UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only (as permitted by
Rule 14a- 6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-12
CALTON, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
CALTON, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 7, 2008
TO THE SHAREHOLDERS OF CALTON, INC.
The Annual Meeting of the Shareholders of CALTON, INC. (the "Company")
will be held on Wednesday, May 7, 2008 at the Homes by Calton Model Center,
Pointe West Community, 1360 South Village Square, Vero Beach, Florida at 10:00
a.m., local time, for the following purposes:
1. To elect one (1) director.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Holders of Common Stock of record at the close of business on March 20,
2008 are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
MARY H. MAGEE
SECRETARY
Red Bank, New Jersey
March 28, 2008
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU ARE UNABLE TO DO
SO, PLEASE MARK, SIGN AND DATE THE ACCOMPANYING PROXY AND MAIL IT AT ONCE IN THE
ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE
APPRECIATED.
CALTON, INC.
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished to the holders of Calton, Inc. (the
"Company" or "Calton") Common Stock, $.05 par value ("Common Stock"), in
connection with the solicitation of proxies for use at the annual meeting of
shareholders to be held on May 7, 2008, and at any adjournment thereof (the
"meeting" or "annual meeting"), pursuant to the accompanying Notice of Annual
Meeting of Shareholders. Holders of Common Stock are referred to herein
collectively as the "shareholders." Forms of proxies for use at the meeting are
also enclosed. The Company anticipates mailing this Proxy Statement to its
shareholders on or about March 31, 2008. The executive offices of the Company
are located at 2050 40th Avenue, Suite One, Vero Beach, Florida 32960.
Shareholders may revoke the authority granted by their execution of
proxies at any time before the effective exercise of proxies by filing written
notice of such revocation with the secretary of the meeting. Presence at the
meeting does not of itself revoke the proxy; however, a vote cast at the meeting
by written ballot will revoke the proxy. All shares represented by executed and
unrevoked proxies will be voted in accordance with the specifications therein.
Proxies submitted without specification will be voted FOR the election of the
nominee for director named herein. Management is not aware at the date hereof of
any matters to be presented at the meeting other than the election of one
director. If any other matter is properly presented, the persons named in the
proxy will vote thereon according to their best judgment.
Proxies for use at the meeting are being solicited by the Board of
Directors of the Company. The cost of preparing, assembling and mailing the
proxy material is to be borne by the Company. It is not anticipated that any
compensation will be paid for soliciting proxies, and the Company does not
intend to employ specially engaged personnel of the Company or other paid
solicitors in the solicitation of proxies. It is contemplated that proxies will
be solicited principally through the mail, but directors, officers and employees
of the Company may, without additional compensation, solicit proxies personally
or by telephone, facsimile transmission or letter.
VOTING SECURITIES
The voting securities entitled to vote at the meeting consist of shares of
Common Stock, with each share entitling its owner to one vote on an equal basis.
On March 20, 2008, the number of outstanding shares of Common Stock was
10,002,671. Only shareholders of record on the books of the Company at the close
of business on March 20, 2008 will be entitled to vote at the meeting. The
holders of a majority of the outstanding shares of Common Stock, present in
person or by proxy, will constitute a quorum at the meeting. The affirmative
vote of a plurality
of the shares of Common Stock present in person or represented by proxy and
entitled to vote, is required for the election of directors. The proxy card
provides space for a shareholder to withhold votes for any nominee for the Board
of Directors.
All votes will be tabulated by the inspector of election appointed at the
meeting who will separately tabulate affirmative votes, negative votes,
authority withheld for any nominee for director, abstentions and broker
non-votes. Authority withheld will be counted toward the tabulation of the votes
cast on the election of directors and will have the same effect as a negative
vote. Under New Jersey law, any proxy submitted and containing an abstention or
broker non-vote will not be counted as a vote cast on any matter to which it
relates and, accordingly, will have no effect on the outcome of the vote.
Abstentions and broker non-votes will be counted for purposes of determining
whether a quorum is present at the annual meeting.
PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to each person
who, as of March 20, 2008, is known by the Company to be the beneficial owner
(as defined in Rule 13d-3 ("Rule 13d-3") of the Securities Exchange Act of 1934)
of more than five percent (5%) of the Company's Common Stock. Except as set
forth in the footnotes to the table, the shareholders have sole voting and
investment power over such shares:
Amount and Percent
Nature of of
Name of Beneficial Owner Beneficial Ownership Class
------------------------ -------------------- -----
Anthony J. Caldarone................... 4,004,752 (1) 40.0 %
Joyce P. Caldarone..................... 4,004,752 (2) 40.0 %
Maria F. Caldarone..................... 1,118,093 (3) 11.1 %
John G. Yates.......................... 1,011,407 (4) 9.9 %
--------------------
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(1) Includes an aggregate of 456,240 shares held by Joyce P. Caldarone, Mr.
Caldarone's wife, as to which shares he disclaims any beneficial interest.
(2) Includes an aggregate of 3,548,512 shares beneficially owned by Anthony J.
Caldarone, Mrs. Caldarone's husband, as to which shares she disclaims any
beneficial interest.
(3) Includes an aggregate of 105,000 shares subject to stock options which are
exercisable within 60 days of March 20, 2008 ("Currently Exercisable Stock
Options").
(4) Includes an aggregate of 185,000 shares subject to Currently Exercisable
Stock Options. Exercisable Stock Options.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of March 20, 2008, with
respect to the beneficial ownership (as defined in Rule 13d-3) of the Company's
Common Stock by each director and nominee for director, each of the Named
Officers (as defined in the section captioned "Executive Compensation") and by
all directors and executive officers as a group.
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Except as set forth in the footnotes to the table, the shareholders have sole
voting and investment power over such shares.
Amount and Percent
Nature of of
Name of Beneficial Owner Beneficial Ownership Class
------------------------ -------------------- -----
Anthony J. Caldarone............................ 4,004,752 (1) 40.0 %
Kenneth D. Hill................................. 249,262 (2) 2.5 %
John G. Yates................................... 1,011,407 (3) 9.9 %
Maria F. Caldarone.............................. 1,118,093 (4) 11.1 %
J. Ernest Brophy................................ 114,762 (5) 1.1 %
Mark N. Fessel.................................. 256,156 (5) 2.5 %
Frank Cavell Smith, Jr. ........................ 220,567 (5) 2.2 %
All Directors and Executive Officers as
a Group (7 persons) (1),(2),(3),(4) and (5).. 6,974,999 66.5 %
---------------
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(1) Includes an aggregate of 456,240 shares held by Joyce P. Caldarone, Mr.
Caldarone's wife, as to which shares he disclaims any beneficial interest.
(2) Includes 8,000 shares held by Mr. Hill's spouse, as to which shares he
disclaims any beneficial interest and 50,000 shares subject to Currently
Exercisable Stock Options.
(3) Includes 185,000 shares subject to Currently Exercisable Stock Options.
(4) Includes 105,000 shares subject to Currently Exercisable Stock Options.
(5) Includes 50,000 shares subject to Currently Exercisable Stock Options.
ELECTION OF DIRECTORS
GENERAL
The Company's by-laws provide that the Board of Directors shall consist of
not fewer than three nor more than 15 members. The Board of Directors is divided
into four classes, with each class to hold office for a term of four years and
the term of office of one class to expire each year. The Board of Directors has
fixed the number of directors at six, one whose term expires at the annual
meeting in 2008, one whose term expires at the annual meeting in 2009, two whose
term expires at the annual meeting in 2010, and two whose term expires at the
annual meeting in 2011.
NOMINATION PROCESS
The Board of Directors established a Nominating Committee in 2004. The
current members of the Nominating Committee are J. Ernest Brophy, Mark N.
Fessel, Kenneth D. Hill and Frank Cavell Smith, Jr., each of whom currently
meets the standards for independence as set forth in the rules of the American
Stock Exchange. The Nominating Committee's primary responsibilities and duties
are to:
o identify individuals qualified to become members of the Board;
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o select, or recommend to the Board, director nominees to be presented
for shareholder approval at the annual meeting;
o select, or recommend to the Board, director nominees to fill
vacancies on the Board as necessary; and
o review periodically the structure, size, composition and operation
of the Board and each committee of the Board.
The members of the Nominating Committee as a whole believe that, at a
minimum, the Board should be comprised of directors who have expertise that may
be useful to the Company as well as directors who have in the past exhibited the
highest personal and professional ethics. When considering nominees for
director, the Nominating Committee considers several factors, including (i)
relevant business experience; (ii) independence from management; (iii) judgment,
skill, integrity and reputation; (iv) existing commitments and potential
conflicts of interest; (v) financial and accounting background; and (vi) the
size and composition of the existing Board. Because the nominee named below is a
sitting director of the Company who is up for re-election at the annual meeting,
the independent directors also considered the director's past performance on the
Board. The Board seeks to identify individuals who satisfy these criteria from
among persons known to them.
The Nominating Committee will also consider nominees for director
suggested by shareholders of the Company. The process by which a shareholder of
the Company may suggest a nominee for director of the Company can be found under
"Shareholder Proposals and Nominees for Director." The Nominating Committee will
apply the same criteria described above to any candidate suggested by a
shareholder, as well as evaluate any additional information required to be
submitted therewith. The Company does not pay any fees to third parties to
identify, evaluate or assist in identifying or evaluating potential nominees.
Frank Cavell Smith, Jr. is the incumbent director whose term expires at
the 2008 annual meeting. Mr. Smith has been unanimously nominated by the
Nominating Committee to stand for election at the meeting to hold office until
the 2012 annual meeting. It is the intention of the persons named in the
accompanying proxy to vote, unless otherwise instructed, in favor of the
election of Mr. Smith. If Mr. Smith should be unable to serve, the proxies will
be voted for the election of a substitute nominee, if any, designated by the
Board of Directors. The Company is not aware of any reason why Mr. Smith, if
elected, would be unable to serve as a director.
Set forth below is certain biographical information with respect to the
nominee for election to the Board and the directors whose terms of office will
continue after the 2008 annual meeting.
NOMINEE
NOMINEE FOR ELECTION FOR FOUR-YEAR TERM EXPIRING AT THE 2012 ANNUAL MEETING.
FRANK CAVELL SMITH, JR. Mr. Smith, age 63, has served as a Director of
Calton since May 1993. Since 1990, Mr. Smith has been associated with the MEG
Companies as a Senior
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Consultant responsible for corporate real estate consulting activities. From
1977 to 1990, Mr. Smith served as a Real Estate Consultant and Real Estate
Development Manager for The Spaulding Co., Inc. Mr. Smith also is an adjunct
faculty member at Boston University and a member of the Board of Trustees of
Shelter, Inc.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2011 ANNUAL MEETING:
MARK N. FESSEL. Mr. Fessel, age 51, has served as a Director of Calton
since May 1993. Since 1985, Mr. Fessel has owned and operated a real estate
company and has acted as principal in numerous commercial and residential real
estate developments throughout the northeast. Mr. Fessel is a 1981 graduate of
the New York University School of Law and the New York University Undergraduate
School of Business. Prior to forming his own real estate company in 1985, Mr.
Fessel was an associate at the New York based law firm of Weil, Gotshal &
Manges.
JOHN G. YATES. Mr. Yates, age 65, was appointed a Director of the Company
in October 2002. From September 2002 through January 2005, he served as
President and Chief Operating Officer of the Company. He has also served as
President and Chief Executive Officer of the Company's wholly owned subsidiary,
PrivilegeONE Networks, LLC since May 2001. For eight years prior to joining the
Company, Mr. Yates served as Senior Vice President and General Manager of
American Express, and in that capacity implemented and managed the American
Express Corporate Purchasing Card division. He was also employed for more than
24 years with General Electric in a variety of senior management positions.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2010 ANNUAL MEETING:
KENNETH D. HILL. Mr. Hill, age 66, has served as a Director of Calton
since April 1999. From July 1999 through June, 2001 he served as Chief Executive
Officer of the Company's wholly owned subsidiary, eCalton.com, Inc. Since 1975,
he has founded and managed computer related companies, including NASTEC
Corporation, a developer of computer-aided software engineering development
tools, from 1982 until its acquisition in 1987, and Multiple Technologies
Corporation, a consulting and application development company, from 1975 to
1982. From January 1994 through February 1996, he was employed as a consultant
by KDH Enterprises, Inc. From March 1997 through April 1998, Mr. Hill served as
President and Chief Executive Officer of DataTell Solutions, Inc., a regional
systems integration company. He served as President and Chief Executive Officer
of National AmeriServe, Inc., an internet business solutions provider, from May
1998 through October 1998, when it merged with iAW, Inc., the predecessor of
eCalton.com, Inc.
J. ERNEST BROPHY. Mr. Brophy, age 83, a retired attorney and Certified
Public Accountant who specialized in tax consultation to clients engaged in the
construction business, was reappointed as a Director of Calton in November 1995,
having served in such capacity from March 1983 through November 1985 and from
April 1986 until through May 1993. From 1992 through March 1996, Mr. Brophy
served as Chief Financial Officer and a director of Hurdy-Gurdy International,
Inc., a company that marketed sorbet products.
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DIRECTOR CONTINUING IN OFFICE UNTIL THE 2009 ANNUAL MEETING:
ANTHONY J. CALDARONE. Mr. Caldarone, age 70, has served as Chairman,
President and Chief Executive Officer of the Company since January 2005 and
served in the same capacity from the inception of the Company in 1981 through
June 1993 and from November 1995 through September 2002. From September 2002
until January 2005, he served as Chairman and Chief Executive Officer of the
Company. He served as a Director of the Company from June 1993 through October
1995.
DIRECTOR INDEPENDENCE
The Board has affirmatively determined that Messrs. Brophy, Fessel, Hill,
Smith and Yates are "independent directors," as that term is defined under the
rules of the American Stock Exchange. The only non-independent director is Mr.
Caldarone.
CODE OF CONDUCT
The Company has adopted a Code of Conduct that applies to all of its
directors, officers and employees, including its Chief Executive Officer, Chief
Financial Officer and other senior financial officers. The Company's Code of
Conduct is posted on its website, www.caltoninc.com, under "Investor Relations".
The Company intends to disclose on its website any amendment to, or waiver of, a
provision of the Code of Conduct that applies to its Chief Executive Officer,
Chief Financial Officer or other senior financial officers.
MEETINGS OF THE BOARD OF DIRECTORS; COMMITTEES
During the fiscal year ended November 30, 2007, the Board of Directors
held four meetings. During fiscal 2007, each member of the Company's current
Board of Directors attended at least 75% of the meetings of the Board of
Directors and meetings of the committees on which he served. See the section
captioned "Directors' Compensation" for a discussion of fees paid by the Company
to its directors for their services.
The Company's Bylaws provide that the Chairman of the Board shall preside
as chairman at all meetings of shareholders. Otherwise, the Company has no
requirements for its directors to attend the Company's annual meeting of
shareholders. Mr. Caldarone, Mr. Hill and Mr. Yates attended the 2007 annual
meeting of shareholders.
During fiscal 2007, the Board of Directors had three standing committees:
the Audit Committee, the Compensation Committee and the Nominating Committee.
The Audit Committee currently consists of Mr. Brophy, Mr. Fessel and Mr.
Smith. The duties and functions performed by the Audit Committee are described
under the caption "Audit Committee Report" contained elsewhere in this Proxy
Statement. The Audit Committee held four meetings in fiscal 2007.
Mr. Fessel and Mr. Smith currently serve as members of the Compensation
Committee. The Compensation Committee reviews and approves compensation for
executive employees of the Company on a periodic basis, subject to approval of
the Board, and administers the
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Company's Incentive Compensation Plan, the 2000 Equity Incentive Plan (the "2000
Plan"), the 2006 Equity Incentive Plan (the "2006 Plan") and the Employee Stock
Purchase Plan. The Compensation Committee met three times in fiscal 2007. The
Compensation Committee does not currently operate under a charter. In reviewing
compensation for executive officers, the Compensation Committee considers: (i)
recommendations of the Company's President; (ii) the combined value of all cash
and non-cash benefits provided to the individual, (iii) the compensation history
of the individual as compared to other individuals with comparable expertise at
the Company, (iv) the performance of the Company and the individual, (v) the
financial condition of the Company and (vi) comparable compensation packages at
similar companies.
The Nominating Committee, which was established by the Board in August
2004, currently consists of Mr. Brophy, Mr. Fessel, Mr. Hill and Mr. Smith. The
duties and functions performed by the Nominating Committee are described under
the caption "Nomination Process." The Nominating Committee Charter is posted on
the Company's website, www.caltoninc.com, under "Investor Relations." The
Nominating Committee met on one occasion in fiscal 2007.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total
compensation awarded to, earned by or paid to the Company's Chief Executive
Officer during the two fiscal years ended November 30, 2007 and 2006 and the
only other executive officer of the Company who earned in excess of $100,000 in
fiscal 2007, whom are sometimes referred to herein as the "Named Officers."
NON-EQUITY NONQUALIFIED
NAME AND FISCAL OPTION INCENTIVE PLAN DEFERRED ALL OTHER
PRINCIPAL YEAR STOCK AWARDS COMPENSATION COMPENSATION COMPENSATION
POSITION ENDED SALARY ($) BONUS ($) AWARDS ($) ($) ($) EARNINGS ($) ($) (2) TOTAL ($)
Anthony J. 11/30/07 $ 1 -- -- -- -- -- $ 13,042 $ 13,043
Caldarone 11/30/06 $ 75,000 -- -- -- -- -- $ 10,984 $ 85,985
President and
CEO
Maria F. 11/30/07 $131,278 -- -- $ 1,903 (1) -- -- $ 843 $134,024
Caldarone 11/30/06 $130,641 -- -- -- -- -- $ 770 $131,411
Executive Vice
President
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(1) Represents compensation expense recorded with respect to a grant of an
option to acquire 100,000 shares of Common Stock at an exercise price of
$.23 per share made to Ms. Caldarone on May 9, 2007. The option has a term
of five years and vests in equal annual installments commencing on the
first anniversary of the date of grant. The fair value of the option was
estimated on the date of grant using the Black-Scholes option-pricing
model with the following weighted average assumptions: dividend yield of
0%; expected volatility of 114.46%; risk free rate of return of 4.60% and
expected life of four years. The weighted average fair value of this
option was $0.16 per share.
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(2) Represents costs of premiums paid by the Company under a program that
provides officers of the Company with additional life insurance
(supplementary to coverage available under the Company's group life
insurance plan).
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table provides information about all equity compensation awards
held by the Named Executive Officers as of November 30, 2007:
OUTSTANDING EQUITY AWARDS
OPTION AWARDS STOCK AWARDS
---------------------------------------------------------------------- --------------------------------------------
EQUITY
INCENTIVE EQUITY
EQUITY PLAN INCENTIVE
INCENTIVE AWARDS: PLAN AWARDS:
PLAN NUMBER OF MARKET OR
AWARDS: MARKET UNEARNED PAYOUT VALUE
NUMBER OF NUMBER OF NUMBER OF NUMBER OF VALUE OF SHARES, OF UNEARNED
SECURITIES SECURITIES SECURITIES SHARES OR SHARES OR UNITS OR SHARES,
UNDERLYING UNDERLYING UNDERLYING UNITS OF UNITS OF OTHER UNITS OR
UNEXERCISED UNEXERCISED UNEXERCISED OPTION STOCK THAT STOCK RIGHTS OTHER RIGHTS
OPTIONS OPTIONS UNEARNED EXERCISE OPTION HAVE NOT THAT HAVE THAT HAVE THAT HAVE
DATE OF (#) (#) OPTIONS PRICE EXPIRATION VESTED NOT VESTED NOT VESTED NOT VESTED
NAME GRANT EXERCISABLE UNEXERCISABLE (#) ($) DATE (#) ($) (#) ($)
---------- ----- ----------- ------------- --------- ---------- ---------- -------- ---------- ---------- ---------
Anthony J. --- --- --- --- --- --- --- --- --- ---
Caldarone,
Chief
Executive
Officer
Maria F. 05/09/07 --- 100,000 (1) --- $ 0.23 05/09/12 --- --- --- ---
Caldarone, 01/27/05 35,000 --- --- $ 0.43 01/27/10 --- --- --- ---
Executive 10/25/02 20,000 --- --- $ 1.55 10/25/12 --- --- --- ---
Vice
President 01/25/02 30,000 --- --- $ 0.61 01/25/12 --- --- --- ---
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(1) Represents stock option that vests in five equal annual installments
commencing on the first anniversary of the date of grant.
DIRECTORS' COMPENSATION
Members of the Board of Directors who are not full time employees of
Calton were each entitled in fiscal 2007 to annual compensation of $10,000 for
service as a director. Effective May 31, 2003, all such compensation is payable
in the form of Common Stock having an equivalent market value at the time of
issuance. Calton paid or accrued a total of $50,000 in director fees to members
of the Board of Directors during fiscal year 2007.
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Each non-employee director is awarded options to purchase 10,000 shares of
the Company's Common Stock each time such director is elected or re-elected to
the Board of Directors and each time that an annual meeting of shareholders is
held during the term of such director. In order to receive the award, an
incumbent non-employee director must have attended 75% of all Board meetings and
75% of all meetings of Board committees of which the director is a member during
the prior 12 months. Options to purchase an aggregate of 50,000 shares of Common
Stock at an exercise price of $0.21 per share (the fair market value of the
Common Stock on the date of grant) were granted to non-employee directors
pursuant to this arrangement in fiscal 2007.
The following table sets forth information concerning the compensation of
the directors of the Company for the year ended November 30, 2007:
CHANGE IN
PENSION VALUE
AND
FEES NONQUALIFIED
EARNED OR NON-EQUITY DEFERRED
PAID IN STOCK OPTION INCENTIVE PLAN COMPENSATION ALL OTHER
CASH AWARDS AWARDS COMPENSATION EARNINGS COMPENSATION TOTAL
NAME ($) ($) (1) ($) ($) ($) ($) ($)
-------------------- -------- ------- ------- ------------- ----------- ------------ -------
Anthony J. Caldarone $-- $ -- $ -- $-- $-- $-- $ --
J. Ernest Brophy $-- $10,000 $858 (2) $-- $-- $-- $10,858
Mark N. Fessel $-- $10,000 $858 (2) $-- $-- $-- $10,858
Kenneth D. Hill $-- $10,000 $858 (2) $-- $-- $-- $10,858
Frank C. Smith $-- $10,000 $858 (2) $-- $-- $-- $10,858
John G. Yates $-- $10,000 $858 (2) $-- $-- $-- $10,858
|
(1) Represents compensation expense recorded with respect to payment of
directors' fees in the form of Common Stock.
(2) Represents compensation expense recorded with respect to grant of option
with respect to 10,000 shares of Common Stock made on May 9, 2007 that
vests in full on the first anniversary of the date of grant. The fair
value of the option was estimated using the Black-Scholes option-pricing
model with the following assumptions: dividend yield of 0%; expected
volatility of 119.26%; risk free rate of return of 4.64% and expected life
of three years. The weighted average fair value of this option was $0.15
per share.
Directors are reimbursed for travel expenses incurred in connection with
attendance at Board and committee meetings.
-9-
EMPLOYMENT AGREEMENT WITH CHIEF EXECUTIVE OFFICER
Effective January 1, 2006, the Company entered into an Employment
Agreement (the "Employment Agreement") with Anthony J. Caldarone, Chairman,
President and Chief Executive Officer of the Company. The Employment Agreement
provides for an annual base salary of $100,000 and entitles Mr.Caldarone to
participate in all benefit plans made available to the Company's senior
executives. In January 2007, Mr. Caldarone agreed to a reduction of his salary
to $1.00 per year, and the Board of Directors extended the term of the
Employment Agreement until December 31, 2007. Effective January 2008, the Board
of Directors extended the term of the Employment Agreement until December 31,
2008, at a salary of $1.00 per year. The Employment Agreement, which replaced
the employment agreement between the Company and Mr. Caldarone that expired on
December 31, 2005, is terminable at will by either party. Mr. Caldarone will be
prohibited from engaging in the acquisition, development, construction and
marketing of residential real estate in the State of Florida for a twelve month
period following the termination of the Employment Agreement.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information as of November 30, 2007 with
respect to shares of Common Stock that may be issued under the Company's equity
compensation plans:
======================================================================================================================
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE EXERCISE FUTURE ISSUANCE UNDER EQUITY
ISSUED UPON EXERCISE OF PRICE OF OUTSTANDING COMPENSATION PLANS (EXCLUDING
OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND SECURITIES REFLECTED IN
WARRANTS AND RIGHTS RIGHTS COLUMN (A))
PLAN CATEGORY (A) (B) (C)
----------------------------------------------------------------------------------------------------------------------
Equity compensation plans 827,000 $0.35 954,676 (2)
approved by security
holders (1)
----------------------------------------------------------------------------------------------------------------------
Equity compensation plans
not approved by security
holders (3) 120,000 $8.15 -0-
----------------------------------------------------------------------------------------------------------------------
TOTAL 947,000 $1.34 954,676
======================================================================================================================
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(1) The Company's 2000 and 2006 Plans provide for the issuance of incentive
awards to officers, directors, employees and consultants in the form of
stock options, stock appreciation rights, restricted stock and deferred
stock, and in lieu of cash compensation. The Company's Employee Stock
Purchase Plan permits the purchase of Common Stock by employees at a
discount to market value through periodic payroll deductions.
(2) Represents 112,585 shares available for issuance under the 2000 Plan,
410,830 shares available for issuance under the 2006 Plan and 431,261
shares available for issuance under the Employee Stock Purchase Plan.
Unless otherwise determined by the Compensation Committee, the number of
shares available for issuance under the Employee Stock Purchase Plan is
increased on January 1 of each year by an amount equal to the lesser of
two percent (2%) of the total number of shares of Common Stock then
outstanding or 75,000 shares.
(3) Represents 120,000 shares subject to options granted to a Director of the
Company that have an exercise price of $8.15 per share and expire in July
2009.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In November 2007, the Company sold two homes in its Pointe West
development to AFP Enterprises, Inc. ("AFP"), a company owned by the Caldarone
family, including Anthony J. Caldarone, the Company's Chairman, President and
Chief Executive Officer, and Maria F. Caldarone, the Company's Executive Vice
President. The contract prices for the homes were $617,000 and $629,000,
respectively. The costs incurred by the Company in constructing the homes were
$562,000 and $584,000, respectively. The Company entered into a sale-leaseback
agreement with AFP for one of these homes which is being used as a sales model
on a month-to-month basis, at a cost of $2,000 per month, and at a savings of
$3,000 per month from a prior sale-leaseback.
REPORT OF THE AUDIT COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that might incorporate this Proxy Statement or future filings
with the SEC, in whole or in part, the following report shall not be deemed to
be incorporated by reference into any such filing.
MEMBERSHIP AND ROLE OF AUDIT COMMITTEE
The Audit Committee of the Board (the "Audit Committee") is comprised of
the following directors: J. Ernest Brophy, Mark N. Fessel and Frank Cavell
Smith, Jr. Each member of the Audit Committee qualifies as an independent
director in accordance with the rules and regulations of the American Stock
Exchange. In addition, the Board has determined that J. Ernest Brophy is both
independent and qualifies as a financial expert, as defined by rules and
regulations of the American Stock Exchange. The Audit Committee operates under a
written charter previously adopted by the Board (see discussion below).
-11-
The primary function of the Audit Committee is to provide advice with
respect to the Company's financial matters and to assist the Board in fulfilling
its oversight responsibilities regarding finance, accounting, tax and legal
compliance. The Audit Committee's primary duties and responsibilities are to: 1)
serve as an independent and objective body to monitor the financial reporting
process and internal control systems of the Company; 2) oversee the quality and
integrity of the financial statements of the Company; 3) engage a firm of
independent auditors for the Company each year; 4) review and appraise the
qualifications, performance and independence of the Company's independent
auditors; 5) review and appraise the performance of the Company's internal audit
department; 6) provide an open forum for communication among the independent
auditors, senior financial officers, other members of management, the internal
audit department and the Board; and 7) assist in assuring the Company's
compliance with legal and regulatory requirements.
AUDIT COMMITTEE CHARTER
The Audit Committee developed an Audit Committee Charter (the "Charter")
in consultation with the Company's accounting department, the Company's
independent auditors and outside general counsel. The Board adopted the Charter
in fiscal 2001, and the Charter was filed with the SEC on March 16, 2001 as
Appendix "A" to the Company's proxy statement delivered in connection with the
2001 annual meeting of shareholders. The Audit Committee reviews the Charter on
an annual basis and updates the Charter as necessary. The Charter was updated in
January 2005 and the updated Charter was filed with the SEC on March 30, 2005 as
Appendix "A" to the Company's proxy statement delivered in connection with the
2005 annual meeting of shareholders. The Audit Committee reviewed the Charter in
February 2008 and determined that no changes were required. The Charter is
posted on the Company's website, www.caltoninc.com, under "Investor Relations."
REVIEW OF THE COMPANY'S AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 2007
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for the fiscal year ended November 30, 2007 with the
Company's management. The Audit Committee has discussed with Aidman, Piser &
Company, P.A. ("Aidman, Piser"), the Company's independent auditors, those
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Audit Committee has also received the written disclosures and the
letter from Aidman, Piser required by Independence Standards Board Standard No.
1 (Independence Discussion with Audit Committees), and the Audit Committee has
discussed the independence of Aidman, Piser with that firm. Aidman, Piser
confirmed, in its professional judgment, that it is not aware of any
relationship between Aidman, Piser and the Company that would reasonably bear on
its independence.
-12-
Based on the Audit Committee's review and discussions noted above, the
Audit Committee recommended to the Board that the Company's audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended November 30, 2007 for filing with the SEC.
Submitted by:
J. Ernest Brophy
Mark N. Fessel
Frank C. Smith, Jr.
PRINCIPAL ACCOUNTING FEES AND SERVICES
In accordance with its Charter, the Audit Committee approves, in advance,
all audit and permissible non-audit services to be performed by the Company's
independent registered public accounting firm. The following table sets forth
the aggregate fees billed to the Company for the years ended November 30, 2007
and November 30, 2006 by Aidman, Piser:
Year Ended November 30,
2007 2006
------- -------
Audit Fees $75,800 $72,100
Audit-Related Fees 3,034 3,657
Financial Information Systems -- --
Design and Implementation Fees -- --
Tax Fees -- --
All Other Fees 6,000 6,000
|
Audit fees represent amounts billed for professional services rendered for
the audit of the Company's annual financial statements and the reviews of its
financial statements included in the Company's Forms 10-QSB for the fiscal year.
Before Aidman, Piser was engaged by the Company to render its audit services,
the engagement was approved by the Audit Committee of the Company's Board of
Directors.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish the Company with
copies of all Forms 3, 4 and 5 they file.
Based solely on the Company's review of the copies of such forms it has
received, the Company believes that all of its executive officers, directors and
greater than ten percent shareholders complied with all filing requirements
applicable to them with respect to events or transactions during fiscal 2007.
-13-
ANNUAL REPORT
The annual report to shareholders for the fiscal year ended November 30,
2007 accompanies this Proxy Statement. Aidman, Piser has audited the financial
statements of the Company for the last seven fiscal years ended November 30,
2007.
INDEPENDENT AUDITORS
The firm of Aidman, Piser, independent registered public accountants, was
retained as independent auditors to the Company for the year ended November 30,
2007 by the Audit Committee of the Board of Directors. A representative of
Aidman, Piser will be present at the meeting and will have an opportunity to
make a statement if the representative desires to do so. Said representative
will also be available to respond to appropriate questions from shareholders of
the Company.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
The Board has adopted a formal process to be followed for those
shareholders who wish to communicate directly with the Board or any individual
director of the Company. A shareholder can contact the Board, or any individual
director, by sending a written communication to: Board of Directors, Calton,
Inc., c/o Corporate Secretary, 43 W. Front Street, Suite 15, Red Bank, New
Jersey 07701. A shareholder's letter should also indicate that he or she is a
Calton, Inc. shareholder. The Secretary of the Company shall either (a)
distribute such communication to the Board, or a member or members thereof, as
appropriate depending upon the facts and circumstances described in the
communication received; or (b) determine that the communication should not be
forwarded to the Board because, in his or her judgment, (i) the communication is
primarily commercial in nature and relates to the Company's ordinary business or
relates to a topic that is improper or not relevant to the Board; or (ii) the
Company's management can adequately handle the shareholder inquiry or request,
in which case the inquiry or request will be forwarded to the appropriate
individual. If a shareholder communication is addressed to one or more members
of the Board, but not the entire Board, the Corporate Secretary shall notify any
member of the Board to whom such communication was not addressed that such
communication was received and shall provide a copy of such communication upon
request.
SHAREHOLDER PROPOSALS AND NOMINEES FOR DIRECTOR
A shareholder of the Company who wishes to present a proposal for action
at the Company's 2009 annual meeting of shareholders must submit such proposal
to the Company and such proposal must be received by November 30, 2008. A
shareholder wishing to submit a proposal should write to the Company's Corporate
Secretary and include a detailed description of such proposal.
The Nominating Committee of the Board will also consider nominees for
director suggested by shareholders of the Company applying the same criteria for
nominees described under "Election of Directors--Nomination Process" and
considering the additional information required below. A shareholder who wishes
to suggest a nominee for director should write to the Company's Corporate
Secretary and include the following information: (1) the name and contact
information for the nominee; (2) a statement of the nominee's business
experience and
-14-
educational background; (3) a detailed description describing any relationship
between the nominee and the proposing shareholder; (4) a statement by the
shareholder explaining why he or she believes that the nominee is qualified to
serve on the Board and how his or her service would benefit the Company; and (5)
a statement that the nominee is willing to be considered and willing to serve as
a director of the Company if nominated and elected. A shareholder wishing to
suggest a nominee for director for possible consideration at the Company's 2009
annual meeting of shareholders must submit the required information to the
Company and such information must be received by the Company by February 6,
2009. The Nominating Committee retains complete discretion for making
nominations for election as a member of the Board.
THE MANAGEMENT OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
THE NOMINEE TO THE BOARD OF DIRECTORS.
THE COMPANY SUBMITS TO THE SECURITIES AND EXCHANGE COMMISSION AN ANNUAL
REPORT ON FORM 10-KSB. COPIES OF THE REPORT WILL BE FURNISHED WITHOUT CHARGE
UPON WRITTEN REQUEST RECEIVED FROM ANY HOLDER OF RECORD OR BENEFICIAL OWNER OF
SHARES OF COMMON STOCK OF THE COMPANY. REQUESTS SHOULD BE DIRECTED TO
SHAREHOLDER RELATIONS, CALTON, INC., 43 WEST FRONT STREET, SUITE 15, RED BANK,
NEW JERSEY 07701.
ALL SHAREHOLDERS ARE URGED TO MARK, SIGN, DATE AND SEND IN THEIR PROXIES
IN THE ENCLOSED ENVELOPE WITHOUT DELAY TO STOCKTRANS, INC., 44 WEST LANCASTER
AVENUE, ARDMORE, PENNSYLVANIA 19003.
PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
MARY H. MAGEE
SECRETARY
March 28, 2008
-15-
CALTON, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 7, 2008
THIS PROXY IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF CALTON, INC.
P KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Anthony J. Caldarone and Vicky F. Savage and each of them,
R the true and lawful attorneys, agents and proxies of the undersigned, with
full power of substitution, to vote with respect to all the shares of
O Common Stock of CALTON, INC., standing in the name of the undersigned at
the close of business on March 20, 2008, at the annual meeting of
X shareholders to be held at the Homes by Calton Model Center, Pointe West
Community, 1360 South Village Square, Vero Beach, Florida on May 7, 2008
Y and at any and all adjournments thereof, with all powers that the
undersigned would possess if personally present and especially (but
without limiting the general authorization and power hereby given) to
vote as indicated on the reverse side hereof. Said proxies are authorized
to vote in their discretion upon any other matters which may come before
the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED,
AND IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED, WILL BE VOTED FOR
THE ELECTION OF THE NOMINEE FOR DIRECTOR LISTED ON THE REVERSE SIDE OF
THIS CARD.
COMMON STOCK
(This proxy is continued from reverse side)
Please mark your votes |X|
as in this example.
1. Election of Frank Cavell Smith, Jr. as Director.
|
|_| FOR the nominee (except as provided to the contrary below)
|_| WITHHOLD AUTHORITY to vote for the nominee
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE NOMINEE(S) NAME HERE:
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature(s) of Shareholder(s)__________________________________________________
(Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s) on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title.)
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