Cto Realty Growth, Inc. · NYSE:CTO
Cto Realty Growth — Consolidated Tomoka Land — Proxy Contest (April 2017)
39 slides from Cto Realty Growth's proxy contest presentation, Apr 7, 2017
Slide 1: Investor Presentation: Consolidated-Tomoka Land Company
WINTERGREEN ADVISERS, LLC Investor Presentation Consolidated-Tomoka Land Company April 5, 2017 http://enhanceCTO.com
Slide 2: Table of Contents
Table of Contents 2 Overview of Wintergreen Advisers 3 Wintergreen’s Prior Communication with CTO 4-7 CTO’s Current Board 8-18 What is Wrong With CTO? 19-20 Misstatements by CTO 21 CTO Executive Compensation 22-29 Wintergreen Nominees 30-37 Wintergreen’s Path Forward a WINTERGREEN http: //enhanceCTO
Slide 3: Overview of Wintergreen Advisers
Overview of Wintergreen Advisers @ Established in May 2005 as a registered Investment Adviser with the SEC ¢ Adviser to Wintergreen Fund (US Mutual Fund) and other pooled investment vehicles Wintergreen is Consolidated-Tomoka’s (“CTO’s”) largest shareholder, with 27.2% of shares outstanding « Winter
Slide 4: Wintergreen's Prior Proposals and Ongoing Communication with CTO
Wintergreen’s Prior Proposals and Ongoing Communication with CTO have Benefitted All Shareholders Wintergreen’s Prior Proposals have included: = 2008 - Destaggering the Board = 2009 - Enactment of Majority Voting = 2009 - Separation of Chairman and CEO = 2009 - Annual Say on Pay Voting ¢ From 2008-2
Slide 5: CTO's Current Directors have Failed Shareholders
CTO’s Current Directors have Failed Shareholders: © At the 2016 Annual Meeting, 55% of shareholders opposed the Company’s “Say on Pay” proposal. This compensation plan included a massive proposed increase in compensation that would have consumed 37% of CTO’s total operating profit. Compensation Comm
Slide 6: CTO's Current Directors have Failed Shareholders
CTO’s Current Directors have Failed Shareholders: ¢ Audit Fees have increased from $218,107 in 2014 to over $450,000 in 2016, without explanation to shareholders. Wintergreen finds this more than doubling of Auditor fees, without justification or explanation to shareholders, as extremely alarming fo
Slide 7: CTO's Current Directors have Failed Shareholders
CTO’s Current Directors have Failed Shareholders: A Change at the Board is needed to prevent a compromised compensation committee from granting additional stock to management. Based on CTO’s documents, Wintergreen estimates that approximately 122,000 share are left to grant under the 2010 plan. © Us
Slide 8: CTO's Current Directors have Failed Shareholders
CTO’s Current Directors have Failed Shareholders: Income before Income Tax 2016: $28,031,268 (CTO 10K PAGE F-5) At Market: $6,480,640 23% At FBR Estimate of NAV: $10,614,000 39% Average: $8,547,320 31% @ RANGE OF PRE TAX INCOME POTENTIALLY ALLOCATED TO MANAGEMENT: 23% to 39% POOR SHAREHOLDERS ARE LE
Slide 9: What is Wrong With CTO? Frustrating Shareholder Rights
What is Wrong With CTO? Frustrating Shareholder Rights We believe CTO management has resorted to lies, distortions and misdirection to avoid discussing what is really happening at the Company: 1. Let's not forget that CTO sought to avoid ever having this conversation about the future of CTO. It took
Slide 10: What is Wrong With CTO? Mr. Albright's Stock Sales
What is Wrong With CTO? Mr. Albright’s Stock Sales 2. John Albright has been an ongoing seller of CTO stock. Over the past two years, John Albright has sold over 58,000 shares of CTO stock, worth more than $3.1 million dollars. When Mr. Albright was hired in 2011, he reported ownership of 33,849 sha
Slide 11: What is Wrong With CTO? Shareholder Unfriendly
What is Wrong With CTO? Shareholder Unfriendly 3. We believe CTO has been structured as a compensation scheme for management - at the expense of shareholders. After shareholders rejected the Company's “say on pay” vote in 2016 by a 55% vote against the say on pay, CTO had the gall to make its compen
Slide 12: What is Wrong With CTO? Disclosure Issues
What is Wrong With CTO? Disclosure Issues 4. We believe the Board is not adequately protecting the interests of the true owners of the Company - the shareholders. A lack of board oversight of management and ongoing wasteful use of shareholder funds are detrimental to all shareholders and we would se
Slide 13: What is Wrong With CTO? Misleading statements
What is Wrong With CTO? Misleading statements « CTO presented the value of the contributed land for the golf course transaction as $95,000 to CTO shareholders, when Mark Patten told the City Commissioners that the land was worth a minimum of $350,000, and as much as $600,000 to $900,000 if it was de
Slide 14: What is Wrong With CTO? Disorganized 1031 Portfolio
What is Wrong With CTO? Disorganized 1031 Portfolio b. We believe the Company’s scattershot approach to building a portfolio of investment properties is a failed strategy. Recent acquisitions of properties anchored by struggling chains such as Staples and Outback, many of which are at capitalization
Slide 15: What is Wrong With CTO? Blind Pool/Speculative Trading
What is Wrong With CTO? Blind Pool/Speculative Trading ¢. In the first quarter of 2015, the Company purchased approximately $5.1 million in investment securities, without disclosure of holdings. By the third quarter of 2015, this number had increased to $8.1 million, and was accompanied by increased
Slide 16: What is Wrong With CTO? Hostility Towards Investors
What is Wrong With CTO? Hostility Towards Investors 5. We believe the Company's attempts at initiating a shareholder outreach program can only be described as disastrous. Management was hostile to shareholders at the December 2016 Investor Day and has terminated investor calls when questions get dif
Slide 17: What is Wrong With CTO? Shareholder Unfriendly Bylaws Change
What is Wrong With CTO? Shareholder Unfriendly Bylaws Change Without seeking shareholder approval, and with the only disclosure of the change buried on page 53 of the Company’s 2016 2" Quarter Report, CTO added shareholder unfriendly bylaws changes. The changes require that any proceedings against t
Slide 18: CTO's Actions Impaired the Strategic Review Process
What is Wrong With CTO? CTO‘’s Actions Impaired the Strategic Review Process At the 2016 CTO annual meeting of shareholders (the “Annual Meeting”), over 69% of the total votes cast at the meeting supported Wintergreen’s proposal to hire an independent advisor to maximize shareholder value through th
Slide 19: CTO's Actions Impaired the Strategic Review Process (continued)
What is Wrong With CTO? CTO’s Actions Impaired the Strategic Review Process (continued): In addition, we believe the transactions were curiously timed to meet bonus goals. At the conclusion of the process the Company refused at first to disclose material details of the review, including what types o
Slide 20: CTO's Fight Letter Contains Several Misleading and Inaccurate Statements
CTO’s Fight Letter Contains Several Misleading and Inaccurate Statements ¢ The Company’s narrative of any sort of a Ii simply false. « As demonstrated in our registered fund’s publicly-available financial statements, we have ample cash on hand and we are significantly larger than CTO. » Our objectiv
Slide 21: CTO's Fight Letter Contains Several Misleading and Inaccurate Statements (continued)
CTO’s Fight Letter Contains Several Misleading and Inaccurate Statements (continued) Since January 2015, when CTO’s Board's lack of attention allowed management to lose focus, CTO has horribly underperformed despite a great bull market in Daytona: Actual Returns From 1/1/2015 to 2/28/2017: ° ° ° ° C
Slide 22: Management's Primary Goal is to Maximize Compensation at Any Cost
Management’s Primary Goal is to Maximize Compensation at Any Cost ¢ Albright is selling shares to receive a favorable recommendation from ISS on CTO’s Say on Pay proposal: John Albrights own words: “So, as you know, the company lost the say on pay and ISS frowns upon directors and management having
Slide 23: Wintergreen's Highly Qualified Candidates
Wintergreens Highly Qualified Candidates: Wintergreen is nominating 4 highly qualified candidates to enact change at CTO. Our candidates Include principals of Wintergreen and consultants who are affiliated with Wintergreen. We are certain these candidates have shareholders interests as their primary
Slide 24: Director Nominees: Elizabeth N. Cohernour
Director Nominees @ Eliz h_N. Cohernour Ms. Cohernour has over 30 years of legal experience and decades of experience investing in real estate companies. Ms. Cohernour is the Chief Operating Officer and a principal of Wintergreen Advisers, LLC. Prior to co-founding Wintergreen Advisers, LLC in 2005,
Slide 25: Director Nominees: Evan Ho
Director Nominees @ Evan Ho Prior to forming Value Investor Resources, Inc. in 2015, Mr. Ho worked at Wintergreen Advisers, LLC from 2006 to 2014 as a securities analyst. Mr. Ho began his career at a real estate consultancy and brokerage firm in Hong Kong, and a bank in Taiwan which was active in co
Slide 26: Director Nominees: Edward Pollock
Director Nominees @ Edward Pollock Mr. Pollock has over 35 years’ experience in real estate, and industrial and economic development. From 1984 up to his retirement in 2010, Mr. Pollock was. the Central and South Florida Manager of Regional Development & Site Design for CSX Transportation, Inc. In h
Slide 27: Director Nominees: David J. Winters
Director Nominees @ David J. Winters David J. Winters is the Chief Executive Officer of Wintergreen Advisers, LLC. Mr. Winters has over 30 years of experience analyzing securities and is responsible for determining general investment advice to be given to clients. Mr. Winters has substantial experie
Slide 28: Decades of Real-Estate Experience
Decades of Real-Estate Experience Mr. Winters and Ms. Cohernour have worked together for over 25 years and have substantial experience investing in the securities of real estate companies over their careers. In connection with these investments, Mr. Winters and Ms. Cohernour have often worked with i
Slide 29: Decades of Real-Estate Experience
Decades of Real-Estate Experience > Florida East Coast Industries, Inc.: While Mr. Winters worked as FMA's lead analyst on Florida East Coast's vast array of developed and undeveloped real estate and railroad assets and Ms. Cohernour provided advice with respect to same, FMA beneficially owned (thro
Slide 30: Decades of Real-Estate Experience
Decades of Real-Estate Experience Evan Ho’s background in credit analysis will be helpful in evaluating proposed investment property purchases with respect to quality of tenants. Investment property occupants such as Outback, Carrabba’s, Staples and Container Store, for example, should have come und
Slide 31: Wintergreen's Path Forward for CTO
Wintergreen’s Path Forward for CTO Wintergreen intends to take a thoughtful, long-term, tax efficient approach to overseeing CTO’s investments and operations. Our initial list of tasks will include: 1. Areview of assets, procedures, status of pending transactions, outside service providers and asses
Slide 32: Wintergreen's Path Forward for CTO
Wintergreen’s Path Forward for CTO Wintergreen intends to take a thoughtful, long-term, tax efficient approach to overseeing CTO’s investments and operations. Our initial list of tasks will include: 2. Focus the 1031 portfolio on one or two attractive real estate sectors, and roll less attractive se
Slide 33: Wintergreen's Path Forward for CTO
Wintergreen’s Path Forward for CTO Wintergreen intends to take a thoughtful, long-term, tax efficient approach to overseeing CTO’s investments and operations. Our initial list of tasks will include: 4. Work with tax experts to maximize tax efficiency for shareholders. 5. Endeavor to reduce dilution
Slide 34: Wintergreen's Path Forward for CTO
Wintergreen’s Path Forward for CTO Wintergreen intends to take a thoughtful, long-term, tax efficient approach to overseeing CTO’s investments and operations. Our initial list of tasks wi include: 6. Buy back stock at discounts to estimated Net Asset Value: = For too long the Company has refused to
Slide 35: Wintergreen's Path Forward for CTO
Wintergreen’s Path Forward for CTO Wintergreen intends to take a thoughtful, long-term, tax efficient approach to overseeing CTO’s investments and operations. Our initial list of tasks wi include: 7. Implement an incentive system that encourages value creation for shareholders at a reasonable cost w
Slide 36: Wintergreen's Path Forward for CTO
Wintergreen’s Path Forward for CTO Wintergreen intends to take a thoughtful, long-term, tax efficient appr overseeing CTO’s investments and operations. Our initial list of tasks will include: h to 8. Pethaps most importantly, Wintergreen will create a culture at CTO where the Board and management th
Slide 37: Wintergreen is asking shareholders for their votes
Wintergreen is asking shareholders for their votes: ¢ Nomination of four highly qualified director candidates @ Rejecting the Say on Pay proposal ® Rejecting Grant Thornton as Auditors Requiring the Company to maintain Say on Pay votes annual, which Wintergreen originally proposed in 2009. o WINTERG
Slide 38: Wintergreen is asking shareholders for their votes
Wintergreen is asking shareholders for their votes: Wintergreen is a long-term large shareholder in CTO. The success of this Company is of great importance to us. In addition to the governance improvements we have been able to introduce to CTO through proxy initiatives over the last ten years, and o
Slide 39: Additional Information
ADDITIONAL INFORMATION The participants in the proxy solicitation are Wintergreen Fund, Inc., Wintergreen Partners Fund, LP, Wintergreen Partners Offshore Master Fund, Ltd., Wintergreen Advisers, LLC, David J. Winters, Elizabeth N. Cohernour, Evan H. Ho and Edward W. Pollock. WINTERGREEN ADVISERS, L
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