wintergreen Advisers, LLC
333 Route 46 West, Suite 204
Mountain Lakes, New Jersey 07046
(973) 263-2600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 12, 2010
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 210226106
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Wintergreen Advisers, LLC
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware, USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
1,481,474
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
1,481,474
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,481,474 - See Item 5
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.9%
14. TYPE OF REPORTING PERSON*
IA
CUSIP No. 210226106
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Wintergreen Fund, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland, USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
715,423
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
715,423
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
715,423 - See Item 5
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.5%
14. TYPE OF REPORTING PERSON*
IV
CUSIP No. 210226106
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Wintergreen Partners Fund, LP
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware, USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
391,114
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
391,114
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
391,114 - See Item 5
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.8%
14. TYPE OF REPORTING PERSON*
PN
CUSIP No. 210226106
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Wintergreen Partners Offshore Master Fund, Ltd.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
213,762
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
213,762
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
213,762 - See Item 5
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.7%
14. TYPE OF REPORTING PERSON*
CO
CUSIP No. 210226106
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Renaissance Global Markets Fund
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
161,175
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
161,175
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
161,175 - See Item 5
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.8%
14. TYPE OF REPORTING PERSON*
CO
CUSIP No. 210226106
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
David J. Winters
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
1,481,474
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
1,481,474
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,481,474 - See Item 5
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.9%
14. TYPE OF REPORTING PERSON*
IN
CUSIP No. 210226106
---------------------
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Item 1. Security and Issuer.
Consolidated-Tomoka Land Co. (the "Issuer"), Common Stock, par value $1.00
per share (the "Shares").
The address of the Issuer is 1530 Cornerstone Boulevard, Suite 100
Daytona Beach, Florida 32117.
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Item 2. Identity and Background.
(a-c, f) This statement is being filed by (i) Wintergreen Fund, Inc, a
Maryland USA corporation registered as an investment company under the
Investment Company Act of 1940, as amended ("Wintergreen Fund"), (ii)
Wintergreen Partners Fund, LP, an unregistered pooled investment vehicle
organized as a Delaware USA limited partnership ("Wintergreen Partners"), (iii)
Wintergreen Partners Offshore Master Fund, Ltd., an unregistered pooled
investment vehicle organized as a Cayman Islands exempted company ("Wintergreen
Offshore"), (iv) Renaissance Global Markets Fund, a mutual fund trust organized
under the laws of Ontario Canada ("Renaissance"), (v) Wintergreen Advisers, LLC,
("Wintergreen Advisers"), a Delaware USA limited liability company which acts as
investment manager of Wintergreen Fund, Wintergreen Partners, Wintergreen
Offshore, Renaissance and other investment vehicles, and (vi) David J. Winters,
a citizen of the United States ("David Winters"), the managing member and
portfolio manager of Wintergreen Advisers. (Each of Wintergreen Fund,
Wintergreen Partners, Wintergreen Offshore, Renaissance, Wintergreen Advisers,
and David Winters may be referred to herein as a "Reporting Person" and
collectively may be referred to as "Reporting Persons").
The principal business and principal office address of each of David Winters,
Wintergreen Fund, Wintergreen Partners and Wintergreen Advisers is 333 Route 46
West, Suite 204, Mountain Lakes, New Jersey.
(d) None of the Reporting Persons have, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons have, during the last five years, been a
party to a civil proceeding of a judicial or Administrative body of competent
jurisdiction and as a result of such proceeding were or are subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
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Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof Wintergreen Advisers may be deemed to beneficially own
1,481,474 Shares.
As of the date hereof Wintergreen Fund beneficially owns 715,423 Shares.
As of the date hereof Wintergreen Partners beneficially owns 391,114 Shares.
As of the date hereof Wintergreen Offshore beneficially owns 213,762 Shares.
As of the date hereof Renaissance beneficially owns 161,175 Shares.
The source of funds used to purchase the securities reported herein was the
working capital of Wintergreen Fund, Wintergreen Partners, Wintergreen Offshore,
and Renaissance. The aggregate funds used by the forgoing Reporting Persons to
make the purchases was approximately $87.1 million.
No borrowed funds were used to purchase the Shares, other than any borrowed
funds used for working capital purposes in the ordinary course of business.
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Item 4. Purpose of Transaction.
Advisory clients of Wintergreen Advisers are the beneficial owners of
approximately 25.9% of the Issuer's common stock. Wintergreen Advisers has
initiated discussions with the Issuer on maximizing the value of the Daytona
properties, through direct development or partnerships. Wintergreen Advisers
intends to continue its dialogue with, and to take an active interest in, the
Issuer to encourage strategic focus on the Volusia county properties. To this
end, Wintergreen Advisers, from time to time, will communicate with the Issuer
and other holders of Common Stock regarding such matters.
On April 12, 2010, Wintergreen delivered a letter (the "April 12 Letter") to the
Board of Directors of the Issuer. In the April 12 Letter, Wintergreen states its
belief that the Issuer's 2010 proxy statement suffers from a lack of adequate
disclosure and mischaracterizations of fact. A copy of the April 12 Letter is
attached hereto as Exhibit B and incorporated herein by reference.
On April 7, 2010, Wintergreen delivered a letter (the "April 7 Letter") to the
Board of Directors of the Issuer. In the April 7 Letter, Wintergreen identifies
its concerns with the Issuer's 2010 Equity Incentive Plan as described in
proposal 5 of the Issuer's 2010 proxy statement. In addition, Wintergreen
indicates its intent to vote "no" on proposal 5 if Wintergreen's concerns are
not appropriately addressed. A copy of the April 7 Letter is attached hereto as
Exhibit C and incorporated herein by reference.
The Reporting Persons may in the future purchase additional Shares or dispose of
some or all of such Shares in open-market transactions or privately negotiated
transactions. Other than as described herein, the Reporting Persons do not have
any plans or proposals that would result in any of the actions described in
paragraphs (b) through (j) of Item 4 of the instructions to Schedule 13D.
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Item 5. Interest in Securities of the Issuer.
(a, b) The Reporting Persons are a group and are each deemed to be the
beneficial owner of 1,481,474 Shares, constituting 25.9% of the Shares of the
Issuer, based upon 5,723,268 Shares outstanding as of the date of this filing.
Each Reporting Person disclaims beneficial ownership in the Shares reported
herein except to the extent of its pecuniary interest therein.
(a, b) As of the date hereof, Wintergreen Advisers as investment manager of
Wintergreen Fund, Wintergreen Partners, Wintergreen Offshore and Renaissance,
and David Winters, a managing member and portfolio manager of Wintergreen
Advisers may be deemed to be the beneficial owner of 1,481,474 Shares,
constituting 25.9% of the Shares of the Issuer, based upon 5,723,268 Shares
outstanding as of the date of this filing.
Wintergreen Advisers has the sole power to vote or direct the vote of 0
Shares; has the shared power to vote or direct the vote of 1,481,474 Shares; has
sole power to dispose or direct the disposition of 0 Shares; and has shared
power to dispose or direct the disposition of 1,481,474 Shares.
David Winters has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 1,481,474 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 1,481,474 Shares.
(a, b) As of the date hereof, Wintergreen Fund is the beneficial owner of
715,423 Shares (1), constituting 12.5% of the Shares of the Issuer, based upon
5,723,268 Shares outstanding as of the date of this filing.
Wintergreen Fund has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 715,423 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 715,423 Shares.
(a, b) As of the date hereof, Wintergreen Partners is the beneficial owner of
391,114 Shares (1), constituting 6.8% of the Shares of the Issuer, based upon
5,723,268 Shares outstanding as of the date of this filing.
Wintergreen Partners has the sole power to vote or direct the vote of 0
Shares; has the shared power to vote or direct the vote of 391,114 Shares; has
sole power to dispose or direct the disposition of 0 Shares; and has shared
power to dispose or direct the disposition of 391,114 Shares.
(a, b) As of the date hereof, Wintergreen Offshore is the beneficial owner of
213,762 Shares (1), constituting 3.7% of the Shares of the Issuer, based upon
5,723,268 Shares outstanding as of the date of this filing.
Wintergreen Offshore has the sole power to vote or direct the vote of 0
Shares; has the shared power to vote or direct the vote of 213,762 Shares; has
sole power to dispose or direct the disposition of 0 Shares; and has shared
power to dispose or direct the disposition of 213,762 Shares.
(a, b) As of the date hereof, Renaissance is the beneficial owner of 161,175
Shares (1), constituting 2.8% of the Shares of the Issuer, based upon 5,723,268
Shares outstanding as of the date of this filing.
Renaissance has the sole power to vote or direct the vote of 0 Shares; has
the shared power to vote or direct the vote of 161,175 Shares; has sole power to
dispose or direct the disposition of 0 Shares; and has shared power to dispose
or direct the disposition of 161,175 Shares.
(c) None of the Reporting Persons has effected any transactions in the
Shares during the past sixty days or since the most recent filing of Schedule
13D.
(d) N/A
(e) N/A
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
N/A.
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Item 7. Material to be Filed as Exhibits.
Exhibit A: Agreement between the Reporting Persons to file jointly
Exhibit B: Letter to Board of Directors of Issuer dated April 12, 2010
Exhibit C: Letter to Board of Directors of Issuer dated April 7, 2010
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Wintergreen Advisers, LLC
By: David J. Winters, Managing Member.
/s/ David J. Winters
______________________________________
Wintergreen Fund, Inc.
By: David J. Winters, Executive Vice President
/s/ David J. Winters
______________________________________
Wintergreen Partners Fund, LP
By: Wintergreen GP, LLC
By: David J. Winters, Managing Member
/s/ David J. Winters
______________________________________
Wintergreen Partners Offshore Master Fund, Ltd.
By: Wintergreen Advisers, LLC
By: David J. Winters, Managing Member
/s/ David J. Winters
______________________________________
Renaissance Global Markets Fund
By: David J. Winters, Attorney-in-Fact
/s/ David J. Winters
______________________________________
David J. Winters
/s/ David J. Winters
______________________________________
April 16, 2010
Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
Exhibit A
AGREEMENT
The undersigned agree that this Amendment No 24 to Schedule 13D dated April 16,
2010, relating to the Common Stock, par value $1.00 per share of Consolidated-
Tomoka Land Co. shall be filed on behalf of the undersigned.
Wintergreen Advisers, LLC.
By: David J. Winters, Managing Member
/s/ David J. Winters
______________________________________
Wintergreen Fund, Inc.
By: David J. Winters, Executive Vice President
/s/ David J. Winters
______________________________________
Wintergreen Partners Fund, LP
By: Wintergreen GP, LLC
By: David J. Winters, Managing Member
/s/ David J. Winters
______________________________________
Wintergreen Partners Offshore Master Fund, Ltd.
By: Wintergreen Advisers, LLC
By: David J. Winters, Managing Member
/s/ David J. Winters
______________________________________
Renaissance Global Markets Fund
By: David J. Winters, Attorney-in-Fact
/s/ David J. Winters
______________________________________
David J. Winters
/s/ David J. Winters
______________________________________
April 16, 2010
Exhibit B
Wintergreen Advisers, LLC
333 Route 46 West
Suite 204
Mountain Lakes, New Jersey
07046
April 12, 2010
Board of Directors
Consolidated-Tomoka Land Co.
c/o Linda Crisp, Corporate Secretary
1530 Cornerstone Blvd., Suite 100
Daytona Beach, FL 32117
Dear Board Members,
We are writing to comment on several aspects of Consolidated-Tomoka's ("CTO" or
the "Company") 2010 proxy statement. We believe the Company's proxy statement
suffers from a lack of adequate disclosure in several areas, as well as
mischaracterizations of fact.
- CTO states on page 46 of its proxy that "we believe our proposals 6 and 7 are
substantially similar to Wintergreen's shareholder proposals." While we
agree with this characterization with regard to proposal 7 (majority voting
in director elections), we believe this statement is inaccurate with regard
to proposal 6 (advisory vote on executive compensation). Wintergreen's
proposal is a three-pronged approach, including voting on the Company's
compensation philosophy and objectives as described in the Compensation
Discussion and Analysis section of the proxy, the compensation of named
executive officers, and the application of the compensation philosophy and
objectives. CTO's proposal only permits shareholders to vote generally on
compensation of named executive officers as set forth in the Summary
Compensation Table and specifically excludes the Compensation Discussion and
Analysis section. We believe it is disingenuous to represent to shareholders
that proposal 6 is "substantially similar" to our original proposal;
- Page 22 states that "Mr. McMunn's performance was commendable based on his
overall leadership, development and implementation of strategies beneficial to
the Company and the ongoing profitability of the Company in a very difficult
operating environment." We have not seen a new strategy developed for CTO
since the 1999 decision to sell land and use the proceeds to purchase income
properties. It is our understanding that the Company was only slightly
profitable the past two years because of revenue from a passive portfolio of
leases, not because of any commendable actions of management. We believe it
is inappropriate for management to be repeatedly rewarded for a strategy
developed over a decade ago and which does not require any sort of active
involvement or unique skill to manage;
- While the "Executive Compensation Elements" section compliments the
performance of the named executive officers, it omits negative aspects of the
executives' performance for the year. For example, page 23 compliments Bruce
Teeters for "his accomplishments during the year as the Company's chief
development officer," and "his role in completion and leasing of the Company's
1616 Concierge office building." What the proxy fails to mention is CTO's
flex-office building which has sat largely vacant for nearly two years, and
Mr. Teeters' role in that project. It also fails to mention the Lakeland,
Florida Barnes & Noble which has been vacated by its tenant and is now
apparently empty and generating no revenue for the Company while costing
shareholders taxes and upkeep expenses. We believe Mr. McMunn and Mr. Teeters
also bear a large degree of responsibility for the eleventh consecutive
annual loss at the LPGA golf operations, which grew for the sixth straight
year in 2009, to a nearly $2 million loss because the lease on that property
was negotiated and signed by current management. More balanced disclosure of
executive performance generally assists shareholders to more accurately judge
the appropriateness of executive pay packages;
- Based on the insubstantial disclosure provided, we are also left wondering
exactly what role Bill McMunn played in the "negotiation of an advantageous
road construction agreement using federal stimulus funds," as mentioned on
page 22, and how the $12 million "anticipated capital investment" was
determined. We also question management's role in "influencing the passage of
new state growth management legislation," and believe further disclosure is
merited for both;
- We believe disclosure regarding the "conversion of approximately 700 acres
of Company lands that will improve long-term shareholder value" on page 23 is
woefully inadequate. We request that CTO disclose exactly what this
"conversion" entailed, the role played by Bill McMunn in it, and why it
believes it will increase shareholder value. 700 acres is a significant
amount of CTO's lands, and as such, we believe noteworthy events surrounding
it deserve far more detailed disclosure;
- As we expressed in our April 7, 2010 letter to the Board, we believe that
given the December 19, 2009 proxy disclosure rule amendments adopted by the
SEC, more disclosure is required as to the role played by any compensation
consultants in formulating CTO's compensation and bonus plans and practices.
The disclosure rule amendments require enhanced disclosure related to
compensation consultants except for cases where the role of the consultant is
limited to consulting on any broad-based plan that is available generally to
all salaried employees or to providing information that is not customized to
the Company or that is customized based on parameters that are not developed
by the compensation consultant and about which the consultant does not provide
advice. Based on CTO's disclosure, we do not feel either of these exceptions
are applicable and request that CTO disclose in more detail the role of Towers
Perrin and Towers Watson in developing its compensation programs;
- Page 15 states that "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." Considering the small size
of CTO's workforce and the fact that compensation is CTO's single largest
expense, we believe more disclosure is needed on this topic, such as the
percentage of employees whose compensation exceeds this threshold. While we
cannot determine from the Company's disclosure what CTO's total compensation
expense is, we are troubled by the fact that approximately 7.4% of 2009
revenue was spent on compensation for the two named executive officers;
- Page 12 states that CTO had a 7.32% return on its short term investments in
2009 (following returns of 7.40% and 8.00% in 2007 and 2008, respectively).
Considering that 1 year U.S. Treasuries yield 0.45% and short term corporate
bonds yield approximately 2.50%, we are concerned about the risks being taken
by CTO to achieve such high returns. We believe improved disclosure is
necessary to inform investors about the appropriateness of the investments CTO
is making;
- We are concerned with the return on assets assumption for CTO's pension plan.
CTO targets a 9.0% return on pension assets, and has 41%, 34% and 25% invested
in equities, fixed income and cash equivalents, respectively. Making
reasonable assumptions about fixed income and cash equivalent returns (5.0%
and 1.0%, respectively), CTO would need to earn more than 17% per year from
the equity portion of the plan to achieve a 9% annual return for its plan
assets. We do not believe this is a reasonable assumption, and believe it
could lead to funding problems down the road. If the plans actual returns
fall short of assumed returns, CTO will be required to contribute more cash to
pay for retirees defined benefits to the likely detriment of the Company's
shareholders. We believe further disclosure is required to help shareholders
understand the risks involved with this pension plan.
We are troubled by the inadequate disclosure by CTO. We believe the proxy
statement to be vitally important to shareholders in evaluating the performance
of the Company and its executives. Without accurate and candid disclosure by
the Company of all relevant details, it becomes more difficult for shareholders
to make informed decisions.
The Company's compensation practices, which appear to repeatedly reward
management for profits realized on income property leases which were signed
years ago, remain a concern for us. We believe the revenue from these
properties is completely passive and requires no day to day involvement by
management. Without the $9 million in revenue generated by the income
properties, the Company would have experienced a loss of several million dollars
for each of the past two years; we question whether this is the type of
performance that should be worthy of a generous compensation package. We
believe management should be rewarded for actions that increase long-term
shareholder value, not for cashing checks on $9 million of passive revenue.
Similarly, we would expect to see members of management's pay decreased when
their actions are detrimental to shareholder value. Recent examples of such
actions include spending tens of millions of dollars on long-term flat leases
the value of which will be likely eroded by inflation, mounting losses at the
LPGA golf operations, and the construction of a several million dollar flex-
office building which has sat largely empty for the better part of two years.
We have no quarrel with executives being well paid when their performance
justifies such rewards. What we find troubling are pay practices which
generously compensate executives when their performance does not justify it.
For each of the foregoing reasons, as well as the reasons detailed in our
January 7, 2010 letter to the Compensation Committee, we do not plan to support
proposal 5 on CTO's 2010 proxy. We request that the board of directors address
each of the points raised above, and endeavor to improve public disclosure going
forward.
Sincerely yours,
/s/ David J. Winters
David J. Winters, Managing Member
Wintergreen Advisers, LLC
Exhibit C
Wintergreen Advisers, LLC
333 Route 46 West
Suite 204
Mountain Lakes, New Jersey
07046
April 7, 2010
Board of Directors
Consolidated-Tomoka Land Co.
c/o Linda Crisp, Corporate Secretary
1530 Cornerstone Blvd., Suite 100
Daytona Beach, FL 32117
Dear Board Members,
We would be remiss if we were not to express our disappointment with proposal 5
in Consolidated-Tomoka Land Co's ("CTO" or the "Company") proxy statement to
approve CTO's 2010 Equity Incentive Plan (the "Plan"). While we believe the
plan that the Compensation Committee "currently intends" to implement has some
compelling features, we take issue with the following aspects of proposal 5:
- The proposed Plan allows for the granting of stock options, stock appreciation
rights, restricted shares, restricted share units, performance shares and
performance units. We believe that this is an overbroad request, and that the
Company should seek approval for specific compensation plans. The blanket
approval of six different types of awards sought by the Company is not
something which we can comfortably endorse;
- With regard to performance based grants, we believe it is inappropriate to
allow the Compensation Committee to "modify the performance objectives or the
related minimum acceptable level of achievement, in whole or in part." The
performance measurement yardsticks should be established prior to the
performance measurement period so that shareholders, board members and
executives know the objectives and standards that will be applied to measure
success in advance. These guideposts should not be modified after year end
to suit the results actually achieved. Allowing the Compensation Committee
to lower objectives for executives will only create the potential to overpay
for sub-par performance.
- Over-compensating executives in any year will cost shareholders not only in
the year the grant is awarded but for years to come, as several executives
approach retirement age and their pension payouts will be determined by their
salary, cash bonuses and equity awards over the next few years. We remain
concerned about the percentage of future corporate profits that will go
towards paying executive pensions. In 2009 the Company's two named executives
were paid approximately 7.4% of CTO's total revenue.
- As currently envisioned, awards would vest over a "three-year or five-year
period following the date of grant." We believe a five-year period is
appropriate given the long-term nature of CTO's assets. We also believe a
five year vesting schedule should be accelerated only for a change in control,
but not for any other circumstances, including, for example, termination or
resignation of the employee or director. A three year vesting schedule is too
short a period of time for a company such as CTO.
- We believe the peer group constituent companies which will be used to
determine CTO's percentile ranking should be disclosed to shareholders before
the proposal is put to a vote;
- We are troubled by the vesting schedule of restricted share awards on page 42.
The schedule rewards grantees with 10% more shares for each five point
increase in rank above the 50th percentile, but reduces share awards by only
7.5% for each five point decrease below the 50th percentile. This asymmetric
award schedule allows plan participants to be well rewarded when performance
warrants it, but limits their downside when performance falls short of the
Company's peers. We believe executives should participate equally in both
the upside and the downside of CTO's performance, as do all other
shareholders;
- We are encouraged to see that directors are eligible for awards under the
proposed plan; we believe this will encourage the Board to act as long-term
owners of the Company's assets. While the total amount of shares available
for the proposed plan over the next decade (210,000) strikes us as
reasonable, we are alarmed by the prospect of one person receiving up to
50,000 of these shares in one year. An award of this size should be viewed
as the total award given to all directors and all participating executives
over a period of 2.5 years since it would constitute nearly one-quarter of
the total shares available under the plan. To open the door to the
possibility that one person could receive this size award in one year is
inappropriate. A grant of 50,000 shares would nearly double the holdings of
the executive with the largest holding of shares [CEO Bill McMunn] and more
than triple the holdings of the executive with the next largest number of
shares [CFO Bruce Teeters]. We see no need to make such outlandish rewards to
any employee, and remain concerned with the long-term impacts these rewards
will have on the bottom line of the Company as executives approach retirement
age and their pension payouts are calculated. We hope the Board will see fit
to dramatically reduce the maximum annual per person grant size to something
far more reasonable than 50,000 shares. We believe a limit of 25,000 share
awards in total for all participants in a given year is more appropriate given
the time frame of the proposed plan, the participation by all independent
directors and the possibility of additional employees qualifying to
participate in the plan in future years. Proposal 5 is seeking authorization
for a 10 year incentive plan and as such, the plan should be designed to
actually last for 10 years;
- While the ultimate cost of the proposed plan will only be determined by future
rewards and the price of CTO's stock, we believe it would be prudent to
disclose the approximate dilution of current shareholders which this proposal
will entail. By clearly disclosing this number, shareholders could more
easily judge whether or not they are comfortable giving away approximately
3.7% of the Company in return for services rendered;
- We believe that, given the December 19, 2009 proxy disclosure rule amendments
adopted by the SEC, more disclosure is required as to the role played by any
compensation consultants in formulating CTO's compensation and bonus plans and
practices. The disclosure rule amendments require enhanced disclosure related
to compensation consultants except for cases where the role of the consultant
is limited to consulting on any broad-based plan that is available generally
to all salaried employees or to providing information that is not customized
to the company or that is customized based on parameters that are not
developed by the compensation consultant and about which the consultant does
not provide advice. Based on CTO's disclosure, we do not feel either of these
exceptions are applicable and request that CTO disclose in more detail the
role of Towers Perrin and Towers Watson in developing its compensation
programs;
- We also believe that CTO's compensation plans should focus on attracting a new
group of talented executives who will oversee the Company's growth over the
next decade. Structuring compensation plans to retain executives who are
approaching retirement seems unnecessary, especially in the current depressed
real estate market. These employees appear to have been well compensated over
the years for the work produced.
The plan that the Compensation Committee "currently intends" to implement, as
outlined on page 42 of the 2010 proxy statement, is a reasonable starting point
for developing a sound compensation structure. As presented however it is not
supportable. A supportable plan is one which awards a reasonable amount of
restricted stock which vests over a five-year period, based upon pre-established
performance criteria (such as total shareholder return) which cannot be modified
after the fact, using a peer group which is fully disclosed ahead of time. We
believe such a plan would be a rational way to encourage management and board
members to think as long-term owners. The upside rewards and downside risk
associated with the proposed Equity Inventive Plan should be symmetrical and in
line with the experience of outside shareholders. We believe such a standard is
necessary for this and all other future compensation plans.
A specific proposal such as this, rather than a blanket approval of all types of
potential awards, is a proposal that Wintergreen would be comfortable voting
for. As currently constituted, we cannot support proposal 5 on behalf of our
clients. If proposal 5 is not revised to address the concerns described herein,
Wintergreen intends to vote against the proposed bonus plan, and will explore
all alternatives available to it with respect to communications with
shareholders regarding its objections to the structure of the proposed bonus
plan.
We encourage the Compensation Committee and the full Board to amend proposal 5
so that it may garner broader shareholder confidence and support.
Sincerely yours,
/s/ David J. Winters
David J. Winters, Managing Member
Wintergreen Advisers, LLC
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