UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
x
Filed by a Party other than the Registrant |_|
o
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 toss.240.14a-11(c) orss.240.14a-12
| | |
| o Preliminary Proxy Statement | | |
| oConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | | |
| x Definitive Proxy Statement |
| o Definitive Additional Materials |
| o Soliciting Material Pursuant to §240.14a-12 |
BFC FINANCIAL CORPORATION
(NameFinancial Corporation
(Name of Registrant as Specified inIn 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 the table below per Exchange Act Rules 14a-6(i)(4) 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.
|_|
| |
| x | No fee required. |
|
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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: |
| |
| o | Fee paid previously with preliminary materials. |
|
| o | 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.: |
BFC Financial Corporation
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
April 21, 2004
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of BFC Financial Corporation, which will be held on May 11, 2004 at 2:45 p.m., local time, at the Broward County Convention Center, 1950 Eisenhower Blvd., Ft. Lauderdale, FL 33316. Following the Annual Meeting please join us for our Annual Celebration and Exposition. The schedule will be as follows: 3:30 p.m. – 5:00 p.m. Exposition opens; 5:00pm – 6:15 p.m. Video and Presentation; 6:15 p.m. – 8:00 p.m. Exposition reopens.
Please read these materials so that you will know what we plan to do at the Annual Meeting. Also, please sign and return the accompanying proxy card in the postage-paid envelope. This way, your shares will be voted as you direct even if you cannot attend the Annual Meeting.
On behalf of your Board of Directors and our employees, I would like to express our appreciation for your continued support.
Sincerely,
Alan B. Levan
Chairman 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:
Board
TABLE OF CONTENTS
BFC FINANCIAL CORPORATION
P.O. Box 5403
Financial Corporation
1750 East Sunrise Boulevard
Fort Lauderdale, FL 33310-5403
Florida 33304
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 20, 2003
Fort Lauderdale, Florida
April 17, 2003
To11, 2004
Notice is hereby given that the Shareholders of BFC Financial Corporation:
The Annual Meeting of Shareholders of BFC Financial Corporation (the "Company"“Company”) will be held at Signature Grand, 6900 State Road 84, Davie, Florida 33317,the Broward County Convention Center, 1950 Eisenhower Blvd., Ft. Lauderdale, FL 33316 on Tuesday, May 20, 2003,11, 2004 commencing at 6:002:45 p.m., local time, for the following purposes:
1. To elect three members to the Board of Directors, one to serve a
term of three years, one to serve a term of two years and the other
to serve a term of one year; and
2. To transact such other business as may properly come
| 1. | | To elect three members to the Board of Directors, two to serve a term of three years, one to serve a term of two years; and |
|
| 2. | | To transact such other business as may properly be brought before the Annual Meeting or any adjournment or postponement thereof, including any adjournment thereof. |
The matters relating or incident to the foregoing.
The foregoing matterslisted above are described in more detailfully described in the Proxy Statement which forms a part of this Notice.
Only shareholders of record at the close of business on March 26, 2003April 1, 2004 are entitled to notice of and to vote at the Annual Meeting.
Sincerely yours,
Alan B. Levan
Chairman of the Board
Fort Lauderdale, Florida
April 21, 2004
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES; THEREFORE EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
BFC Financial Corporation
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
PROXY STATEMENT
The Board of Directors of BFC Financial Corporation (the “Company”) is soliciting proxies to be used at the Annual Meeting of Shareholders of the Company (the “Annual Meeting”) to be held at the Broward County Convention Center, 1950 Eisenhower Blvd., Ft. Lauderdale, FL 33316 on May 11, 2004 at 2:45 p.m., and at any and all postponements or adjournments of the Annual Meeting, for the purposes set forth in the accompanying Notice of Meeting.
This Proxy Statement, Notice of Meeting and accompanying proxy card are being mailed to shareholders on or about April 21, 2004.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING
What is the purpose of the meeting?
At our Annual Meeting, shareholders will act upon the matters outlined in the Notice of Meeting on the cover page of this Proxy Statement, including the election of directors, as well as any other matters which may properly be brought before the Annual Meeting. Also, management will report on the Company’s performance during the last fiscal year and respond to appropriate questions from shareholders.
Who is entitled to vote at the meeting?
Record holders of the Company’s Class A Common Stock (“Class A Stock”) and record holders of the Company’s Class B Common Stock (“Class B Stock”) at the close of business on April 1, 2004 may vote at the Annual Meeting.
On April 1, 2004, 13,916,077 shares of Class A Stock and 3,094,198 shares of Class B Stock were outstanding and, thus, are eligible to vote at the Annual Meeting.
What are the voting rights of the holders of Class A Stock and Class B Stock?
Holders of Class A
Common Stock and holders of Class B Common Stock will vote as one class on the matters to be entitled to vote on all
matters properly brought before the meeting.
Enclosed for your review and consideration is a proxy statement in connection
with the solicitation of proxies on behalf of the Board of Directors of the
Company for use at the Annual Meeting of Shareholders. You are urged to read the
proxy statement carefully. YOUR VOTE IS IMPORTANT.
Whether or not you expect to attend the meeting in person, please mark, sign and
return the accompanying proxy card in the enclosed envelope. If you later desire
to revoke your proxy, you may do so at any time prior to its exercise by giving
written notice to the Secretary of the Company, by executing a subsequent dated
proxy or by personally attending and votingvoted upon at the Annual Meeting. Any proxy
that is not revoked will be voted at the meeting as directed in the proxy, or,
where no direction is given, the proxy will be voted in accordance with the
recommendations of the Board of Directors.
All BFC Financial Corporation shareholders are invited to attend the
BankAtlantic Bancorp, Inc. Annual Meeting of Shareholders, which will be held at
Signature Grand at 5:30 p.m.
Sincerely,
/s/ Glen R. Gilbert
Glen R. Gilbert
Secretary
BFC FINANCIAL CORPORATION
P.O. Box 5403
Fort Lauderdale, FL 33310-5403
PROXY STATEMENT
MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of proxies
to be used at the 2003 Annual Meeting of Shareholders (the "Annual Meeting") of
BFC Financial Corporation (the "Company" or "BFC") to be held on Tuesday, May
20, 2003, commencing at 6:00 p.m., local time, at Signature Grand, 6900 State
Road 84, Davie, Florida 33317 and any adjournment thereof, for the election of
three members to the Board of Directors of the Company and for any other matter
properly brought before the Annual Meeting.
This solicitation of proxies is made on behalf of the Board of Directors of the
Company.
Each proxy solicited hereby, if properly executed and received by the Company
prior to the Annual Meeting and not revoked prior to its use, will be voted in
accordance with the instructions contained therein. Executed proxies with no
instructions contained therein will be voted for the election of the nominees
for director described below. Although the Board of Directors is unaware of any
matters to be presented at the Annual Meeting other than matters disclosed
herein, if any other matters are properly brought before the Annual Meeting, the
persons named in the enclosed form of proxy would vote as proxies in accordance
with their own best judgment on those matters.
Holders of the Company's Class A Common Stock and Class B Common Stock will be
entitled to vote for the election of the three nominees to the Company's Board
of Directors and on any other matter properly brought before the Annual Meeting.
Any shareholder signing and returning a proxy on the enclosed form has the power
to revoke it at any time before it is exercised by notifying the Secretary of
the Company in writing at the address set forth above, by submitting a duly
executed proxy bearing a later date or by attending the Annual Meeting and
voting in person.
NOTICE OF PREVIOUSLY ADOPTED AMENDMENT
In addition, the Company is informing you that, on April 15, 2003, the holders
of outstanding shares of Class A Common Stock and Class B Common Stock
representing a majority of the votes entitled to be cast, including the holders
of a majority of the shares of Class B Common Stock voting as a separate class,
approved an amendment (the "Amendment") to the Company's Amended and Restated
Articles of Incorporation, as amended (the "Articles of Incorporation"), by
written consent in lieu of a meeting. We are not asking you for a proxy in
connection with the previously adopted Amendment and you are not required to
send us a proxy in connection with the previously adopted Amendment. Pursuant to
the Amendment, once the number of outstanding shares of Class B Common Stock
falls below 500,000 shares, the per
share voting power of the Class A Common Stock and the Class B Common Stock will
be the same and the holders of Class A Common Stock and Class B Common Stock
will then each be entitled to one vote for eachper share, held. The Company
undertook to adopt the Amendment in connection with the Company's application to
list the Class A Common Stock on the NASDAQ National Market. Based on such
Amendment, the Company believes that its shares of Class A Common Stock will be
approved for listing on the NASDAQ National Market subject to stated conditions
for listing.
The approval of the Amendment by those shareholders was sufficient to approve
the Amendment, no action by the other holders of Class A Common Stock or Class B
Common Stock is required.
RECORD DATE; SHAREHOLDERS ENTITLED TO VOTE
Only shareholders of record, at the close of business on March 26, 2003 are
entitled to vote at the Annual Meeting. On that day, there were issued and
outstanding 6,476,999 shares of Class A Common Stock and 2,362,365 shares of
Class B Common Stock. Holders of the Company's Class A Common Stock and Class B
Common Stock are entitled to vote on all matters properly brought before the
Annual Meeting. Each holder of Class A Common Stock is entitled to one vote for
each share held, with all holders of Class A Common Stock possessinghaving in the aggregate 22% of the totalgeneral voting power. HoldersThe number of votes represented by each share of Class B Common Stock, havingwhich represent in the remainingaggregate 78% of the totalgeneral voting power, are entitled to 9.720727 votes foris calculated each share held underyear in accordance with the terms of the Company'sCompany’s Amended and Restated Articles of Incorporation. See
"Quorum", "Vote Required for Approval" and "Security OwnershipAt this year’s Annual Meeting, each outstanding share of Certain
Beneficial Owners and Management."
QUORUMClass B Stock will be entitled to 15.9456 votes on each matter.
What constitutes a quorum?
The presence at the Annual Meeting, in person or by proxy, of the holders of shares representing a majority of the aggregate voting power (as described above) of our Common Stockthe common stock outstanding on the record date will constitute a quorum, permitting the conduct of business at the Annual Meeting.
What is the difference between a shareholder of record and a “street name” holder?
If your shares are registered directly in your name with American Stock Transfer & Trust Company, the Company’s stock transfer agent, you are considered the shareholder of record with respect to those shares. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of these shares but not the shareholder of record, and your shares are held in “street name.”
2
How do I vote my shares?
If you are a shareholder of record, you can give a proxy to be voted at the Annual Meeting constitutesby mailing in the enclosed proxy card.
If you hold your shares in “street name,” you must vote your shares in the manner prescribed by your broker or nominee. Your broker or nominee has enclosed or provided a quorum, permitting businessvoting instruction card for you to be conducteduse in directing the broker or nominee how to vote your shares.
Can I vote my shares in person at the Annual Meeting.
In the event that thereMeeting?
Yes. If you are not sufficienta shareholder of record, you may vote your shares represented for a quorum,at the Annual Meeting by completing a ballot at the Annual Meeting.
However, if you are a “street name” holder, you may be adjournedvote your shares in person only if you obtain a signed proxy from timeyour broker or nominee giving you the right to time until a quorum is obtained.
Abstentions and "broker non-votes" (asvote the shares.
Even if you currently plan to attend the Annual Meeting, we recommend that you also submit your vote by proxy or by giving instructions to your broker or nominee as described below)above so that your vote will be counted if you later decide not to determineattend the presenceAnnual Meeting.
What are my choices when voting?
In the election of a quorum.
VOTE REQUIRED FOR APPROVAL
To elect the threedirectors, you may vote for all nominees, or your vote may be withheld with respect to one or more nominees. The proposal related to the Company'selection of directors is described in this Proxy Statement beginning at page 7.
What is the Board’s recommendation?
The Board of Directors recommends a voteFORall of the nominees for director.
What if I do not specify how I want my shares voted?
If you do not specify on your proxy card how you want to vote your shares, the proxy holder will vote themFORall of the nominees for director.
Can I change my vote?
Yes. You can revoke your proxy at any time before it is exercised in any of three ways:
| • | | by submitting written notice of revocation to the Company’s Secretary; |
|
| • | | by submitting another proxy by mail that is dated later and is properly signed; or |
|
| • | | by voting in person at the Annual Meeting. |
What vote is required for a proposal to be approved?
For the election of directors, the affirmative vote of a plurality of the votes cast of Class A Common Stock and Class B Common
Stock voting together without regard to classat the Annual Meeting is required. Brokers or other nominees who hold shares in "street name" for customers will be
permitted to exercise voting discretionA properly executed proxy marked “WITHHOLD AUTHORITY” with respect to the election of directors. Accordingly, absent specific and timelyone or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a quorum.
If you hold your shares in “street name” through a broker or other nominee, your broker or nominee may or may not vote your shares in its discretion if you have not provided voting instructions to the broker. Whether the broker may vote your shares in its discretion depends on the proposals before the Annual Meeting. “Broker non-votes” occur when shares held through the broker are not voted with respect to a particular proposal because the broker has not received voting instructions from the beneficial owner of such shares, brokers or nominees are empoweredand the broker lacks discretionary authority to vote such shares with respect toshares. For the election of directors. However, because shares held
by brokers or nominees will not be considered entitled to vote on matters as to
which
2
the brokers withhold authority (so called "broker non-votes"), broker non-votesdirectors, “broker non-votes” will have no effect on the outcome of the electionelection.
3
Are there any other matters to be acted upon at the Annual Meeting?
We do not know of directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Listedany other matters to be presented or acted upon at the Annual Meeting. If any other matter is presented at the Annual Meeting on which a vote may properly be taken, the shares represented by proxies will be voted in accordance with the judgment of the person or persons voting those shares.
CORPORATE GOVERNANCE
Pursuant to the Company’s bylaws and the Florida Business Corporation Act, the Company’s business and affairs are managed under the direction of the Board of Directors. Directors are kept informed of the Company’s business through discussions with management, including the Chief Executive Officer and other senior officers, by reviewing materials provided to them and by participating in meetings of the Board of Directors and its committees.
Determining Director Independence
The Board undertook a review of each director’s independence in March 2004. During this review, the Board considered transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates, including those reported below under“Certain Relationships and Related Transactions.”The Board also examined transactions and relationships between directors or their affiliates and members of the Company’s senior management or their affiliates. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent under applicable laws and regulations and the Nasdaq Stock Market (“Nasdaq”) listing standards. The Board determined that the following relationships will not be deemed to be material relationships which impair independence: (i) banking relationships with BankAtlantic in the table below areordinary course of BankAtlantic’s business, (ii) serving on third party boards of directors with other members of the beneficial owners knownBoard, (iii) payments or charitable gifts by the Company to holdentities with which a director is an executive officer or employee where such payments do not exceed the greater of $1 million or 2% of such company’s or charity’s consolidated gross revenues, and (iv) investments by directors in common with each other or the Company. As a result of its review of the relationships of each of the members of the Board, the Board affirmatively determined that a majority of the Company’s Board members, including Oscar Holzmann, Earl Pertnoy, and Neil Sterling, are “independent” directors within the meaning of the listing standards of Nasdaq and applicable law. D. Keith Cobb was appointed to the Board in accordance with the Company’s By-Laws effective April 2, 2004, to serve until the election of directors at the 2004 Annual Meeting. Upon his appointment, the Board affirmatively determined that D. Keith Cobb was an “independent” director within the meaning of the listing standards of Nasdaq and applicable law.
Committees of the Board of Directors and Meeting Attendance
The Board met eleven times during 2003. The Board of Directors has established Audit, Compensation and Nominating and Corporate Governance Committees. The Board has adopted a written charter for each of these three committees and Corporate Governance Guidelines that address the make-up and functioning of the Board. The Board has also adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees. The committee charters, Corporate Governance Guidelines and Code of Business Conduct and Ethics are posted in the “Investor Relations” section of our website at www.bfcfinancial.com/investor/.
Each of the members of the Board of Directors attended at least 75% of the meetings of the Board and Committees on which he served, and 60% of the then-serving members of the Board of Directors attended the Annual Meeting in 2003, although the Company has no formal policy requiring them to do so.
The Audit Committee
The Audit Committee consists of Oscar Holzmann, Chairman, Earl Pertnoy and Neil Sterling. The Board has determined that all members of the Audit Committee are “financially literate” and “independent” within the meaning of the listing standards of the Nasdaq and applicable SEC regulations. Mr. Holzmann, the chair of the Committee, is qualified as the “audit committee financial expert” within the meaning of SEC regulations and the Board has determined that he has the finance and accounting expertise which results in his “financial sophistication” within the meaning of the listing standards of Nasdaq. The Committee met five times during the 2003 fiscal year. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the
4
independent auditor. Additionally, the Audit Committee assists Board oversight of: (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications, performance and independence of the Company’s independent auditor and (iv) the performance of the Company’s internal audit function. A report from the Audit Committee is included at page 18, and the Audit Committee’s Charter is attached as Appendix A to this proxy statement.
The Compensation Committee
The Compensation Committee consists of Earl Pertnoy, Chairman, Oscar Holzmann and Neil Sterling. All of the members of the Committee are considered to be “independent” within the meaning of the listing standards of Nasdaq. The Committee met three times during 2003. The Compensation Committee provides assistance to the Board in fulfilling its responsibilities relating to compensation of the Company’s executive officers. It reviews and determines the compensation of the Chief Executive Officer and determines or makes recommendations with respect to the compensation of the Company’s other executive officers. It also assists the Board of Directors in the administration of the Company’s equity-based compensation plans.A report from the Compensation Committee is included at page 16.
The Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee was established by Board resolution in March 26, 20032004. The Nominating and Corporate Governance Committee consists of Neil Sterling, Chairman, Oscar Holzmann and Earl Pertnoy. All of the members of the Committee are considered to be “independent” within the meaning of the listing standards of Nasdaq. The Nominating and Corporate Governance Committee is responsible for assisting the Board of Directors in identifying individuals qualified to become directors, making recommendations of candidates for directorships, developing and recommending to the Board a set of corporate governance principles for the Company, overseeing the evaluation of the Board and management, overseeing the selection, composition and evaluation of Board committees and overseeing the management continuity and succession planning process.
Generally, the Committee will identify candidates through the business and other organization networks of the directors and management. Candidates for director will be selected on the basis of the contributions the Committee believes that those candidates can make to the Board and to management and on such other qualifications and factors as the Committee considers appropriate. In assessing potential new directors, the Committee will seek individuals from diverse professional backgrounds who provide a broad range of experience and expertise. Board candidates should have a reputation for honesty and integrity, strength of character, mature judgment and experience in positions with a high degree of responsibility. In addition to reviewing a candidate’s background and accomplishments, candidates for director nominees are reviewed in the context of the current composition of the Board and the evolving needs of the Company. The Company also requires that its Board members be able to dedicate the time and resources sufficient to ensure the diligent performance of their duties on the Company’s behalf, including attending Board and applicable committee meetings. If the Committee believes a candidate would be a valuable addition to the Board, it will recommend the candidate’s election to the full Board.
This year, D. Keith Cobb, who was appointed as a director by the Board in April 2004, is standing for election by the shareholders for the first time. Our Chief Executive Officer recommended Mr. Cobb to the Board. Mr. Cobb also sits on the BankAtlantic Bancorp, Inc. board and was selected based on his administrative skills, active involvement in the community, financial expertise and knowledge and understanding of statewide issues in Florida.
Under the Company’s bylaws, nominations for directors may be made only by or at the direction of our Board of Directors, or by a shareholder entitled to vote who delivers written notice (along with certain additional information specified in our bylaws) not less than 90 nor more than 5%120 days prior to the first anniversary of either classthe preceding year’s annual meeting. For the Company’s 2005 Annual Meeting, we must receive this notice between January 11 and February 10, 2005.
Executive Sessions of our outstanding Common
Stock.Independent Directors
In accordance with applicable Nasdaq rules, beginning in 2004 the independent directors of the Company intend to have periodic executive sessions of the Board in which non-independent directors and members of management do not participate. Earl Pertnoy has been selected as the presiding director for these sessions.
Compensation of Directors
The Company’s Compensation Committee recommends director compensation to the Board based on factors it considers
5
appropriate and based on the recommendations of management. Non-employee directors of the Company each received annual retainer fees of $30,000 in 2003 with no additional compensation for attendance at Board of Directors’ meetings and $5,500 annually for attendance at meetings of the Audit Committee except as noted below. Effective February 3, 2003, members of the Audit Committee began to receive $4,000 per quarter for their service on that committee. In addition, this table includesbeginning February 3, 2003 the outstanding securities beneficially
owned byChairman of the Company's executive officers andAudit Committee received an additional fee of $1,000 per quarter for service as Chairman. On February 3, 2003 all non-employee directors then serving received options to acquire 8,985 shares of the Company’s Class B Stock under the BFC Financial Corporation Stock Option Plan as Amended (the “Option Plan”) at an exercise price of $2.8672 per share. The number of options granted and the numberexercise price per share have been adjusted in accordance with the Option Plan to reflect the stock dividend payable on June 17, 2003 and the stock splits payable on December 1, 2003 and March 1, 2004. All such options vested and became exercisable immediately upon grant. Directors who are also officers of shares
owned bythe Company or its subsidiaries do not receive additional compensation for their service as directors or for attendance at Board of Directors’ meetings or committee meetings.
Director and executive officers as a group.
CLASS A CLASS B
COMMON STOCK COMMON STOCK
OWNERSHIP AS OWNERSHIP AS PERCENT OF PERCENT OF
OF MARCH OF MARCH CLASS A CLASS B
NAME OF BENEFICIAL OWNER 26, 2003 26, 2003 COMMON STOCK COMMON STOCK
- ------------------------ -------- -------- ------------ ------------
I.R.E. Realty Advisory Group, Inc. (2)(3)(5) 1,375,000 500,000 21.24% 9.63%
I.R.E. Properties, Inc. (3)(5) 375,832 136,666 5.80% 2.63%
I.R.E. Realty Advisors, Inc. (3)(5) 666,108 242,221 10.29% 4.67%
Florida Partners, Corporation (3)(5) 366,614 133,314 5.66% 2.57%
Levan Enterprises, Ltd. (3)(5) 153,629 55,865 2.37% 1.08%
Alan B. Levan (1)(3)(5)(6) 2,940,483 2,339,673 45.41% 45.07%
John E. Abdo (1)(3)(5)(6) 1,019,563 1,720,750 15.75% 33.15%
Dr. Herbert A. Wertheim (4) 1,145,232 416,448 17.69% 8.02%
Glen R. Gilbert (1)(5) 2,690 123,478 0.04% 2.38%
Earl Pertnoy (1)(5) 18,975 83,150 0.29% 1.60%
Oscar Holzmann (1)(5) -- 5,000 0.00% 0.10%
Neil Sterling (1)(5) -- 5,000 0.00% 0.10%
All directors and executive officers
of the Company as a group
(6 persons, including the
individuals identified above) (1)(3) 3,981,711 4,277,051 61.49% 82.39%
- ----------
(1) Amount and nature of beneficial ownership and percent of class include
shares that may be acquired within 60 days pursuant to exercise of stock
options to purchase Class B Common Stock as follows:Management Indebtedness On February 6, 2001, Alan B. Levan, 1,270,407 shares,Chairman, President and Chief Executive Officer of the Company, borrowed $500,000 from the Company on a recourse basis and Glen R. Gilbert, Executive Vice President, and Earl Pertnoy, a director of the Company, each borrowed $50,000 on a non-recourse basis to make investments in a technology company sponsored by the Company. Such amounts bear interest at the prime rate plus 1% with only interest payable annually and the entire balance due in February 2006.
On July 16, 2002, John E. Abdo, 1,350,000 shares, Glen R. Gilbert 122,500
shares, Earl Pertnoy 76,250 shares, Oscar Holzmann 5,000 shares and Neil
Sterling 5,000 shares.
(2) The Company owns 45.5% of I.R.E. Realty Advisory Group, Inc.
(3) The Company may be deemed to be controlled by Alan B. Levan and John E.
Abdo who collectively may be deemed to have an aggregate beneficial
ownership of 68.8%Vice Chairman of the outstanding Common Stock ofCompany, borrowed $3.5 million from the Company on a recourse basis and paid off an existing $500,000 loan due to the Company. Levan
Enterprises, Ltd.The $3.5 million loan bears interest at the prime rate plus 1%, requires monthly interest payments, is a controllingdue on demand and majority shareholder of I.R.E.
Realty Advisors, Inc. and I.R.E. Properties, Inc. and may be deemed to be
the controlling shareholder of I.R.E. Realty Advisory Group, Inc. and
3
Florida Partners Corporation. Levan Enterprises, Ltd. is a limited
partnership whose sole general partner is Levan General Corp., a
corporation 100% ownedsecured by Alan B. Levan. Therefore, Mr. Levan may be
deemed to be the beneficial owner of the shares of Common Stock owned by
each of such entities. In addition to his personal holdings of Common
Stock, Mr. Levan may be deemed to be the beneficial owner of 3,3001,019,564 shares of Class A Common Stock and 1,200370,750 shares of Class B Common Stock heldStock.
Such amounts were still outstanding at the end of record by Mr. Levan's wife and 1,270,407 shares of Class B Common Stock
which can be acquired within 60 days pursuant to stock options, for an
aggregate beneficial ownership of 2,940,483 shares (45.41%) of Class A
Common Stock and 2,339,673 shares (45.07%) of Class B Common Stock.
(4) Dr. Wertheim's ownership was reported in a Rebuttal of Control Agreement
filed on December 20, 1996the year,
Communications with the OfficeBoard of Thrift Supervision (as
adjusted for stock splits sinceDirectors and Non-Management Directors
Shareholders who wish to communicate with the dateBoard of filing). The Rebuttal of
Control Agreement indicates that Dr. Wertheim has no intentionDirectors, any individual director or the non-management directors as a group can write to manage
or control, directly or indirectly, the Company. Dr. Wertheim's mailing
address is 191 Leucadendra Drive, Coral Gables, Florida 33156.
(5) Mailing address isCorporate Secretary, BFC Financial Corporation, 1750 East Sunrise Boulevard, Fort Lauderdale, Florida 33304. (6) Messrs. Levan and Abdo have entered intoThe letter should include a Shareholders Agreement and
Irrevocable Proxy with respectstatement indicating that the sender is a shareholder of the Company. Depending on the subject matter, an officer of the Company will:
| • | | forward the letter to the director or directors to whom it is addressed; |
|
| • | | attempt to handle the inquiry directly if it relates to routine or ministerial matters, including requests for information; or |
|
| • | | not forward the letter if it is primarily commercial in nature or if it is determined to relate to an improper or irrelevant topic. |
A member of management will, at each meeting of the Board, present a summary of all letters received since the last meeting that were not forwarded to the sharesBoard and will make those letters available to the Board upon request.
Code of Class B Common Stock
controlled by them. Under the agreement, they have agreedEthics
The Company has a Code of Business Conduct and Ethics which is applicable to vote their
shares of Class B Common Stock in favorall directors, officers and employees of the electionCompany, including the principal executive officer, the principal financial officer and the principal accounting officer. The Code of each otherEthics is available on the Company’s website at www.bfcfinancial.com/investor/. The Company intends to post amendments to or waivers from its Code of Ethics (to the extent applicable to the Company'sCompany’s chief executive officer, principal financial officer or principal accounting officer) on its website.
Compensation Committee Interlocks and Insider Participation
The Board of Directors for so long as Mr. Levanhas designated directors Pertnoy, Holzmann and Mr. AbdoSterling, none of whom are willing and ableemployees of the Company or any of its subsidiaries, to serve as directorson the Compensation Committee. The Company’s executive officers are also executive officers of BankAtlantic Bancorp, Inc. and Levitt Corporation, entities deemed to be controlled by the Company.
6
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of the Company. Additionally, Mr.
Abdo will grant an irrevocable proxy to an entity controlled by Mr. Levan
and obtaincopies of the consent of Mr. Levan priorforms furnished to the sale or conversion of
certain of his shares of Class B Common Stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCECompany and written representations that no other reports were required, the Company believes that during the year ended December 31, 2003, all filing requirements under Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities,applicable to file with
the SEC initial reports of ownership and reports of changes in ownership of the
Common Stock of the Company. Copies of all such reports filed with the SEC are
required to be furnished to the Company. Based solely on the Company's review of
the copies of such reports it has received, the Company believes that all of its
executive officers, directors and greater than ten percent10% beneficial owners were complied with all filing requirements applicable to themon a timely basis except that one Form 4 was inadvertently filled late with respect to five transactions duringon behalf of director Earl Pertnoy regarding the year ended December 31, 2002 except for Oscar Holzmann
who became a director on November 4, 2002 and whose initial Form 3 was
inadvertently not filed until February 7, 2003.sale of shares of the Company’s common stock.
PROPOSAL AT THE ANNUAL MEETING
PROPOSAL FOR ELECTION OF DIRECTORS
Nominees for Election as Director
The Bylaws of the CompanyCompany’s By-Laws provide that the Board of Directors shall consist of notno less than three nor more than twelve directors. The specific number of directors is set from time to time by resolution of the Board. The Company’s Board of Directors currently consists of six directors divided into three classes.
In November 2002, the numberclasses, each of which has a three-year term, expiring in annual succession. The Board was expanded from four to five directors on the Company's Board of Directors
was increasedFebruary 3, 2003 and from five to four and in February 2003,
4
the number ofsix directors on the Company's Board of DirectorsApril 2, 2004. Director Neil Sterling was increasedappointed to
five. Oscar Holzmann was elected by the Board of Directorsin accordance with the Company’s By-Laws effective February 3, 2003 to fill a vacancy in
November 2002 and, Neil Sterlingat the 2003 Annual Meeting, was elected byto a one-year term to expire at the 2004 Annual Meeting. D. Keith Cobb was appointed to the Board of Directors to fill a
vacancy in February 2003, in each case,accordance with the Company’s By-Laws effective April 2, 2004, to serve until the election of directors at the 2004 Annual Meeting. Additionally, the term
A total of Earl Pertnoy expiresthree directors will be elected at the Annual Meeting. Accordingly, three directors have been nominatedMeeting, two of whom will be elected for election as
directors at the Annual Meeting. Neil Sterlingterm expiring in 2007 and one of whom will be elected for the term expiring in 2006. Each of the nominees has been nominatedconsented to serve the term indicated. If any of them should become unavailable to serve as a director, in the class whose term expires atBoard may designate a substitute nominee. In that case, the 2004 Annual Meeting of
Shareholders, Oscar Holzmann has been nominated to servepersons named as a director inproxies will vote for the class whose term expires atsubstitute nominee designated by the 2005 Annual Meeting of Shareholders and Earl
Pertnoy has been nominated to serve as a director in the class whose term
expires at the 2006 Annual Meeting of Shareholders. All directors are to serve
until the election and qualification of their respective successors.Board. Except as disclosed elsewhere in this Proxy Statement, to the Company's
knowledge, there are no arrangements or understandings between the Company and
any person pursuant to which such person has been or will be elected a director
and there are no familial relationships between any directors and officers of
the Company.
Unless otherwise directed, each proxy executed and returned by a shareholder
will be voted for the election ofindicated, the nominees shown below.
The Board of Directors recommends that holders of Class A Common Stock and holders of Class B Common Stock vote FOR the election of each of the nominees
for director.
BOARD OF DIRECTORS
The following information is provided for each of the Company's current
directors.
NAME AGE DIRECTOR SINCE TERM EXPIRES
---- --- -------------- ------------
John E. Abdo 59 1988 2005
Oscar Holzmann 60 2002 2003
Alan B. Levan 58 1978 2004
Earl Pertnoy 76 1978 2003
Neil Sterling 51 2003 2003
Mr. Sterling is nominated to serve a one-year term expiring at the 2004 Annual
Meeting of Shareholders, Mr. Holzmann is nominated to serve a two-year term
expiring at the 2005 Annual Meeting of Shareholders and Mr. Pertnoy is nominated
to serve a three-year term expiring at the 2006 Annual Meeting of Shareholders.
Thedirectors listed below have had no change in principal occupation and certain other information with respect to each
director, includingor employment during the nominees, are set forth below.
JOHN E. ABDO has been principally employed as Vice Chairman of BankAtlantic
since April 1987 and Chairman of the Executive Committee of BankAtlantic since
October 1985. He has been a director of the Company since 1988 and Vice Chairman
of the Board of the Company since 1993. He has been a director and Vice Chairman
of the Board of BankAtlantic Bancorp,
5
Inc., the holding company for BankAtlantic, since 1994, a director of
BankAtlantic since 1984 and President of Levitt Corporation, a wholly owned
subsidiary of BankAtlantic, since 1985. He has been Vice Chairman of the Board
of Levitt Corporation since April 2001. He has been President and Chief
Executive Officer of the Abdo Companies, Inc., a real estate development,
construction and real estate brokerage firm, for more thanpast five years. He is
also a director of Benihana, Inc., a national restaurant chain, and a director
and Vice Chairman of the Board of Bluegreen Corporation, a public company whose
stock is traded on the New York Stock Exchange, and in which BankAtlantic
Bancorp, Inc. has an approximately 40% interest. Mr. Abdo is also President of
the Broward Performing Arts Foundation.
OSCAR HOLZMANN has been an Associate Professor of Accounting at the University
of Miami since 1980. He received his Ph.D. in Business Administration from
Pennsylvania State University in 1974.
The Directors Standing For Election Are:
TERMS ENDING IN 2007:
| | |
| ALAN B. LEVAN | | Director since 1978 |
Mr. Levan, age 59, formed the I.R.E. Group (predecessor to the Company) in 1972. Since 1978, he has been the Chairman of the Board, President, and Chief Executive Officer of the Company or its predecessors. He is Chairman of the Board and President of I.R.E. Realty Advisors, Inc., I.R.E. Properties, Inc., I.R.E. Realty Advisory Group, Inc. and Florida Partners Corporation. He has been Chairman of the Board, President and Chief Executive Officer of BankAtlantic Bancorp, Inc. since 1994, and President and Chairman of the Board of BankAtlantic since 1987. He is Chairman of the Board of Levitt Corporation and Bluegreen Corporation. HeCorporation, each of which is an individual general partnera public company whose stock is traded on the New York Stock Exchange.
| | |
| NEIL STERLING | | Director since 2003 |
Mr. Sterling, age 52, has been the principal of The Sterling Resources Group, a business development-consulting firm in Fort Lauderdale, Florida, since 1998.
7
TERM ENDING IN 2006:
| | |
| D. KEITH COBB | | Director since 2004 |
Mr. Cobb, age 63, has served as a business consultant and an officer andstrategic advisor to a directornumber of companies since 1996. In addition, Mr. Cobb completed a six-year term on the Board of the corporate general partnerFederal Reserve Bank of Miami in 2002. Mr. Cobb spent thirty-two years as a public limited partnership that
is affiliated withpracticing CPA at KPMG LLP, and was Vice Chairman and CEO of Alamo Rent A Car, Inc. from 1995 until its sale in 1996. Mr. Cobb also serves on the Company.
boards of BankAtlantic Bancorp, Inc., a subsidiary of the Company, CRA Qualified Investment Fund (a registered mutual fund) and several private companies.
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF CLASS A COMMON STOCK AND HOLDERS OF CLASS B COMMON STOCK VOTE FOR THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
Directors Continuing In Office:
TERM ENDING IN 2006:
| | |
| EARL PERTNOY | | Director since 1978 |
Mr. Pertnoy, age 77, is a real estate investor and developer. He has been a director of the Company and its predecessor companies since 19781978.
TERMS ENDING IN 2005:
| | |
| JOHN E. ABDO | | Director since 1988 |
Mr. Abdo, age 60, has been principally employed as Vice Chairman of BankAtlantic since April 1987 and Chairman of the Executive Committee of BankAtlantic since October 1985. He has been a director of the Company since 1988 and Vice Chairman of the Board of the Company since 1993. He has been a director and Vice Chairman of the Board of BankAtlantic Bancorp, Inc., the holding company for BankAtlantic, since 1994, a director of BankAtlantic since 1984 and President of Levitt Corporation since 1985. He has been Vice Chairman of the Board of Levitt Corporation since April 2001. He has been President and Chief Executive Officer of the Abdo Companies, Inc., a real estate development, construction and real estate brokerage firm, for more than five years. He is also a director of the corporate general partner ofBenihana, Inc., a public limited partnership that is affiliated
with the Company.
NEIL STERLING has been the principal of The Sterling Resources Group,national restaurant chain, and a business
development-consulting firm in Fort Lauderdale, Florida, since 1998.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 2002, the Board of Directors held eleven meetings. No director attended
fewer than seventy-five percent (75%) of the total number of meetingsand Vice Chairman of the Board of Directors or the committees on which such Board member served during
this period. The Board of Directors has two committees, the Audit Committee and
the Compensation Committee.
The membersBluegreen Corporation. Mr. Abdo is also President of the Audit Committee for 2002 consistedBroward Performing Arts Foundation.
| | |
| OSCAR HOLZMANN | | Director since 2002 |
Mr. Holzmann, age 61, has been an Associate Professor of Earl Pertnoy forAccounting at the entire yearUniversity of Miami since 1980. He received his Ph.D. in Business Administration from Pennsylvania State University in 1974.
Identification of Executive Officers and Oscar Holzmann from the date he joined the Board.Significant Employees
The primary
responsibilityfollowing individuals are executive officers of the Audit Committee is to oversee the Company's reporting
process on behalf of the Board of Directors and the shareholders and to report
the results of its activities to the Board of Directors. The Audit Committee
engages the independent auditors, approves all auditing services and non-audit
services to be provided by the independent auditor, considers the fee
arrangement and scope of the audit, reviews the financial statements and the
independent auditors' report, and reviews internal accounting procedures and
controls with the Company's financial and accounting staff.
6
A report of the Audit Committee is included on page 14 and the Audit Committee's
Charter is attached as Appendix A. The Audit Committee held six meetings during
the year ended December 31, 2002. In 2003, Director Neil Sterling joined the
Audit Committee with Mr. Pertnoy and Mr. Holzmann. All members of the Audit
Committee are "independent" as such term is defined by the listing standards of
the NASDAQ Stock Market.
The sole member of the Compensation Committee for 2002 was Mr. Pertnoy. The
Compensation Committee held one meeting during 2002. The primary purpose of the
Compensation Committee is to provide assistance to the Board of Directors in
fulfilling its responsibilities to oversee and participate in the creation and
administration of executive compensation programs and practices. It also serves
as the Stock Option Committee for the purpose of determining incentive stock
options to be granted under the Company's Stock Option Plan. In 2003, Oscar
Holzmann and Neil Sterling joined the Compensation Committee with Mr. Pertnoy.
The Board of Directors has no standing nominating committee.
COMPENSATION OF DIRECTORS
Members of the Board of Directors of the Company who are not employees of the
Company receive $2,500 per month for serving on the Company's Board of
Directors. Additionally, commencing in 2003, members of the Audit Committee
receive an annual fee of $10,000 and the Chairman of the Audit Committee
receives an additional annual fee of $5,000. Other than such compensation, there
are no other arrangements pursuant to which any director is compensated for his
services as such.
IDENTIFICATION AND BACKGROUND OF EXECUTIVE OFFICERS
The Executive Officers of the Company are as follows:
Company:
NAME AGE POSITION
---- --- --------
| | |
Name
| | Position
|
Alan B. Levan 58 President, | | Chairman of the Board, Chief Executive Officer, President and Director |
John E. Abdo 59 | | Vice Chairman of the Board and Director |
Glen R. Gilbert 58 | | Executive Vice President, Chief Financial and Accounting Officer and Secretary |
| Phil Bakes | | Executive Vice President |
8
All such officers will serve until they resign or are replaced or removed by the Board of Directors.
BACKGROUND OF EXECUTIVE OFFICERS
ALAN B. LEVAN - See "Board Of Directors."
JOHN E. ABDO - See "Board Of Directors."
7
GLEN
The following additional information is provided for the executive officers shown above who are not directors of the Company or director nominees:
Glen R. GILBERTGilbert,age 59, has been Executive Vice President of the Company since July 1997. In May 1987, he was appointed Chief Financial and Accounting Officer and, in October 1988, was appointed Secretary. He joined the Company in November 1980 as Vice President and Chief Accountant. He has been a certified public accountant since 1970. He serves as an officer of Florida Partners Corporation
and of the corporate general partner of a public limited partnership that is
affiliated with the Company.Corporation. He has been Executive Vice President, Chief Financial Officer and Secretary of Levitt Corporation since 1997.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the annual
compensation paid by
Phil Bakes, age 58,joined the Company BankAtlanticas an Executive Vice President in January 2004. Before joining the Company, he served as Chairman, Co-Founder and Levitt Corporation, for
services rendered inChief Executive Officer of FAR&WIDE Travel Corp. from 1999 to 2003. In September 2003, FAR&WIDE Travel Corp. liquidated and sold virtually all capacities during the three years ended December 31,
2002 to eachof its assets under Chapter 11 of the U.S. Bankruptcy Act. Prior to founding FAR&WIDE Travel Corp., Mr. Bakes served as president and chief executive officersofficer of the Company.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS Payouts
OTHER ------ ------- ALL
NAME AND ANNUAL RESTRICTED STOCK OTHER
PRINCIPAL COMPEN- STOCK OPTION LTIP COMPEN-
POSITION SOURCE YEAR SALARY BONUS SATION AWARD(S) AWARD(S) PAYOUTS SATION
- ----------------------------------------------------------------------------------------------------------------------------------
(a) ($) ($) ($) ($) (#) ($) ($)
Alan B. Levan BFC 2002 570,560 399,100 -- -- -- 6,288 105,116(b)
Chairman of the Board, BankAtlantic 2002 438,887 443,800 9,600(f) -- 60,000 -- 121,707(c)
President and Chief Levitt 2002 83,791 62,500 -- -- -- -- --
Executive Officer
BFC 2001 538,510 255,833 -- -- -- 4,480 101,073(b)
BankAtlantic 2001 383,405 345,500 7,385(f) -- 40,000 -- 134,030(c)
Levitt 2001 -- 50,000 -- -- -- -- --
BFC 2000 517,798 92,247 -- -- -- 5,315 97,185(b)
BankAtlantic 2000 387,890 312,624 -- -- 60,000 -- 137,635(c)
Levitt 2000 -- -- -- -- -- -- --
John E. Abdo BFC 2002 264,879 156,000 -- -- -- 6,288 --
Vice Chairman of the BankAtlantic 2002 211,368 118,004 18,600(d) 40,000 8,040(e)
Board Levitt 2002 263,187 425,000 -- -- -- -- --
BFC 2001 250,000 150,000 -- -- -- 4,880 --
BankAtlantic 2001 181,700 92,836 18,600(d) -- 30,000 -- 15,840(e)
Levitt 2001 250,000 250,000 -- -- -- -- --
BFC 2000 181,730 112,500 -- -- -- 5,315 --
BankAtlantic 2000 196,901 99,000 18,600(d) -- 30,000 -- 15,840(e)
Levitt 2000 91,000 91,000 -- -- -- -- --
Glen R. Gilbert BFC 2002 126,718 84,754 -- -- -- 6,288 --
Executive Vice President, BankAtlantic 2002 -- -- -- -- 15,000 -- --
Chief Financial Officer Levitt 2002 123,938 97,192 -- -- -- -- 6,135(g)
and Secretary
BFC 2001 119,600 29,900 -- -- -- 4,880 --
BankAtlantic 2001 -- -- -- -- 10,000 -- --
Levitt 2001 119,600 29,900 -- -- -- -- --
BFC 2000 136,881 17,250 -- -- -- 5,315 --
BankAtlantic 2000 -- -- -- -- 2,500 -- --
Levitt 2000 93,130 17,250 -- -- -- -- --
8
- ----------
(a) Amounts identifiedan advisory and merchant banking firm as BankAtlantic represent payments or grants by
BankAtlantic and amounts identified as Levitt represent payments or
grants by Levitt Corporation, both wholly owned subsidiaries of
BankAtlantic Bancorp, Inc.
(b) Represents reimbursements or payments for life and disability
insurance.
(c) Includes BankAtlantic contributions of $8,000 in 2002 and $6,800 in
each of 2000 and 2001 to its 401(k) savings plan on behalf of Mr.
Alan Levan, a $40 dividend payment for a Real Estate Investment
Trust ("REIT") controlled by BankAtlantic for 2002, 2001 and 2000
and $113,667 in 2002, $127,190 in 2001 and $130,795 in 2000
representing the value of the benefit received by Mr. Alan Levan in
connection with premiums paid by BankAtlantic Bancorp for a
split-dollar life insurance policy.
(d) Includes $9,000 per year for service as trustee of BankAtlantic's
pension plan, which amount is paid by the pension plan, and $9,600
per yearwell as an auto allowance. Payments were also made to the Abdo
Companies, Inc., a company controlled by Mr. Abdo. See "Certainairline executive.Certain Relationships and Related Transactions."
(e) Includes BankAtlantic contributions of $8,000 in 2002 and $6,800 in
each of 2000 and 2001 to its 401(k) savings plan on behalf of Mr.
Abdo and a $40 dividend payment for the REIT for 2002, 2001 and
2000.
(f) Reflects amount paid as auto allowance.
(g) Includes Levitt Corporation contributions of $6,135 to its 401(k)
savings plan on behalf of Mr. Gilbert.
Other than Mr. Levan and Mr. Abdo, executive officers of BankAtlantic Bancorp,
Inc. and its subsidiaries do not have significant executive responsibilities
with respect to key policy decisions of the Company.
OPTIONS/SAR GRANTS
During the year ended December 31, 2002, there were no individual grants of
stock options to the named executives in the Compensation Table pursuant to the
Company's Stock Option Plan. The Company has not granted and does not currently
grant stock appreciation rights.
The following table sets forth information concerning individual grants of stock
options by BankAtlantic Bancorp, Inc. to the named executives in the Summary
Compensation Table pursuant to the stock option plans of BankAtlantic Bancorp,
Inc. during the year ended December 31, 2002. BankAtlantic Bancorp, Inc. has not
granted and does not currently grant stock appreciation rights.
9
POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS EXERCISE ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE PRICE APPRECIATION FOR
OPTIONS EMPLOYEES IN PER EXPIRATION OPTION TERM (2)
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
---- ------- ----------- ----- ---- --- ---
# % $ $ $
Alan B. Levan 60,000 7.9 11.18 3/4/2012 421,863 1,069,082
John E. Abdo 40,000 5.3 11.18 3/4/2012 281,242 712,722
Glen R. Gilbert 15,000 2.0 11.18 3/4/2012 105,465 267,270
- ----------
(1) All option grants are to acquire shares of BankAtlantic Bancorp, Inc.
Class A Common Stock. All options granted in 2002 vest in 2007.
(2) Amounts for the named executive have been calculated by multiplying the
exercise price by the annual appreciation rate shown (compounded for the
remaining term of the options), subtracting the exercise price per share
and multiplying the gain per share by the number of shares covered by the
options. The dollar amounts under these columns are the result of
calculations based upon assumed rates of annual compounded stock price
appreciation specified by regulation and are not intended to forecast
actual future appreciation rates of BankAtlantic Bancorp's stock price.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END OPTION/SAR VALUE TABLE
The following table sets forth as to each of the named executives in the
Compensation Table information with respect to the number of shares of the
Company's Class B Common Stock acquired upon exercise of options during 2002 and
underlying unexercised options at December 31, 2002.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
NUMBER OF VALUE OPTIONS AT 12/31/2002 ON 12/31/2002 (1)
SHARES REALIZED --------------------- -----------------
ACQUIRED OR UPON
NAME EXERCISED EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- -------- ----------- ------------- ----------- -------------
# $ # # $ $
Alan B. Levan -- -- 1,270,407 75,000 3,478,628 --
John E. Abdo -- -- 1,350,000 75,000 3,831,225 --
Glen R. Gilbert 20,000 122,665 122,500 10,000 155,705 --
(1) Based upon a price of $5.75, which was the price of the last sale as
reported by the OTC Market Report for 2002.
The following table sets forth as to each of the named executives in the
Compensation Table information with respect to the number of shares of
BankAtlantic Bancorp, Inc. Class A
10
Common Stock acquired upon exercise of options during 2002 and underlying
unexercised options at December 31, 2002.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
NUMBER OF VALUE OPTIONS AT 12/31/2002 ON 12/31/2002 (1)
SHARES REALIZED --------------------- -----------------
ACQUIRED OR UPON
NAME EXERCISED EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- -------- ----------- ------------- ----------- -------------
# $ # # $ $
Alan B. Levan -- -- 1,109,939 253,983 6,698,844 795,697
John E. Abdo -- -- 532,962 169,000 3,341,442 475,221
Glen R. Gilbert -- -- -- 27,500 -- 69,532
(1) Based upon a fair market value of $9.45 at December 31, 2002, which was
the closing price for BankAtlantic Bancorp, Inc. Class A Common Stock as
reported on the New York Stock Exchange on December 31, 2002.
LONG-TERM INCENTIVE PLAN ("LTIP") AWARDS TABLE
The Company has made available a profit-sharing plan to all of its employees
(which does not include employees of BankAtlantic Bancorp, Inc. who are not
employees of the Company) who meet certain minimum requirements. The Company is
not required to make any contribution and the amount of the Company's
contribution is determined each year by the Board of Directors. It requires a
uniform allocation to each employee of 0% to 15% of compensation, with the
maximum compensation considered being $50,000. Vesting is in increments over a
6-year period to 100%.Transactions
�� Alan B. Levan, and Glen R. Gilbert are 100% vested. John
E. Abdo is 40% vested. During 2002, the accounts for each of the above named
individuals were credited with a $6,288 contribution.
STOCK PERFORMANCE GRAPH AND COMPENSATION COMMITTEE REPORT
Notwithstanding contrary statements set forth in any of the Company's previous
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
that might incorporate future filings, including this proxy statement, the Stock
Performance Graph and the Compensation Committee Report set forth below shall
not be incorporated by reference into such filings.
STOCK PERFORMANCE GRAPH
The following graph provides an indicator of cumulative total stockholder
returns for the Company as compared with the Wilshire 5000 Total Market Index
and the NASDAQ Bank Index:
11
[LINE GRAPH OMITTED]
12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 12/31/2002
---------- ---------- ---------- ---------- ---------- ----------
BFC Financial Corporation 100 65 30 22 58 57
Wilshire 5000 Total Market 100 122 149 131 115 90
NASDAQ Bank Index 100 88 81 93 102 107
*Assumes $100 invested on December 31, 1997.
COMPENSATION COMMITTEE REPORT
During 2002, Mr. Pertnoy, a non-employee director served on the Compensation
Committee. Currently, Messrs. Pertnoy, Holzmann and Sterling, all non-employee
directors, serve on the Compensation Committee. The Compensation Committee
provided the following report on executive compensation.
EXECUTIVE OFFICER COMPENSATION
The Compensation Committee of BFC Financial Corporation met to consider the
appropriate compensation package to recommend to the Board of Directors for the
Chairman and President, Alan B. Levan and Glen R. Gilbert and John E. Abdo. At
the meeting the following elements were considered:
Executive Compensation Policy - The Company's overall compensation philosophy is
to retain quality personnel, which is critical to both the short-term and
long-term success of the Company. In order to implement that philosophy, the
Company's approach to base compensation is to offer competitive salaries in
comparison to market practices.
General - During 2002 base salaries and other compensation for Mr. Levan, Mr.
Abdo and Mr. Gilbert were increased by 4%. Bonuses were paid for 2002 to
compensate executives based on the Company's profitability and the achievement
of individual and corporate goals. In deciding compensation levels, cost of
living, market compensation levels and general trends in the labor market were
considered and available market information was used as a frame of reference for
annual salary adjustments.
12
Stock Options -No Company stock options were granted to executive officers
during 2002. As indicated, options to acquire BankAtlantic Bancorp, Inc. shares
were granted to Messrs. Levan, Abdo and Gilbert by the BankAtlantic Bancorp,
Inc. Stock Option Committee based on contributions to BankAtlantic Bancorp, Inc.
and its subsidiaries including Levitt Corporation. The Compensation Committee
was aware of and took into account the options in considering the executives'
overall compensation. When granted by the Company options are awarded based on
an assessment of an employee's contribution to the success and growth of the
Company. Grants of stock options are based on the level of an executive's
position with the Company and evaluation of the executive's past and expected
performance, the number of outstanding and previously granted options and
discussions with the executive.
CEO Compensation - In evaluating the performance of the Chief Executive Mr.
Levan, the Compensation Committee considered the Company's financial condition
and 2002 results. In its review of the Company's financial condition and 2002
results, the Compensation Committee noted the 11% increase in income before
income taxes, minority interest, extraordinary items and cumulative effect of a
change in accounting principle for the 2002 fiscal year. Also noted was the
Company's increased size, an increase of 16% in total assets. The Compensation
Committee also considered that Mr. Levan spends considerable effort and
attention in connection with the operations of BankAtlantic Bancorp, Inc. and
its subsidiaries and that the performance of those entities has been a
substantial factor in the success of the Company. In 2002, BankAtlantic
Bancorp's net income increased $50.3 million from $32.2 million in 2001.
Additionally, the Compensation Committee considered the quantitative and
qualitative effects on the Company and BankAtlantic Bancorp and it subsidiaries
of the acquisition of Community Savings Bankshares, the acquisition of certain
of the assets and related liabilities of Gruntal & Co., and the acquisition of a
significant interest in Bluegreen Corporation. In arriving at his BFC
compensation level, the Compensation Committee also considered the fact that
BankAtlantic and its subsidiaries also compensate Mr. Levan.
Section 162(m) of the Internal Revenue Code generally disallows a tax deduction
to public corporations for compensation over $1,000,000 paid for any fiscal year
to the corporation's chief executive officer and four other most highly
compensated executive officers as of the end of any fiscal year. However, the
statute exempts qualifying performance-based compensation for the deduction
limit if certain requirements are met. The Compensation Committee believes that
it is generally in the Company's best interest to attempt to structure
performance-based compensation, restricted stock awards and bonuses to executive
officers who may be subject to Section 162(m) in a manner that satisfies the
statute's requirements. However, the Compensation Committee also recognizes the
need to retain flexibility to make compensation decisions that may not meet
Section 162(m) standards when necessary to enable the Company to meet its
overall objectives, even if the Company may not deduct all of the compensation.
Accordingly, the Compensation Committee expressly reserves the authority to
approve non-deductible compensation in appropriate circumstances. Further,
because of ambiguities and uncertainties regarding the application and
interpretation of Section 162(m) and the regulations issued thereunder, no
assurance can be given, notwithstanding the Company's efforts, that compensation
intended by the Company to satisfy the requirements for deductibility under
Section 162(m) does in fact do so.
Earl Pertnoy, Oscar Holzmann and Neil Sterling submitted the above report.
13
AUDIT COMMITTEE REPORT
The following Audit Committee Report does not constitute soliciting material and
should not be deemed filed or incorporated by reference into any other Company
filing under the Securities Act of 1933 or the Securities Act of 1934 except to
the extent the Company specifically incorporates this Audit Committee Report by
reference.
The Charter of the Audit Committee of the Board of Directors, as adopted on
February 3, 2003, specifies that the Committee is to assist the Board of
Directors in fulfilling its oversight of the Company's accounting and financial
reporting principles, policies and internal audit, controls and procedures,
financial statements and the independent audit thereof, the selection,
evaluation and, where appropriate, replacement of the outside auditor, and the
evaluation of the independence of the outside auditor. During 2002, Mr. Pertnoy,
a non-employee director, served on the Committee. Currently, Messrs. Pertnoy,
Holzmann and Sterling, all non-employee directors, serve on the Audit Committee.
The Company's Board of Directors has adopted a written charter for the
Committee, a copy of which is attached as Appendix A.
The Company's management is responsible for the preparation, presentation and
integrity of the Company's financial statements, the Company's accounting and
financial reporting process, including the system of internal control, and
procedures to assure compliance with applicable accounting standards and
applicable laws and regulations. The Company's independent auditors are
responsible for auditing those financial statements and expressing an opinion as
to their conformity with generally accepted accounting principles. Our
responsibility as the Audit Committee is to monitor and review these processes.
However, the Committee is not comprised of professionals engaged in the practice
of accounting or auditing, including, without limitation, auditor independence.
The Committee must rely, without independent verification, on the information
provided to it and on the representations made by management and the independent
auditors. Accordingly, although the Committee consults with and discusses these
matters and its questions and concerns with management and the Company's
independent auditors, its oversight can not provide an independent basis to
assure that management has maintained appropriate accounting and financial
reporting principles or appropriate internal control and procedures consistent
with accounting standards and applicable laws and regulations. Furthermore, the
Committee's considerations and discussions can not assure that the audit of the
Company's financial statements has been carried out in accordance with generally
accepted auditing standards, that the financial statements are presented in
accordance with generally accepted accounting principles or that the Company's
auditors are in fact "independent."
In this context, the Committee held four meetings during the year ended December
31, 2002. The meetings were designed, among other things, to facilitate and
encourage communication among the Committee, management, and the Company's
independent auditors for the fiscal year ended December 31, 2002, KPMG LLP
("KPMG"). The Committee discussed with the Company's independent auditors their
overall scope and plans. The Committee met with the independent
14
auditors, with and without management present, to discuss the results of their
examinations and their evaluations of the Company's internal controls.
The Committee has reviewed and discussed the audited consolidated financial
statements for the fiscal year ended December 31, 2002 with management and KPMG.
The Committee has also discussed with the independent auditors matters required
to be discussed with audit committees under generally accepted auditing
standards, including, among other things, matters related to the conduct of the
audit of the Company's consolidated financial statements and the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended
(Communication with Audit Committees). The Committee's discussions also included
a discussion of the background and experience of the KPMG audit managers
assigned to the Company and the quality control procedures established by KPMG.
The Company's independent auditors also provided to the Committee the written
disclosures and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees), and the Committee discussed
with the independent auditors their independence from the Company. When
considering KPMG's independence, the Committee was advised that KPMG did not
provide the Company with any services beyond those rendered in connection with
their audit and review of the Company's consolidated financial statements. The
Committee did note however that KPMG provided services to BankAtlantic Bancorp
beyond those rendered in connection with their audit and review of BankAtlantic
Bancorp's financial statements. The Committee also reviewed, among other things,
the amount of fees paid to KPMG directly by the Company for audit services as
well as the amounts paid to KPMG for audit and non-audit services by
BankAtlantic Bancorp, both separately and in the aggregate, as these amounts
were included in the Company's consolidated financial statements, as well as the
nature of the non-audit services provided to BankAtlantic Bancorp.
Based on our review and these meetings, discussions and reports, and subject to
the limitations on our role and responsibilities referred to above and in the
Audit Committee Charter, we recommended to the Board of Directors that the
Company's audited consolidated financial statements for the fiscal year ended
December 31, 2002 be included in the Company's Annual Report on Form 10-K.
On January 6, 2003, the Company dismissed KPMG as its independent public
accountants effective upon completion of the audit of the fiscal year ended
December 31, 2002. KPMG served as independent accountants through the filing of
all required reports covering operations for fiscal year 2002, including the
Annual Report on Form 10-K for the year ended December 31, 2002. The decision to
change accountants was approved by the Committee.
The reports of KPMG on the financial statements for the past two years ended
December 31, 2002 and 2001 contained no adverse opinion or disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope or accounting
principles, except that it was noted that the Company changed its method of
accounting for derivative instruments and hedging activities in 2001 and for
goodwill and intangible assets and for gains and losses on the extinguishment of
15
debt in 2002. Additionally, in 2002 diluted earnings per share were restated to
include the proportionate share of a subsidiary's diluted income attributable to
potential common shares.
In connection with its audits for the two most recent fiscal years ended
December 31, 2002 and 2001, and through January 6, 2003, there were no
disagreements with KPMG on any matter of accounting principles or practices,
financial statement disclosure, auditing scope or procedure, which disagreements
if not resolved to the satisfaction of KPMG would have caused them to make
reference thereto in their report on the financial statements for such years and
there were no reportable events as defined in Item 304(a)(1)(v) of Regulation
S-K.
The Committee engaged PricewaterhouseCoopers as the Company's principal
independent public accountants effective as of January 1, 2003. During the two
most recent fiscal years and through January 6, 2003, the Company did not
consult with PricewaterhouseCoopers regarding either (i) the application of
accounting principles to a specific transaction, either completed or proposed;
or the type of audit opinion that might be rendered on the Company's financial
statements; or (ii) any matter that was either the subject of a disagreement, as
that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions to Item 304 of Regulation S-K, or a reportable event, as that term
is defined in Item 304(a)(1)(v) of Regulation S-K.
Oscar Holzmann, Earl Pertnoy, and Neil Sterling submitted the above report.
AUDIT FEES
Audit Fees - The aggregate fees for professional services rendered by KPMG in
connection with their audit of the Company's consolidated financial statements
and reviews of the consolidated financial statements included in our Quarterly
Reports on Form 10-Q for the 2002 fiscal year were approximately $92,000. No
other fees were paid to KPMG by the Company for other services during 2002.
KPMG also served as independent auditor for BankAtlantic Bancorp, Inc. The
aggregate fees for professional services rendered by KPMG to BankAtlantic
Bancorp, Inc. in connection with its audit of BankAtlantic Bancorp's
consolidated financial statements, the financial statements of its subsidiaries
and reviews of the consolidated financial statements included in their Quarterly
Reports on Form 10-Q for the 2002 fiscal year were approximately $878,400.
All Other Fees - The aggregate fees for all other services rendered by KPMG in
the 2002 fiscal year to BankAtlantic Bancorp, Inc. were approximately $628,600
and can be sub-categorized as follows:
o Attestation Fees - The aggregate fees for attestation services
rendered by KPMG for matters such as comfort letters and consents
related to SEC and other registration statements, audits of employee
benefit plans, agreed-upon procedures, due diligence pertaining to
acquisitions and consultation on accounting standards or
transactions were approximately $374,100.
16
o Other Fees - The aggregate fees for all other services, such as
consultation related to tax planning and compliance, improving
business and operational processes and regulatory matters, rendered
by KPMG in the 2002 fiscal year were approximately $254,500.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Alan B. Levan,Officer, President and Chairman of the Board of the Company also serves as Chairman of the Board and Chief Executive Officer of BankAtlantic Bancorp, Inc. and BankAtlantic. Alan B. Levan is also Chairman of the Board of Bluegreen Corporation and Levitt Corporation. John E. Abdo, Vice Chairman of the Board of the Company also serves as Vice Chairman of the Board of Directors of BankAtlantic Bancorp, Inc., BankAtlantic, Levitt Corporation and BankAtlanticBluegreen Corporation, and is a director and President of Levitt Corporation, a wholly owned subsidiary of
BankAtlantic Bancorp. John E. Abdo is also Vice Chairman of the Board of
Bluegreen Corporation. Glen R. Gilbert, Executive Vice President of the Company also serves as Executive Vice President of Levitt Corporation.
During 1998,
These executive officers separately receive compensation from affiliates of the Company for services rendered for such affiliates.
The Company’s management fees from related parties for the years ended December 31, 2003, 2002 and 2001 consisted of (in thousands):
| | | | | | | | | | | | | |
| | | For the Years Ended December 31,
|
| | | 2003
| | 2002
| | 2001
|
| Levitt | | $ | 213 | | | | 170 | | | | 80 | |
| | | |
| | | |
| | | |
| |
| Other affiliates | | $ | 10 | | | | 41 | | | | 44 | |
| | | |
| | | |
| | | |
| |
In connection with the spin-off of Levitt Corporationon December 31, 2003, BankAtlantic Bancorp entered into a transitional services agreement with Levitt whereby BankAtlantic Bancorp will provide human resources, risk management and investor and public relation services and receive compensation for such services in an amount not in excess of the amount which would be charged by a third party. Additionally, BankAtlantic Bancorp entered into an employment matters agreement providing for the allocation of responsibility and liability between BankAtlantic Bancorp and Levitt with respect to the welfare and benefit plans for Levitt employees after the spin-off.
Also in connection with the Abdo
Companies, Inc.,spin-off of Levitt, BankAtlantic Bancorp converted a companycurrently outstanding $30.0 million demand note owed by Levitt to BankAtlantic Bancorp to a five year term note with interest only payable monthly initially at a prime rate and thereafter at the prime rate plus increments of an additional 0.25% every six months. Prior to the spin-off, BankAtlantic Bancorp transferred its 1.2 million shares in which Mr. Abdo is the principal shareholderBluegreen to Levitt in exchange for a $5.5 million note and Chief Executive Officer, whereby Abdo Companies receives monthly management and
useadditional shares of office space fees from Levitt Corporation. Levitt Corporation also pays
the Company for accounting, general and administrative services provided to it.
The amounts paid may not be representativecommon stock (which additional shares were distributed as part of the amount that would be paid inspin-off transaction). This note, which had a term of one year and an arms-length transaction. For the year ended December 31, 2002 management fees
were paid by Levitt Corporationinterest rate equal to the Abdo companiesprime rate, was repaid in April 2004. Additionally, prior to the spin-off, Levitt declared an $8.0 million dividend to BankAtlantic Bancorp payable in the amountform of $291,000,
from Levitt Corporation toa five-year note with the Companysame payment terms as the $30.0 million note described above. The above transactions were eliminated in the amount of $170,000 and from other
affiliates to the Company in the aggregate amount of $41,000.Company’s consolidated financial statements.
The Company paid BankAtlantic approximately $67,000 during 20022003 for office space used by the Company in BankAtlantic'sBankAtlantic’s headquarters and for miscellaneous administrative and other related expenses. BankAtlantic provided certain administrative services to Bluegreen in 2002,2003 without receipt of payment for such services,services.
9
During the year ended December 31, 2003, BankAtlantic paid a subsidiary of Levitt a $540,000 management fee to Bluegreen Corporation,operate and sell a public company whose stock is traded onresidential construction property acquired by BankAtlantic through foreclosure. The property was sold to an unrelated developer during the New York
Stock Exchange,fourth quarter of 2003.
In 1994, the Company agreed to participate in certain real estate opportunities with John E. Abdo and certain of his affiliates (the “Abdo Group”). Pursuant to this arrangement, in which BankAtlantic Bancorp, Inc. hasDecember 1994, an entity controlled by the Company acquired from an unaffiliated seller approximately 40%
interest.70 acres of unimproved land known as the “Center Port” property in Pompano Beach, Florida. Through December 31, 2001, all of the project except for land under two pylon signs, a cell tower site and the lake had been sold to unaffiliated third parties for approximately $21.4 million and the Company recognized net gains from the sales of real estate of approximately $4.8 million.
During 1999 and 2000, the Company (without consideration of BankAtlantic Bancorp) acquired interests in unaffiliated technology entities. During 2000 and 2001, the Company'sCompany’s interests in the technology entities were transferred at the Company'sCompany’s cost to specified asset limited partnerships. Subsidiaries of the Company are the controlling general partners of these venture partnerships, and therefore, they are consolidated in the Company’s financial statements of the Company.statements. Interests in such partnerships were sold in 2000 and 2001 to accredited investors in private offerings. During 2000, approximately $5.1 million of capital was raised by these partnerships from unaffiliated third parties, as well as officers, directors and affiliates of the Company who invested approximately $4.4 million in the partnerships. The Company and the general partners retained ownership interests of approximately $1.8 million. Additionally, during 2001, approximately $895,000 of capital was raised from unaffiliated third parties by one of these partnerships and officers, directors and affiliates of the Company invested approximately $1.3 17
million in the partnership. The Company and the general partners retained ownership interests of approximately $3.8 million increasing the Company'sCompany’s total investment in these partnerships to an aggregate of $5.6 million. Of the $1.3
million, invested by officers, directors and affiliates, Alan B. Levan and John
E. Abdo each borrowed $500,000 from the Company on a recourse basis and Glen R.
Gilbert, Executive Vice President, and Earl Pertnoy, a director of the Company
each borrowed $50,000 on a non-recourse basis to make their investments. Such
amounts were still outstanding at the end of the year (except for John E. Abdo's
$500,000 loan which is discussed below), bear interest at the prime rate plus 1%
and are payable interest only annually with the entire balance due in February
2006. After the limited partners receive a specified return from the partnerships, the general partners are entitled to receive 20% of all cash distributions from the partnerships. The general partners are limited liability companies of which the members are: BFC Financial Corporation -The Company – 57.5%, John E. Abdo -– 13.75%; Alan B. Levan -– 9.25%; Glen R. Gilbert -– 2.0% and John E. Abdo, Jr. -– 17.5%. Losses net of minority interests for the year ended December 31, 2003 were $1.8 million. At December 31, 2002,2003, the Company'sCompany’s net investment in these partnerships was $2.4 million.
On July 16, 2002, John E. Abdo borrowed $3.5 million from the Company on a
recourse basis and paid off his existing $500,000 loan due to the Company. The
$3.5 million loan bears interest at the prime rate plus 1%, requires monthly
interest payments, is due on demand and is secured by 1,019,564 shares of BFC
Class A Common Stock and 370,750 shares of BFC Class B Common Stock.
During 1999, the Company entered into an agreement with John E. Abdo, Jr., son
of John E. Abdo, a Director and Vice Chairman of the Board. Pursuant to the
agreement, the Company will pay to John E. Abdo, Jr. an amount equal to 1% of
the amount of the Company's investment in venture capital investments identified
by him for the Company and will grant him a profit participation of 3 1/2% of
the net profit realized by the Company through his interest in the general
partner of the venture partnership that holds the identified investment.
Additionally, the Company pays him an expense allowance of $300 per month.
During 2002, the Company paid John E. Abdo, Jr. expense allowances of $3,600
pursuant to the agreement.$626,000.
An affiliated limited partnership, BankAtlantic Bancorp and affiliates of the Company are investors in a privately held technology company located in Boca Raton, Florida. TheIn October 2000, the affiliated limited partnership invested $2 million in 219,300 shares of the privately held technology company'scompany’s common stock which
shares were acquired in October 2000 at a price per share of $9.12. At December 31, 2001, the carrying value of this investment by the limited partnership had been written down to $4.95 per share and, in 2002, based on several factors/considerations, the technology company was written off entirely by the Company and Bancorp. BankAtlantic Bancorp invested $15 million in 3,033,386 shares of the technology company'scompany’s common stock in cash and by issuance to the technology company of 748,000 shares of BankAtlantic Bancorp Class A Common Stock. BankAtlantic Bancorp'sBancorp’s shares in the technology company were acquired in October 1999 at an average price per share of $4.95. Both Alan B. Levan and John E. Abdo joined the Boardbecame directors of the technology company. Mr.company in connection with the investment. In addition, Alan B. Levan owns or controls direct and indirect interests in an aggregate of 286,709 shares of the technology company common stock, purchased at an average price per share of $8.14 and Mr. John E. Abdo owns or controls direct and indirect interests in an aggregate of 368,408 shares of the technology company common stock purchased at an average price per share of $7.69. Glen Gilbert, Jarett Levan, a director of BankAtlantic Bancorp and SeniorExecutive Vice President of BankAtlantic, has an indirect ownership interest in an aggregate of
350 shares of such common stock, and Bruno DiGiulian, a director of BankAtlantic Bancorp has an indirecthave a 0.9%, 0.15% and 0.7% ownership interest, respectively, in 1,754 shares
18
of such common stock.the limited partnership. The Company and its affiliates collectively ownowned approximately 7% inof the technology company'scompany’s outstanding common stock. The
technology company also served as an Application Service Provider ("ASP") for
BankAtlantic Bancorp for one customer service information technology
application. This ASP relationship was in the ordinary course of business, and
fees aggregating approximately $155,000 were paid by BankAtlantic Bancorp to the
technology company for its services during the year endedstock at December 31, 2002. The
ASP relationship was terminated effective September 2002.2003. During 2001, Mr. Levan and Mr. Abdo resigned from the Board of Directors of the technology company and initiated a lawsuit on behalf of the Company and others against the founder of the technology company, personally, regarding his role in the technology
company. The Company, BankAtlantic Bancorp and other owners in the technology
company who are parties to the lawsuit will share in the legal fees incurred in
connection with the litigation and in any recovery in proportion to their
respective interests.role. In early 2003, the technology company initiated a lawsuit against BankAtlantic Bancorp seeking to have a restrictive legend on its BankAtlantic Bancorp'sBancorp’s Class A Common Stock removed. On March 24, 2004, the parties settled the pending litigation. Pursuant to the terms of the settlement, the affiliated limited partnership, BankAtlantic Bancorp and the other affiliates of the Company were given the opportunity to sell their respective investments in the technology company to a third party investor group for the amount of their initial investment. The investor group and the technology company also agreed to pay an additional amount equal to the legal expenses incurred and damages. The amounts paid by the technology company were paid by delivery of shares of BankAtlantic Bancorp Class A Common Stock owned by the technology company. BankAtlantic Bancorp sold its shares in the technology company for $15 million in cash, its original cost, and received compensation for legal expenses and damages consisting of $1.7 million in cash and return of 378,000 shares of BankAtlantic Bancorp Class A Common Stock. The affiliated limited partnership and other affiliates of the Company chose not to sell their shares in the technology company but recovered legal fees and damages. The affiliated limited partnership received $309,845 in cash and 50,422 shares of BankAtlantic Bancorp Class A Common Stock in connection with the settlement and the Company’s other affiliates, without regard to their interests in the affiliated partnership, received in the aggregate $132,747 in cash and 29,413 shares of BankAtlantic Bancorp
10
Class A Common Stock. The parties also exchanged releases and the pending litigation between the parties was dismissed in connection with the settlement.
BankAtlantic Bancorp and its subsidiaries utilized certain services of Ruden, McClosky, Smith, Schuster & Russell, P.A. (“Ruden, McClosky”), a law firm to which Bruno DiGiulian is of counsel. Fees aggregating $110,000 were paid by BankAtlantic and $30,000 was paid by Ryan Beck& Co. to Ruden, McClosky in 2003. In addition, fees aggregating approximately $1.1 million were paid to Ruden, McClosky by Levitt and Bluegreen in 2003. Ruden, McClosky also represents Alan B. Levan and John E. Abdo with respect to certain other business interests.
Since 2002, Levitt has utilized certain services of Conrad & Scherer, a law firm in which William R. Scherer, a member of Levitt’s Board of Directors, is a member. Levitt paid fees aggregating $79,000 to this firm during the year ended December 31, 2003.
Alan B. Levan, Jarett Levan and John E. Abdo have investments or are partners in real estate joint ventures with developers, which, in connection with other ventures, have outstanding loans from BankAtlantic or are joint venture partners with Levitt.
Certain of the Company’s affiliates, including its executive officers, have independently made investments with their own funds in both public and private entities in which the Company holds investments.
The Company has a 49.5% interest and affiliates and third parties have a 50.5% interest in a limited partnership formed in 1979, for which the Company'sCompany’s Chairman serves as the individual general partner.General Partner. The partnership'spartnership’s primary asset is real estate subject to net lease agreements. The Company’s cost for this investment, approximately $441,000, was written off in 1990 due to the bankruptcy of the entity leasing the real estate. During both 2003 and 2002, the Company received operating distributions of approximately $25,000 and Alan B. Levan, as
the individual general partner, received operating distributions of
approximately $14,860 from the partnership.
Florida Partners Corporation owns 133,314 shares of the Company'sCompany’s Class B Common
Stock and 366,615764,995 shares of the Company'sCompany’s Class A Common Stock. Alan B. Levan may be deemed to beneficially hold such shares by virtue ofbe the fact that he is principal shareholder of Florida Partners, and is an officer and a member of the Board of Directors of Florida Partners Corporation. Glen R. Gilbert, Executive Vice President and Secretary of the Company, holds similar positions at Florida Partners Corporation.
BankAtlantic and Levitt Corporation utilized certain services of Ruden,
McClosky, Smith, Schuster & Russell, P.A. ("Ruden, McClosky"), a law firm to
which Bruno DiGiulian, a director of BankAtlantic Bancorp, is of counsel. Fees
aggregating $1.0 million were paid to Ruden, McClosky by BankAtlantic and Levitt
Corporation during the year ended December 31, 2002. Ruden, McClosky also
represents Alan B. Levan and John E. Abdo with respect to certain other business
interests.
Alan B. Levan, John E. Abdo and Jarett Levan have investments or are partners in
real estate joint ventures with developers, which developers, in connection with
other ventures, have loans from BankAtlantic or are partners in joint ventures
with Levitt Corporation. Certain of the Company's executive officers have
independently made investments with their own funds in both public and private
entities in which the Company holds investments.
Certain officers of Levitt Corporation or its subsidiaries have minority
ownership interests in joint venture partnerships in which Levitt is also a
limited or general partner.
19
The BankAtlantic Foundation is a non-profit foundation established by BankAtlantic. During 2002,2003, the Foundation made donations aggregating $350,000,$364,530, including $50,000$25,000 to the Broward Community College Foundation (as the first installment of a 4-year commitment of $100,000 to the Will and Jo Holcombe Institute for Teaching and Learning), $15,000 to the Florida Grand Opera, $8,320$7,500 to the Leadership Broward Foundation, $7,500 to Nova Southeastern University (including $5,000 as the first installment of a 5-year, $25,000 commitment to the Wayne Huizenga School of Business and $2,500 to Nova Southeastern University Libraries), $4,250 to ArtServe, $3,000 to the Broward Performing Arts Foundation and $2,500$2,000 to the Boys & Girls ClubMuseum of Broward.Art of Ft. Lauderdale. In addition to the contributions made by the BankAtlantic Foundation, BankAtlantic made certain direct contributions. In 2003 BankAtlantic made donations of $11,500 to the Broward Community College Foundation, $10,963 to the Urban League of Broward County, $6,000 to ArtServe, $1,160 to United Way of Broward County and $900 to the Leadership Broward Foundation. Alan B. Levan sits on the Boards of the Broward Community College Foundation, and the Florida Grand Opera and Nova Southeastern University, Jarett Levan sits on the Boards of the Leadership Broward Foundation and ArtServe and the Board of Governors of the Museum of Art of Ft. Lauderdale, John E. Abdo is President of the Board of the Broward Performing Arts Foundation, Dr. Willis Holcombe, a member of BankAtlantic’s Board, sits on the Boards of the Broward Community College Foundation and Charlie C.
Winningham, II isthe Urban League of Broward County. In addition both D. Keith Cobb and Lloyd Devaux, Executive Vice President and chief Operating Officer of BankAtlantic, sits on the Board of the Boys & Girls ClubUnited Way of Broward.Broward County which may further provide funds to these entities.
During 2002,fiscal 2003, Jarett Levan, a director of BankAtlantic and son of director, presidentPresident and CEO Alan B. Levan, was employed by BankAtlantic as Senior Vice
President/Alternative Delivery SystemsChief Marketing Officer and was paid annual compensation of
$181,313approximately $211,000 for his services. Alan B. Levan'sLevan’s daughter, ShelleyRachelle Levan Margolis, served as executive director of the BankAtlantic Foundation and received approximately $43,000 for the year.
Included in the Company’s other assets at December 31, 2003 and 2002 were approximately $138,000 and $391,000, respectively due from affiliates.
11
Summary Compensation Table
The following table sets forth information with respect to the annual compensation paid or accrued by the Company, BankAtlantic and Levitt Corporation, for services rendered in all capacities during the three years ended December 31, 2003 to each of the executive officers of the Company.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Annual Compensation
| | Long-Term Compensation
| | |
| | | | | | | | | | | | | | | | | | | | | Awards
| | Payouts
| | |
| | | | | | | | | | | | | | | | | Other | | | | | | | | | | | | | | All |
| Name and | | | | | | | | | | | | | | | | Annual | | Restricted | | Stock | | | | | | Other |
| Principal | | | | | | | | | | | | | | | | Compen- | | Stock | | Option | | LTIP | | Compen- |
Position
| | Source
| | Year
| | Salary
| | Bonus
| | sation
| | Award(s)
| | Award(s)
| | Payouts
| | sation
|
| | | (a) | | | | ($) | | ($) | | ($) | | ($) | | (#) | | ($) | | ($) |
| Alan B. Levan | | BFC | | | 2003 | | | | 581,849 | | | | 415,064 | | | | — | | | | — | | | | 134,770 | | | | 6,267 | | | | 109,321 | (b) |
| Chairman of the | | BankAtlantic | | | 2003 | | | | 445,923 | | | | 435,488 | | | | — | | | | — | | | | 78,377 | | | | — | | | | 110,282 | (c) |
| Board, President | | Levitt | | | 2003 | | | | 103,231 | | | | 62,400 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| and Chief Executive | | BFC | | | 2002 | | | | 570,560 | | | | 399,100 | | | | — | | | | — | | | | — | | | | 6,288 | | | | 105,116 | (b) |
| Officer | | BankAtlantic | | | 2002 | | | | 438,887 | | | | 443,800 | | | | 9,600 | (f) | | | — | | | | 60,000 | | | | — | | | | 121,707 | (c) |
| | | Levitt | | | 2002 | | | | 83,791 | | | | 62,500 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | BFC | | | 2001 | | | | 538,510 | | | | 255,833 | | | | — | | | | — | | | | — | | | | 4,480 | | | | 101,073 | (b) |
| | | BankAtlantic | | | 2001 | | | | 383,405 | | | | 345,500 | | | | 7,385 | (f) | | | — | | | | 40,000 | | | | — | | | | 134,030 | (c) |
| | | Levitt | | | 2001 | | | | — | | | | 50,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| John E. Abdo | | BFC | | | 2003 | | | | 310,600 | | | | 187,200 | | | | — | | | | — | | | | 134,770 | | | | 6,267 | | | | — | |
| Vice Chairman | | BankAtlantic | | | 2003 | | | | 221,487 | | | | 221,227 | | | | 18,600 | (d) | | | — | | | | 52,251 | | | | — | | | | 8,040 | (c) |
| of the Board | | Levitt | | | 2003 | | | | 365,000 | | | | 390,000 | | | | — | | | | — | | | | — | | | | — | | | | 291,240 | (h) |
| | | BFC | | | 2002 | | | | 264,879 | | | | 156,000 | | | | — | | | | — | | | | — | | | | 6,288 | | | | — | |
| | | BankAtlantic | | | 2002 | | | | 211,368 | | | | 118,004 | | | | 18,600 | (d) | | | — | | | | 40,000 | | | | — | | | | 8,040 | (e) |
| | | Levitt | | | 2002 | | | | 263,187 | | | | 425,000 | | | | — | | | | — | | | | — | | | | — | | | | 291,240 | (h) |
| | | BFC | | | 2001 | | | | 250,000 | | | | 150,000 | | | | — | | | | — | | | | — | | | | 4,880 | | | | — | |
| | | BankAtlantic | | | 2001 | | | | 181,700 | | | | 92,836 | | | | 18,600 | (d) | | | — | | | | 30,000 | | | | — | | | | 6,840 | (e) |
| | | Levitt | | | 2001 | | | | 250,000 | | | | 250,000 | | | | — | | | | — | | | | — | | | | — | | | | 291,240 | (h) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Glen R. Gilbert | | BFC | | | 2003 | | | | 154,642 | | | | 93,288 | | | | — | | | | — | | | | 35,941 | | | | 6,267 | | | | — | |
| Executive Vice | | BankAtlantic | | | 2003 | | | | — | | | | — | | | | — | | | | — | | | | 13,494 | | | | — | | | | — | |
| President, Chief | | Levitt | | | 2003 | | | | 149,500 | | | | 93,288 | | | | — | | | | — | | | | — | | | | — | | | | 8,000 | (g) |
| Financial Officer | | BFC | | | 2002 | | | | 126,718 | | | | 84,754 | | | | — | | | | — | | | | — | | | | 6,288 | | | | — | |
| and Secretary | | BankAtlantic | | | 2002 | | | | — | | | | — | | | | — | | | | — | | | | 15,000 | | | | — | | | | — | |
| | | Levitt | | | 2002 | | | | 123,938 | | | | 97,192 | | | | — | | | | — | | | | — | | | | — | | | | 6,135- | (g) |
| | | BFC | | | 2001 | | | | 119,600 | | | | 29,900 | | | | — | | | | — | | | | — | | | | 4,880 | | | | — | |
| | | BankAtlantic | | | 2001 | | | | — | | | | — | | | | — | | | | — | | | | 10,000 | | | | — | | | | — | |
| | | Levitt | | | 2001 | | | | 119,600 | | | | 29,900 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| (a) | | Amounts identified as BankAtlantic represent payments or grants by BankAtlantic and amounts identified as Levitt represent payments or grants by Levitt Corporation, both of which for 2001, 2002 and 2003 were wholly-owned subsidiaries of BankAtlantic Bancorp, Inc. |
|
| (b) | | Represents reimbursements or payments for life and disability insurance. |
|
| (c) | | Includes BankAtlantic contributions of $8,000 in 2003 and 2002 and $6,800 in 2001 to its 401(k) savings plan on behalf of Mr. Alan B. Levan, a $40 dividend payment for a Real Estate Investment Trust (“REIT”) controlled by BankAtlantic for 2003, 2002 and 2001 and $102,242 in 2003, $113,667 in 2002 and $127,190 in 2001 representing the value of the benefit received by Mr. Alan B. Levan in connection with premiums paid by BankAtlantic for a split-dollar life insurance policy. |
|
| (d) | | Includes $9,000 per year for service as trustee of BankAtlantic’s pension plan, which amount is paid by the pension plan, and $9,600 per year as an auto allowance. Payments were also made to the Abdo Companies, Inc., a company controlled by Mr. Abdo. See “Certain Relationships and Related Transactions.” |
12
| | |
|
| (e) | | Includes BankAtlantic contributions of $8,000 in 2003 and 2002 and $6,800 in 2001 to its 401(k) savings plan on behalf of Mr. Abdo and a $40 dividend payment for the REIT for 2003, 2002 and 2001. |
|
| (f) | | Reflects amount paid as auto allowance. |
|
| (g) | | Includes Levitt Corporation contributions of $8,000 in 2003 and $6,135 in 2002 to its 401(k) savings plan on behalf of Mr. Gilbert. |
|
| (h) | | The Abdo Companies, a company in which John E. Abdo is the principal shareholder and Chief Executive Officer, receives from Levitt monthly management fees and reimbursement for expenses associated with use of office space. The amounts paid may not be representative of the amounts that would be paid in an arms-length transaction. |
Option Grants in 2003
The following table sets forth information concerning individual grants of stock options to the named executives in the Summary Compensation Table pursuant to the Company’s stock option plans during the fiscal year ended December 31, 2003. The Company has not granted and does not currently grant stock appreciation rights.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Potential Realizable |
| | | | | | | | | | | | | | | | | | | Value at Assumed |
| | | Number of | | % of Total | | | | | | | | | | Annual Rates of Stock |
| | | Securities | | Options | | Exercise | | | | | | Price Appreciation for |
| | | Underlying
Options | | Granted to
Employees in | | Price
Per | | Expiration | | Option Term (2)
|
Name
| | Granted (1)
| | Fiscal Year
| | Share
| | Date
| | 5% ($)
| | 10% ($)
|
| Alan B. Levan | | | 134,770 | | | | 38.0 | | | $ | 2.87 | | | | 2/7/2013 | | | $ | 243,013 | | | $ | 615,842 | |
| John E. Abdo | | | 134,770 | | | | 38.0 | | | $ | 2.87 | | | | 2/7/2013 | | | | 243,013 | | | | 615,842 | |
| Glen R. Gilbert | | | 35,941 | | | | 10.1 | | | $ | 2.87 | | | | 2/7/2013 | | | | 64,808 | | | | 164,235 | |
| (1) | | All option grants are to acquire shares of BFC Financial Corporation Class B Stock. All options granted in 2003 vest in 2008. The number of options granted has been adjusted to reflect stock dividends and stock splits which occurred in 2003 and March 1, 2004. |
|
| (2) | | Amounts for the named executive have been calculated by multiplying the exercise price by the annual appreciation rate shown (compounded for the remaining term of the options), subtracting the exercise price per share and multiplying the gain per share by the number of shares covered by the options. The dollar amounts under these columns are the result of calculations based upon assumed rates of annual compounded stock price appreciation specified by regulation and are not intended to forecast actual future appreciation rates of the Company’s stock price. |
The following table sets forth information concerning individual grants of stock options for shares of BankAtlantic Bancorp, Inc.’s Class A Stock by BankAtlantic Bancorp, Inc. to the named executives in the Summary Compensation Table pursuant to the stock option plans of BankAtlantic Bancorp, Inc. during the year 2002, receiving annual compensation of $104,823 for such year.
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
On April 15,ended December 31, 2003. BankAtlantic Bancorp, Inc. has not granted and does not currently grant stock appreciation rights.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Potential Realizable |
| | | | | | | | | | | | | | | | | | | Value at Assumed |
| | | Number of | | % of Total | | | | | | | | | | Annual Rates of Stock |
| | | Securities | | Options | | Exercise | | | | | | Price Appreciation for |
| | | Underlying
Options | | Granted to
Employees in | | Price
Per | | Expiration | | Option Term (3)
|
Name
| | Granted (1) (2)
| | Fiscal Year
| | Share
| | Date
| | 5% ($)
| | 10% ($)
|
| Alan B. Levan | | | 78,377 | | | | 7.7 | | | $ | 7.41 | | | | 3/31/2013 | | | $ | 365,260 | | | $ | 925,641 | |
| John E. Abdo | | | 52,251 | | | | 5.1 | | | $ | 7.41 | | | | 3/31/2013 | | | | 243,505 | | | | 617,090 | |
| Glen R. Gilbert | | | 13,494 | | | | 1.3 | | | $ | 7.41 | | | | 3/31/2013 | | | | 62,886 | | | | 159,366 | |
13
| (1) | | All option grants are in BankAtlantic Bancorp’s Class A Stock. All options vest in 2008. |
|
| (2) | | Number of securities underlying options granted and exercise price per share have been adjusted in accordance with the BankAtlantic Bancorp 2001 Amended and Restated Stock Option Plan as a result of the spin-off of Levitt Corporation on December 31, 2003. |
|
| (3) | | Amounts for the named executive have been calculated by multiplying the exercise price by the annual appreciation rate shown (compounded for the remaining term of the options), subtracting the exercise price per share and multiplying the gain per share by the number of shares covered by the options. The dollar amounts set forth in these columns are the result of calculations based upon assumed rates of annual compounded stock price appreciation specified by regulation and are not intended to forecast actual future appreciation rates of BankAtlantic Bancorp’s stock price. |
Aggregated Option Exercises in 2003 the holders of outstanding shares of Class A Common Stock and Class B Common Stock representing a majorityYear-End Option Values
The following table sets forth as to each of the votes entitlednamed executive officers in the Summary Compensation Table information with respect to be cast,
including the holders of a majority of the shares of Class B Common Stock voting
as a separate class, approved an Amendment to the Company's Articles of
Incorporation by written consent in lieu of a meeting. Pursuant to the
Amendment, once the number of outstanding shares of Class B Common Stock falls
below 500,000 shares, the per share voting power of the Class A Common Stockoption exercises during 2003 and the Class B Common Stock will be identical and each will entitle the holder to
one vote for each share held. The Amendment also makes corresponding clerical
changes to the Articlesstatus of Incorporation for purposes of consistency but the
other terms of the Class A Common Stock and Class B Common Stock are not
affected by the Amendment.
As of April 15, 2003, the Company had 6,476,999 shares of Class A Common Stock
and 2,362,365 shares of Class B Common Stock issued and outstanding. Approval of
the Amendment required the approval of the holders of Class A Common Stock and
Class B Common Stock voting together without regard to class and required the
approval of the holders of Class B Common Stock voting as a separate class. Each
holder of Class A Common Stock was entitled to one vote for each share held,
with all holders of Class A Common Stock possessing in the aggregate 22% of the
total voting power. Holders of Class B Common Stock, having the remaining 78% of
the total voting power, were entitled to 9.720727 votes for each share held
under the terms of the Company's Articles of Incorporation.
THE APPROVAL OF THE AMENDMENT BY THOSE SHAREHOLDERS WAS SUFFICIENT TO APPROVE
THE AMENDMENT UNDER THE APPLICABLE PROVISIONS OF FLORIDA LAW AND THE COMPANY'S
ARTICLES OF INCORPORATION AND BYLAWS. NO ACTION BY THE OTHER HOLDERS OF CLASS A
COMMON STOCK OR CLASS B COMMON STOCK IS REQUIRED TO APPROVE THE AMENDMENT, AND
THE COMPANY IS NOT SEEKING YOUR APPROVAL OF THE AMENDMENT.
20
The complete text of the Amendment is set forth in full in the Articles of
Amendment attached as Appendix B. This summary of the contents and effect of the
Amendment should be read in conjunction with, and is qualified in its entirety
by reference to, the Amendment.
DESCRIPTION OF CHANGES TO THE CLASS A COMMON STOCK AND CLASS B COMMON STOCK
Except for the change described above, the Amendment will not change the present
rights of the holders of Class A Common Stock or Class B Common Stock.
REASONS FOR THE AMENDMENT
The Company undertook to adopt the Amendment in connection with the Company's
application for listing of the Class A Common Stocktheir options on the NASDAQ National
Market. The Company believes that listing shares of the Company's Class A Common
Stock on the NASDAQ National Market may make the Class A Common Stock more
attractive to certain classes of investors and that greater interest in the
Class A Common Stock may lead to increased trading volume and liquidity. In
addition, the Company believes that listing shares of the Company's Class A
Common Stock on the NASDAQ National Market may enhance the Company's flexibility
to issue shares of Class A Common Stock for financing and acquisitions.
POSSIBLE NEGATIVE EFFECTS OF THE AMENDMENT
Currently, the Articles of Incorporation provide that the Class B Common Stock
will not represent less than 47.0% of the total voting power of the Class A
Common Stock and Class B Common Stock regardless ofDecember 31, 2003: (i) the number of shares of Class B Common Stock outstanding. As a resultunderlying options exercised during 2003, (ii) the aggregate dollar value realized upon the exercise of such options, (iii) the total number of exercisable and non-exercisable stock options held on December 31, 2003 and (iv) the aggregate dollar value of in-the-money exercisable options on December 31, 2003.| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Number of Securities | | Value of Unexercised |
| | | | | | | | | Underlying Unexercised | | In-the Money Options |
| | | Number of
Shares | | | | | | Options on 12/31/03
| | on 12/31/2003 (1)
|
| | | Acquired Upon | | Value Realized | | | | | | | | |
Name
| | Exercise of Option
| | Upon Exercise
| | Exercisable
| | Unexercisable
| | Exercisable
| | Unexercisable
|
| Alan B. Levan | | | 156,100 | | | $ | 506,513 | | | | 2,126,666 | | | | 269,537 | | | $ | 18,482,234 | | | $ | 2,106,702 | |
| John E. Abdo | | | 197,548 | | | | 641,004 | | | | 2,228,237 | | | | 269,537 | | | | 19,516,633 | | | | 2,106,702 | |
| Glen R. Gilbert | | | — | | | | — | | | | 220,121 | | | | 53,910 | | | | 1,716,988 | | | | 425,616 | |
| (1) | | Based upon a price of $10.92, which was the price of the last sale as reported by the OTC Market Report for 2003. |
The following table sets forth certain information as to each of the Amendment, oncenamed executives in the numberSummary Compensation Table information with respect to the exercise of outstandingstock options during 2003, for shares of Class B Common Stock falls below 500,000 shares, the
per share voting power of theBankAtlantic Bancorp’s Class A Common Stock granted by BankAtlantic Bancorp and the Class B Common Stock
will bestatus of their BankAtlantic Bancorp options on December 31, 2003: (i) the same and, accordingly, the Class B Common Stock in the aggregate
will no longer be entitled to 47.0%number of the total voting powershares of theBankAtlantic Bancorp Class A Common Stock underlying options exercised in 2003, (ii) the aggregate dollar value realized upon the exercise of such options, (iii) the total number of exercisable and Class B Common Stock.non-exercisable stock options held on December 31, 2003 and (iv) the aggregate dollar value of in-the-money options on December 31, 2003.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Number of Securities | | Value of Unexercised |
| | | | | | | | | Underlying Unexercised | | In-the Money Options |
| | | Number of
Shares | | | | | | Options on 12/31/03 (1)
| | on 12/31/2003 (2)
|
| | | Acquired Upon | | Value Realized | | | | | | | | |
Name
| | Exercise of Option
| | Upon Exercise
| | Exercisable
| | Unexercisable
| | Exercisable
| | Unexercisable
|
| Alan B. Levan | | | 44,017 | | | $ | 137,025 | | | | 1,410,668 | | | | 377,516 | | | $ | 16,279,062 | | | $ | 3,221,122 | |
| John E. Abdo | | | 11,005 | | | | 49,335 | | | | 741,272 | | | | 227,945 | | | | 8,416,297 | | | | 1,903,727 | |
| Glen R. Gilbert | | | — | | | | — | | | | — | | | | 55,514 | | | | — | | | | 423,169 | |
| (1) | | As adjusted in accordance with the terms of the plans under which the options were granted as a result of the spin-off of Levitt Corporation to BankAtlantic Bancorp’s shareholders on December 31, 2003. |
|
| (2) | | Based upon a fair market value of $14.025, determined by adjusting BankAtlantic Bancorp’s closing price of $19.00 at December 31, 2003 (which was the closing price for BankAtlantic Bancorp Class A Common Stock as reported on the New York Stock Exchange on December 31, 2003) for the above-referenced spin-off of Levitt Corporation. |
14
Long-Term Incentive Plan (“LTIP”) Awards
The AmendmentCompany has made available a profit-sharing plan to all of its employees (which does not include employees of BankAtlantic Bancorp, Inc. who are not employees of the Company) who meet certain minimum requirements. The Company is not intendedrequired to havemake any anti-takeover effect. However,contribution and the current fixed voting percentagesamount of the Class A Common Stock and Class B Common
Stock make a sale or transfer of control or removal of incumbent directors
unlikely without the concurrence of the holders of the Class B Common Stock.
Further, the Company's Articles of Incorporation and Bylaws currently contain
provisions that could have anti-takeover effects. These provisions include,
without limitation: (i) the authority ofCompany’s contribution is determined each year by the Board of DirectorsDirectors. It requires a uniform allocation to issue
additional shareseach employee of preferred stock0% to 15% of compensation, with the maximum compensation considered being $50,000. Vesting is in increments over a 6-year period to 100%. Alan B. Levan and to fixGlen R. Gilbert are 100% vested. John E. Abdo is 60% vested. During 2003, the relative rights and
preferencesaccounts for each of the preferred stock without additional shareholder approval, (ii)
the divisionabove named individuals were credited with a $6,269 contribution.
Annual Incentive Program
Each of the Company's Board of Directors into three classes of directors
with three-year staggered terms, and (iii) certain notice procedures to be
complied with by shareholdersexecutive officers named in order to make shareholder proposals or nominate
directors.
The Company also hasthe Summary Compensation Table above is eligible for a shareholders' rights plan, commonly referred to as a
"poison pill,"bonus which is intendeddetermined based upon the achievement of certain specified individual and corporate competencies or goals. These competencies and goals are established each year for each officer, and the Compensation Committee reviews the performance of each officer against such competencies and goals each year. The amounts set forth under “Bonus” in the Summary Compensation Table includes the amount earned by each officer named in the table under this bonus program with respect to cause substantial dilution2003.
BankAtlantic Profit Sharing Plan
BankAtlantic adopted the BankAtlantic Profit Sharing Stretch Plan (the “Profit Sharing Plan”) for all BankAtlantic employees, including Alan B. Levan and John E. Abdo, effective on January 1, 2003. The Profit Sharing Plan provides a quarterly payout in an amount equal to a person or
group who attemptspercentage of annual base salary to acquireall BankAtlantic employees based upon the achievement of certain pre-established goals each quarter. For 2003, such goals related to increasing low cost deposits, decreasing non-interest expense, increasing non-interest income and increasing BankAtlantic’s net income. Profit Sharing Plan payments of $118,183 were paid to Messrs. Alan B. Levan and John E. Abdo with respect to 2003. The amounts paid to each of the named executive officers under the Profit Sharing Plan for 2003 are set forth under “Bonus” in the Summary Compensation Table.
Shareholder Return Performance Graph
The following graph provides a comparison of the cumulative total returns for the Company, the Wilshire 5000 Total Market Index and the NASDAQ Bank Index and assumes $100 invested on terms that the Company's Board of
Directors has not approved. December 31, 1998:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/31/1998
| | 12/31/1999
| | 12/31/2000
| | 12/31/2001
| | 12/31/2002
| | 12/31/2003
|
| BFC Financial Corporation | | | 100 | | | | 43 | | | | 33 | | | | 84 | | | | 84 | | | | 289 | |
| Wilshire 5000 Total Market | | | 100 | | | | 122 | | | | 108 | | | | 95 | | | | 74 | | | | 95 | |
| Nasdaq Bank Index | | | 100 | | | | 92 | | | | 106 | | | | 116 | | | | 121 | | | | 158 | |
15
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The existence of
21
the shareholders' rights plan could make it more difficult for a third party to
acquire a majorityfollowing Report of the Class B Common Stock withoutCompensation Committee and the consentperformance graph included elsewhere in this proxy statement do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Company's BoardSecurities Exchange Act of Directors.
EFFECT ON MARKET PRICE1934, except to the extent the Company specifically incorporates this Report or the performance graphs by reference therein.
Executive Officer Compensation
The market priceCompany’s compensation program for executive officers consists of three key elements: a base salary, an incentive bonus (including the Company's Class A Common StockCompany’s Long Term Incentive Plan) and Class B Common Stock
depends on many factors including, among others,periodic grants of stock options. The Compensation Committee believes that this approach best serves the future performanceinterests of shareholders by ensuring that executive officers are compensated in a manner that advances both the short and long term interests of the Company and its subsidiaries (includingshareholders. Thus, compensation for the Company’s executive officers involves a portion of pay which depends on incentive payments which are generally earned based on an assessment of performance in relation to corporate goals, and stock options, which directly relate a significant portion of an executive officer’s long term remuneration to stock price appreciation realized by the Company’s shareholders. Messrs. Alan B. Levan and John E. Abdo each hold positions in, and therefore also received compensation in 2003 from, both BankAtlantic and Levitt Corporation. Mr. Glen R. Gilbert holds a position in Levitt Corporation, and therefore received compensation in 2003 from Levitt Corporation. Levitt Corporation was spun off from BankAtlantic Bancorp Inc.), general
economic andto its shareholders on December 31, 2003. The Company’s Compensation Committee does not determine the compensation from the Company’s affiliates but considers such compensation when determining the compensation paid those individuals by the Company.
Base Salary
The Company offers competitive salaries based on a review of market conditions and conditions relating to financial institutions
generally. Many of these factors are beyond the Company's control,practices and the duties and responsibilities of each officer. In setting base compensation, the Compensation Committee periodically examines market compensation levels and trends observed in the labor market. Market information is used as an initial frame of reference for annual salary adjustments and starting salary offers. Salary decisions are determined based on an annual review by the Compensation Committee with input and recommendations from the CEO. Base salary determinations are made based on, among other things, competitive market salaries, the functional and decision making responsibilities of each position, and the contribution, experience and work performance of each executive officer.
Annual Incentive Program
The Company’s management incentive program is designed to motivate executives by recognizing and rewarding performance. The annual incentive program is a bonus plan used to compensate executives generally based on the Company’s profitability and the achievement of individual performance competencies and goals. Generally, a minimum corporate profitability threshold must be achieved before any bonus will be paid.
Each participant’s bonus is intended to take into account corporate and individual components, which are weighted according to the executive’s responsibilities. Bonuses of $695,552 were paid to the named executive officers based on their individual performances during 2003.
Stock Options
Executive officers of the Company cannot predict the prices at which the Class A Common Stock or thewere granted stock options to purchase Class B Common Stock will trade. There is no assurance that the Amendment or the
listing of sharesduring 2003. All of the Company's Class A Common Stock onstock options were granted with an exercise price equal to at least 100% of the NASDAQ National
Market will have a positive effect, or will not have an adverse effect, on the
marketability or market value of the Class B Stock on the date of grant and vest on the fifth anniversary of the date of grant. The higher the trading price of the Class B Stock, the higher the value of the stock options. The granting of options is totally discretionary and options are awarded based on an assessment of an executive officer’s contribution to the success and growth of the Company. Grants of stock options to executive officers, including the named executive officers (other than the CEO), are generally made upon the recommendation of the CEO based on the level of an executive’s position with the Company, or its Common Stock.
EFFECTIVENESS OF THE AMENDMENT; CERTIFICATESBankAtlantic, Levitt Corporation, an evaluation of the executive’s past and expected performance, the number of outstanding and previously granted options and discussions with the executive. The Company intendsBoard of Directors believes that providing executives with opportunities to file the Articles of Incorporation, substantiallyacquire an interest in the form attachedgrowth and prosperity of the Company through the grant of stock options enables the Company to attract and retain qualified and experienced executive officers and offer additional long-term incentives. The
16
Board of Directors believes that utilization of stock options more closely aligns the executives’ interests with those of the Company’s shareholders, since the ultimate value of such compensation is directly dependent on the stock price.
Compensation of the Chairman and Chief Executive Officer
As previously indicated, the Compensation Committee believes that the Company’s total compensation program is appropriately based upon business performance, market compensation levels and personal performance. The Compensation Committee reviews and fixes the base salary of the CEO, based on those factors described above for other executive officers as Appendix B,well as the Compensation Committee’s assessment of Mr. Levan’s past performance as CEO and its expectation as to his future contributions. In 2003, Mr. Alan B. Levan received a 4% base salary increase from the Company. This increase was consistent with the Officeincreases given to other members of the Secretary of State of the
State of Floridaexecutive management and was considered appropriate based on or about April 16, 2003. The Amendment will become effective
immediately upon the filing of the Articles of Amendment with the Office of the
Secretary of State.
Shareholders should retain all certificates representing their shares of Class A
Common Stock or Class B Common Stock (and should not send such certificatesMr. Levan’s efforts and contributions to the Company orCompany.
In evaluating the Company's transfer agent) because it will not be necessary to
issue new certificatesperformance of Mr. Levan, the Compensation Committee considered the Company’s financial condition and 2003 results. In its review, the Compensation Committee noted the 101% increase in income before income taxes, minority interest, extraordinary items and cumulative effect of a change in accounting principle for the 2003 fiscal year. Also noted was the Company’s stock price appreciation of 245%. The Compensation Committee also considered that Mr. Levan spends considerable effort and attention in connection with the Amendmentoperations of BankAtlantic Bancorp, Inc. and Levitt Corporation, and that the currently
outstanding certificatesperformance of those entities has been a substantial factor in the success of the Company. The Compensation Committee also took note of Mr. Alan B. Levan’s leadership during 2003. Specifically, it acknowledged his successful leadership in the spin-off of Levitt Corporation from BankAtlantic Bancorp, his efforts to increase the visibility of and institutional interest in the Company, BankAtlantic Bancorp and Levitt and creating and leading BankAtlantic’s Florida’s Most Convenient Bank initiative. Based on the foregoing, Mr. Levan was awarded an aggregate bonus of $415,000.
Future salary increases and bonuses will continue to represent sharesreflect the amounts paid to chief executive officers at other public companies, as well as the Company’s financial condition, operating results and attainment of strategic objectives.
Internal Revenue Code Limits on Deductibility of Compensation
Section 162(m) of the Company's
Class A Common Stock or Class B Common Stock, as applicable, followingInternal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1,000,000 paid for any fiscal year to the filing of the Articles of Amendment.
DISSENTER'S APPRAISAL RIGHTS
Pursuant to Section 607.1320 of the Florida Business Corporation Act, a holder
of Class B Common Stock (a "Class B Common Shareholder") may dissentcorporation’s chief executive officer and elect
to receive the fair value of such shareholder's sharesfour other most highly compensated executive officers as of the day priorend of any fiscal year. However, the statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met.
The Compensation Committee believes that it is generally in the Company’s best interest to attempt to structure performance-based compensation, including stock option grants or performance-based restricted stock or restricted stock unit awards and annual bonuses, to executive officers who may be subject to Section 162(m) in a manner that satisfies the statute’s requirements. However, the Committee also recognizes the need to retain flexibility to make compensation decisions that may not meet Section 162(m) standards when necessary to enable the Company to meet its overall objectives, even if the Company may not deduct all of the compensation. Accordingly, the Compensation Committee this year approved and may in the future approve compensation arrangements for certain officers, including Mr. Levan, that are not fully deductible. Further, because of ambiguities and uncertainties as to the date on which the Amendment was approved by written consent, without
including the incremental value or the diminution in value, if any, arising in
anticipationapplication and interpretation of the effectiveness of the Amendment, judicially determined and
paid. Holders of Class A Common Stock do not have appraisal rights with respect
to the Amendment. In order to perfect such shareholder's appraisal rights, a
dissenting shareholder (a "Dissenting Shareholder") must fully comply with the
statutory procedures of Sections 607.1301, 607.1302 and 607.1320 of the Florida
Business Corporation Act summarized below. Such Sections are attached as
Appendix C. Holders of Class B Common Stock are urged to read such Sections in
their entirety and to consult with their legal advisors. Each holder of Class B
Common Stock who may desire to assert appraisal rights is cautioned that failure
on his or her part to adhere strictly to the requirements of Florida law in any
regard may cause a forfeiture of any appraisal rights.
22
To exercise appraisal rights, a Dissenting Shareholder must satisfy the
following conditions:
1. Within ten days after the Amendment was approved by written consent,
the Company shall give written notice of the authorization of the Amendment to
each holder of Class B Common Stock who did not consent in writing to the
Amendment.
2. Within twenty days after the giving of the foregoing notice by the
Company, each Dissenting Shareholder who elects to dissent shall file with the
Company a notice of such election, stating such shareholder's name and address,
the number, class and series of shares as to which he dissents and a demand for
payment of the fair value of such shareholder's shares. Any Dissenting
Shareholder failing to file such election to dissent within the period set forth
shall lose the right to dissent from the Amendment. Any holder of Class B Common
Stock filing an election to dissent shall deposit the certificate(s)
representing such shareholder's shares with the Company simultaneously with the
filing of the election. The Company may restrict the transfer of such shares
from the date the election to dissent is filed.
3. Upon filing a notice of election to dissent, the Dissenting Shareholder
shall thereafter be entitled only to payment pursuant to the procedure set forth
herein and shall not be entitled to vote or to exercise any other rights of a
shareholder. A notice of election may be withdrawn in writing by the Dissenting
Shareholder at any time before an offer is made by the Company, as provided
below, to pay for such shareholder's shares. However, the right of the
Dissenting Shareholder to be paid the fair value of such shareholder's shares
shall cease, and he shall be reinstated to have all rights as a shareholder as
of the filing of such shareholder's notice of election, including any
intervening preemptive rightsSection 162(m) and the right to payment of any intervening
dividend or other distribution or, if any such rights have expired or any such
dividend or distribution other than in cash has been completed, in lieu thereof,
atregulations issued thereunder, no assurance can be given, notwithstanding the election of the Company, the fair value thereof in cash as determined by
the Company as of the time of such expiration or completion, but without
prejudice otherwise to any corporate proceedingsCompany’s efforts, that may have been taken in the
interim, if:
a. Such demand is withdrawn as provided;
b. The Company rescinds the Amendment or the Company's shareholders
revoke their approval by written consent of the Amendment;
c. No demand or petition for the determination of fair value by a
court has been made or filed within the required time; or
d. A court of competent jurisdiction determines that such Dissenting
Shareholder is not entitled to the relief as provided herein.
4. Within ten days after the expiration of the period in which the holders
of Class B Common Stock may file their notices of election to dissent, or within
ten days after the date on which the Amendment becomes effective, whichever is
later (but in no event later than ninety days after the Amendment was approved
by written consent), the Company shall make a written offer to each Dissenting
Shareholder who has made demand as herein provided to pay for such
23
shares at a specified price deemedcompensation intended by the Company to satisfy the requirements for deductibility under Section 162(m) does in fact do so.
Submitted by the Members of the Compensation Committee:
Earl Pertnoy, Chairman
Oscar Holzmann
Neil Sterling
17
AUDIT COMMITTEE REPORT
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the fair value thereof.
IfSecurities Act of 1933 or the AmendmentSecurities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein.
The Audit Committee held five meetings during 2003. The meetings were designed, among other things, to facilitate and encourage communication among the Audit Committee, management, the internal auditors and the Company’s independent auditors for 2003, PricewaterhouseCoopers LLP (“PWC”). The Committee discussed with the Company’s independent auditors the overall scope and plan for their audit and met with the independent auditors, with and without management present, to discuss the results of their examination. In 2003, the Committee engaged an internal audit company to begin an internal audit process and an evaluation of the Company’s internal controls. On January 7, 2003, the Committee approved the dismissal of KPMG LLP (“KPMG”) and the engagement of PWC as the Company’s independent auditors.
The Audit Committee reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2003 with management and PWC.
Management has not become effective withinprimary responsibility for the ninety days afterCompany’s financial statements and the approvaloverall reporting process, including the Company’s system of internal controls. The independent auditors audit the annual financial statements prepared by written consent thereof,management, express an opinion as to whether those financial statements present fairly, in all material respects, the offer may be conditioned upon such
effectiveness. Such offer is to be accompanied by (i) a balance sheetfinancial position, results of operations and cash flows of the Company asin conformity with accounting principles generally accepted in the United States of America and discuss with the Audit Committee their independence and any other matters they are required to discuss with the Audit Committee or that they believe should be raised with it. The Audit Committee oversees these processes, although it must rely on information provided to it and on the representations made by management and the independent auditors.
The Audit Committee also discussed with the independent auditors matters required to be discussed with audit committees under generally accepted auditing standards, including, among other things, matters related to the conduct of the latest available date (not more than twelve months prioraudit of the Company’s consolidated financial statements and the matters required to be discussed byStatement on Auditing Standards No. 61 (Communication with Audit Committees).
The Company’s independent auditors also provided to the making of an offer)Audit Committee the written disclosures and the letter required byIndependence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and (ii) a profitthe Audit Committee discussed with PWC its independence from the Company. When considering PWC’s independence, the Audit Committee considered whether their provision of services to the Company beyond those rendered in connection with their audit and loss statementreview of the Company for
the twelve-month period ended on the date of such balance sheet.
5. If, within thirty days after the making of such offer, the Dissenting
Shareholder accepts the same, payment for the shares of that Dissenting
Shareholder is to be made within ninety days after the making of such offer or
the effective date of the Amendment, whichever is later. Upon payment of the
agreed value, the Dissenting Shareholder shall cease to have any interest in
such shares.
6. If the Company fails to make such an offer, or if it makes such an
offer and any Dissenting Shareholder fails to accept the offer within the thirty
day period thereafter, then the Company, within thirty days after receipt of
written demand from any Dissenting Shareholder given within sixty days after the
effective date of the Amendment, shall, or, at its election within such sixty
day period may, file an action in any court of competent jurisdiction in Broward
County, Florida, requesting that the fair value of such shares be determined.Company’s consolidated financial statements was compatible with maintaining their independence. The court's jurisdiction shall be plenary and exclusive. If the Company fails to
institute such proceeding within the above-prescribed period, any Dissenting
Shareholder may do so in the name of the Company. All Dissenting Shareholders,
wherever residing, will be made parties to the proceedings as an action against
their shares. A copy of the initial pleading will be served on each Dissenting
Shareholder. All Dissenting Shareholders who are proper parties to the
proceeding as determined by the court are entitled to judgment against the
Company forAudit Committee also reviewed, among other things, the amount of fees paid to PWC for audit and non-audit services.
Based on these reviews and meetings, discussions and reports, the fair valueAudit Committee recommended to the Board of their shares, as well, as atDirectors that the discretionCompany’s audited consolidated financial statements for the fiscal year ended December 31, 2003 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
Submitted by the Members of the court, an allowanceAudit Committee:
Oscar Holzmann, Chairman
Earl Pertnoy
Neil Sterling
18
Fees to Independent Auditors for interest at such rateFiscal 2003 and 2002
PWC served as the court may
find fairindependent auditor for the Company and equitable.BankAtlantic for 2003 and for Levitt Corporation for 2003 and 2002. KPMG served as independent auditor for the Company and BankAtlantic for 2002. The Company shall payfollowing tables present for each Dissenting Shareholderof these entities, fees for professional services rendered by the amount found to be due to him within ten days after final determinationthen engaged independent auditor for the audit of each of the proceedings.
7. The court may, if it elects, appoint one or more appraisers to receive
evidenceentities, annual financial statements, fees for audit-related services, tax services and recommend a decision on the question of fair value.
8. The judgment of the court is payable only uponall other services.
| | | | | | | | | |
| | | 2002
| | 2003
|
| | | (in thousands) |
BFC Financial Corporation | | | | | | | | |
| Audit fees | | $ | 92 | | | | 64 | |
| Audit - related fees (a) | | | — | | | | — | |
| Tax fees (b) | | | — | | | | — | |
| All other fees | | | 7 | | | | — | |
BankAtlantic | | | | | | | | |
| Audit fees | | | 1,141 | | | | 951 | |
| Audit - related fees (a) | | | 164 | | | | 27 | |
| Tax fees (b) | | | 191 | | | | 451 | |
| All other fees | | | — | | | | — | |
Levitt Corporation | | | | | | | | |
| Audit fees | | | 134 | | | | 180 | |
| Audit - related fees (a) | | | 45 | | | | 43 | |
| Tax fees (b) | | | — | | | | 43 | |
| All other fees | | | — | | | | — | |
| (a) | | Principally audits of employee benefit plans and other related entities, due diligence and consultation services with respect to acquisitions and consultations regarding generally accepted accounting principles. |
|
| (b) | | Principally, in 2003, work related to the preparation, filing and completion of a private letter ruling request in connection with the Levitt spin-off, and in 2003 and 2002, also includes tax compliance services, tax advice, tax planning and tax examination assistance. |
All audit related services, tax services and concurrently with
the surrender to the Company of the certificate(s) representing the shares. Upon
payment of the judgment, the Dissenting Shareholder ceases to have any interest
in such shares.
9. The costs and expenses of the proceeding are determined by the court
and assessed against the Company, except that all or any part of such costs and
expenses may be apportioned and assessed against any or all of the Dissenting
Shareholders who are parties to the proceeding and to whom the Company has made
an offer to pay for their shares, if the court finds their refusal to accept
such offer to have been arbitrary, vexatious or not in good faith. Expenses
include reasonable compensation for, and expenses of, appraisers, but shall
exclude the fees and expenses of counsel for, and experts employed by, any
party. If the value of shares, as determined by the court, materially exceeds
the amount that the Company offered to pay for the shares, then the court may,
in its discretion, award to any Dissenting Shareholder who is a party
24
to the proceedings such sum as the court may determine to be reasonable
compensation to any expert(s) employed by the Dissenting Shareholder in the
proceeding.
10. Successful assertion by holders of Class B Common Stock of their
dissenters' appraisal rights is dependent upon compliance with the requirements
described above. Non-compliance with any provision may result in failure to
perfect those rights and the loss of an opportunity to receive payment for
shares pursuant to an appraisal.
BECAUSE OF THE COMPLEXITY OF THE PROVISIONS OF THE FLORIDA LAW RELATING TO
DISSENTERS' APPRAISAL RIGHTS, SHAREHOLDERS WHO ARE CONSIDERING ASSERTING
APPRAISAL RIGHTS ARE URGED TO CONSULT THEIR OWN LEGAL ADVISERS.
APPOINTMENT OF INDEPENDENT AUDITORS
PricewaterhouseCoopers has been selectedother services were pre-approved by the Audit Committee of the respective entity, which concluded that the provision of such services by PWC was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. Under its charter, the Audit Committee must review and pre-approve both audit and permitted non-audit services provided by the independent auditors and shall not engage the independent auditors to perform any non-audit services prohibited by law or regulation. Each year, the independent auditor’s retention to audit the Company’s financial statements, including the associated fee, is approved by the Audit Committee before the filing of the preceding year’s annual report on Form 10-K. Under its current practices, the Audit Committee does not regularly evaluate potential engagements of the independent auditor and approve or reject such potential engagements. At each Audit Committee meeting, the Audit Committee receives updates on the services actually provided by the independent auditor, and management may present additional services for pre-approval. Effective, March 29, 2004, the Audit Committee has delegated to the Chairman of the Audit Committee the authority to evaluate and approve engagements involving projected fees of $10,000 or less on behalf of the Audit Committee in the event that a need arises for pre-approval between regular Audit Committee meetings. If the Chairman so approves any such engagements, he will report that approval to the full Audit Committee at the next Audit Committee meeting. Engagements involving projected fees of more than $10,000 may only be pre-approved by the full Audit Committee at a regular or special meeting.
The Audit Committee has determined that the provision of the services, other than audit services, described above are compatible with maintaining the principal independent auditor’s independence.
19
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of April 1, 2004, certain information as to Class A Stock and Class B Stock beneficially owned by persons owning in excess of 5% of the outstanding shares of such stock. In addition, this table includes the outstanding securities beneficially owned by the Company’s Beneficial Owners, directors and executive officers named in the Summary Compensation Table and the number of shares owned by directors and executive officers as a group. Management knows of no person, except as listed below, who beneficially owned more than 5% of the Company’s outstanding Class A Stock or Class B Stock as of April 1, 2004. Except as otherwise indicated, the information provided in the following table was obtained from filings with the Securities and Exchange Commission (the “SEC”) and with the Company pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For purposes of the table below in accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner of any shares of the Company’s Common Stock (1) over which he or she has or shares, directly or indirectly, voting or investment power, or (2) of which he or she has the right to acquire beneficial ownership at any time within 60 days after April 1, 2004. As used herein, “voting power” is the power to vote, or direct the voting of, shares and “investment power” includes the power to dispose, or direct the disposition of, such shares. Unless otherwise noted, each beneficial owner has sole voting and sole investment power over the shares beneficially owned.
| | | | | | | | | | | | | | | | | |
| | | Class A
Stock | | Class B
Stock | | | | |
| | | Ownership | | Ownership | | Percent of | | Percent of |
| | | as of | | as of | | Class A | | Class B |
Name of Beneficial Owner
| | April 1, 2004
| | April 1, 2004
| | Stock
| | Stock
|
| I.R.E. Realty Advisory Group, Inc.(2)(3)(5) | | | 2,869,142 | | | | 500,000 | | | | 20.62 | % | | | 16.16 | % |
| Florida Partners, Corporation(3)(5) | | | 764,995 | | | | 133,314 | | | | 5.50 | % | | | 4.31 | % |
| I.R.E. Properties, Inc.(3)(5) | | | 784,229 | | | | 136,666 | | | | 5.64 | % | | | 4.42 | % |
| I.R.E. Realty Advisors, Inc.(3)(5) | | | 1,389,933 | | | | 242,221 | | | | 9.99 | % | | | 7.83 | % |
| Levan Enterprises, Ltd.(3)(5) | | | 320,570 | | | | 55,865 | | | | 2.30 | % | | | 1.81 | % |
| Alan B. Levan(1)(3)(5)(6) | | | 121,723 | | | | 2,187,691 | | | | 0.88 | % | | | 43.94 | % |
| Glen R. Gilbert(1)(5) | | | 5,614 | | | | 239,068 | | | | 0.04 | % | | | 7.17 | % |
| John E. Abdo(1)(3)(5)(6) | | | 1,771,181 | | | | 2,748,437 | | | | 12.73 | % | | | 55.18 | % |
| Earl Pertnoy(1)(5) | | | 39,594 | | | | 119,208 | | | | 0.28 | % | | | 3.72 | % |
| Oscar Holzmann(1)(5) | | | — | | | | 8,965 | | | | 0.00 | % | | | 0.29 | % |
| Neil Sterling(1)(5) | | | — | | | | 8,965 | | | | 0.00 | % | | | 0.29 | % |
| Dr. Herbert A. Wertheim(4) | | | 2,389,699 | | | | 416,448 | | | | 17.17 | % | | | 13.46 | % |
| All directors and executive officers of the Company as a group (6 persons, including the individuals identified above)(1)(3) | | | 8,066,981 | | | | 6,380,400 | | | | 57.97 | % | | | 88.18 | % |
| (1) | | Amount and nature of beneficial ownership and percent of class include shares that may be acquired within 60 days pursuant to exercise of stock options to purchase Class B Common Stock as follows: Alan B. Levan 1,866,723 shares, John E. Abdo 1,866,723 shares, Glen R. Gilbert 238,090 shares, Earl Pertnoy 112,308 shares, Oscar Holzmann 8,965 shares and Neil Sterling 8,965 shares. |
|
| (2) | | The Company owns 45.5% of I.R.E. Realty Advisory Group, Inc. |
|
| (3) | | The Company may be deemed to be controlled by Alan B. Levan and John E. Abdo who collectively may be deemed to have an aggregate beneficial ownership of 67.5% of the outstanding Common Stock of the Company. Levan Enterprises, Ltd. is a controlling and majority shareholder of I.R.E. Realty Advisors, Inc. and I.R.E. Properties, Inc. and may be deemed to be the controlling shareholder of I.R.E. Realty Advisory Group, Inc. and Florida Partners Corporation. Levan Enterprises, Ltd. is a limited partnership whose sole general partner is Levan General Corp., a corporation 100% owned by Alan B. Levan. Therefore, Mr. Levan may be deemed to be the beneficial owner of the shares of Common Stock owned by each of such |
20
| | entities. In addition to his personal holdings of Common Stock, Mr. Levan may be deemed to be the beneficial owner of 6,887 shares of Class A Common Stock and 1,200 shares of Class B Common Stock held of record by Mr. Levan’s wife and 1,866,723 shares of Class B Common Stock which can be acquired within 60 days pursuant to stock options, for an aggregate beneficial ownership of 6,250,590 shares (44.9%) of Class A Common Stock and 3,255,757 shares (65.4%) of Class B Common Stock. |
|
| (4) | | Dr. Wertheim’s ownership was reported in a Rebuttal of Control Agreement filed on December 20, 1996 with the Office of Thrift Supervision (as adjusted for stock splits since the date of filing). The Rebuttal of Control Agreement indicates that Dr. Wertheim has no intention to manage or control, directly or indirectly, the Company. Dr. Wertheim’s mailing address is 191 Leucadendra Drive, Coral Gables, Florida 33156. |
|
| (5) | | Mailing address is 1750 East Sunrise Boulevard, Fort Lauderdale, Florida 33304. |
|
| (6) | | Messrs. Levan and Abdo have entered into a Shareholders Agreement and Irrevocable Proxy with respect to the shares of Class B Common Stock controlled by them. Under the agreement, they have agreed to vote their shares of Class B Common Stock in favor of the election of each other to the Company’s Board of Directors for so long as Mr. Levan and Mr. Abdo are willing and able to serve as directors of the Company. Additionally, Mr. Abdo will grant an irrevocable proxy to an entity controlled by Mr. Levan and obtain the consent of Mr. Levan prior to the sale or conversion of certain of his shares of Class B Common Stock. |
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not aware of any matters, other than those referred to servein the accompanying Notice of Meeting, that may be brought before the Annual Meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP served as the Company's independent certified public accountants for
the fiscal year ending December 31, 2003. KPMG acted as the Company'sCompany’s independent public accountants for the year ended December 31, 20022003. A representative of PricewaterhouseCoopers LLP is expected to be present at the Annual Meeting, will have the opportunity to make a statement if he desires to do so, and will be available to respond to appropriate questions from shareholders.
KPMG LLP (“KPMG”) served as the Company’s independent public accountants for the year ended December 31, 2002. On January 7, 2003, the Company dismissed KPMG as its independent public accountants, effective upon completion of the audit of the fiscal year ended December 31, 2002. KPMG served as independent public accountants through the filing of all required reports covering operations for fiscal year 2002, including the Annual Report on Form 10-K for the year ended December 31, 2002.
The Audit Committee of the Board of Directors dismissed KPMG on January 6, 2003,
and engaged the services of PricewaterhouseCoopers as the Company's new
independent certified public accountants for the fiscal year ending December 31,
2003, effective January 1, 2003.10-K. The reports of KPMG on the Company’s financial statements for the past two years ended December 31, 2002 and 2001 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that it was noted thatin 2002, the Company changed its method of accounting for goodwill and intangible assets and in 2001, the Company changed its method of accounting for derivative instruments and hedging activities in 2001 and for
goodwill and intangible assets and for gains and losses onactivities. The decision to change accountants was approved by the extinguishmentAudit Committee of debt in 2002. Additionally, in 2002 diluted earnings per share were restated to
include the proportionate shareBoard of a subsidiary's diluted income attributable to
potential common shares.Directors of the Company. In connection with its audits for the two most recent fiscal years ended December 31, 2002 and 2001, and through the date of this Proxy Statement,proxy statement, there werehave been no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure, auditing scope or procedure, which disagreements if not resolved to the satisfaction of KPMG would have caused them to make reference thereto in their report on the financial statements for such yearsyears.
ADDITIONAL INFORMATION
“Householding” of Proxy Material.The Securities and there were no reportable eventsExchange Commission has adopted rules that permit companies and intermediaries such as defined in Item 304(a)(1)(v) of
Regulation S-K.
Duringbrokers to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the two most recent fiscal yearssame address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and through January 7, 2003, thecost savings for companies. The Company did not consult with PricewaterhouseCoopers regarding either (i) the application
of accounting principles to a specific transaction, either completed or
proposed; or the type of audit opinion that might be rendered on the Company's
financial statements; or (ii) any matter that was either the subject of a
disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions to Item 304 of Regulation S-K, or a reportable
event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
25
Representatives of PricewaterhouseCoopers are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire and
will be available to respond to appropriate questions from shareholders.
Representatives of KPMG will be invited to be present at the Annual Meeting and
will have the opportunity to make a statement if they desire and will be
available to respond to appropriate questions from shareholders.
OTHER INFORMATION
MULTIPLE SHAREHOLDERS SHARING THE SAME ADDRESS
Recent changes in the regulations regarding the delivery of copies ofsome brokers household proxy materials, and annual reports to shareholders permit the Company to send one
annual report anddelivering a single proxy statement to multiple shareholders who share the same
address under certain circumstances, unless otherwise requested. This practice
is known as "householding." If a shareholder sharing an address who now receives
only oneunless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker or our transfer agent, American Stock Transfer & Trust Company (“AST”), that they or we will be householding materials to your address, householding
21
will continue until you are notified otherwise or until you revoke your consent. However, the Company will deliver promptly upon written or oral request a separate copy of the Company's annual report andthis proxy statement per householdto a shareholder at a shared address to which a single proxy statement was delivered. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple proxy statements and would like to request delivery of a single proxy statement, please notify your broker if your shares are held in a brokerage account or AST if you hold registered shares. You can notify AST by sending a written request to American Stock Transfer & Trust Company, 59 Maiden Lane — Plaza Level, New York, NY 10038, attention Karen A. Lazar, Vice President.
Advance Notice Procedures.Under our bylaws, no business may be brought before an annual meeting unless it is specified in the notice of the meeting or is otherwise brought before the meeting by or at the direction of the Board or by a shareholder entitled to vote who has delivered written notice to the Company’s Corporate Secretary (containing certain information specified in the bylaws about the shareholder and the proposed action) not less than 90 or more than 120 days prior to the first anniversary of the preceding year’s annual meeting—that is, with respect to the 2005 annual meeting, between January 11 and February 10, 2005. In addition, any shareholder who wishes to receivesubmit a nomination to the Board must deliver written notice of the nomination within this time period and comply with the information requirements in the bylaws relating to shareholder nominations. These requirements are separate copies of these materials, thenfrom and in addition to the shareholder
should contact BFC Financial Corporation, Investor Relations, P.O. Box 5403,
Fort Lauderdale, FL 33310-5403 by mail or by calling (954) 760-5200. IfSEC’s requirements that a shareholder of record sharing an address who currently receives multiple copies
of the Company's annual report and proxy statement wishesmust meet in order to receive only one
copy of these materials per householdhave a shareholder proposal included in the future, thenCompany’s proxy statement.
Shareholder Proposals for the 2005 Annual Meeting.Shareholders interested in submitting a proposal for inclusion in the proxy materials for the annual meeting of shareholders in 2005 may do so by following the procedures prescribed in SEC Rule l4a-8. To be eligible for inclusion, shareholder should
also contact BFC Financial Corporation, Investor Relation, by mail or telephone
as instructed above.
SHAREHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Shareholders' proposals intended to be presented at the 2004 Annual Meeting must be received by the CompanyCompany’s Secretary no later than December 31, 2003, for inclusion16, 2004 at the Company’s main offices, 1750 East Sunrise Boulevard, Fort Lauderdale, Florida 33304. If such proposal or proposals are in compliance with applicable rules and regulations, they will be included in the Company'sCompany’s proxy statement and form of proxy for that meeting.
EXPENSES OF SOLICITATION
Proxy Solicitation Costs.The costCompany will bear the expense of preparing, assembling, and mailing the proxy materialsoliciting proxies and of reimbursing brokers, nominees,banks and fiduciariesnominees for the out-of-pocket and clerical expenses of transmitting copies of the proxy materialmaterials to the beneficial owners of shares held of record by such persons will be borne by the Company.persons. The Company does not currently intend to solicit proxies otherwiseother than by use of the mail, but certain directors, officers and regular employees of the Company or its subsidiary, BankAtlantic, without additional compensation, may use their personal efforts,solicit proxies personally or by telephone, fax, special letter or otherwise,otherwise.
BY ORDER OF THE BOARD OF DIRECTORS
Alan B. Levan
Chairman
April 21, 2004
22
Appendix A
AUDIT COMMITTEE
BFC FINANCIAL CORPORATION
CHARTER
Adopted March 1, 2004
Organization
There shall be a committee of the Board of Directors to obtain proxies.be known as the Audit Committee. The Audit Committee shall be comprised of not less than three members of the Board of Directors. The members of the Audit Committee shall be elected by the Board of Directors and shall serve until their successors shall be duly elected and qualified or until such member’s earlier resignation or removal. The members of the Audit Committee may be removed, with or without cause, by a majority vote of the Board of Directors. Unless a Chair is elected by the full Board, the members of the Audit Committee may designate a Chair by majority vote of the full Audit Committee membership.
All Audit Committee members shall be free from any material relationship with the Company, as determined by the Board of Directors in its business judgment. Each member of the Audit Committee shall, in the judgment of the Board of Directors, be “independent,” as defined by all applicable laws, rules and regulations, and members of the Audit Committee shall not, directly or indirectly, accept any consulting, advisory, or other compensatory fee from the Company.
Each member of the Audit Committee shall be “financially literate,” as such qualification is interpreted by the Board of Directors in its business judgment. At least one member of the Audit Committee shall be a “financial expert” based on the criteria established by the Securities and Exchange Commission (the “SEC”) and other relevant rules and regulations as determined by the Board of Directors in its business judgment. No member of the Audit Committee shall serve on the audit committees of more than three public companies unless the Board of Directors determines, in its business judgment, that such simultaneous service would not impair the ability of such member to effectively serve on the Company’s Audit Committee.
Statement of Policy
The Audit Committee shall provide assistance to the Board of Directors in fulfilling its oversight responsibilities for the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the qualifications, performance and independence of the Company’s independent auditor, and the performance of the Company’s internal audit function. In so doing, it will be the responsibility of the Audit Committee to facilitate free and open communication between the Audit Committee, the independent auditors, the internal auditors, and management of the Company. The Audit Committee will also prepare a report to be included in the Company’s annual proxy materials are first being mailedstatement, as required by SEC regulations, and will report regularly to shareholders of record at the close of business on March 26, 2003.
26
OTHER BUSINESS
The Board of Directors of the Company does not knowon its activities and discussions.
In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its attention within its scope of responsibility with full access to all books, records, facilities, and personnel of the Company and the authority to engage independent legal, accounting and other advisors as it determines necessary to carry out its duties. The Company shall provide appropriate funding, as determined by the Audit Committee, for compensation to the independent auditor and to any otheradvisors that the Audit Committee may choose to engage. The decision to engage or to terminate any advisors to the Audit Committee and all decisions regarding the fee arrangements for any such advisors shall be made solely by the Audit Committee.
Meetings
The Audit Committee shall meet at least four times per year, or more frequently as circumstances may require. If the Audit Committee deems it advisable, its meetings may include an executive session of the Audit Committee absent members of management and on such terms and conditions as the Audit Committee may elect. As part of its role to foster open communication, the Audit Committee should meet periodically with management, the person or persons responsible for the Company’s internal audit function and the independent auditors in separate executive sessions to discuss any matters that arethe Audit Committee or each of these groups believe should be discussed privately. In addition, the Audit Committee should meet at least quarterly with the independent auditors
23
and management to be presented for action atdiscuss the meeting. Should any other matter come
before the meeting, however, the persons named in the enclosed proxy shall have
discretionary authority to vote all shares represented by valid proxies with
respect to such matter in accordance with their judgment.
INCORPORATION BY REFERENCE
The Company is allowed to "incorporate by reference" certain information into
this Proxy Statement. The information incorporated by reference is deemed to be
a part of this Proxy Statement, except for any information superseded by
information in this Proxy Statement. The information incorporated by reference
is an important part of this Proxy Statement. The Company incorporates by
reference into this Proxy Statement the following information from the Company's
Annual Report on Form 10-K for the year ended December 31, 2002:
o The Company'saudited annual financial statements foror quarterly financial statements, as applicable, including the year ended December 31,
2002Company’s disclosure under “Management’s Discussion and the notesAnalysis of Financial Condition and accountant's report thereto;
o The Company's supplementary financial information (Item 302Results of Regulation S-K);
o The Company's management's discussion and analysis of financial
condition and results of operations (Item 303 of Regulation S-K);
o The Company's changes in and disagreements with accountants on
accounting and financial disclosure (Item 304 of Regulation S-K);
and
o The Company's quantitative and qualitative disclosures about market
risk (Item 305 of Regulation S-K).
The Company's Annual Report on Form 10-K for the year ended December 31, 2002 is
being delivered to you with this Proxy Statement (other than exhibits which are
not specifically incorporated by reference herein).
* * * * * * * * * * * * * * * * * * * * * * * * * * *
By Order of the Board of Directors
/s/ Glen R. Gilbert
Glen R. Gilbert
Secretary
April 17, 2003
27
APPENDIX A
AUDIT COMMITTEE CHARTER
OF
BFC FINANCIAL CORPORATION
I. PurposeOperations.”
Responsibilities
The primary functionresponsibility of the Audit Committee is to assistoversee the Company’s reporting processes on behalf of the Board of Directors (i) in its oversight of the Company's accounting and financial
reporting principles and policies and internal audit controls and procedures,
(ii) in its oversight of the Company's financial statements and the independent
audit thereof, (iii) in selecting, evaluatingshareholders and where appropriate, replacingto report the outside auditor, and (iv) in evaluatingresults of its activities to the independenceBoard of the outside
auditor.Directors. While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company'sCompany’s financial statements are complete and accurate orand are in accordance with accounting principles generally accepted inaccounting principles. Management is responsible for the United States. This ispreparation, presentation, and integrity of the responsibilityCompany’s financial statements. The independent auditors are responsible for auditing the Company’s financial statements and for reviewing the Company’s unaudited interim financial statements. The Board of Directors recognizes that the Audit Committee’s functions are not intended to duplicate or certify the activities of management and the independent auditor. Nor is it the duty ofauditor, nor can the Audit Committee to conduct investigations, to
resolve disagreements, if any, between management andcertify that the independent auditor or
to assure compliance with laws and regulationsis “independent” within the meaning of applicable to the Company. In
fulfilling their responsibilities hereunder, it is recognized that members of
the Audit Committee are not full-time employees of the Company and are not, and
do not represent themselves to be, accountants or auditors by profession or
experts in the fields of accounting or auditing including in respect of auditor
independence. As such, it is not the duty or responsibility of the Audit
Committee or its members to conduct "field work" or other types of auditing or
accounting reviews or procedures or to set auditor independence standards, and
each member of the Audit Committee shall be entitled to rely on (i) the
integrity of those persons and organizations within and outside the Company from
which it receives information, (ii) the accuracy of the financial and other
information provided to the Audit Committee by such persons or organizations
absent actual knowledge to the contrary (which shall be promptly reported to the
Board of Directors) and (iii) representations made by management as to any
non-audit services provided by the auditors to the Company.
II. Composition
The Audit Committee shall be comprised of at least three directors, each
of whom shall not be an officer or employee of the Company or its subsidiaries,
shall not have any relationship which, in the opinion of the Board of Directors,
would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director and shall otherwise be "independent," as defined
by all applicable laws, rules and regulations. Furthermore, no member of the
Audit Committee shall, directly or indirectly, accept any consulting, advisory,
or other compensatory fee from the Company other than payment for service on the
Board of Directors or any committees of the Board of Directors. All Audit
Committee members shall be "financially literate," and, if required for the
listing of the Company's securities on any national securities exchange or
automated quotation system, at least one member of the Audit Committee shall be
28
an "audit committee financial expert," as such terms are defined by all
applicable laws, rules and regulations. Each member of the Audit Committee shall
be appointed by the Board of Directors and the Board of Directors shall
designate one member of the Audit Committee to serve as its Chairman.
III. Authority
The Audit Committee is granted the authority to conduct investigations
into any matters within its scope of responsibilities. The Audit Committee is
empowered to retain persons having special competence as necessary to assist the
Audit Committee in fulfilling its responsibility including independent counsel,
accountants, or other persons providing assistance in conducting an
investigation. The Company shall provide appropriate funding, as determined by
the Audit Committee, for compensation to the outside auditor and to any advisors
that the Audit Committee may choose to engage.
IV. Duties and Responsibilities
The function of the Audit Committee is oversight.
In carrying out its responsibilities, the Audit Committee believes its policies and procedures should remain flexible to enable the Audit Committee to react to changing conditions and circumstances. The duties and responsibilitiesprocesses set forth below are intended to serve as a guide with the understanding that the Audit Committee may supplement or diverge from them as appropriate. In fulfilling its function,
the
• The Audit Committee shall have the following duties and responsibilities:
- Oversee the reliability and integrity of the accounting policies and
financial reporting and disclosure practices of the Company.
- Bebe directly responsible for the appointment and termination (subject, if applicable, to shareholder ratification), setting of compensation, and oversight of the work of the independent auditors. - ReviewThe independent auditors shall report directly to the Audit Committee and the Audit Committee shall oversee the resolution of disagreements between management and the independent auditors in the event that they arise, including resolution of disagreements between management and the auditors regarding financial reporting.
• The Audit Committee shall meet at least annually with the internal auditors and the independent auditors and financial management of the Company to review the scope of their proposed audits for the current year and the proposed audit procedures to be utilized, including the adequacy of staffing and compensation and shall review with management and the independent auditors the results of the audit, including any comments or recommendations they may have.
• At least annually the Audit Committee shall evaluate the independent auditor’s qualifications and performance, which review shall include a review of the lead partner assigned by the independent auditor to the Company. In making its evaluation, the Audit Committee shall take into consideration the opinions of management as well as the person or persons responsible for the Company’s internal audit function.
• The Audit Committee shall review and pre-approve both audit and permitted non-audit services provided by the independent auditors and shall not engage the independent auditors to perform any non-audit services prohibited by applicable law rule or regulation. The Audit Committee may establish policies and
procedures for pre-approval and may delegate pre-approval authority to a member of the Audit Committee. The decisions of any Audit Committee member to whom pre-approval authority is delegated must be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee shall inform the Board of Directors of its approval of any permitted non-audit services so that the Company may disclose such approval if appropriate.
- Consultsuch disclosure shall be required by any applicable laws, rules or regulations.
• The Audit Committee shall consider whether the auditor’s performance of permissible non-audit services is compatible with the auditor’s independence and shall also request from the independent auditors annually a formal written statement delineating all relationships between the auditor and the Company consistent with Independent Standards Board Standard Number 1. The Audit Committee shall review and discuss with the independent auditors any such disclosed relationships and their impact on the independent auditor’s independence. The Audit Committee shall ensure the rotation of the lead audit partner assigned to the Company by the independent auditor at least every five years and confirm that the lead audit partner or the audit partner responsible for reviewing the audit has not performed audit services for the Company in any of the Company’s last five fiscal years.
• The Audit Committee shall hold timely discussions with the independent auditors regarding material written communications between the independent auditor and management including, but not limited to, the management letter and schedule of unadjusted differences.
• The Audit Committee shall obtain and review at least annually a report by the outside auditor describing the independent auditor’s internal quality-control procedures, any material issues raised by the most recent internal quality-control review or peer
24
review or by any governmental or professional authorities within the preceding five years, respecting one or more independent audits carried out by the independent auditor and any steps taken to deal with any such issues.
• The Audit Committee shall review and advise the Board on the selection, performance, compensation and removal of the person or persons responsible for the Company’s internal audit function. The Audit Committee shall review activities, organizational structure, and qualifications of the internal audit department. The Audit Committee shall periodically, but at least quarterly, review with the person or persons responsible for the Company’s internal audit function any significant difficulties, disagreements with management, or scope restrictions encountered in the course of the department’s work.
• The Audit Committee shall review and discuss with management and the independent auditors regarding
financial issues including, but not limited to, the adequacy of
financial disclosures, major fluctuations or unusual circumstances
noted in theaudited annual financial statements and quarterly financial statements of the Company to be included in the Company’s Annual Report on Form 10-K or Quarterly Reports on Form 10-Q, as applicable, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including the results of the independent auditor's
responsibilities forauditors’ reviews of the interim financial statements, and all internal controls reports (or summaries thereof). The Audit Committee shall also review other relevant reports or financial information in documents containing audited
financial statements.
29
- Review withsubmitted by the Company to any governmental body, or the public, including management and its independent auditor the scope of
servicescertifications as required by the audit, critical accounting policiesSarbanes-Oxley Act of 2002 and practices, and audit conclusions regarding significant accounting
estimates and judgments.
- Reviewrelevant reports rendered by the independent auditors (or summaries thereof). The Audit Committee shall discuss with management and the independent auditor atauditors the completionquality, not just acceptability, of each fiscal year the Company's annualaccounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the Company’s financial statements, and the related footnotes,shall review and consider with the independent auditor's auditauditors the matters required to be discussed by Statement of Auditing Standards (“SAS”) No. 61.
• The Audit Committee shall review disclosures made by the CEO and CFO during the Forms 10-K and 10-Q certification process about significant deficiencies in the design or operation of internal controls or any fraud that involves management or other employees who have a significant role in the Company’s internal controls.
• The Audit Committee shall discuss the Company’s earnings press releases, as well as financial information and any earnings guidance provided to analysts and rating agencies; provided that any such discussions may be general in nature, need not take place in advance of the financial statementspublic dissemination of each earnings release and its report thereon,need not address each instance in which the Company may provide earnings guidance.
• The Audit Committee shall discuss with management and the independent auditors the accounting policies that may be viewed as critical. The Audit Committee shall review and discuss any significant changes in the independent auditor's audit plan, any substantial
difficulties or disputes encountered during the courseaccounting policies of the audit,Company and any other matters related toaccounting and financial reporting proposals that may have a significant impact on the conduct of the audit which are
to be communicated to the committee under generally accepted
auditing standards.
- Review and discuss all critical accounting policies and practices to
be used andCompany’s financial reports as well as all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, the ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor andauditor. The Audit Committee shall confer with management and the independent auditor on all significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative methods under generally acceptable accounting principles on the financial statements of alternative methods permitted by generally
accepted accounting principles.
- Reviewstatements.
• The Audit Committee shall discuss with management and the independent auditor all financial
reports filed with the Securities and Exchange Commission or any
other regulatory agency or entity.
- Consider with management and its independent auditor their
assessments ofauditors the integrity of the Company'sCompany’s financial reporting processprocesses (both internal and external) and the quality and adequacy of the Company’s internal controls and disclosure controls.
• The Audit Committee shall review management’s assessment of the effectiveness of internal controls as of the end of the most recent fiscal year and the resolutionindependent auditors’ report on and attestation of identifiedmanagement’s assessment. The Audit Committee shall review all material weaknesses and reportable conditions inissues raised by management’s internal controls or disclosure controls, includingreview.
• The Audit Committee shall provide sufficient opportunity for the prevention or
detectionindependent auditors to meet with the Audit Committee outside the presence of management, override or compromiseand to discuss the independent auditors’ evaluation of the internal audit
control system or disclosure controls.
- Discuss with managementCompany’s financial and accounting personnel and the selection and termination ofcooperation that the independent auditor, any significant relationshipsauditors received during the accountants
have with the Company which may influence their independence and any
significant disagreements between the independent auditor and
management.
- Oversee the internal audit function, including the planned audit
work and results of the completed work, oversee internal audit's
capacity to fulfill its responsibilities and assess the
qualifications and experience levelcourse of the audit staff.
- Establishas well as any audit problems or difficulties and management’s response.
• The Audit Committee shall establish procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
30
- Prepare and maintain minutes and other records of
25
• The Audit Committee meetings and distributeshall review the findings of any examination by regulatory agencies such minutes to committee members and
non-committee directors.
- Obtain fromas the outside auditors assurance that the audit was
conducted in a manner consistent with Section 10AFederal Reserve, FDIC, Office of the Securities
Exchange Act of 1934, as amended, which sets forth certain
procedures to be followed in any audit of financial statements
required under the Securities Exchange Act of 1934.
- Prepare any reportThrift Supervision, or other disclosures, including any
recommendation of the Audit Committee, required by the rules of the Securities and Exchange Commission, as well as any response by management to be included inregulatory agency examinations or reviews.
• The Audit Committee shall review the Company's
annual proxy statement.
- Report its activitiesCompany’s Code of Ethics that applies to the full Board of Directors on a regular
basis and make such recommendationsCompany’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
• The Audit Committee shall discuss the Company’s policies with respect to risk assessment and risk management.
• The Audit Committee shall set clear hiring policies for employees or former employees of the aboveindependent auditor in compliance with applicable laws, rules and other matters asregulations.
• The Audit Committee shall perform a self-evaluation of its performance at least annually to determine whether it is functioning effectively.
• The Audit Committee shall review and reassess this Charter periodically, but at least annually, and recommend to the Board any amendments that the Audit Committee may deem necessary or appropriate.
- Review thisadvisable.
Disclosure of Charter
This Charter will be made available on an annual basisthe Company’s website and recommend any proposed
changes to the Board of Directors for approval.
Additionally, the Audit Committee is to be the Board of Director's
principal agent in assessing the independence of the Company's internal audit
function and independent auditors. However, the opportunity for the independent
auditors to meet with the Board of Directorsotherwise as needed is not restricted.
Further, the Audit Committee will approve the evaluation and compensation
review, as well as the hiring and firing, of those responsible for the internal
audit function.
V. Independent Auditors
The independent auditors for the Company are accountable to and must
report to the Audit Committee. The Audit Committee has the authority and
responsibility to select, evaluate and hire the independent auditors.
The independent auditors shall submit to the Company annually a formal
written statement delineating all relationships between the independent auditors
and the Company ("Statement as to Independence"), addressing each non-audit
service provided to the Company. The independent auditors shall also submit to
the Company all material written communications between the independent auditors
and management.
The independent auditors shall submit to the Company annually a formal
written statement of the fees billed in each of the last two fiscal years for
each of the following categories of services rendered by the independent
auditors: (i) the audit of the Company's annual financial statements and review
of financial statements included in the Company's quarterly reports on Form
10-Q; (ii) assurance and related services that are reasonably related to the
performance of the audit or review of the Company's financial statements and are
not reported under clause (i); (iii) professional services for tax compliance,
tax advice, and tax
31
planning; and (iv) products and services provided other than the services
reported under clause (i), (ii) or (iii).
VI. Meetings
The Audit Committee shall meet at least four times per year, or more
frequently if the Audit Committee deems necessary. The Audit Committee shall
meet with the independent auditors and management on a quarterly basis to review
the financials of the Company and the Company's disclosure under "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
discuss any other matters the Audit Committee deems appropriate.
32
APPENDIX B
PROPOSED FORM OF
ARTICLES OF AMENDMENT TO
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
BFC FINANCIAL CORPORATION
The Amended and Restated Articles of Incorporation, as amended, of BFC
FINANCIAL CORPORATION, a Florida corporation (the "Corporation"), are hereby
amended pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act and such amendments are set forth as follows:
1. Article IV shall be deleted in its entirety and is replaced in its
stead with the following:
"ARTICLE IV
CAPITAL STOCK
The Corporation is authorized to have outstanding three classes of capital
stock designated Special Class A Common Stock, Class B Common Stock (previously
designated Common Stock), and Preferred Stock.
Special Class A Common Stock: The Corporation is authorized to issue
20,000,000 shares of Special Class A Common Stock at a par value of $.01 per
share. The Special Class A Common Stock may be issued for time to time in one or
more series in any manner permitted by law as determined from time to time by
the Board of Directors and stated in the resolution or resolutions providing for
the issuance of the Special Class A Common Stock adopted by the Board of
Directors pursuant to authority hereby vested in the Board, each series to be
appropriately designated prior to the issuance of any shares thereof by some
distinguishing letter number, or title. All shares of each series of Special
Class A Common Stock shall be identical except as to the following relative
rights and preferences as to which there may be variations between different
series:
1. the rate or manner of payment of dividends and the dates from which
such dividends shall commence to accrue;
2. whether shares may be redeemed and, if so, the redemption price and
the terms and conditions of redemption;
3. the amount payable upon shares in the event of voluntary or
involuntary liquidation;
33
4. sinking fund provisions, if any, for the redemption or purchase of
shares;
5. the terms and conditions, if any, on which shares may be converted;
and
6. voting rights, if any.
The designation of each particular series of Special Class A Common Stock
and its terms in respect of the foregoing particulars shall be fixed and
determined by the Board of Directors in any manner permitted by law and stated
in the resolution or resolutions providing for the issuance of such shares
adopted by the Board of Directors pursuant to authority hereby vested in it,
before any shares of such series are issued. The Board of Directors may from
time to time increase the number of shares of any series of Special Class A
Common Stock already created by providing that any unissued Special Class A
Common Stock shall constitute part of such series, or may decrease (but not
below the number of shares thereof then outstanding) the number of shares of any
series of Special Class A Common Stock already created by providing that any
unissued shares previously assigned to such series shall no longer constitute
part thereof. The Board of Directors is hereby empowered to classify or
reclassify any unissued Special Class A Common Stock by fixing or altering the
terms thereof in respect of the above mentioned particulars and by assigning the
same to an existing or newly created series from time to time before the
issuance of such shares.
Class B Common Stock: The Corporation is authorized to issue 20,000,000
shares of Class B Common Stock at a par value of $.01 per share.
Preferred Stock: The Corporation is authorized to issue 10,000,000 shares
of $.01 par value Preferred Stock. The Preferred Stock may be divided into and
issued in series by the Board of Directors as set forth below.
The Board of Directors is authorized to divide the Preferred Stock into
series or classes having the relative rights, preferences and limitations as may
from time to time be determined by the Board of Directors. Without limiting the
foregoing, the Board of Directors is expressly authorized to fix and determine:
1. The number of shares which shall constitute the series and the
designation of such shares.
2. The rate and the time at which dividends on that series shall be
paid and whether, and the extent to which, such dividends shall be
cumulative or noncumulative.
3. The right of the holders of the series to vote.
4. The preferential rights of the holders upon liquidation or
distribution of the assets of the Corporation.
5. The terms upon which the holders of any series may convert their
shares into any class or classes.
34
6. The terms and conditions upon which the series may be redeemed and
the terms and amount of any sinking fund or purchase fund for the
purchase or redemption of that series."
2. Section 3 of Article V shall be deleted in its entirety and is replaced
in its stead with the following:
"Section 3. Voting Rights.
Except as provided in this Article V (or in any supplementary sections
thereto), all rights to vote and all voting power (including, without
limitation, the right to elect directors) shall be vested exclusively in the
holders of Class A Common Stock and the holders of Class B Common Stock, voting
together without regard to class.
(a) Class A Common Stock. On all matters presented for a vote of
shareholders, holders of Class A Common Stock shall be entitled to one vote for
each share held. Until the total number of outstanding shares of Class B Common
Stock shall first fall below 1,800,000 shares (an "Initial Trigger Event"), the
Class A Common Stock shall possess in the aggregate 22.0% of the total voting
power of the Common Stock (as adjusted pursuant to clauses (ii) and (iv) of
subparagraph (b) below, the "Class A Percentage").
(b) Class B Common Stock.
(i) On all matters presented for a vote of shareholders,
holders of Class B Common Stock shall be entitled to a number of votes (which
may be or include a fraction of a vote) for each share of Class B Common Stock
held equal to the quotient derived by dividing (1) the number equal to (x) the
total number of shares of Class A Common Stock outstanding on the relevant
record date divided by the Class A Percentage less (y) the total number of
shares of Class A Common Stock outstanding on such record date by (2) the total
number of shares of Class B Common Stock outstanding on such record date.
(ii) Until the occurrence of an Initial Trigger Event the
Class B Common Stock shall possess in the aggregate 78.0% of the total voting
power of the Common Stock (as adjusted pursuant to clauses (ii) and (iv) below,
the "Class B Percentage"). From and after the occurrence of an Initial Trigger
Event but prior to a Final Trigger Event, the Class A Percentage shall be
increased and the Class B Percentage shall be decreased based on the number of
shares of Class B Common Stock then issued and outstanding as follows:
(1) if on the record date for any matter to be voted
upon the number of outstanding shares of Class B Common Stock is
less than 1,800,000 but greater than 1,400,000 then the Class A
Percentage shall thereafter be equal to 40.0% and the Class B
Percentage shall thereafter be equal to 60.0%, in each case until
further adjusted in accordance herewith; and
(2) if on the record date for any matter to be voted
upon the number of outstanding shares of Class B Common Stock is
less than 1,400,000
35
then the Class A Percentage shall thereafter be equal to 53.0% and
the Class B Percentage shall thereafter be equal to 47.0%.
(iii) Notwithstanding the foregoing nor anything else herein
to the contrary, until the occurrence of a Final Trigger Event: (1) at no time
shall the Class B Percentage be increased or the Class A Percentage reduced as a
result of a change in the number of shares of Class B Common Stock outstanding
other than through the operation of subparagraph (e) below, and (2) the Class A
Percentage shall never be greater than 53.0% and Class B Percentage shall never
be less than 47.0%.
(iv) When the total number of outstanding shares of Class B
Common Stock shall first fall below 500,000 shares (a "Final Trigger Event") and
thereafter, on all matters presented for a vote of shareholders, holders of
Class B Common Stock shall be entitled to one vote for each share held and the
Class A Percentage and the Class B Percentage shall no longer have any
application or effect.
(c) Cumulative Voting. There shall be no cumulation of votes for the
election of directors.
(d) Class Vote by Class B Common Stock. Notwithstanding any other
provision of this Article V, until the occurrence of a Final Trigger Event the
Corporation shall not take any of the following actions without the affirmative
vote of the holders of a majority of the outstanding shares of Class B Common
Stock, given separately as a class, which vote shall be in addition to any right
to vote required by the laws of the State of Florida: (i) issue any additional
shares of Class B Common Stock, except (1) pursuant to a stock dividend issued
exclusively to the holders of Class B Common Stock, (2) pursuant to the terms of
any securities outstanding on June 18, 2002 that are by their terms convertible
intoapplicable law, rule or exchangeable or exercisable for shares of Class B Common Stock, (3)
pursuant to the terms of any class or series of securities established and
issued after June 18, 2002 pursuant the "Preferred Stock" provisions of Article
IV hereof, or (4) pursuant to any stock options exercisable for shares of Class
B Common Stock issued under the terms of any stock option plan of the
Corporation existing on June 18, 2002 or established after June 18, 2002 and
approved by the holders of a majority of the then issued and outstanding shares
of Class B Common Stock; (ii) effect any reduction in the number of outstanding
shares of Class B Common Stock (other than by holders of Class B Common Stock
converting Class B Common Stock into Class A Common Stock or through voluntary
disposition thereof to the Corporation); or (iii) effect any change or
alteration in any provision of this Section 3 of this Article V.
(e) Adjustments. In the event of a reorganization, recapitalization,
merger or stock split affecting the Class B Common Stock, then the threshold
number of shares of Class B Common Stock referenced in the definition of an
Initial Trigger Event, in the definition of a Final Trigger Event or in the
adjustment of the Class A Percentage or the Class B Percentage specified in
subsection (b)(ii) of this Section 3 and the number or kind of shares into which
the Class B Common Stock are convertible pursuant to this Article V shall be
appropriately and proportionately adjusted; and in each such case such
provisions shall be applied so as to give effect to such adjustments. If any
such transaction shall be effected by amendment of the
36
Articles of Incorporation, then such amendment shall itself adjust such
threshold share number or conversion rate in accordance with the foregoing."
3. Subsection 2 of Section 6 of Article V shall be deleted in its entirety
and is replaced in its stead with the following:
"2. Voting. A holder of shares of Class A Common Stock shall be entitled to vote
in accordance with the provisions of Section 3 of Article V."
37
APPENDIX C
PROVISIONS OF THE FLORIDA BUSINESS CORPORATION ACT
607.1301 DISSENTERS' RIGHTS; DEFINITIONS. --The following definitions apply to
ss. 607.1302 and 607.1320:
(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Fair value," with respect to a dissenter's shares, means the value of the
shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(3) "Shareholders' authorization date" means the date on which the shareholders'
vote authorizing the proposed action was taken, the date on which the
corporation received written consents without a meeting from the requisite
number of shareholders in order to authorize the action, or, in the case of a
merger pursuant to s. 607.1104, the day prior to the date on which a copy of the
plan of merger was mailed to each shareholder of record of the subsidiary
corporation.
607.1302 RIGHT OF SHAREHOLDERS TO DISSENT. --
(1) Any shareholder of a corporation has the right to dissent from, and obtain
payment of the fair value of his or her shares in the event of, any of the
following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party:
1. If the shareholder is entitled to vote on the merger, or
2. If the corporation is a subsidiary that is merged with its parent under s.
607.1104, and the shareholders would have been entitled to vote on action taken,
except for the applicability of s. 607.1104;
(b) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation, other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange
pursuant to s. 607.1202, including a sale in dissolution but not including a
sale pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to the
shareholders within 1 year after the date of sale;
(c) As provided in s. 607.0902(11), the approval of a control-share acquisition;
(d) Consummation of a plan of share exchange to which the corporation is a party
as the corporation the shares of which will be acquired, if the shareholder is
entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the shareholder is
entitled to vote on the amendment and if such amendment would adversely affect
such shareholder by:
1. Altering or abolishing any preemptive rights attached to any of his or her
shares;
38
2. Altering or abolishing the voting rights pertaining to any of his or her
shares, except as such rights may be affected by the voting rights of new shares
then being authorized of any existing or new class or series of shares;
3. Effecting an exchange, cancellation, or reclassification of any of his or her
shares, when such exchange, cancellation, or reclassification would alter or
abolish the shareholder's voting rights or alter his or her percentage of equity
in the corporation, or effecting a reduction or cancellation of accrued
dividends or other arrearages in respect to such shares;
4. Reducing the stated redemption price of any of the shareholder's redeemable
shares, altering or abolishing any provision relating to any sinking fund for
the redemption or purchase of any of his or her shares, or making any of his or
her shares subject to redemption when they are not otherwise redeemable;
5. Making noncumulative, in whole or in part, dividends of any of the
shareholder's preferred shares which had theretofore been cumulative;
6. Reducing the stated dividend preference of any of the shareholder's preferred
shares; or
7. Reducing any stated preferential amount payable on any of the shareholder's
preferred shares upon voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of incorporation
provide that a voting or nonvoting shareholder is entitled to dissent and obtain
payment for his or her shares.
(2) A shareholder dissenting from any amendment specified in paragraph (1)(e)
has the right to dissent only as to those of his or her shares which are
adversely affected by the amendment.
(3) A shareholder may dissent as to less than all the shares registered in his
or her name. In that event, the shareholder's rights shall be determined as if
the shares as to which he or she has dissented and his or her other shares were
registered in the names of different shareholders.
(4) Unless the articles of incorporation otherwise provide, this section does
not apply with respect to a plan of merger or share exchange or a proposed sale
or exchange of property, to the holders of shares of any class or series which,
on the record date fixed to determine the shareholders entitled to vote at the
meeting of shareholders at which such action is to be acted upon or to consent
to any such action without a meeting, were either registered on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc., or held of record by not fewer than 2,000 shareholders.
(5) A shareholder entitled to dissent and obtain payment for his or her shares
under this section may not challenge the corporate action creating his or her
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
39
607.1320 PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS. --
(1)(a) If a proposed corporate action creating dissenters' rights under s.
607.1302 is submitted to a vote at a shareholders' meeting, the meeting notice
shall state that shareholders are or may be entitled to assert dissenters'
rights and be accompanied by a copy of ss. 607.1301, 607.1302, and 607.1320. A
shareholder who wishes to assert dissenters' rights shall:
1. Deliver to the corporation before the vote is taken written notice of the
shareholder's intent to demand payment for his or her shares if the proposed
action is effectuated, and
2. Not vote his or her shares in favor of the proposed action. A proxy or vote
against the proposed action does not constitute such a notice of intent to
demand payment.
(b) If proposed corporate action creating dissenters' rights under s. 607.1302
is effectuated by written consent without a meeting, the corporation shall
deliver a copy of ss. 607.1301, 607.1302, and 607.1320 to each shareholder
simultaneously with any request for the shareholder's written consent or, if
such a request is not made, within 10 days after the date the corporation
received written consents without a meeting from the requisite number of
shareholders necessary to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the corporation
shall give written notice of such authorization or consent or adoption of the
plan of merger, as the case may be, to each shareholder who filed a notice of
intent to demand payment for his or her shares pursuant to paragraph (1)(a) or,
in the case of action authorized by written consent, to each shareholder,
excepting any who voted for, or consented in writing to, the proposed action.
(3) Within 20 days after the giving of notice to him or her, any shareholder who
elects to dissent shall file with the corporation a notice of such election,
stating the shareholder's name and address, the number, classes, and series of
shares as to which he or she dissents, and a demand for payment of the fair
value of his or her shares. Any shareholder failing to file such election to
dissent within the period set forth shall be bound by the terms of the proposed
corporate action. Any shareholder filing an election to dissent shall deposit
his or her certificates for certificated shares with the corporation
simultaneously with the filing of the election to dissent. The corporation may
restrict the transfer of uncertificated shares from the date the shareholder's
election to dissent is filed with the corporation.
(4) Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall not
be entitled to vote or to exercise any other rights of a shareholder. A notice
of election may be withdrawn in writing by the shareholder at any time before an
offer is made by the corporation, as provided in subsection (5), to pay for his
or her shares. After such offer, no such notice of election may be withdrawn
unless the corporation consents thereto. However, the right of such shareholder
to be paid the fair value of his or her shares shall cease, and the shareholder
shall be reinstated to have all his or her rights as a shareholder as of the
filing of his or her notice of election, including any intervening preemptive
rights and the right to payment of any intervening dividend or other
distribution or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as
40
determined by the board as of the time of such expiration or completion, but
without prejudice otherwise to any corporate proceedings that may have been
taken in the interim, if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the shareholders
revoke the authority to effect such action;
(c) No demand or petition for the determination of fair value by a court has
been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such shareholder is not
entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which shareholders may
file their notices of election to dissent, or within 10 days after such
corporate action is effected, whichever is later (but in no case later than 90
days from the shareholders' authorization date), the corporation shall make a
written offer to each dissenting shareholder who has made demand as provided in
this section to pay an amount the corporation estimates to be the fair value for
such shares. If the corporate action has not been consummated before the
expiration of the 90-day period after the shareholders' authorization date, the
offer may be made conditional upon the consummation of such action. Such notice
and offer shall be accompanied by:
(a) A balance sheet of the corporation, the shares of which the dissenting
shareholder holds, as of the latest available date and not more than 12 months
prior to the making of such offer; and
(b) A profit and loss statement of such corporation for the 12-month period
ended on the date of such balance sheet or, if the corporation was not in
existence throughout such 12-month period, for the portion thereof during which
it was in existence.
(6) If within 30 days after the making of such offer any shareholder accepts the
same, payment for his or her shares shall be made within 90 days after the
making of such offer or the consummation of the proposed action, whichever is
later. Upon payment of the agreed value, the dissenting shareholder shall cease
to have any interest in such shares.
(7) If the corporation fails to make such offer within the period specified
therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30 days
thereafter, then the corporation, within 30 days after receipt of written demand
from any dissenting shareholder given within 60 days after the date on which
such corporate action was effected, shall, or at its election at any time within
such period of 60 days may, file an action in any court of competent
jurisdiction in the county in this state where the registered office of the
corporation is located requesting that the fair value of such shares be
determined. The court shall also determine whether each dissenting shareholder,
as to whom the corporation requests the court to make such determination, is
entitled to receive payment for his or her shares. If the corporation fails to
institute the proceeding as herein provided, any dissenting shareholder may do
so in the name of the corporation. All dissenting shareholders (whether or not
residents of this state), other than shareholders who have agreed with the
corporation as to the value of their shares, shall be made parties to the
proceeding as an action against their shares. The corporation shall serve a copy
of the initial pleading in such proceeding
41
upon each dissenting shareholder who is a resident of this state in the manner
provided by law for the service of a summons and complaint and upon each
nonresident dissenting shareholder either by registered or certified mail and
publication or in such other manner as is permitted by law. The jurisdiction of
the court is plenary and exclusive. All shareholders who are proper parties to
the proceeding are entitled to judgment against the corporation for the amount
of the fair value of their shares. The court may, if it so elects, appoint one
or more persons as appraisers to receive evidence and recommend a decision on
the question of fair value. The appraisers shall have such power and authority
as is specified in the order of their appointment or an amendment thereof. The
corporation shall pay each dissenting shareholder the amount found to be due him
or her within 10 days after final determination of the proceedings. Upon payment
of the judgment, the dissenting shareholder shall cease to have any interest in
such shares.
(8) The judgment may, at the discretion of the court, include a fair rate of
interest, to be determined by the court.
(9) The costs and expenses of any such proceeding shall be determined by the
court and shall be assessed against the corporation, but all or any part of such
costs and expenses may be apportioned and assessed as the court deems equitable
against any or all of the dissenting shareholders who are parties to the
proceeding, to whom the corporation has made an offer to pay for the shares, if
the court finds that the action of such shareholders in failing to accept such
offer was arbitrary, vexatious, or not in good faith. Such expenses shall
include reasonable compensation for, and reasonable expenses of, the appraisers,
but shall exclude the fees and expenses of counsel for, and experts employed by,
any party. If the fair value of the shares, as determined, materially exceeds
the amount which the corporation offered to pay therefor or if no offer was
made, the court in its discretion may award to any shareholder who is a party to
the proceeding such sum as the court determines to be reasonable compensation to
any attorney or expert employed by the shareholder in the proceeding.
(10) Shares acquired by a corporation pursuant to payment of the agreed value
thereof or pursuant to payment of the judgment entered therefor, as provided in
this section, may be held and disposed of by such corporation as authorized but
unissued shares of the corporation, except that, in the case of a merger, they
may be held and disposed of as the plan of merger otherwise provides. The shares
of the surviving corporation into which the shares of such dissenting
shareholders would have been converted had they assented to the merger shall
have the status of authorized but unissued shares of the surviving corporation.
42
regulation.
26
Form of Proxy Class A Common Stock
REVOCABLE PROXY
BFC FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Proxy Solicited On Behalf of the Board of Directors
The undersigned hereby appoints Glen R. Gilbert and Maria R. Scheker, or either of them, the undersigned'sundersigned’s proxies, with full power of substitution, to vote all of the shares of Class A Common Stock of BFC FINANCIAL CORPORATION (the "Company"“Company”) which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held at Signature Grand, 6900 State
Road 84, Davie, Florida 33317,Broward County Convention Center, 1950 Eisenhower Boulevard, Ft. Lauderdale, FL 33316 on Tuesday, May 20, 2003,11, 2004, at 6:002:45 p.m., local time, and at any adjournment or postponement thereof, as hereinafter specified upon the proposal listed on the reverse side and as more particularly described in the Company'sCompany’s Proxy Statement, receipt of which is hereby acknowledged, and in their discretion, upon such other business as may properly come before such Annual Meeting or adjournments or postponements thereof.
This Proxy will be voted in accordance with the instructions set forth herein, or in the event no instructions are set forth, this Proxy will be voted FOR the nominees set forth on the back of this card and described in the accompanying Notice of Annual Meeting and Proxy Statement.This Proxy hereby revokes all prior proxies given with respect to the shares of the undersigned.
(Continued,
(Continued, and to be signed and dated on the other side.)
43
1. Election of three directors -one to serve a three-year term to expire in
2006, one to serve a two year tem to expire in 2005 and the other to serve
a one year term to expire in 2004.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW:
Nominees: Earl Pertnoy (term to expire in 2006), Oscar Holzmann (term to
expire in 2005 and Neil Sterling (term to expire in 2004).
|_| FOR ALL NOMINEES
|_| WITHHOLD AUTHORITY FOR ALL NOMINEES
|_| FOR ALL NOMINEES EXCEPT
(See instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s)
mark "FOR ALL NOMINEES EXCEPT" and write the nominee name(s) below:
________________________________________
________________________________________
2. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1.
Please mark, sign, date and return this
proxy card promptly, using the enclosed
envelope. No Postage is required for
mailing it in the United States.
Dated: ____________________,2003
________________________________________
(Signature of Shareholder)
________________________________________
(Signature of Shareholder)
IMPORTANT: Please sign exactly as
name(s) appear(s) at left. When signing
as attorney, executor, administrator,
trustee, guardian, please give full
title as such. If a corporation, please
sign the full corporate name by
President or other authorized officer.
If a partnership, please sign in
partnership name by authorized person.
44
27
| 1. | | Election of three directors –two to serve a three-year term to expire in 2007, one to serve a two year term to expire in 2006. |
| | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW: |
|
| | | Nominees: Neil Sterling and Alan B. Levan (term to expire in 2007) and D. Keith Cobb (term to expire in 2006). |
| | | | |
| | o | | FOR ALL NOMINEES |
| | | | |
| | o | | WITHHOLD AUTHORITY FOR ALL NOMINEES |
| | | | |
| | o | | FOR ALL NOMINEES EXCEPT |
| | | | (See instructions below) |
| | | INSTRUCTIONS: To withhold authority to vote for any individual nominee(s) mark “FOR ALL NOMINEES EXCEPT” and write the nominee name(s) below: |
|
| | |
|
|
| | |
|
| 2. | | In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting. |
| | | THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1. |
| | |
| | Please mark, sign, date and return this proxy card promptly, using the enclosed envelope. No Postage is required for mailing it in the United States. |
| | |
| | Dated:, 2004 |
| | |
| | |
| | (Signature of Shareholder) |
| | |
| | |
| | (Signature of Shareholder) |
| | |
| | IMPORTANT: Please sign exactly as name(s) appear(s) at left. When signing as attorney, executor, administrator, trustee, guardian, please give full title as such. If a corporation, please sign the full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. |
28
Form of Proxy Class B Common Stock
REVOCABLE PROXY
BFC FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Proxy Solicited On Behalf of the Board of Directors
The undersigned hereby appoints Glen R. Gilbert and Maria R. Scheker, or either of them, the undersigned'sundersigned’s proxies, with full power of substitution, to vote all of the shares of Class B Common Stock of BFC FINANCIAL CORPORATION (the "Company"“Company”) which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held at Signature Grand, 6900 State
Road 84, Davie, Florida 33317,Broward County Convention Center, 1950 Eisenhower Boulevard, Ft. Lauderdale, FL 33316 on Tuesday, May 20, 2003,11, 2004, at 6:002:45 p.m., local time, and at any adjournment or postponement thereof, as hereinafter specified upon the proposal listed on the reverse side and as more particularly described in the Company'sCompany’s Proxy Statement, receipt of which is hereby acknowledged, and in their discretion, upon such other business as may properly come before such Annual Meeting or adjournments or postponements thereof.
This Proxy will be voted in accordance with the instructions set forth herein, or in the event no instructions are set forth, this Proxy will be voted FOR the nominees set forth on the back of this card and described in the accompanying Notice of Annual Meeting and Proxy Statement.Statement. This Proxy hereby revokes all prior proxies given with respect to the shares of the undersigned.
(Continued,
(Continued, and to be signed and dated on the other side.)
45
1. Election of three directors -one to serve a three-year term to expire in
2006, one to serve a two year tem to expire in 2005 and the other to serve
a one year term to expire in 2004.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW:
Nominees: Earl Pertnoy (term to expire in 2006), Oscar Holzmann (term to
expire in 2005 and Neil Sterling (term to expire in 2004).
|_| FOR ALL NOMINEES
|_| WITHHOLD AUTHORITY FOR ALL NOMINEES
|_| FOR ALL NOMINEES EXCEPT
(See instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s)
mark "FOR ALL NOMINEES EXCEPT" and write the nominee name(s) below:
________________________________________
________________________________________
2. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1.
Please mark, sign, date and return this
proxy card promptly, using the enclosed
envelope. No Postage is required for
mailing it in the United States.
Dated:______________________,2003
________________________________________
(Signature of Shareholder)
________________________________________
(Signature of Shareholder)
IMPORTANT: Please sign exactly as
name(s) appear(s) at left. When signing
as attorney, executor, administrator,
trustee, guardian, please give full
title as such. If a corporation, please
sign the full corporate name by
President or other authorized officer.
If a partnership, please sign in
partnership name by authorized person.
46
29
| 1. | | Election of three directors –two to serve a three-year term to expire in 2007, one to serve a two year term to expire in 2006. |
| | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW: |
|
| | | Nominees: Neil Sterling and Alan B. Levan (term to expire in 2007) and D. Keith Cobb (term to expire in 2006). |
| | | | |
| | o | | FOR ALL NOMINEES |
| | | | |
| | o | | WITHHOLD AUTHORITY FOR ALL NOMINEES |
| | | | |
| | o | | FOR ALL NOMINEES EXCEPT |
| | | | (See instructions below) |
| | | INSTRUCTIONS: To withhold authority to vote for any individual nominee(s) mark “FOR ALL NOMINEES EXCEPT” and write the nominee name(s) below: |
|
| | |
|
|
| | |
|
| 2. | | In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting. |
| | | THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1. |
| | |
| | Please mark, sign, date and return this proxy card promptly, using the enclosed envelope. No Postage is required for mailing it in the United States. |
| | |
| | Dated:, 2004 |
| | |
| | |
| | (Signature of Shareholder) |
| | |
| | |
| | (Signature of Shareholder) |
| | |
| | IMPORTANT: Please sign exactly as name(s) appear(s) at left. When signing as attorney, executor, administrator, trustee, guardian, please give full title as such. If a corporation, please sign the full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. |
30