BFC Financial Corporation
As filed with the Securities and Exchange Commission on
May 9, 2007
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-4
REGISTRATION
STATEMENT
UNDER THE SECURITIES ACT OF
1933
BFC
Financial Corporation
(Exact name of Registrant as
specified in its charter)
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Florida
(State or other
jurisdiction of
incorporation or organization)
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6035
(Primary Standard
Industrial
Classifications Code Number)
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59-2022148
(I.R.S. Employer
Identification Number)
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2100 West Cypress Creek
Road
Fort Lauderdale, Florida
33309
(954) 940-4900
(Address, including zip code,
and telephone number, including area code, of Registrants
principal executive offices)
Alan B. Levan
BFC Financial
Corporation
2100 West Cypress Creek
Road
Fort Lauderdale, Florida
33309
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies
to:
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Alison W. Miller
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
150 West Flagler Street, Suite 2200
Miami, Florida 33130
(305) 789-3200
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Barry H. Genkin
Blank Rome LLP
(Transaction counsel to the Special Committee of Levitt
Corporation)
One Logan Square
Philadelphia, Pennsylvania 19103
(215) 569-5500
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Seth M. Wise
President
Levitt Corporation
2200 West Cypress Creek Road
Fort Lauderdale, Florida 33309
(954) 958-1800
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Approximate date of commencement of proposed sale to the
public: As soon as practicable following the
effectiveness of this Registration Statement, satisfaction or
waiver of the other conditions to closing of the merger
described herein and consummation of the merger.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company
and there is compliance with General Instruction G, check
the following box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
CALCULATION
OF REGISTRATION FEE
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Proposed
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Proposed
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Maximum
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Maximum
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Amount of
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Title of Each Class of
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Amount to be
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Offering Price
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Aggregate
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Registration
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Securities to Registered(1)
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Registered(2)
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Per Share
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Offering Price(3)
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Fee
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Class A Common Stock, par
value $0.01 per share
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41,700,154
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N/A
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$162,391,790
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$4,985
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(1)
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This Registration Statement relates
to Class A Common Stock, par value $0.01 per share
(BFC Class A Common Stock), of BFC Financial
Corporation (BFC or the Registrant)
issuable to holders of Class A Common Stock, par value
$0.01 per share (the Levitt Class A Common
Stock), of Levitt Corporation (Levitt),
pursuant to the proposed merger (the merger) of
Levitt with and into LEV Merger Sub, Inc., a wholly owned
subsidiary of BFC (Merger Sub).
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(2)
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Based on the number of shares of
BFC Class A Common Stock to be issued in connection with
the merger, calculated as the product of (i) the sum of the
aggregate number of shares of Levitt Class A Common Stock
(A) outstanding (other than shares owned by Merger Sub or
BFC) as of May 8, 2007 and (B) issuable pursuant to
the exercise of options outstanding as of May 8, 2007, and
(ii) an exchange ratio of 2.27 shares of BFC
Class A Common Stock for each share of Levitt Class A
Common Stock.
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(3)
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Pursuant to Rules 457(c) and
457(f)(1) under the Securities Act of 1933, as amended (the
Securities Act), and solely for purposes of
calculating this registration fee, the proposed maximum
aggregate offering price is equal to the product of
(i) $8.84, the average of the high and low prices per share
of Levitt Class A Common Stock on May 2, 2007, as
reported on the New York Stock Exchange, and (ii) the sum
of the aggregate number of shares of Levitt Class A Common
Stock (A) outstanding (other than shares owned by Merger
Sub or BFC) as of May 8, 2007 and (B) issuable
pursuant to the exercise of options outstanding as of
May 8, 2007.
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
The
information in this joint proxy statement/prospectus is not
complete and may be changed. BFC may not sell the securities
offered by this document until the registration statement filed
with the Securities and Exchange Commission is effective. This
joint proxy statement/prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
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PRELIMINARY
SUBJECT TO COMPLETION
DATED ,
2007
JOINT PROXY STATEMENT/PROSPECTUS
Dear Shareholders:
As you know, on January 30, 2007, BFC Financial Corporation
and Levitt Corporation entered into an agreement and plan of
merger which provides for Levitt to be merged with and into and
become a wholly owned subsidiary of BFC. If the proposed merger
is completed, holders of Levitt Class A Common Stock (other
than BFC and holders who exercise and perfect their appraisal
rights) will receive, in consideration for each share of such
stock they own, 2.27 shares of BFC Class A Common
Stock (subject to adjustment in accordance with the terms of the
merger agreement) and cash in lieu of any fractional shares. The
merger is conditioned upon, among other things, the approval of
each of BFCs and Levitts shareholders. BFC
Class A Common Stock is traded on the NYSE Arca Stock
Exchange under the symbol BFF.
On ,
2007, the last trading day before the date of this joint proxy
statement/prospectus, the closing price of BFC Class A
Common Stock on the NYSE Arca Stock Exchange was
$ .
BFC will hold its annual meeting of shareholders
on ,
2007
at
local time, at The Westin Fort Lauderdale, 400 Corporate
Drive, Fort Lauderdale, Florida 33334. At the BFC annual
meeting, BFCs shareholders will be asked (i) to
approve the merger and the related transactions, (ii) to
elect two directors to BFCs board of directors to serve
until BFCs 2010 annual meeting of shareholders and
(iii) to transact such other business as may properly be
brought before the BFC annual meeting or any adjournment or
postponement thereof.
Levitt will hold its annual meeting of shareholders
on ,
2007
at
local time, at The Westin Fort Lauderdale, 400 Corporate
Drive, Fort Lauderdale, Florida 33334. At the Levitt annual
meeting, Levitts shareholders will be asked (i) to
approve the merger agreement and the transactions contemplated
thereby, including the merger, (ii) to elect three
directors to Levitts board of directors to serve until the
earlier of Levitts 2010 annual meeting of shareholders or
the consummation of the merger and (iii) to transact such
other business as may properly be brought before the Levitt
annual meeting or any adjournment or postponement thereof.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to
attend your annual meeting, please take the time to vote by
completing, signing, dating and returning the accompanying proxy
card in the enclosed self-addressed stamped envelope as soon as
possible. If you hold your shares in street name,
you should instruct your broker how to vote in accordance with
your voting instruction form.
This joint proxy statement/prospectus provides detailed
information concerning the merger, the merger agreement and the
other proposals to be considered at the annual meetings.
Additional information regarding BFC and Levitt has been filed
with the Securities and Exchange Commission and is publicly
available. BFC and Levitt encourage you to read carefully
this entire joint proxy statement/prospectus, including all
annexes.
Following receipt of a recommendation in favor of the merger by
a special committee comprised of BFCs independent
directors, the board of directors of BFC determined that the
merger agreement and the transactions contemplated thereby are
advisable, fair to and in the best interests of BFC and its
shareholders, has approved the merger agreement and the
transactions contemplated thereby, and recommends that
BFCs shareholders vote FOR the merger
and the related transactions.
Following receipt of a recommendation in favor of the merger by
a special committee comprised of Levitts independent
directors, the board of directors of Levitt determined that the
merger agreement and the transactions contemplated thereby are
advisable, fair to and in the best interests of Levitts
shareholders, has approved the merger agreement and the
transactions contemplated thereby, and recommends that
Levitts shareholders vote FOR the
approval of the merger agreement and the transactions
contemplated thereby, including the merger.
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Alan B. Levan
Chairman of the Board
BFC Financial Corporation
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Seth M. Wise
President
Levitt Corporation
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For a discussion of significant matters that should be
considered before voting at the annual meetings, please read the
section entitled Risk Factors beginning on
page 27.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the shares
of BFC Class A Common Stock to be issued by BFC under this
joint proxy statement/prospectus or passed upon the adequacy or
accuracy of this joint proxy statement/prospectus. Any
representation to the contrary is a criminal offense.
This joint proxy statement/prospectus is
dated ,
2007 and is first being mailed to shareholders of BFC and Levitt
on or
about ,
2007.
BFC
Financial Corporation
2100 West Cypress Creek
Road
Fort Lauderdale, Florida 33309
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
To Be Held
on ,
2007
To the shareholders of BFC Financial Corporation:
Notice is hereby given that the annual meeting of shareholders
of BFC Financial Corporation will be held at The Westin
Fort Lauderdale, 400 Corporate Drive, Fort Lauderdale,
Florida 33334
on ,
2007 commencing
at
local time, for the following purposes:
1. To consider and vote upon a proposal to approve the
merger of Levitt Corporation with and into a wholly-owned
subsidiary of BFC pursuant to the terms and conditions of the
Agreement and Plan of Merger, dated as of January 30, 2007,
by and among BFC, Levitt and LEV Merger Sub, Inc., a
wholly-owned subsidiary of BFC, as well as the transactions
related to the merger, including the amendment of the Amended
and Restated Articles of Incorporation of BFC, as amended, to
increase the number of authorized shares of BFC Class A
Common Stock from 70,000,000 to 130,000,000 and the amendment of
the BFC 2005 Stock Incentive Plan to increase the aggregate
number of shares of BFC Class A Common Stock authorized for
issuance pursuant to such plan from 3,000,000 to 8,000,000.
2. To consider and vote upon a proposal to elect two
directors to BFCs board of directors to serve until
BFCs 2010 annual meeting of shareholders.
3. To transact such other business as may properly be
brought before the BFC annual meeting or any adjournment or
postponement thereof.
Only holders of record of BFC common stock at the close of
business
on ,
2007, the record date for the BFC annual meeting, are entitled
to notice of, and to vote at, the BFC annual meeting and any
adjournment or postponement thereof.
The joint proxy statement/prospectus accompanying this notice
explains the merger agreement, the merger and the proposals to
be considered at the BFC annual meeting. Please review carefully
the joint proxy statement/prospectus, including the merger
agreement, the Form of Articles of Amendment to our Amended and
Restated Articles of Incorporation, the Form of Amended and
Restated By-laws of BFC and the Form of Amended and Restated BFC
2005 Stock Incentive Plan, which are attached thereto as
Annexes A, D, E and F, respectively.
The merger and the related transactions cannot be completed
unless they are approved at the BFC annual meeting. The board of
directors of BFC has determined that the merger and the related
transactions are advisable, fair to and in the best interests of
BFC and its shareholders, has approved the merger and the
related transactions, and recommends that you vote
FOR the merger and the related transactions.
Whether or not you plan to attend the BFC annual meeting,
please complete, sign and date the enclosed proxy card and
return it promptly in the enclosed postage-paid return envelope
as soon as possible. You may revoke the proxy at any
time prior to its exercise in the manner described in the joint
proxy statement/prospectus. Any shareholder of record present at
the BFC annual meeting, including any adjournment or
postponement thereof, may revoke his, her or its proxy and vote
personally at the BFC annual meeting.
By order of the board of directors,
Alan B. Levan
Chairman of the Board
Fort Lauderdale, Florida
,
2007
Levitt
Corporation
2200 West Cypress Creek
Road
Fort Lauderdale, Florida 33309
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
To Be Held
on ,
2007
To the shareholders of Levitt Corporation:
Notice is hereby given that the annual meeting of shareholders
of Levitt Corporation will be held at The Westin
Fort Lauderdale, 400 Corporate Drive, Fort Lauderdale,
Florida 33334
on ,
2007 commencing
at local
time, for the following purposes:
1. To consider and vote upon a proposal to approve the
Agreement and Plan of Merger, dated as of January 30, 2007,
by and among BFC Financial Corporation, LEV Merger Sub, Inc., a
wholly-owned subsidiary of BFC, and Levitt, and the transactions
contemplated thereby, including the merger of Levitt with and
into a wholly owned subsidiary of BFC and the conversion of each
outstanding share of Levitt Class A Common Stock (other
than shares owned by BFC and holders of Levitt Class A
Common Stock who assert and exercise their appraisal rights)
into the right to receive 2.27 shares of BFC Class A
Common Stock (subject to adjustment in accordance with the terms
of the merger agreement) and cash in lieu of any fractional
shares.
2. To consider and vote upon a proposal to elect three
directors to Levitts board of directors to serve until the
earlier of Levitts 2010 annual meeting of shareholders or
the consummation of the merger.
3. To transact such other business as may properly be
brought before the Levitt annual meeting or any adjournment or
postponement thereof.
Only holders of record of Levitt common stock at the close of
business
on ,
2007, the record date for the Levitt annual meeting, are
entitled to notice of, and to vote at, the Levitt annual meeting
and any adjournment or postponement thereof.
The joint proxy statement/prospectus accompanying this notice
explains the merger agreement, the merger and the proposals to
be considered at the Levitt annual meeting. Please review
carefully the joint proxy statement/prospectus, including the
merger agreement attached thereto as Annex A.
The merger and the other transactions contemplated by the
merger agreement cannot be completed unless the merger agreement
and the transactions contemplated thereby, including the merger,
are approved at the Levitt annual meeting. The board of
directors of Levitt has determined that the merger and the other
transactions contemplated by the merger agreement are advisable,
fair to and in the best interests of Levitts shareholders,
has approved the merger agreement and the transactions
contemplated thereby, and recommends that you vote
FOR the approval of the merger agreement and the
transactions contemplated thereby, including the merger.
Whether or not you plan to attend the Levitt annual meeting,
please complete, sign and date the enclosed proxy card and
return it promptly in the enclosed postage-paid return envelope
as soon as possible. You may revoke the proxy at
any time prior to its exercise in the manner described in the
joint proxy statement/prospectus. Any shareholder of record
present at the Levitt annual meeting, including any adjournment
or postponement of such meeting, may revoke his, her or its
proxy and vote personally at the Levitt annual meeting.
By order of the board of directors,
Seth M. Wise
President
Fort Lauderdale, Florida
,
2007
TABLE OF
CONTENTS
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1
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5
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9
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12
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12
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27
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This joint proxy statement/prospectus incorporates by reference
important business and financial information about BFC and
Levitt from documents that are not included in or delivered with
this joint proxy statement/prospectus. This information is
available to you without charge upon your written or oral
request. You can obtain the documents incorporated by reference
into this joint proxy statement/prospectus by requesting them in
writing or by telephone from the appropriate company at the
following addresses and telephone numbers:
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BFC Financial Corporation
2100 West Cypress Creek Road
Fort Lauderdale, Florida 33309
(954) 940-4900
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Levitt Corporation
2200 West Cypress Creek Road
Fort Lauderdale, Florida 33309
(954) 958-1800
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If you would like to request documents, you must do so
by ,
2007 in order to receive them before the BFC or Levitt annual
meeting.
See Where You Can Find More Information beginning on
page 147.
This document, which forms part of a registration statement on
Form S-4
filed with the Securities and Exchange Commission by BFC,
constitutes a prospectus of BFC under Section 5 of the
Securities Act of 1933, as amended (the Securities
Act), with respect to the shares of BFC Class A
Common Stock to be issued to the holders of Levitt Class A
Common Stock in connection with the merger. This document also
constitutes (i) a proxy statement under Section 14(a)
of the Securities Exchange Act of 1934, as amended (the
Exchange Act), and the rules and regulations
promulgated thereunder, (ii) a notice of meeting with
respect to BFCs 2007 annual meeting of shareholders, at
which BFCs shareholders will consider and vote upon, among
other proposals, the merger and the transactions related
thereto, and (iii) a notice of meeting with respect to
Levitts 2007 annual meeting of shareholders, at which
Levitts shareholders will consider and vote upon, among
other proposals, the merger agreement.
QUESTIONS
AND ANSWERS ABOUT THE MERGER
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Q: |
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What is the merger? |
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A: |
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On January 30, 2007, BFC Financial Corporation
(BFC) and Levitt Corporation (Levitt)
entered into the Agreement and Plan of Merger (the merger
agreement) that is described in this joint proxy
statement/prospectus. See The Merger Agreement
beginning on page 83. A copy of the merger agreement is
attached to this joint proxy statement/prospectus as
Annex A. |
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Under the terms of the merger agreement, Levitt will be merged
with and into LEV Merger Sub, Inc., a wholly owned subsidiary of
BFC (Merger Sub), with Merger Sub surviving and
remaining a wholly owned subsidiary of BFC (the
merger). |
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Q: |
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Why am I being asked to vote on the merger? |
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A: |
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Under applicable law and the terms of the merger agreement, the
merger cannot be completed unless the merger and the
transactions related thereto are approved by BFCs
shareholders and the merger agreement and the transactions
contemplated thereby, including the merger, are approved by
Levitts shareholders. Additionally, pursuant to the terms
of the merger agreement, the separate approval of Levitts
minority shareholders is required to complete the merger.
Accordingly, at BFCs annual meeting of shareholders,
BFCs shareholders will be asked to approve, among other
proposals, the merger and the related transactions, and at
Levitts annual meeting of shareholders, Levitts
shareholders will be asked to approve, among other proposals,
the merger agreement and the transactions contemplated thereby,
including the merger. For purposes of this joint proxy
statement/prospectus, references to Levitts
shareholders vote on, or approval of, the merger agreement
shall be deemed to include the vote on, or approval of, the
merger agreement and the transactions contemplated thereby,
including the merger. See Questions and Answers About the
Levitt Annual Meeting beginning on page 5 and
Questions and Answers About the BFC Annual Meeting
beginning on page 9 for a discussion about the voting
rights, the shareholder votes required and voting procedures
with respect to the requisite shareholder votes on the merger. |
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Q: |
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What will Levitts shareholders receive pursuant to
the merger? |
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A: |
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Other than BFC, whose shares of Levitt common stock will be
canceled in connection with the merger, and holders of Levitt
Class A Common Stock who exercise and perfect their
appraisal rights, each holder of Levitt Class A Common
Stock will be entitled to receive 2.27 shares of BFC
Class A Common Stock for each share of Levitt Class A
Common Stock owned by such holder at the effective time of the
merger (subject to adjustment in accordance with the terms of
the merger agreement) and cash in lieu of any fractional shares.
On January 30, 2007, the last trading day before the public
announcement of the merger agreement, and
on ,
2007, the last trading day before the date of this joint proxy
statement/prospectus, the closing price of BFC Class A
Common Stock on the NYSE Arca Stock Exchange was $6.35 per
share and $ per share,
respectively. On January 30, 2007 and
on ,
2007, the closing price of Levitt Class A Common Stock on
the New York Stock Exchange was $10.88 per share and
$ per share, respectively.
Shareholders of both companies are encouraged to obtain current
market quotations for BFC Class A Common Stock and Levitt
Class A Common Stock prior to voting their shares. |
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Upon completion of the merger, each share of Levitt common stock
owned by BFC will be canceled and no merger consideration will
be delivered in exchange for such shares. |
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Q: |
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What will Levitt option holders and holders of restricted
stock awards receive in the merger? |
|
A: |
|
Options to acquire shares of Levitt Class A Common Stock
and restricted stock awards of shares of Levitt Class A
Common Stock outstanding at the effective time of the merger
will be converted automatically into options to purchase BFC
Class A Common Stock or restricted stock awards of shares
of BFC Class A Common Stock, as applicable, on the same
terms and conditions, with appropriate adjustments made to
(i) the number of shares of BFC Class A Common Stock
covered by the new options or restricted stock awards, and
(ii) the exercise price of the options, in each case based
on the exchange ratio of 2.27 shares of BFC Class A
Common Stock for each share of Levitt Class A Common Stock. |
1
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Q: |
|
What will BFCs shareholders receive pursuant to the
merger? |
|
A: |
|
BFCs shareholders will not receive any consideration in
connection with the merger. Each share of BFC Class A
Common Stock and Class B Common Stock outstanding
immediately prior to the merger will remain outstanding as a
share of BFC Class A Common Stock and Class B Common Stock,
respectively, immediately following the merger. |
|
Q: |
|
Will there be restrictions on the transfer of the shares
of BFC Class A Common Stock to be issued in connection with
the merger? |
|
A: |
|
The shares of BFC Class A Common Stock to be issued in
connection with the merger will be freely tradeable following
receipt unless you are an affiliate of Levitt or BFC within the
meaning of the federal securities laws. This will generally be
the case only if you are a director, executive officer or holder
of 10% or more of Levitts or BFCs outstanding common
stock. |
|
Q: |
|
What are the material federal income tax consequences of
the merger to you? |
|
A: |
|
The merger has been structured to qualify as a tax-free
reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as
amended (the Code). Accordingly, holders of Levitt
Class A Common Stock should not recognize gain or loss for
United States federal income tax purposes upon the exchange of
shares of Levitt Class A Common Stock for shares of BFC
Class A Common Stock, except with respect to cash received
in lieu of fractional shares of BFC Class A Common Stock. |
|
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|
As described in further detail below, holders of Levitt
Class A Common Stock have the right to assert and exercise
appraisal rights with respect to the merger and obtain payment
in cash for the value of their shares of Levitt Class A
Common Stock. The receipt of cash in exchange for shares of
Levitt Class A Common Stock will be a taxable transaction. |
|
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|
Tax matters are very complicated, and the tax consequences of
the merger to a particular shareholder will depend in part on
such shareholders circumstances. Accordingly, BFC and
Levitt urge you to consult your own tax advisor for a full
understanding of the tax consequences of the merger to you,
including the applicability and effect of federal, state, local
and foreign income and other tax laws. |
|
Q: |
|
Does the board of directors of Levitt support the approval
of the merger agreement? |
|
A: |
|
Yes. The board of directors of Levitt designated a special
committee composed of independent directors of Levitt (the
Levitt special committee) to, among other things,
negotiate, review and evaluate the terms and conditions, and
determine the advisability of the merger. After such
negotiation, review and evaluation, the Levitt special committee
determined that the merger is advisable, fair to and in the best
interests of Levitts shareholders. On the basis of such
determination, the Levitt special committee recommended that the
full board of directors of Levitt approve the merger agreement
and the merger on the terms and conditions set forth in the
merger agreement and recommend to the shareholders of Levitt
that they approve the merger agreement. In arriving at its
determination, the Levitt special committee consulted with
certain members of Levitts senior management and its legal
and financial advisors and considered the factors described
under The Merger Recommendation of the Levitt
Board and Its Reasons for the Merger. |
|
|
|
After careful consideration of the recommendation of the Levitt
special committee and careful evaluation and consideration of
the merger agreement and the transactions contemplated thereby,
the board of directors of Levitt determined that the merger
agreement and the merger are advisable, fair to and in the best
interests of Levitts shareholders. Accordingly, the board
of directors of Levitt approved the merger agreement and the
transactions contemplated thereby, including the merger, and
recommends that Levitts shareholders vote FOR
the approval of the merger agreement. In arriving at its
determination, the Levitt board of directors also considered the
factors described under The Merger
Recommendation of the Levitt Board and Its Reasons for the
Merger. |
|
Q: |
|
Does the board of directors of BFC support the merger and
the related transactions? |
|
A: |
|
Yes. The board of directors of BFC designated a special
committee composed of independent directors of BFC (the
BFC special committee) to review, evaluate and
determine the advisability of a possible business combination
between BFC and Levitt. After such review and evaluation, the
BFC special committee |
2
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|
determined that the merger agreement and the transactions
contemplated thereby are advisable, fair to and in the best
interests of BFC and its shareholders. On the basis of such
determination, the BFC special committee recommended that the
full board of directors of BFC approve the merger agreement and
the transactions contemplated thereby. |
|
|
|
After careful consideration of the recommendation of the BFC
special committee and careful evaluation and consideration of
the merger agreement and the transactions contemplated thereby,
the board of directors of BFC determined that the merger
agreement and the transactions contemplated thereby are
advisable, fair to and in the best interests of BFC and its
shareholders. Accordingly, the board of directors of BFC
approved the merger agreement and the transactions contemplated
thereby and recommends that BFCs shareholders vote
FOR the merger and the related transactions. In
arriving at their respective determinations, the BFC special
committee and board of directors also consulted with certain
members of BFCs senior management and BFCs legal and
financial advisors and considered the factors described under
The Merger Recommendation of the BFC Board and
Its Reasons for the Merger. |
|
Q: |
|
Are there risks associated with the merger and the related
transactions? |
|
A: |
|
Yes. In evaluating the merger agreement and the transactions
contemplated thereby, you should carefully consider the risks
discussed in the section of this joint proxy
statement/prospectus entitled Risk Factors beginning
on page 27 and other information about BFC and Levitt
contained and incorporated by reference in this joint proxy
statement/prospectus. See Where You Can Find More
Information beginning on page 147. |
|
Q: |
|
When do the parties expect the merger to be
completed? |
|
A: |
|
BFC and Levitt are working to complete the merger as quickly as
practicable. If each of BFCs and Levitts
shareholders approve the matters submitted to them at their
respective annual meetings, BFC and Levitt expect that the
merger will be completed prior to July 31, 2007. However,
it is possible that factors outside of BFCs or
Levitts control could require them to complete the merger
at a later time or not complete it at all. |
|
|
|
For a description of certain matters that could delay or prevent
the completion of the merger, please read the section entitled
Risk Factors beginning on page 27. |
|
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|
Additionally, a purported class action lawsuit has been filed
against BFC, Levitt and the members of Levitts board of
directors, which seeks to enjoin the merger. See The
Merger Litigation With Respect to the Merger. |
|
Q: |
|
What will Levitt do if the merger is not completed? |
|
A: |
|
If the merger is not completed, the board of directors of Levitt
will need to pursue alternative means of funding the operations
of Levitts business, and has indicated its intention, in
such event, to immediately conduct a rights offering with
respect to its Class A Common Stock. Pursuant to the rights
offering, the then-current holders of Levitt Class A Common
Stock will be offered the right to purchase a proportional
number of additional shares of Levitt Class A Common Stock.
BFC has indicated its intention to participate to the fullest
extent possible in any such rights offering. |
|
Q: |
|
If I am a Levitt shareholder, should I send in my stock
certificates now? |
|
A: |
|
No. If you are a holder of Levitt Class A Common Stock
and the merger is approved, you will receive written
instructions from the exchange agent retained for purposes of
the merger explaining how to exchange your certificates
representing shares of Levitt Class A Common Stock for
certificates representing shares of BFC Class A Common
Stock and a cash payment in lieu of any fractional share of BFC
Class A Common Stock to which you are otherwise entitled in
connection with the merger. BFCs shareholders will not
exchange their stock certificates. |
|
Q: |
|
Can I assert appraisal rights with respect to the
merger? |
|
A: |
|
Under the Florida Business Corporation Act (the
FBCA), holders of Levitt Class A Common Stock
have the right to assert and exercise appraisal rights with
respect to the merger and obtain payment in cash for the value
of their shares of Levitt Class A Common Stock, rather than
to receive shares of BFC Class A Common Stock in the merger
in exchange for such shares. The receipt of cash in exchange for
shares of Levitt Class A Common Stock will be a taxable
transaction. Pursuant to the FBCA, the fair value of the shares
of Levitt |
3
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Class A Common Stock held by a Levitt shareholder asserting
appraisal rights means the value of such shares determined
immediately preceding the consummation of the merger, excluding
any appreciation or depreciation in anticipation of the merger,
and could be more than, less than or equal to the value of the
shares of BFC Class A Common Stock that the shareholder
would otherwise have received in connection with the merger. To
assert and exercise appraisal rights, holders of Levitt
Class A Common Stock must strictly follow the procedures
set forth in the FBCA. These procedures are summarized under the
section entitled The Merger Appraisal
Rights beginning on page 77. In addition, the text of
the applicable provisions of the FBCA is included as
Annex G to this joint proxy statement/prospectus. Any
holder of Levitt Class A Common Stock wishing to assert and
exercise appraisal rights is urged to consult with his, her or
its legal counsel before attempting to assert and exercise those
rights. BFCs obligation to consummate the merger is
conditioned upon holders of not more than 10% of the outstanding
shares of Levitt Class A Common Stock exercising appraisal
rights for their shares. |
|
|
|
Under the FBCA, BFCs shareholders will not be entitled to
appraisal rights in connection with the merger. |
|
Q: |
|
Where can I find more information about the
companies? |
|
A: |
|
You can obtain more information about BFC and Levitt from the
various sources described under Where You Can Find More
Information beginning on page 147. |
4
QUESTIONS
AND ANSWERS ABOUT THE LEVITT ANNUAL MEETING
|
|
|
Q: |
|
Where and when is the Levitt annual meeting? |
|
A: |
|
Levitts annual meeting of shareholders will be held at the
Westin Fort Lauderdale, 400 Corporate Drive,
Fort Lauderdale, Florida 33334
on ,
2007
at
local time. |
|
Q: |
|
Who can vote at the Levitt annual meeting? |
|
A: |
|
Record holders of Levitt Class A Common Stock and record
holders of Levitt Class B Common Stock at the close of
business
on ,
2007 (the Levitt record date) may vote at the Levitt
annual meeting. |
|
|
|
As of the close of business on such
date, shares
of Levitt Class A Common Stock
and shares
of Levitt Class B Common Stock were outstanding. |
|
Q: |
|
What are the voting rights of Levitts shareholders
with respect to the merger agreement? |
|
A: |
|
Holders of Levitt Class A Common Stock and Class B
Common Stock are entitled to vote as separate classes on the
approval of the merger agreement, with each such holder entitled
to one vote per share owned. |
|
Q: |
|
What vote of Levitts shareholders is required to
approve the merger agreement? |
|
A: |
|
Under the FBCA, both the affirmative vote of a majority of the
votes entitled to be cast by holders of Levitt Class A
Common Stock and the affirmative vote of a majority of the votes
entitled to be cast by holders of Levitt Class B Common
Stock are required to approve the merger agreement. Accordingly,
abstentions, failures to vote and broker non-votes
will have the same effect as votes cast against the approval of
the merger agreement. |
|
|
|
In addition to the shareholder vote required under the FBCA, the
merger agreement requires that the number of shares of Levitt
Class A Common Stock voted in person or by proxy at the
Levitt annual meeting to approve the merger agreement must
exceed the number of shares of Levitt Class A Common Stock
voted in person or by proxy at the Levitt annual meeting against
the merger agreement, excluding for the purposes of this
additional approval, shares owned by BFC and directors of Levitt
who are not independent within the meaning of the rules and
regulations of the New York Stock Exchange. This additional vote
is referred to in this joint proxy statement/prospectus as the
majority of the minority vote. Abstentions, failures
to vote and broker non-votes will have no effect on
the approval of the merger agreement with respect to the
majority of the minority vote. |
|
Q: |
|
How will BFC vote its shares of Levitt common stock on the
approval of the merger agreement? Are any other shareholders of
Levitt committed to vote for the approval of the merger
agreement? |
|
A: |
|
BFC owns approximately 11% of the outstanding shares of Levitt
Class A Common Stock and all of the outstanding shares of
Levitt Class B Common Stock and has agreed to vote such
shares in favor of the approval of the merger agreement. Except
for the foregoing, there are no agreements or arrangements
pursuant to which any shareholder of Levitt has committed to
vote for or against the approval of the merger agreement.
However, it is anticipated that BFCs directors and
executive officers, who collectively own less than 1% of the
outstanding shares of Levitt Class A Common Stock (other
than the shares beneficially owned through BFC), will vote their
shares of Levitt Class A Common Stock in favor of the
approval of the merger agreement although they are not required
to do so. |
|
Q: |
|
Other than the proposal to approve the merger agreement,
what other proposals will be considered at the Levitt annual
meeting? |
|
A: |
|
In addition to the merger agreement, Levitts shareholders
will also be asked to approve the election of three directors to
Levitts board of directors to serve until the earlier of
Levitts 2010 annual meeting of shareholders or the
consummation of the merger as well as any other matters which
may properly be brought before the Levitt annual meeting. |
5
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|
Q: |
|
What are the voting rights of Levitts shareholders
with respect to the election of directors? |
|
A: |
|
Levitts shareholders will vote as one class on the
election of directors to Levitts board of directors.
Holders of Levitt Class A Common Stock are entitled to one
vote per share, with all such holders having in the aggregate
53% of the general voting power. The number of votes represented
by each share of Levitt Class B Common Stock, which
represent in the aggregate 47% of the general voting power, is
calculated each year in accordance with the Amended and Restated
Articles of Incorporation of Levitt (Levitts
Articles of Incorporation). At the Levitt annual meeting,
each outstanding share of Levitt Class B Common Stock will
be entitled
to
votes on the election of directors. |
|
Q: |
|
What are my choices when voting on the election of
directors? |
|
A: |
|
With respect to the vote on the election of directors, you may
vote for all nominees, or your vote may be withheld with respect
to one or more nominees. |
|
Q: |
|
What is the recommendation of Levitts board of
directors with respect to the election of directors? |
|
A: |
|
The board of directors of Levitt recommends a vote
FOR all of the nominees for director. |
|
Q: |
|
What vote is required to approve the election of
directors? |
|
A: |
|
The affirmative vote of a plurality of the votes cast at the
Levitt annual meeting is required to approve the election of
directors. A properly executed proxy marked WITHHOLD
AUTHORITY with respect to the election of one 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 or not a quorum exists. |
|
Q: |
|
How many shares of Levitt common stock do Levitts
executive officers and directors collectively own? |
|
A: |
|
At the close of business on the Levitt record date, directors
and executive officers of Levitt and their affiliates
collectively beneficially owned and were entitled to
vote shares of Levitt Class A Common
Stock, representing approximately % of the shares of
Levitt Class A Common Stock on that date. BFC beneficially
owns all of the outstanding shares of Levitt Class B Common
Stock. |
|
Q: |
|
What constitutes a quorum? |
|
A: |
|
With respect to the vote on the merger agreement, a quorum will
be present at the Levitt annual meeting if shares representing a
majority of the voting power of Levitt Class A Common Stock
outstanding on the Levitt record date and shares representing a
majority of the voting power of Levitt Class B Common Stock
outstanding on the Levitt record date are represented, in person
or by proxy, at the meeting. There is no independent quorum
needed for the majority of the minority vote
required by the terms of the merger agreement. |
|
|
|
With respect to the vote on the election of directors, a quorum
will be present at the Levitt annual meeting, if shares
representing a majority of the aggregate voting power of Levitt
common stock outstanding on the Levitt record date are
represented, in person or by proxy, at the meeting. |
|
Q: |
|
May I vote in person? |
|
A: |
|
If your shares of Levitt common stock are registered directly in
your name with Levitts transfer agent, you will be
considered the shareholder of record of those shares, and the
proxy materials and proxy card are being sent directly to you by
Levitt. If you are a Levitt shareholder of record, you may
attend the Levitt annual meeting and vote your shares in person,
rather than signing and returning your proxy card. |
|
|
|
If your shares of Levitt common stock are held in a brokerage
account or by another nominee, you are considered the beneficial
owner of shares held in street name, and the proxy
materials are being forwarded to you together with a voting
instruction card. As the beneficial owner, you are also invited
to attend the Levitt annual meeting. Since a beneficial owner is
not the shareholder of record, you may not vote these shares in
person at the Levitt annual meeting unless you obtain a
legal proxy from the broker, trustee or nominee that
holds your shares, giving you the right to vote the shares in
person at the meeting. |
6
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|
Q: |
|
If my shares are held in street name by my
broker, will my broker vote my shares for me? |
|
A: |
|
If your shares of Levitt common stock are held in street
name and you have not provided voting instructions to your
broker or nominee, then whether your broker or nominee may vote
your shares in its discretion depends on the proposals before
the Levitt annual meeting. Under the rules of the New York Stock
Exchange, your broker or nominee may vote your shares in its
discretion on routine matters. The vote with respect
to the merger agreement is not a routine matter.
Accordingly, your broker will vote your shares for you on the
merger agreement only if you provide instructions to your broker
on how to vote on the merger agreement. You should follow the
directions provided by your broker regarding how to instruct
your broker to vote your shares. Without instructions, your
shares will not be voted on the merger agreement and the
broker non-votes of such shares will have the effect
of a vote against the approval of the merger agreement with
respect to the vote required by the FBCA, but will have no
effect on the approval of the merger agreement with respect to
the majority of the minority vote required by the
terms of the merger agreement. |
|
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|
The election of directors is a routine matter on which your
broker or nominee will be permitted to vote your shares if no
instructions are furnished. |
|
Q: |
|
What happens if I do not attend the Levitt annual meeting
and fail to return a proxy card or otherwise provide proxy
instructions? |
|
A: |
|
The failure to return your proxy card or otherwise provide proxy
instructions will have the same effect as voting against the
merger agreement with respect to the vote required by the FBCA,
but will have no effect on either the approval of the merger
agreement with respect to the majority of the
minority vote required by the terms of the merger
agreement or the election of directors. In any case, the failure
to return your proxy card or otherwise provide proxy
instructions could prevent a quorum from being established at
the Levitt annual meeting. |
|
Q: |
|
What do I need to do now? |
|
A: |
|
After carefully reading and considering the information
contained, or incorporated by reference, in this joint proxy
statement/prospectus, please complete, sign and date your proxy
and return it in the enclosed postage-paid return envelope so
that your shares may be represented at the Levitt annual
meeting. If you sign and send in your proxy and do not indicate
how you want to vote, Levitt will count your proxy as a vote
FOR the merger agreement and FOR each of
the nominees for director. Additionally, although the board of
directors of Levitt is not aware of any other matters to be
presented at the Levitt annual meeting, if any other matters are
properly brought before such meeting, the persons named in the
enclosed proxy will vote the proxies in accordance with their
judgment on those matters. |
|
Q: |
|
Can I change my vote after I have mailed my signed
proxy? |
|
A: |
|
Yes. You can change your vote at any time before your proxy is
voted at the Levitt annual meeting. If you are the record owner
of your shares, you can do this in one of three ways. First, you
can send a written notice to Levitts secretary stating
that you would like to revoke your proxy. Second, you can
complete and submit by mail a new valid proxy bearing a later
date. Third, you can attend the Levitt annual meeting and vote
in person. Attendance at the Levitt annual meeting will not in
and of itself constitute revocation of a previously executed
proxy. |
|
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|
If you are not the record owner of your shares and your shares
are held in street name, you must contact your
broker, bank or other nominee to find out how to change your
vote. |
|
Q: |
|
Are there any other matters to be acted upon at the Levitt
annual meeting? |
|
A: |
|
The board of directors of Levitt is not aware of any other
matters to be presented or acted upon at the Levitt annual
meeting. If any other matter is presented at the Levitt 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. |
7
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|
Q: |
|
Who can help answer my questions? |
|
A: |
|
If you are a Levitt shareholder, and would like additional
copies, without charge, of this joint proxy statement/prospectus
or if you have questions about the merger agreement or the
election of directors, including the procedures for voting your
shares on such proposals, you should contact: |
|
|
|
Levitt Corporation
Attn: Investor Relations
2200 West Cypress Creek Road
Fort Lauderdale, FL 33309
Phone:
(954) 940-4995
Email: InvestorRelations@LevittCorporation.com |
|
|
|
Shareholders of Levitt may also call Levitts information
agent, Georgeson Shareholder, toll-free at
(866) 413-8827
for further information or to answer any additional questions
he, she or it may have about the merger. |
8
QUESTIONS
AND ANSWERS ABOUT THE BFC ANNUAL MEETING
|
|
|
Q: |
|
Where and when is the BFC annual meeting? |
|
A: |
|
BFCs annual meeting of shareholders will be held at the
Westin Fort Lauderdale, 400 Corporate Drive,
Fort Lauderdale, Florida 33334
on ,
2007
at
local time. |
|
Q: |
|
Who can vote at the BFC annual meeting? |
|
A: |
|
Record holders of BFC Class A Common Stock and record
holders of BFC Class B Common Stock at the close of
business
on ,
2007 (the BFC record date) may vote at the BFC
annual meeting. |
|
|
|
As of the close of business on such
date, shares
of BFC Class A Common Stock
and shares
of BFC Class B Common Stock were outstanding. |
|
Q: |
|
Other than the proposal to approve the merger and the
related transactions, what other proposals will be considered at
the BFC annual meeting? |
|
A: |
|
In addition to the merger and the transactions related thereto,
BFCs shareholders will also be asked to approve the
election of two directors to the board of directors of BFC to
serve until BFCs 2010 annual meeting of shareholders as
well as any other matters which may properly be brought before
the BFC annual meeting. |
|
Q: |
|
What are the voting rights of BFCs
shareholders? |
|
A: |
|
BFCs shareholders will vote together as a single class on
the merger and the related transactions and on the election of
directors. Each share of BFC Class A Common Stock entitles
the holder thereof to one vote per share on each proposal. BFC
Class A Common Stock represents in the aggregate 22% of the
general voting power of BFC. The number of votes represented by
each share of BFC Class B Common Stock, which represent in
the aggregate 78% of the general voting power of BFC, is
calculated in accordance with the Amended and Restated Articles
of Incorporation of BFC, as amended (BFCs Articles
of Incorporation). At the BFC annual meeting, each
outstanding share of BFC Class B Common Stock will be
entitled
to votes
on each proposal. |
|
Q: |
|
What vote of BFCs shareholders is required to
approve the merger and the related transactions? |
|
A: |
|
The proposal to approve the merger and the related transactions
will be approved if it receives the affirmative vote of a
majority of the votes entitled to be cast on such proposal.
Accordingly, abstentions, failures to vote and broker
non-votes will have the same effect as votes against the
merger and the related transactions. |
|
|
|
Alan B. Levan, the chairman of the board of directors and chief
executive officer of BFC, and John E. Abdo, the vice chairman of
the board of directors of BFC, collectively beneficially own
approximately 44.4% of the outstanding shares of BFC
Class A Common Stock and 86.4% of the outstanding shares of
BFC Class B Common Stock, representing approximately 77.1%
of the total voting power of BFC, and have indicated their
intention to vote their shares of BFC common stock in favor of
the merger and the related transactions at the BFC annual
meeting. If the shares of BFC common stock beneficially owned by
Messrs. Levan and Abdo are voted as expected to approve the
merger and the related transactions, then the approval of the
merger and the related transactions by BFCs shareholders
would be assured. |
|
Q: |
|
What are my choices when voting on the election of
directors? |
|
A: |
|
With respect to the vote on the election of directors, you may
vote for both nominees, or your vote may be withheld with
respect to one or both nominees. |
|
Q: |
|
What is the recommendation of BFCs board of
directors with respect to the election of directors? |
|
A: |
|
The board of directors of BFC recommends a vote FOR
both of the nominees for director. |
|
Q: |
|
What vote is required to approve the election of
directors? |
|
A: |
|
The affirmative vote of a plurality of the votes cast at the BFC
annual meeting is required to approve the election of directors.
A properly executed proxy marked WITHHOLD AUTHORITY
with respect to the election of one or both directors will not
be voted with respect to the director or directors indicated,
although it will be counted for purposes of determining whether
or not a quorum exists. |
9
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|
|
Q: |
|
How many shares of BFC common stock do BFCs
executive officers and directors collectively own? |
|
A: |
|
At the close of business on the BFC record date, directors and
executive officers of BFC and their affiliates collectively
beneficially owned and were entitled to vote
shares of BFC Class A Common Stock, representing
approximately % of the shares of BFC Class A
Common Stock outstanding on that date,
and shares
of BFC Class B Common Stock, representing
approximately % of the shares of BFC Class B
Common Stock outstanding on that date. Based on such share
ownership, as of the BFC record date, directors and executive
officers of BFC and their affiliates represent, in the
aggregate, % of the general voting power of BFC. |
|
Q: |
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What constitutes a quorum? |
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The presence at the BFC annual meeting, in person or by proxy,
of the holders of a majority of the shares of BFC common stock
outstanding on the BFC record date will constitute a quorum,
permitting the conduct of business at the BFC annual meeting. |
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May I vote in person? |
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If your shares of BFC common stock are registered directly in
your name with BFCs transfer agent, you will be considered
the shareholder of record of those shares, and the proxy
materials and proxy card are being sent directly to you by BFC.
If you are a BFC shareholder of record, you may attend the BFC
annual meeting and vote your shares in person, rather than
signing and returning your proxy card. |
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If your shares of BFC common stock are held in a brokerage
account or by another nominee, you are considered the beneficial
owner of shares held in street name, and the proxy
materials are being forwarded to you together with a voting
instruction card. As the beneficial owner, you are also invited
to attend the BFC annual meeting. Since a beneficial owner is
not the shareholder of record, you may not vote these shares in
person at the BFC annual meeting unless you obtain a legal
proxy from the broker, trustee or nominee that holds your
shares, giving you the right to vote the shares in person at the
meeting. |
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If my shares are held in street name by my
broker, will my broker vote my shares for me? |
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If your shares of BFC common stock are held in street
name and you have not provided voting instructions to your
broker or nominee, then whether your broker or nominee may vote
your shares in its discretion depends on the proposals before
the BFC annual meeting. Under the rules of the NYSE Arca Stock
Exchange, your broker or nominee may vote your shares in its
discretion on routine matters. The merger is not a
routine matter. Accordingly, your broker will vote
your shares for you on the merger and the related transactions
only if you provide instructions to your broker on how to vote
on the merger and the related transactions. You should follow
the directions provided by your broker regarding how to instruct
your broker to vote your shares. Without instructions, your
shares will not be voted on the merger and the related
transactions and the broker non-votes of such shares
will have the effect of a vote against the merger and the
related transactions. |
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The election of directors is a routine matter on which your
broker or nominee will be permitted to vote your shares if no
instructions are furnished. |
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Q: |
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What happens if I do not attend the BFC annual meeting and
fail to return a proxy card or otherwise provide proxy
instructions? |
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The failure to return your proxy card or otherwise provide proxy
instructions will have the same effect as voting against the
merger and the related transactions, but will have no effect on
the election of directors. In each case, the failure to return
your proxy card or otherwise provide proxy instructions could
prevent a quorum from being established at the BFC annual
meeting. |
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What do I need to do now? |
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After carefully reading and considering the information
contained, or incorporated by reference, in this joint proxy
statement/prospectus, please complete, sign and date your proxy
and return it in the enclosed postage-paid return envelope so
that your shares may be represented at the BFC annual meeting.
If you sign and send in your proxy and do not indicate how you
want to vote, BFC will count your proxy as a vote
FOR the merger and the related transactions and
FOR each of the nominees for director. Additionally,
although the board of directors of BFC is not aware of any other
matters to be presented at the BFC annual meeting, if any other |
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matters are properly brought before such meeting, the persons
named in the enclosed proxy will vote the proxies in accordance
with their best judgment on those matters. |
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Can I change my vote after I have mailed my signed
proxy? |
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Yes. You can change your vote at any time before your proxy is
voted at the BFC annual meeting. If you are the record owner of
your shares, you can do this in one of three ways. First, you
can send a written notice to BFCs secretary stating that
you would like to revoke your proxy. Second, you can complete
and submit by mail a new valid proxy bearing a later date.
Third, you can attend the BFC annual meeting and vote in person.
Attendance at the BFC annual meeting will not in and of itself
constitute revocation of a previously executed proxy. |
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If you are not the record owner of your shares and your shares
are held in street name, you must contact your
broker, bank or other nominee to find out how to change your
vote. |
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Are there any other matters to be acted upon at the BFC
annual meeting? |
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The board of directors of BFC is not aware of any other matters
to be presented or acted upon at the BFC annual meeting. If any
other matter is presented at the BFC 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. |
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Who can help answer my questions? |
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If you are a BFC shareholder, and would like additional copies,
without charge, of this joint proxy statement/prospectus or if
you have questions about the merger and the related transactions
or the election of directors, including the procedures for
voting your shares on such proposals, you should contact: |
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BFC Financial Corporation
Attn: Investor Relations
2100 West Cypress Creek Road
Fort Lauderdale, FL 33309
Phone:
(954) 940-4994
Email: InvestorRelations@BFCFinancial.com |
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Shareholders of BFC may also call Levitts information
agent, Georgeson Shareholder, toll-free at
(866) 877-6017
for further information or to answer any additional questions
he, she or it may have about the merger. |
11
SUMMARY
This summary highlights selected information from this joint
proxy statement/prospectus. This summary may not contain all of
the information that is important to you. To understand the
merger fully and for a more complete description of the legal
terms of the merger, you should carefully read this entire joint
proxy statement/prospectus and the other documents to which you
are referred, including in particular the copies of the merger
agreement and the opinions of Sandler ONeill &
Partners, L.P., BFCs financial advisor, and Houlihan Lokey
Howard & Zukin, Levitts financial advisor, that
are attached as annexes to this joint proxy statement/prospectus
or included as exhibits to or incorporated by reference into the
registration statement on
Form S-4,
of which this joint proxy statement/prospectus forms a part,
filed by BFC with the Securities and Exchange Commission. Also,
see Where You Can Find More Information beginning on
page 147. Page references have been included
parenthetically to direct you to a more complete description of
the topics presented in this summary.
General
The
Companies (page 41)
BFC Financial Corporation
2100 West Cypress Creek Road
Fort Lauderdale, FL 33309
(954) 940-4900
BFC is a holding company that invests in and acquires businesses
in diverse industries. BFCs ownership interests include
direct and indirect interests in businesses in a variety of
sectors, including consumer and commercial banking, investment
banking, homebuilding and master-planned community development,
time-share and vacation ownership, Asian-themed restaurant
chains and various real estate and venture capital investments.
BFCs activities primarily relate to monitoring and
managing its investments, particularly the operations of its two
largest investments, Levitt and BankAtlantic Bancorp, Inc.
(BankAtlantic Bancorp), a Florida-based financial
services holding company which owns BankAtlantic, a federally
chartered, federally insured savings bank. BFC currently owns
approximately 11% of the outstanding shares of Levitt
Class A Common Stock and all of the outstanding shares of
Levitt Class B Common Stock, representing approximately 17%
of Levitts total common stock and 53% of the general
voting power of Levitt. BFC, itself, has no significant
operations other than activities relating to the monitoring and
managing of its existing investments and the identification,
analysis and, in appropriate cases, acquisition of new
investments.
Levitt Corporation
2200 West Cypress Creek Road
Fort Lauderdale, FL 33309
(954) 958-1800
Levitt engages in homebuilding and real estate development with
activities throughout the Southeastern United States.
Levitts principal real estate activities, the development
of single-family homes and master-planned communities, are
conducted through its Homebuilding and Land Divisions.
Levitts Homebuilding Division operates through its
homebuilding subsidiary, Levitt and Sons, LLC (Levitt and
Sons), and its Land Division operates through its
master-planned community development subsidiary, Core
Communities, LLC (Core Communities). In addition,
Levitt also owns approximately 31% of the outstanding common
stock of Bluegreen Corporation, a New York Stock Exchange-traded
corporation (Bluegreen), which acquires, develops,
markets and sells time-share vacation ownership
interests primarily in drive-to vacation
destinations as well as residential home sites in some cases on
properties featuring golf courses or other related amenities.
12
The
Merger (page 43)
On January 30, 2007, BFC and Levitt entered into the merger
agreement, which is the legal document governing the merger.
Pursuant to the merger agreement, Levitt will be merged with and
into Merger Sub, a newly formed wholly owned subsidiary of BFC.
Upon the completion of the merger, Levitt Class A Common
Stock will no longer be publicly traded and Levitt will be a
wholly owned subsidiary of BFC.
The
Merger Consideration (page 83)
At the effective time of the merger, each outstanding share of
Levitt Class A Common Stock (other than shares owned by BFC
and holders of Levitt Class A Common Stock who exercise and
perfect their appraisal rights) will be converted automatically
into the right to receive 2.27 shares of BFC Class A
Common Stock (subject to adjustment in accordance with the terms
of the merger agreement) and cash in lieu of any fractional
shares. As quoted on the NYSE Arca Stock Exchange, the closing
price of BFC Class A Common Stock on January 30, 2007,
the last trading day prior to the public announcement of the
merger agreement, and
on ,
2007, the last trading day prior to the date of this joint proxy
statement/prospectus, was $6.35
and ,
respectively. Shareholders of both companies are encouraged to
obtain current market quotations for BFC Class A Common
Stock and Levitt Class A Common Stock prior to voting their
shares.
Holders of Levitt Class A Common Stock will be entitled to
receive cash in lieu of any fractional shares of BFC
Class A Common Stock they otherwise would have been
entitled to receive in connection with the merger in an amount
equal to the product of (i) the fractional share to which
such holder otherwise would be entitled (after taking into
account all shares of Levitt Class A Common Stock then held
of record by such holder) and (ii) the average closing
price of BFC Class A Common Stock on the NYSE Arca Stock
Exchange for the twenty consecutive trading days ending on and
including the trading day that is two days prior to the day of
the effective time of the merger.
The shares of BFC Class A Common Stock to be received in
exchange for shares of Levitt Class A Common Stock and any
cash to be received in lieu of any fractional shares of BFC
Class A Common Stock are referred to collectively as the
merger consideration in this joint proxy
statement/prospectus.
Treatment
of Levitt Stock Options and Restricted Stock Awards Outstanding
Under the Levitt Corporation Amended and Restated 2003 Stock
Incentive Plan (page 83)
Upon consummation of the merger, the Levitt Corporation Amended
and Restated 2003 Stock Incentive Plan will be assumed by BFC
and options to purchase shares of Levitt Class A Common
Stock outstanding at the effective time of the merger will be
converted automatically into options to purchase shares of BFC
Class A Common Stock on the same terms and conditions, with
appropriate adjustments made to the number of shares and the
exercise price under those options based on the exchange ratio
of 2.27 shares of BFC Class A Common Stock for each
share of Levitt Class A Common Stock (subject to adjustment
in accordance with the terms of the merger agreement).
Additionally, all outstanding restricted stock awards issued
under the Levitt Corporation Amended and Restated 2003 Stock
Incentive Plan will be converted into restricted stock awards of
shares of BFC Class A Common Stock on the same terms and
conditions, with appropriate adjustments made to the number of
shares subject to such restricted stock awards based on the
exchange ratio of 2.27 shares of BFC Class A Common
Stock for each share of Levitt Class A Common Stock
(subject to adjustment in accordance with the terms of the
merger agreement).
Amendment
of the BFC 2005 Stock Incentive Plan (page 73)
If the merger is completed, Levitts employees will be
eligible to receive options to purchase shares of BFC
Class A Common Stock and restricted stock awards of shares
of BFC Class A Common Stock if and when granted pursuant to
the terms of the BFC 2005 Stock Incentive Plan. Because Levitt
has significantly more employees than BFC, the BFC 2005 Stock
Incentive Plan will be amended in connection with the merger
solely to increase the maximum number of shares of BFC
Class A Common Stock authorized for issuance pursuant to
such plan from 3,000,000 to 8,000,000.
13
Articles
of Incorporation and By-laws of BFC Following the Merger
(page 72)
In connection with the merger, BFCs Articles of
Incorporation will be amended to increase the authorized number
of shares of BFC Class A Common Stock from 70,000,000 to
130,000,000 and BFCs By-laws will be amended to increase
the maximum number of members of the board of directors of BFC
from 12 to 17. The Articles of Amendment to BFCs Articles
of Incorporation and the Amended and Restated By-laws of BFC
will be as set forth on Annexes D and E, respectively, and
you are urged to read them carefully.
Board of
Directors and Executive Officers of BFC Following the Merger
(page 72)
Currently, there are six persons serving on the board of
directors of BFC, each of whom will continue to serve as
directors of BFC following the merger. Additionally, as required
by the terms of the merger agreement, BFC has agreed to cause
each of Messrs. James Blosser, Darwin Dornbush, S. Lawrence
Kahn, III, Alan J. Levy, Joel Levy, William Nicholson and
William Scherer, the seven current directors of Levitt who are
not also directors of BFC, to be appointed to the board of
directors of BFC to serve until BFCs 2008 annual meeting
of shareholders.
The executive officers of BFC in office immediately prior to the
effective time of the merger will hold the same positions upon
completion of the merger.
Ownership
of BFC Following the Merger (page 72)
Based on the number of shares of Levitt Class A Common
Stock (other than shares owned by BFC) and BFC Class A
Common Stock outstanding as of May 1, 2007, and assuming no
holders of Levitt Class A Common Stock choose to assert and
exercise their appraisal rights, immediately following the
merger, Levitts shareholders will own approximately 51%
and BFCs shareholders will own approximately 49% of the
then-outstanding shares of BFC Class A Common Stock.
Immediately following the merger, shares of BFC Class A
Common Stock and Class B Common Stock will represent in the
aggregate 22% and 78%, respectively, of the general voting power
of BFC and approximately 90% and 10%, respectively, of the total
outstanding common equity of BFC.
Anticipated
Accounting Treatment (page 81)
The merger will be accounted for as a purchase transaction by
BFC for financial reporting and accounting purposes under
U.S. generally accepted accounting principles. The results
of operations of Levitt will continue to be included in the
consolidated financial statements of BFC.
Appraisal
Rights (page 77)
Under the FBCA, holders of Levitt Class A Common Stock who
do not vote for the approval of the merger agreement and who
properly exercise their appraisal rights with respect to the
merger will be entitled to receive a cash payment equal to the
fair value of their shares. The receipt of cash in
exchange for shares of Levitt Class A Common Stock will be
a taxable transaction. Pursuant to the FBCA, fair value of the
shares of Levitt Class A Common Stock held by a Levitt
shareholder exercising appraisal rights means the value of such
shares determined immediately preceding the consummation of the
merger excluding any appreciation or depreciation in
anticipation of the merger and could be more than, less than or
equal to the value of the shares of BFC Class A Common
Stock that the shareholder would otherwise have received in
connection with the merger. Merely voting against the approval
of the merger agreement will not serve to assert the appraisal
rights of a holder of Levitt Class A Common Stock under the
FBCA. In addition, a proxy submitted by a record holder of
Levitt Class A Common Stock not marked Against
or Abstain will be voted For the
approval of the merger agreement with respect to the vote
required by the FBCA and, accordingly, will result in the waiver
of such record holders appraisal rights. Annex G to
this joint proxy statement/prospectus contains the full text of
Sections 607.1301 through 607.1333 of the FBCA, which
relate to appraisal rights. You are encouraged to read these
provisions carefully and in their entirety.
Under the FBCA, BFCs shareholders will not be entitled to
appraisal rights in connection with the merger.
14
Risks
(page 27)
In evaluating the merger agreement and the transactions
contemplated thereby, you should carefully read this joint proxy
statement/prospectus and especially consider the factors
discussed in the section entitled Risk Factors
beginning on page 27.
Material
U.S. Federal Income Tax Consequences of the Merger
(page 79)
The merger has been structured to qualify as a tax-free
reorganization under Section 368(a) of the
Code. Accordingly, a holder of Levitt Class A Common Stock
generally will not recognize any gain or loss for
U.S. federal income tax purposes upon the exchange of his,
her or its shares of Levitt Class A Common Stock for shares
of BFC Class A Common Stock. However, any cash received in
lieu of any fractional share of BFC Class A Common Stock to
which a holder of Levitt Class A Common Stock would have
been entitled to receive in connection with the merger will
result in the recognition of gain or loss as if such holder sold
his, her or its fractional share. Each holder of Levitt
Class A Common Stock will have a tax basis in the shares of
BFC Class A Common Stock that he, she or it receives in the
merger equal to his, her or its current tax basis in his, her or
its shares of Levitt Class A Common Stock (reduced by the
basis allocable to any fractional share for which he, she or it
receives cash).
Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A. (Stearns Weaver) will issue an opinion to BFC
and Levitt as of the date on which the merger is consummated to
the effect that the merger will qualify as a tax-free
reorganization under Section 368(a) of the Code
and that BFC and Levitt will each be a party to that
reorganization under Section 368(b) of the Code.
This summary may not be applicable to all holders of Levitt
Class A Common Stock. You should read The
Merger Material U.S. Federal Income Tax
Consequences of the Merger beginning on page 79 for a
more complete discussion of the U.S. federal income tax
consequences of the merger. Tax matters can be complicated,
and the tax consequences of the merger to you will depend on
your particular tax situation. BFC and Levitt urge you to
consult your tax advisor to determine the tax consequences of
the merger to you.
Recommendations
of the BFC Special Committee and Board of Directors
(page 47)
The board of directors of BFC designated a special committee
composed of independent directors of BFC to review and evaluate
the terms and conditions and determine the advisability of a
possible business transaction between BFC and Levitt. After
careful review and consideration, the BFC special committee
determined that the merger agreement and the transactions
contemplated thereby are advisable, fair to and in the best
interests of BFC and its shareholders. On the basis of such
determination, the BFC special committee recommended that the
full board of directors of BFC approve the merger agreement and
the transactions contemplated thereby.
After careful consideration of the recommendation of the BFC
special committee and careful evaluation and consideration of
the merger agreement and the transactions contemplated thereby,
the board of directors of BFC determined that the merger
agreement and the transactions contemplated thereby are
advisable, fair to and in the best interests of BFC and its
shareholders. Accordingly, the board of directors of BFC
approved the merger agreement and the transactions contemplated
thereby and recommends that BFCs shareholders vote
FOR the merger and the related transactions.
To review the background of, and BFCs reasons for, the
merger, as well as certain risks related to the merger, see the
sections entitled The Merger Background of the
Merger, The Merger Recommendation of the
BFC Board and Its Reasons for the Merger and Risk
Factors beginning on pages 43, 48 and 27,
respectively.
Recommendations
of the Levitt Special Committee and Board of Directors
(page 49)
The board of directors of Levitt designated a special committee
composed of independent directors of Levitt to, among other
things, negotiate, review and evaluate the terms and conditions,
and determine the advisability of, the merger. After such
negotiation, review and evaluation, the Levitt special committee
determined that the merger is advisable, fair to and in the best
interests of Levitts shareholders. On the basis of such
determination, the Levitt special committee recommended that the
full board of directors of Levitt approve the merger agreement
and the
15
transactions contemplated thereby and recommend to the
shareholders of Levitt that they approve the merger agreement.
After careful consideration of the recommendation of the Levitt
special committee and careful evaluation and consideration of
the merger agreement and the transactions contemplated thereby,
the board of directors of Levitt determined that the merger
agreement and the transactions contemplated thereby are
advisable, fair to and in the best interests of Levitts
shareholders. Accordingly, the board of directors of Levitt
approved the merger agreement and the transactions contemplated
thereby and recommends that Levitts shareholders vote
FOR the approval of the merger agreement.
To review the background of, and Levitts reasons for, the
merger, as well as certain risks related to the merger, see the
sections entitled The Merger Background
of the Merger, The Merger Recommendation
of the Levitt Board and Its Reasons for the Merger and
Risk Factors beginning on pages 43, 50 and 27,
respectively.
Opinion
of BFCs Financial Advisor (page 52)
Sandler ONeill & Partners, L.P. (Sandler
ONeill) delivered its opinion to the BFC special
committee and board of directors that, as of the date of its
opinion and based upon and subject to the assumptions,
qualifications and limitations set forth in its opinion, the
consideration to be exchanged by BFC pursuant to the merger
agreement was fair, from a financial point of view, to BFC.
The full text of the written opinion of Sandler ONeill,
dated January 30, 2007, which sets forth the assumptions
made, matters considered and limitations on the review
undertaken in connection with the opinion, is attached to this
joint proxy statement/prospectus as Annex B. BFCs
shareholders are urged to read the opinion carefully and in its
entirety. The written opinion is addressed to the BFC special
committee and board of directors, is directed only to the
consideration to be exchanged by BFC pursuant to the merger
agreement and does not constitute a recommendation to any BFC
shareholder as to how such shareholder should vote at the BFC
annual meeting.
Opinion
of Levitts Financial Advisor (page 56)
Houlihan Lokey Howard & Zukin (Houlihan
Lokey) delivered its opinion to the Levitt special
committee and board of directors, that, as of the date of its
opinion and based upon and subject to the factors, limitations
and assumptions set forth therein, the consideration to be
received by holders of Levitt Class A Common Stock pursuant
to the merger agreement was fair, from a financial point of
view, to such holders (other than BFC and directors of Levitt
who are not independent within the meaning of the
rules and regulations of the New York Stock Exchange).
The full text of the written opinion of Houlihan Lokey, dated
January 30, 2007, which sets forth the assumptions made,
procedures followed, matters considered and limitations on the
review undertaken in connection with the opinion, is attached to
this joint proxy statement/prospectus as Annex C. Houlihan
Lokey provided its opinion for the information and assistance of
the Levitt special committee and board of directors in
connection with their consideration of the merger. The Houlihan
Lokey opinion does not constitute a recommendation to any Levitt
shareholder on whether or not to support the merger or as to how
such shareholder should vote at the Levitt annual meeting.
Listing
of BFC Class A Common Stock and Delisting of Levitt
Class A Common Stock (page 77)
Application will be made to have the shares of BFC Class A
Common Stock to be issued in connection with the merger approved
for listing on the NYSE Arca Stock Exchange, where BFC
Class A Common Stock currently is traded under the symbol
BFF. If the merger is consummated, BFC intends to
seek approval for the listing of BFC Class A Common Stock
on the New York Stock Exchange. There is no assurance that the
listing of BFC Class A Common Stock on the New York Stock
Exchange will be approved.
If the merger is consummated, all of the shares of Levitt common
stock will be canceled and Levitt Class A Common Stock will
no longer be listed on the New York Stock Exchange and will be
deregistered under the Exchange Act.
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Interests
of Certain Persons in the Merger (page 71)
Shareholders should note that some directors or executive
officers of each of BFC and Levitt may have interests in the
merger that are different from, or are in addition to, the
interests of BFCs and Levitts shareholders,
generally. Specifically, Alan B. Levan, the chairman of the
board and chief executive officer of each of BFC and Levitt,
John E. Abdo, the vice chairman of the board of each of BFC and
Levitt, and their affiliates collectively own shares of BFC
common stock representing approximately 77.1% of the general
voting power and 52.7% of the total common stock of BFC, and,
after the completion of the merger, are expected to own shares
of BFC common stock representing approximately 71.6% of the
general voting power and 25.8% of the total common stock of BFC.
Additionally, in connection with the merger, BFC has agreed to
cause the seven current directors of Levitt who are not also
directors of BFC to be appointed to BFCs board of
directors to serve until BFCs 2008 annual meeting of
shareholders.
Each of BFCs and Levitts special committees were
aware of these interests when they determined to recommend to
their respective boards of directors the approval of the merger
agreement and the transactions contemplated thereby. In
addition, each of BFCs and Levitts boards of
directors were aware of these interests when they voted to
approve the merger agreement and the transactions contemplated
thereby and recommend that their shareholders vote to approve
the merger and the related transactions.
Regulatory
Matters (page 81)
BFC must comply with applicable federal and state securities
laws and the rules and regulations of the NYSE Arca Stock
Exchange in connection with the issuance of the shares of BFC
Class A Common Stock in the merger and the filing of this
joint proxy statement/prospectus with the SEC.
Resale of
BFC Class A Common Stock (page 81)
The shares of BFC Class A Common Stock to be issued in
connection with the merger will not be subject to any
restrictions on transfer arising under the Securities Act,
except for shares issued to any Levitt shareholder who may be
deemed to be an affiliate of Levitt or BFC for purposes of
Rule 145 under the Securities Act. It is expected that each
such affiliate will agree not to transfer any shares of BFC
Class A Common Stock received pursuant to the merger other
than in compliance with the provisions of the Securities Act
governing sales by affiliates.
Comparison
of Rights of Common Shareholders of BFC and Levitt
(page 98)
Levitts shareholders, whose rights are currently governed
by Florida law, Levitts Articles of Incorporation and the
Amended and Restated By-laws of Levitt (Levitts
By-laws), will, upon consummation of the merger, become
holders of BFC Class A Common Stock and their rights will
be governed by Florida law and BFCs Articles of
Incorporation and By-laws, which are different than those of
Levitt. The Articles of Amendment to BFCs Articles of
Incorporation and the Amended and Restated By-laws of BFC to be
adopted in connection with the merger are as set forth on
Annexes D and E hereto, respectively, and you are urged to
read them carefully.
17
The
Merger Agreement
The following summary describes certain material provisions
of the merger agreement, which is attached to this joint proxy
statement/prospectus as Annex A and is incorporated by
reference into this joint proxy statement/prospectus. This
summary may not contain all the information about the merger
agreement that is important to you and is qualified in its
entirety by reference to the merger agreement. You are
encouraged to carefully read the merger agreement in its
entirety.
Conditions
to Consummation of the Merger (page 85)
A number of conditions must be satisfied or waived before the
merger will be completed, including, among others:
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the approval of the merger and the related transactions and the
merger agreement, respectively, by BFCs and Levitts
shareholders, including the approval of the merger agreement by
a majority of the minority of Levitts
shareholders as required under the terms of the merger agreement;
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the absence of any legal restraints or prohibitions preventing
the completion of the merger or litigation or other proceeding
seeking to enjoin or prohibit the merger;
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the declaration by the SEC that the registration statement of
which this joint proxy statement/prospectus is a part is
effective and the absence of any stop order or proceeding,
initiated or threatened in writing by the SEC, suspending or
threatening to suspend such effectiveness;
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the approval for listing of the shares of BFC Class A
Common Stock to be issued in the merger on the NYSE Arca Stock
Exchange, subject only to official notice of issuance; and
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holders of not more than 10% of the outstanding shares of Levitt
Class A Common Stock duly and validly exercising, or
remaining entitled to exercise, their appraisal rights in
accordance with the FBCA.
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Conduct
of Business by BFC and Levitt Prior to Consummation of the
Merger (page 87)
BFC and Levitt have each generally agreed that, during the
period from the date of the merger agreement to the earlier of
the consummation of the merger and the termination of the merger
agreement, except as expressly contemplated by the merger
agreement or consented to in writing by BFC or Levitt, as the
case may be, each of BFC and Levitt will not, among other
things, conduct its business in a manner that is not consistent
with its ordinary course of business and past practice.
Limitation
on the Solicitation, Negotiation and Discussion by Levitt of
Other Acquisition Proposals (page 89)
The merger agreement contains restrictions on the ability of
Levitt to, among other things, solicit, negotiate and discuss
acquisition proposals, and certain related matters, involving
persons other than BFC.
Notwithstanding these restrictions, if at any time prior to the
effective time of the merger, the Levitt special committee or
board of directors receives an unsolicited, bona fide written
acquisition proposal not in violation of the no
solicitation provisions of the merger agreement and the
Levitt special committee or board of directors reasonably
determines in good faith, after consultation with their
financial, legal and other advisors, that such proposal will
result in, or is reasonably expected to result in, a more
favorable proposal to Levitts shareholders from a
financial point of view than the merger or other revised
proposal submitted by BFC and is reasonably capable of being
consummated on the terms proposed, then, after receiving the
advice of outside counsel that it may be necessary to take such
actions to comply with its fiduciary duties under applicable
law, Levitt may, (i) furnish information about its business
to the person making such proposal and (ii) participate in
discussions or negotiations regarding such proposal with the
person making such proposal.
18
Change of
the Recommendation of the Board of Directors of Levitt
(page 91)
The merger agreement provides that the board of directors of
Levitt may withhold, withdraw, modify or change its
recommendation of the advisability of the merger agreement or
approve or recommend any other acquisition or similar proposal
only if, at any time prior to the effective time of the merger,
Levitt has received a superior proposal and the Levitt special
committee or board of directors determines in good faith and
after consultation with their financial advisors and legal
counsel that the failure to take such actions would be
inconsistent with their fiduciary duties under applicable law.
Termination
of the Merger Agreement (page 91)
The merger agreement may be terminated at any time prior to the
effective time of the merger upon the mutual written consent of
BFC and Levitt. In addition, each of BFC and Levitt may
terminate the merger agreement under certain circumstances,
including, without limitation:
|
|
|
|
|
if the requisite shareholder approvals are not obtained;
|
|
|
|
if the merger has not been consummated by July 31, 2007;
provided, however, that if BFC proceeds in good faith to
consummate the merger, this date may be extended to a date not
later than October 1, 2007;
|
|
|
|
if such partys financial advisor withdraws, revokes,
annuls or materially modifies its fairness opinion; or
|
|
|
|
if the Levitt special committee or board of directors determines
to approve or recommend another acquisition or similar proposal
after complying with the no solicitation provisions
of the merger agreement or withholds or withdraws its
recommendation of the merger agreement in a manner adverse to
BFC.
|
In addition, the merger agreement also may be terminated by
Levitt if the average closing price of BFC Class A Common
Stock, as quoted on the NYSE Arca Stock Exchange, and the
average closing price of the Class A Common Stock of
BankAtlantic Bancorp, as quoted on the New York Stock Exchange,
in each case, for the ten consecutive trading days ending on and
including the trading day that is two days prior to the day of
the effective time of the merger, are less than $4.45 and $9.44,
respectively. These prices are equal to 70% of the respective
closing prices for such shares on the date of the merger
agreement. However, BFC may avoid such termination and extend
the date of the effective time of the merger for up to two
business days by providing written notice to Levitt of its
election to increase the value of the consideration delivered to
holders of Levitt Class A Common Stock to equal the value
such holders would have received if the value of BFC
Class A Common Stock at the effective time of the merger
was $4.45.
19
Market
Prices and Dividend Information
BFC Class A Common Stock is listed for trading on the NYSE
Arca Stock Exchange under the trading symbol BFF.
Levitt Class A Common Stock is listed for trading on the
New York Stock Exchange under the trading symbol
LEV. The following table sets forth the closing
prices for BFC Class A Common Stock and Levitt Class A
Common Stock as reported on the NYSE Arca Stock Exchange and the
New York Stock Exchange, respectively, on January 30, 2007,
the last trading day before the public announcement of the
merger agreement, and
on ,
2007, the last trading day before the date of this joint proxy
statement/prospectus. The table also includes the equivalent
prices per share of Levitt Class A Common Stock that
holders of such stock would receive in connection with the
merger if the merger were completed on either of these dates,
applying the exchange ratio of 2.27 shares of BFC
Class A Common Stock for each share of Levitt Class A
Common Stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent Value
|
|
|
|
|
|
|
|
|
|
of
|
|
|
|
BFC Class A
|
|
|
Levitt Class A
|
|
|
Levitt Class A
|
|
|
|
Common Stock
|
|
|
Common Stock
|
|
|
Common Stock
|
|
|
January 30, 2007
|
|
$
|
6.35
|
|
|
$
|
10.88
|
|
|
$
|
14.41
|
|
,
2007
|
|
$
|
[
|
]
|
|
$
|
[
|
]
|
|
$
|
[
|
]
|
The above table shows only historical comparisons. These
comparisons may not provide meaningful information to BFCs
and Levitts shareholders in determining whether to approve
the merger and the related transactions. Shareholders of BFC and
Levitt are urged to obtain current market quotations for BFC
Class A Common Stock and Levitt Class A Common Stock
and to review carefully the other information contained or
incorporated by reference in this joint proxy
statement/prospectus when considering how to vote at their
respective annual meetings.
While there are no restrictions on the payment of cash dividends
by BFC other than those restrictions contained in the merger
agreement with respect to the interim period between the date of
the merger agreement and the effective time of the merger, BFC
has never paid cash dividends. BFC issued a 25% stock dividend
on March 1, 2004, May 25, 2004 and March 7, 2005,
each of which was payable in shares of BFC Class A Common
Stock. BFC may consider declaring and paying a dividend in the
future with respect to BFC Class A Common Stock; however,
there can be no assurance that it will do so. Future declaration
and payment of cash dividends with respect to BFC Class A
Common Stock, if any, will be determined in light of the
then-current financial condition of BFC and other factors deemed
relevant by the board of directors of BFC.
Levitt has declared and paid regular quarterly dividends of
$.02 per share with respect to Levitt Class A Common
Stock since July 26, 2004. There is no assurance that
Levitt will continue to pay cash dividends on its Class A
Common Stock. Future declaration and payment of cash dividends
with respect to Levitt Class A Common Stock, if any, will
be determined in light of the then-current financial condition
of Levitt and other factors deemed relevant by the board of
directors of Levitt. After completion of the merger, other than
BFC, which may receive dividends as the parent company of
Levitt, shareholders of Levitt will not continue to receive
dividends from Levitt.
20
Comparative
Per Share Data
The following table sets forth historical per share information
of BFC and Levitt and unaudited pro forma combined per share
information after giving effect to the merger under the purchase
method of accounting. You should not rely on this information as
being indicative of the historical results that would have been
achieved had Levitt always been a wholly owned subsidiary of BFC
or the future results that BFC will experience after the merger.
The unaudited pro forma condensed combined per share data has
been derived from and should be read in conjunction with the
unaudited pro forma condensed combined financial statements and
related notes appearing elsewhere in this joint proxy
statement/prospectus. The historical per share data has been
derived from the historical consolidated financial statements of
BFC and Levitt as of and for the year ended December 31,
2006, each of which is incorporated by reference into this joint
proxy statement/prospectus. The table also includes
(i) Levitts equivalent loss from continuing
operations per common share basic and diluted and
(ii) book value per common share basic and
diluted, in each case, applying the exchange ratio of
2.27 shares of BFC Class A Common Stock for each share
of Levitt Class A Common Stock.
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
2006
|
|
|
BFC HISTORICAL PER COMMON SHARE:
|
|
|
|
|
Loss from continuing operations
per common share basic
|
|
$
|
(0.04
|
)
|
Loss from continuing operations
per common share diluted
|
|
|
(0.05
|
)
|
Book value per common
share basic and diluted
|
|
|
4.84
|
|
Cash dividends per common share
|
|
|
N/A
|
|
LEVITT HISTORICAL PER COMMON SHARE:
|
|
|
|
|
Loss from continuing operations
per common share basic
|
|
|
(0.46
|
)
|
Loss from continuing operations
per common share diluted
|
|
|
(0.47
|
)
|
Book value per common
share basic and diluted
|
|
|
17.31
|
|
Cash dividends per common share
|
|
|
0.08
|
|
BFC UNAUDITED PRO FORMA COMBINED
PER COMMON SHARE:
|
|
|
|
|
Loss from continuing operations
per common share basic and diluted
|
|
|
(0.13
|
)
|
Book value per common
share basic and diluted
|
|
|
5.71
|
|
Cash dividends per common share
|
|
|
N/A
|
|
LEVITT UNAUDITED PRO FORMA
EQUIVALENT PER COMMON SHARE:
|
|
|
|
|
Loss from continuing operations
per common share basic and diluted
|
|
|
(0.25
|
)
|
Book value per common
share basic and diluted
|
|
|
7.49
|
|
Cash dividends per common share
|
|
|
N/A
|
|
21
Selected
Historical Consolidated Financial Data of BFC
The following selected historical consolidated financial data of
BFC for each of the years in the five-year period ended
December 31, 2006 have been derived from BFCs
historical audited consolidated financial statements
incorporated by reference into this joint proxy
statement/prospectus, which were audited by KPMG LLP, an
independent registered public accounting firm, with respect to
the year ended December 31, 2002, and by
PricewaterhouseCoopers LLP, an independent registered certified
public accounting firm, with respect to the years ended
December 31, 2003 through 2006. The following information
is only a summary, and should be read together with BFCs
Managements Discussion and Analysis of Financial
Condition and Results of Operations and audited
consolidated financial statements and related notes in
BFCs Annual Report on
Form 10-K
for the year ended December 31, 2006, which is incorporated
by reference into this joint proxy statement/prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
|
(Dollars in thousands, except for per share data)
|
|
|
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
$
|
3,682
|
|
|
$
|
3,129
|
|
|
$
|
5,683
|
|
|
$
|
1,073
|
|
|
$
|
607
|
|
Financial Services
|
|
|
507,746
|
|
|
|
445,537
|
|
|
|
358,703
|
|
|
|
320,534
|
|
|
|
350,987
|
|
Homebuilding & Real
Estate Development
|
|
|
583,152
|
|
|
|
574,824
|
|
|
|
558,838
|
|
|
|
288,686
|
|
|
|
212,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,094,580
|
|
|
|
1,023,490
|
|
|
|
923,224
|
|
|
|
610,293
|
|
|
|
563,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
|
12,370
|
|
|
|
9,665
|
|
|
|
7,452
|
|
|
|
7,019
|
|
|
|
5,141
|
|
Financial Services
|
|
|
474,311
|
|
|
|
381,916
|
|
|
|
280,431
|
|
|
|
275,507
|
|
|
|
321,243
|
|
Homebuilding & Real
Estate Development
|
|
|
606,655
|
|
|
|
498,760
|
|
|
|
481,618
|
|
|
|
253,169
|
|
|
|
191,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,093,336
|
|
|
|
890,341
|
|
|
|
769,501
|
|
|
|
535,695
|
|
|
|
518,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings from
unconsolidated affiliates
|
|
|
10,935
|
|
|
|
13,404
|
|
|
|
19,603
|
|
|
|
10,126
|
|
|
|
9,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
12,179
|
|
|
|
146,553
|
|
|
|
173,326
|
|
|
|
84,724
|
|
|
|
54,956
|
|
(Benefit) provision for income taxes
|
|
|
(528
|
)
|
|
|
59,566
|
|
|
|
70,920
|
|
|
|
36,466
|
|
|
|
19,615
|
|
Noncontrolling interest
|
|
|
13,404
|
|
|
|
79,267
|
|
|
|
90,388
|
|
|
|
43,616
|
|
|
|
33,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(697
|
)
|
|
|
7,720
|
|
|
|
12,018
|
|
|
|
4,642
|
|
|
|
1,840
|
|
(Loss) income from discontinued
operations, net of noncontrolling interest and income taxes
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
2,380
|
|
|
|
2,151
|
|
Income from extraordinary items,
net of noncontrolling interest and income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,298
|
|
Cumulative effect of a change in
accounting principle, net of noncontrolling interest and income
taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(2,221
|
)
|
|
|
12,774
|
|
|
|
14,230
|
|
|
|
7,022
|
|
|
|
5,192
|
|
5% Preferred Stock dividends
|
|
|
750
|
|
|
|
750
|
|
|
|
392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income allocable to
common stock
|
|
$
|
(2,971
|
)
|
|
$
|
12,024
|
|
|
$
|
13,838
|
|
|
$
|
7,022
|
|
|
$
|
5,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share
Data(a),(c),(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share
from continuing operations
|
|
$
|
(0.04
|
)
|
|
$
|
0.24
|
|
|
$
|
0.48
|
|
|
$
|
0.21
|
|
|
$
|
0.08
|
|
Discontinued operations
|
|
|
(0.05
|
)
|
|
|
0.18
|
|
|
|
0.09
|
|
|
|
0.10
|
|
|
|
0.10
|
|
Extraordinary items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.15
|
|
Cumulative effect of a change in
accounting principle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share of
common stock
|
|
$
|
(0.09
|
)
|
|
$
|
0.42
|
|
|
$
|
0.57
|
|
|
$
|
0.31
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share
from continuing operations
|
|
$
|
(0.05
|
)
|
|
$
|
0.22
|
|
|
$
|
0.40
|
|
|
$
|
0.16
|
|
|
$
|
0.07
|
|
Discontinued operations
|
|
|
(0.05
|
)
|
|
|
0.15
|
|
|
|
0.07
|
|
|
|
0.09
|
|
|
|
0.09
|
|
Extraordinary items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.14
|
|
Cumulative effect of a change in
accounting principle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share
of common stock
|
|
$
|
(0.10
|
)
|
|
$
|
0.37
|
|
|
$
|
0.47
|
|
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of
common shares outstanding
|
|
|
33,249
|
|
|
|
28,952
|
|
|
|
24,183
|
|
|
|
22,818
|
|
|
|
22,454
|
|
Diluted weighted average number of
common shares outstanding
|
|
|
33,249
|
|
|
|
31,219
|
|
|
|
27,806
|
|
|
|
26,031
|
|
|
|
22,454
|
|
Ratio of earnings to fixed
charges(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.28
|
|
|
|
|
|
Dollar deficiency of earnings to
fixed charges(e)
|
|
$
|
5,197
|
|
|
$
|
7,217
|
|
|
$
|
4,145
|
|
|
$
|
|
|
|
$
|
1,347
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
|
(Dollars in thousands, except for per share data)
|
|
|
Balance Sheet (at period
end)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and held for sale,
net
|
|
$
|
4,603,505
|
|
|
$
|
4,628,744
|
|
|
$
|
4,561,073
|
|
|
$
|
3,611,612
|
|
|
$
|
3,377,870
|
|
Securities
|
|
$
|
1,081,980
|
|
|
$
|
1,064,857
|
|
|
$
|
1,082,985
|
|
|
$
|
553,148
|
|
|
$
|
975,516
|
|
Total assets
|
|
$
|
7,605,766
|
|
|
$
|
7,395,755
|
|
|
$
|
6,954,847
|
|
|
$
|
5,136,235
|
|
|
$
|
5,415,933
|
|
Deposits
|
|
$
|
3,867,036
|
|
|
$
|
3,752,676
|
|
|
$
|
3,457,202
|
|
|
$
|
3,058,142
|
|
|
$
|
2,920,555
|
|
Securities sold under agreements to
repurchase and federal funds purchased
|
|
$
|
128,411
|
|
|
$
|
249,263
|
|
|
$
|
257,002
|
|
|
$
|
120,874
|
|
|
$
|
116,279
|
|
Other borrowings(f)
|
|
$
|
2,426,000
|
|
|
$
|
2,131,976
|
|
|
$
|
2,086,368
|
|
|
$
|
1,209,571
|
|
|
$
|
1,686,613
|
|
Shareholders equity
|
|
$
|
177,585
|
|
|
$
|
183,080
|
|
|
$
|
125,251
|
|
|
$
|
85,675
|
|
|
$
|
77,411
|
|
Book value per share(d),(g)
|
|
$
|
4.84
|
|
|
$
|
5.25
|
|
|
$
|
4.25
|
|
|
$
|
3.68
|
|
|
$
|
3.45
|
|
Return on average equity(b)(h)
|
|
|
(1.24
|
)%
|
|
|
8.08
|
%
|
|
|
13.16
|
%
|
|
|
8.63
|
%
|
|
|
6.85
|
%
|
BankAtlantic asset quality
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets, net of
reserves as a percent of total loans, tax certificates and real
estate owned
|
|
|
0.55
|
%
|
|
|
0.17
|
%
|
|
|
0.19
|
%
|
|
|
0.36
|
%
|
|
|
0.86
|
%
|
Loan loss allowance as a percent of
non-performing loans
|
|
|
982.89
|
%
|
|
|
605.68
|
%
|
|
|
582.18
|
%
|
|
|
422.06
|
%
|
|
|
235.61
|
%
|
Loan loss allowance as a percentage
of total loans
|
|
|
0.94
|
%
|
|
|
0.88
|
%
|
|
|
1.00
|
%
|
|
|
1.24
|
%
|
|
|
1.38
|
%
|
Capital ratios for
BankAtlantic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk based capital
|
|
|
12.08
|
%
|
|
|
11.50
|
%
|
|
|
10.80
|
%
|
|
|
12.06
|
%
|
|
|
11.89
|
%
|
Tier I risk based capital
|
|
|
10.50
|
%
|
|
|
10.02
|
%
|
|
|
9.19
|
%
|
|
|
10.22
|
%
|
|
|
10.01
|
%
|
Leverage
|
|
|
7.55
|
%
|
|
|
7.42
|
%
|
|
|
6.83
|
%
|
|
|
8.52
|
%
|
|
|
7.26
|
%
|
Levitt
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated margin on sales of
real estate
|
|
$
|
83,125
|
|
|
$
|
150,030
|
|
|
$
|
143,378
|
|
|
$
|
73,627
|
|
|
$
|
48,133
|
|
Consolidated margin
|
|
|
14.70
|
%
|
|
|
26.90
|
%
|
|
|
26.1
|
%
|
|
|
26.0
|
%
|
|
|
23.2
|
%
|
Homes delivered (units)
|
|
|
1,660
|
|
|
|
1,789
|
|
|
|
2,126
|
|
|
|
1,011
|
|
|
|
740
|
|
Backlog of homes (units)
|
|
|
1,248
|
|
|
|
1,792
|
|
|
|
1,814
|
|
|
|
2,053
|
|
|
|
824
|
|
Backlog of homes (sales value)
|
|
$
|
438,240
|
|
|
$
|
557,325
|
|
|
$
|
448,647
|
|
|
$
|
458,771
|
|
|
$
|
167,526
|
|
Land division acres sold
|
|
|
371
|
|
|
|
1,647
|
|
|
|
1,212
|
|
|
|
1,337
|
|
|
|
1,715
|
|
|
|
|
(a)
|
|
Since its inception, BFC has not
paid any cash dividends on its common stock.
|
|
(b)
|
|
Ratios were computed using
quarterly averages.
|
|
(c)
|
|
While BFC has two classes of common
stock outstanding, the two-class method is not presented because
BFCs capital structure does not provide for different
dividend rates or other preferences, other than voting rights,
between the two classes.
|
|
(d)
|
|
I.R.E. Realty Advisory Group, Inc.
(RAG) owns 4,764,282 shares of BFC Class A
Common Stock and 500,000 shares of BFC Class B Common
Stock. Because BFC owns 45.5% of the outstanding common stock of
RAG, 2,165,367 shares of BFC Class A Common Stock and
227,500 shares of BFC Class B Common Stock are
eliminated from the number of shares outstanding for purposes of
computing earnings per share and book value per share.
|
|
(e)
|
|
The operations, fixed charges and
dividends of BankAtlantic Bancorp and Levitt are not included in
the calculation because those subsidiaries are separate,
publicly traded companies whose boards of directors are composed
of individuals, a majority of whom are independent. Accordingly,
decisions made by those boards, including with respect to the
payment of dividends, are not within BFCs control.
|
|
(f)
|
|
Other borrowings consist of FHLB
advances, subordinated debentures, notes, mortgage notes
payable, bonds payable, secured borrowings, and junior
subordinated debentures. Secured borrowings were recognized on
loan participation agreements that constituted a legal sale of a
portion of the loan but that were not qualified to be accounted
for as a loan sale.
|
|
(g)
|
|
Preferred stock redemption price is
eliminated from shareholders equity for purposes of
computing book value per share.
|
|
(h)
|
|
The return on average equity is
equal to net income (loss) divided by average consolidated
shareholders equity during the respective year.
|
23
Selected
Historical Parent Company Only Financial Data of BFC
The following selected historical parent company only financial
data of BFC for each of the years in the five-year period ended
December 31, 2006 have been derived from BFCs
historical audited consolidated financial statements
incorporated by reference into this joint proxy
statement/prospectus, which were audited by KPMG LLP, an
independent registered public accounting firm, with respect to
the year ended December 31, 2002, and by
PricewaterhouseCoopers LLP, an independent registered certified
public accounting firm, with respect to the years ended
December 31, 2003 through 2006. The following information
is only a summary, and should be read together with BFCs
Managements Discussion and Analysis of Financial
Condition and Results of Operations and audited
consolidated financial statements and related notes in
BFCs Annual Report on
Form 10-K
for the year ended December 31, 2006, which is incorporated
by reference into this joint proxy statement/prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Years Ended December 31,
|
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
|
(In thousands)
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
17,815
|
|
|
$
|
26,683
|
|
|
$
|
1,520
|
|
|
$
|
1,536
|
|
|
$
|
797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
|
|
2,262
|
|
|
|
2,034
|
|
|
|
1,800
|
|
|
|
1,218
|
|
|
|
1,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Benihana
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in venture partnerships
|
|
|
908
|
|
|
|
950
|
|
|
|
971
|
|
|
|
626
|
|
|
|
2,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in BankAtlantic Bancorp,
Inc.
|
|
|
113,586
|
|
|
|
112,218
|
|
|
|
103,125
|
|
|
|
91,869
|
|
|
|
106,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Levitt Corporation
|
|
|
57,009
|
|
|
|
58,111
|
|
|
|
48,983
|
|
|
|
27,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in other subsidiaries
|
|
|
1,525
|
|
|
|
1,631
|
|
|
|
31,867
|
|
|
|
30,877
|
|
|
|
30,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable
|
|
|
2,157
|
|
|
|
2,071
|
|
|
|
3,364
|
|
|
|
4,175
|
|
|
|
4,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
2,261
|
|
|
|
960
|
|
|
|
2,697
|
|
|
|
484
|
|
|
|
768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
217,523
|
|
|
$
|
224,658
|
|
|
$
|
204,327
|
|
|
$
|
158,670
|
|
|
$
|
146,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10,483
|
|
|
$
|
6,015
|
|
|
$
|
6,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances from and negative basis in
wholly owned subsidiaries
|
|
|
1,290
|
|
|
|
462
|
|
|
|
34,636
|
|
|
|
33,977
|
|
|
|
33,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
7,351
|
|
|
|
7,417
|
|
|
|
6,929
|
|
|
|
6,454
|
|
|
|
6,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
|
31,297
|
|
|
|
33,699
|
|
|
|
27,028
|
|
|
|
26,549
|
|
|
|
23,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
39,938
|
|
|
|
41,578
|
|
|
|
79,076
|
|
|
|
72,995
|
|
|
|
69,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
177,585
|
|
|
|
183,080
|
|
|
|
125,251
|
|
|
|
85,675
|
|
|
|
77,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders equity
|
|
$
|
217,523
|
|
|
$
|
224,658
|
|
|
$
|
204,327
|
|
|
$
|
158,670
|
|
|
$
|
146,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Operations
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,232
|
|
|
$
|
1,775
|
|
|
$
|
3,514
|
|
|
$
|
1,051
|
|
|
$
|
763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
8,413
|
|
|
|
14,904
|
|
|
|
6,717
|
|
|
|
3,954
|
|
|
|
3,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) before earnings (loss) from
subsidiaries
|
|
|
(6,181
|
)
|
|
|
(13,129
|
)
|
|
|
(3,203
|
)
|
|
|
(2,903
|
)
|
|
|
(3,135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity from earnings in
BankAtlantic Bancorp
|
|
|
5,807
|
|
|
|
9,053
|
|
|
|
11,817
|
|
|
|
11,911
|
|
|
|
7,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity from (loss) earnings in
Levitt
|
|
|
(1,522
|
)
|
|
|
9,125
|
|
|
|
10,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity from (loss) earnings in
other subsidiaries
|
|
|
(658
|
)
|
|
|
6,671
|
|
|
|
(35
|
)
|
|
|
(1,428
|
)
|
|
|
(559
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(2,554
|
)
|
|
|
11,720
|
|
|
|
18,844
|
|
|
|
7,580
|
|
|
|
3,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit) provision for income taxes
|
|
|
(1,857
|
)
|
|
|
4,000
|
|
|
|
6,826
|
|
|
|
2,938
|
|
|
|
1,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(697
|
)
|
|
|
7,720
|
|
|
|
12,018
|
|
|
|
4,642
|
|
|
|
1,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued
operations, net of income taxes
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
2,380
|
|
|
|
2,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from extraordinary items,
net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative effect of a change in
accounting principle, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(2,221
|
)
|
|
|
12,774
|
|
|
|
14,230
|
|
|
|
7,022
|
|
|
|
5,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5% Preferred Stock dividends
|
|
|
750
|
|
|
|
750
|
|
|
|
392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(2,971
|
)
|
|
$
|
12,024
|
|
|
$
|
13,838
|
|
|
$
|
7,022
|
|
|
$
|
5,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Cash Flow
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
$
|
(697
|
))
|
|
$
|
7,720
|
|
|
$
|
12,018
|
|
|
$
|
4,642
|
|
|
$
|
1,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued
operations, net of taxes
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
2,380
|
|
|
|
2,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from extraordinary item, net
of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative effect of a change in
accounting principle, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating activities
|
|
|
(820
|
)
|
|
|
(12,709
|
)
|
|
|
(18,243
|
)
|
|
|
(7,694
|
)
|
|
|
(8,313
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
operating activities
|
|
$
|
(3,041
|
)
|
|
$
|
65
|
|
|
$
|
(4,013
|
)
|
|
$
|
(672
|
)
|
|
$
|
(3,121
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
investing activities
|
|
|
(923
|
)
|
|
|
(10,029
|
)
|
|
|
(9,577
|
)
|
|
|
1,129
|
|
|
|
(173
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
financing activities
|
|
|
(4,904
|
)
|
|
|
35,127
|
|
|
|
13,574
|
|
|
|
282
|
|
|
|
1,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and
cash equivalents
|
|
|
(8,868
|
)
|
|
|
25,163
|
|
|
|
(16
|
)
|
|
|
739
|
|
|
|
(1,909
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of period
|
|
|
26,683
|
|
|
|
1,520
|
|
|
|
1,536
|
|
|
|
797
|
|
|
|
2,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
17,815
|
|
|
$
|
26,683
|
|
|
$
|
1,520
|
|
|
$
|
1,536
|
|
|
$
|
797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
Selected
Historical Consolidated Financial Data of Levitt
The following selected historical consolidated financial data of
Levitt for each of the years in the five-year period ended
December 31, 2006 have been derived from Levitts
historical audited consolidated financial statements
incorporated by reference into this joint proxy
statement/prospectus, which were audited by
PricewaterhouseCoopers LLP, an independent registered certified
public accounting firm. The following information is only a
summary, and should be read together with Levitts
Managements Discussion and Analysis of Financial
Condition and Results of Operations and audited
consolidated financial statements and related notes in
Levitts Annual Report on
Form 10-K
for the year ended December 31, 2006, which is incorporated
by reference into this joint proxy statement/prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Years Ended December 31,
|
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
|
(Dollars in thousands, except per share data)
|
|
Consolidated
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from sales of real estate
|
|
$
|
566,086
|
|
|
|
558,112
|
|
|
|
549,652
|
|
|
|
283,058
|
|
|
|
207,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales of real estate(a)
|
|
|
482,961
|
|
|
|
408,082
|
|
|
|
406,274
|
|
|
|
209,431
|
|
|
|
159,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin(a)
|
|
|
83,125
|
|
|
|
150,030
|
|
|
|
143,378
|
|
|
|
73,627
|
|
|
|
48,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from Bluegreen Corporation
|
|
|
9,684
|
|
|
|
12,714
|
|
|
|
13,068
|
|
|
|
7,433
|
|
|
|
4,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general &
administrative expenses
|
|
|
121,151
|
|
|
|
87,639
|
|
|
|
71,001
|
|
|
|
42,027
|
|
|
|
30,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(9,164
|
)
|
|
|
54,911
|
|
|
|
57,415
|
|
|
|
26,820
|
|
|
|
19,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share
|
|
$
|
(0.46
|
)
|
|
|
2.77
|
|
|
|
3.10
|
|
|
|
1.81
|
|
|
|
1.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share(b)
|
|
$
|
(0.47
|
)
|
|
|
2.74
|
|
|
|
3.04
|
|
|
|
1.77
|
|
|
|
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common
shares outstanding (thousands)
|
|
|
19,823
|
|
|
|
19,817
|
|
|
|
18,518
|
|
|
|
14,816
|
|
|
|
14,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common
shares outstanding (thousands)
|
|
|
19,823
|
|
|
|
19,929
|
|
|
|
18,600
|
|
|
|
14,816
|
|
|
|
14,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.08
|
|
|
|
0.08
|
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin percentage(c)
|
|
|
14.7
|
%
|
|
|
26.9
|
%
|
|
|
26.1
|
%
|
|
|
26.0
|
%
|
|
|
23.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A expense as a percentage
of total revenues
|
|
|
21.1
|
%
|
|
|
15.5
|
%
|
|
|
12.8
|
%
|
|
|
14.7
|
%
|
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
shareholders equity, annualized(d)
|
|
|
(2.6
|
)%
|
|
|
17.0
|
%
|
|
|
27.3
|
%
|
|
|
23.0
|
%
|
|
|
22.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of debt to shareholders
equity
|
|
|
179.4
|
%
|
|
|
116.6
|
%
|
|
|
91.0
|
%
|
|
|
138.8
|
%
|
|
|
137.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of debt to total
capitalization(e)
|
|
|
64.2
|
%
|
|
|
53.8
|
%
|
|
|
47.6
|
%
|
|
|
58.1
|
%
|
|
|
57.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net debt to total
capitalization(e)(f)
|
|
|
59.2
|
%
|
|
|
38.9
|
%
|
|
|
25.3
|
%
|
|
|
46.1
|
%
|
|
|
51.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
48,391
|
|
|
|
113,562
|
|
|
|
125,522
|
|
|
|
35,965
|
|
|
|
16,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory of real estate
|
|
|
822,040
|
|
|
|
611,260
|
|
|
|
413,471
|
|
|
|
254,992
|
|
|
|
198,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Bluegreen Corporation
|
|
|
107,063
|
|
|
|
95,828
|
|
|
|
80,572
|
|
|
|
70,852
|
|
|
|
57,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,090,666
|
|
|
|
895,673
|
|
|
|
678,467
|
|
|
|
393,505
|
|
|
|
295,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
615,703
|
|
|
|
407,970
|
|
|
|
268,226
|
|
|
|
174,093
|
|
|
|
147,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
747,427
|
|
|
|
545,887
|
|
|
|
383,678
|
|
|
|
268,053
|
|
|
|
187,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity
|
|
$
|
343,239
|
|
|
|
349,786
|
|
|
|
294,789
|
|
|
|
125,452
|
|
|
|
107,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding
Division(g):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from sales of real estate
|
|
$
|
500,719
|
|
|
|
438,367
|
|
|
|
472,296
|
|
|
|
222,257
|
|
|
|
162,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales of real estate(a)
|
|
|
440,059
|
|
|
|
347,008
|
|
|
|
371,097
|
|
|
|
173,072
|
|
|
|
131,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin(a)
|
|
$
|
60,660
|
|
|
|
91,359
|
|
|
|
101,199
|
|
|
|
49,185
|
|
|
|
31,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin percentage(c)
|
|
|
12.1
|
%
|
|
|
20.8
|
%
|
|
|
21.4
|
%
|
|
|
22.1
|
%
|
|
|
19.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction starts
|
|
|
1,682
|
|
|
|
1,662
|
|
|
|
2,294
|
|
|
|
1,593
|
|
|
|
796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homes delivered
|
|
|
1,660
|
|
|
|
1,789
|
|
|
|
2,126
|
|
|
|
1,011
|
|
|
|
740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price of homes
delivered
|
|
$
|
302,000
|
|
|
|
245,000
|
|
|
|
222,000
|
|
|
|
220,000
|
|
|
|
219,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net orders (units)
|
|
|
1,116
|
|
|
|
1,767
|
|
|
|
1,679
|
|
|
|
2,240
|
|
|
|
980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net orders (value)
|
|
$
|
381,993
|
|
|
|
547,045
|
|
|
|
427,916
|
|
|
|
513,436
|
|
|
|
204,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog of homes (units)
|
|
|
1,248
|
|
|
|
1,792
|
|
|
|
1,814
|
|
|
|
2,053
|
|
|
|
824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog of homes (sales value)
|
|
$
|
438,240
|
|
|
|
557,325
|
|
|
|
448,647
|
|
|
|
458,771
|
|
|
|
167,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land Division(h):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from sales of real estate
|
|
$
|
69,778
|
|
|
|
105,658
|
|
|
|
96,200
|
|
|
|
55,037
|
|
|
|
53,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales of real estate
|
|
|
42,662
|
|
|
|
50,706
|
|
|
|
42,838
|
|
|
|
31,362
|
|
|
|
28,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin(a)
|
|
$
|
27,116
|
|
|
|
54,952
|
|
|
|
53,362
|
|
|
|
23,675
|
|
|
|
25,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin percentage(c)
|
|
|
38.9
|
%
|
|
|
52.0
|
%
|
|
|
55.5
|
%
|
|
|
43.0
|
%
|
|
|
46.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acres sold
|
|
|
371
|
|
|
|
1,647
|
|
|
|
1,212
|
|
|
|
1,337
|
|
|
|
1,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory of real estate (acres)(i)
|
|
|
6,871
|
|
|
|
7,287
|
|
|
|
5,965
|
|
|
|
6,837
|
|
|
|
5,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory of real estate (book
value)
|
|
$
|
176,356
|
|
|
|
150,686
|
|
|
|
122,056
|
|
|
|
43,906
|
|
|
|
59,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acres subject to sales
contracts Third parties
|
|
|
74
|
|
|
|
246
|
|
|
|
1,833
|
|
|
|
1,433
|
|
|
|
1,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate sales price of acres
subject to sales contracts to third parties
|
|
$
|
21,124
|
|
|
|
39,283
|
|
|
|
121,095
|
|
|
|
103,174
|
|
|
|
72,767
|
|
|
|
|
(a)
|
|
Margin is calculated as sales of
real estate minus cost of sales of real estate. Included in cost
of sales of real estate for the year ended December 31,
2006 are homebuilding inventory impairment charges and
write-offs of deposits and pre-acquisition costs of
$36.8 million.
|
|
(b)
|
|
Diluted (loss) earnings per share
takes into account the dilutive effect of Levitts stock
options and restricted stock using the treasury stock method and
the dilution in earnings Levitt recognizes as a result of
outstanding Bluegreen securities that entitle the holders
thereof to acquire shares of Bluegreens common stock.
|
|
(c)
|
|
Margin percentage is calculated by
dividing margin by sales of real estate.
|
|
(d)
|
|
Calculated by dividing net (loss)
income by average shareholders equity. Average
shareholders equity is calculated by averaging beginning
and end of period shareholders equity balances.
|
|
(e)
|
|
Total capitalization is calculated
as total debt plus total shareholders equity.
|
|
(f)
|
|
Net debt is calculated as total
debt minus cash.
|
|
(g)
|
|
Excludes joint ventures.
|
|
(h)
|
|
Financial measures include land
sales to Levitts Homebuilding Division, if any. These
inter-segment transactions are eliminated in consolidation.
|
|
(i)
|
|
Estimated net saleable acres
(subject to final zoning, permitting, and other governmental
regulations/approvals).
|
25
Selected
Unaudited Pro Forma Condensed Combined Financial
Information
The following selected unaudited pro forma condensed combined
financial data are presented as if the merger were completed at
the beginning of the period presented for income statement
purposes and on the date of the balance sheet for balance sheet
purposes. This data should be read in conjunction with
(i) the unaudited pro forma condensed combined financial
statements and related notes appearing elsewhere in this joint
proxy statement/prospectus, (ii) BFCs historical
audited consolidated financial statements and related notes
contained in its Annual Report on
Form 10-K
for the year ended December 31, 2006, which is incorporated
by reference into this joint proxy statement/prospectus, and
(iii) Levitts historical audited consolidated
financial statements and related notes contained in its Annual
Report on
Form 10-K
for the year ended December 31, 2006, which is incorporated
by reference into this joint proxy statement/prospectus. See
Where You Can Find More Information beginning on
page 147.
The pro forma amounts set forth in the table below are presented
for illustrative purposes only. You should not rely on these pro
forma amounts as being indicative of the financial position or
results of operations that BFC would have actually realized had
the merger been completed as of the beginning of the period
presented, nor is it necessarily indicative of the future
operating results or financial position of BFC following the
merger.
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31, 2006
|
|
|
|
(In thousands,
|
|
|
|
except per share data)
|
|
|
Statement of Operations
Data:
|
|
|
|
|
Revenues
|
|
$
|
1,094,580
|
|
Net loss
|
|
$
|
(8,340
|
)
|
Net loss after dividends on
preferred stock
|
|
$
|
(9,090
|
)
|
Net loss per common
share basic and diluted
|
|
$
|
(0.13
|
)
|
Weighted average shares
outstanding basic and diluted
|
|
|
70,783
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31, 2006
|
|
|
|
(In thousands)
|
|
|
Balance Sheet Data:
|
|
|
|
|
Loans receivable and held for
sale, net
|
|
$
|
4,603,505
|
|
Securities
|
|
$
|
1,081,980
|
|
Total assets
|
|
$
|
7,553,521
|
|
Deposits
|
|
$
|
3,867,036
|
|
Securities sold under agreements
to repurchase and federal funds purchased
|
|
$
|
128,411
|
|
Total liabilities
|
|
$
|
6,720,503
|
|
Noncontrolling interest
|
|
$
|
412,093
|
|
Shareholders equity
|
|
$
|
420,925
|
|
26
RISK
FACTORS
In deciding how to vote on the merger and the related
transactions and on the merger agreement, as applicable, you
should carefully consider the risks described below in addition
to the other information contained or incorporated by reference
in this joint proxy statement/prospectus. The risks and
uncertainties described below are not the only ones facing BFC
and Levitt. Additional risks and uncertainties not presently
known to either BFC or Levitt or that they believe are now
immaterial may also impair BFCs or Levitts results
of operations and financial condition. If any of the following
risks actually occur, the financial condition or results of
operations of BFC or Levitt could be materially and adversely
affected and the value of BFC Class A Common Stock or
Class B Common Stock or Levitt Class A Common Stock
could decline. Shareholders of BFC and Levitt should also
carefully consider the risks described in the documents
incorporated by reference into this joint proxy
statement/prospectus. See Where You Can Find More
Information beginning on page 147.
Risks
Related to the Merger and the Business and Operations of BFC
Following the Merger
The exchange ratio set forth in the merger agreement is
fixed and, except in limited circumstances, will not be adjusted
in the event of any change in the market price of BFC
Class A Common Stock or Levitt Class A Common
Stock.
As a result of the merger, each share of Levitt Class A
Common Stock outstanding at the effective time of the merger
(other than shares owned by BFC and holders of Levitt
Class A Common Stock who assert and exercise their
appraisal rights) will be converted automatically into the right
to receive 2.27 shares of BFC Class A Common Stock and
cash in lieu of any fractional shares of BFC Class A Common
Stock. The ratio at which shares of Levitt Class A Common
Stock will be converted is fixed in the merger agreement and,
except in limited circumstances, the merger agreement does not
provide for any adjustment for changes in the market price of
either BFC Class A Common Stock or Levitt Class A
Common Stock. As a result, if the market price of BFC
Class A Common Stock increases or decreases between the
date of the merger agreement and the effective time of the
merger, holders of Levitt Class A Common Stock will be
entitled to receive, upon consummation of the merger, shares
having greater or lesser market value, respectively, than they
would have received based on the market value calculated
pursuant to the exchange ratio on the date of the merger
agreement.
Levitt, however, may terminate the merger agreement if the
average closing price of BFC Class A Common Stock, as
quoted on the NYSE Arca Stock Exchange, and the average closing
price of the Class A Common Stock of BankAtlantic Bancorp,
as quoted on the New York Stock Exchange, in each case, for the
ten consecutive trading days ending on and including the trading
day that is two days prior to the day of the effective time of
the merger, are less than $4.45 and $9.44, respectively, which
prices are equal to 70% of the respective closing prices of such
shares on the date of the merger agreement; provided however,
that after receiving written notice from Levitt of termination
as a result of the decline in such stock prices, BFC may avoid
such termination and extend the date of the effective time of
the merger for up to two business days by promptly providing
written notice to Levitt of its election to increase the value
of the consideration delivered to holders of Levitt Class A
Common Stock to equal the value such holders would have received
if the value of BFC Class A Common Stock at the effective
time of the merger was $4.45.
The market price of BFC Class A Common Stock has fluctuated
and likely will fluctuate between the date of this joint proxy
statement/prospectus and the effective time of the merger. For
example, from January 1, 2005
to ,
2007, the sale price of BFC Class A Common Stock ranged
from a low of $ per share to
a high of $ per share, as
quoted on the NASDAQ National Market (now the NASDAQ Global
Market), with respect to prices quoted prior to June 22,
2006, and the NYSE Arca Stock Exchange, with respect to prices
quoted on and after June 22, 2006. See Comparative
Stock Prices and Dividends beginning on page 96.
Shareholders of both companies are encouraged to obtain current
market quotations for BFC Class A Common Stock and Levitt
Class A Common Stock prior to voting their shares. Further
variations in the market price of BFC Class A Common Stock
could be the result of market assessments of the likelihood that
the merger will be consummated or the timing of the consummation
of the merger, general market and economic conditions and other
factors both within and beyond the control of BFC or Levitt.
Because the date that the merger may be consummated will be
later than the date of the BFC and Levitt annual meetings, at
the time of the annual meetings you will not know the market
value
27
of the BFC Class A Common Stock that holders of Levitt
Class A Common Stock will receive upon consummation of the
merger.
If the merger is consummated, BFCs shareholders will
increase their exposure to the homebuilding industry, which
continues to experience significant weakness.
If the merger is consummated, BFC will significantly increase
its exposure to the risks and uncertainties of the homebuilding
industry. As of December 31, 2006, BFCs investment in
Levitt represented 26% of BFCs total parent company
assets. If the merger is consummated, BFCs investment in
Levitt will represent 64% of BFCs total parent company
assets. The homebuilding industry in general has recently
experienced and continues to experience significant weakness.
Adverse economic and other business conditions have had, and are
expected to continue to have, a negative impact on the
homebuilding industry in general. Homebuilders have recently
experienced declines in sale orders and increased cancellations
of sale contracts and there is an increased inventory of new and
used homes for sale. Prospective homebuyers are concerned about
home prices and rising interest rates and there has been a
decline in homebuyer consumer confidence. Homebuilders,
including Levitt, have used increased sales incentives and
advertising expenditures and paid higher broker commissions in
an attempt to address the slowdown in the housing market, which
has further negatively affected margins in the industry. These
economic and other business conditions are expected to continue
in the near future, and no assurance can be given as to the
timing of any recovery in the homebuilding industry. For the
year ended December 31, 2006 and the quarter ended
March 31, 2007, Levitt had a net loss of $9,164,000 and
$1,250,000, respectively.
If the merger is consummated, Levitts shareholders
will be exposed to the diverse businesses in which BFC has
invested.
Upon completion of the merger, holders of Levitt Class A
Common Stock (other than BFC and holders who assert and exercise
their appraisal rights) will become holders of BFC Class A
Common Stock. BFC is a holding company with investments in
businesses in diverse industries, including industries different
than those in which Levitt operates. In addition to its existing
investment in Levitt, BFC holds a direct controlling interest in
BankAtlantic Bancorp, a Florida- based financial services
holding company which owns BankAtlantic, a federally chartered,
federally insured savings bank, a direct investment in the
convertible preferred stock of Benihana, Inc.
(Benihana), which owns Asian-themed restaurant
chains in the United States, and various real estate and venture
capital investments. If the merger is consummated, Levitts
shareholders will no longer be subject to solely the risks of an
investment in the homebuilding industry, but will be subject to
the risks of BFCs other investments, especially in the
banking industry. BankAtlantic, like other banks, has been
impacted by the deterioration of the real estate market,
specifically in Florida, where most of its borrowers and the
real estate collateralizing its loans are located. Any downturn
in the banking or restaurant industries or in the other
industries in which BFC has investments could have a material
adverse effect on the future market price of the shares of BFC
Class A Common Stock that Levitts shareholders would
receive in the merger. For a discussion of BFCs and
Levitts businesses and certain factors to consider in
connection with such businesses, see the sections entitled
Risk Factors and Managements Discussion
and Analysis of Financial Condition and Results of
Operations in each of BFCs and Levitts Annual
Reports on
Form 10-K
for the year ended December 31, 2006 and other documents
incorporated by reference herein.
If the merger is not consummated, BFC and Levitt will have
incurred substantial costs adversely impacting their results of
operations and financial conditions and the market price of BFC
common stock and Levitt Class A Common Stock.
BFC and Levitt have incurred and will continue to incur
substantial costs in connection with the merger. These costs are
primarily associated with the fees of their respective
attorneys, accountants and financial advisors. In addition, BFC
and Levitt have each diverted significant management resources
in an effort to consummate the merger and each is subject to
restrictions contained in the merger agreement on the conduct of
its business during the interim period between the date of the
merger agreement and the effective time of the merger.
28
Certain executive officers and directors of BFC and Levitt
have financial interests in the merger that are different from,
or in addition to, the interests of BFCs and Levitts
shareholders, generally.
In considering the recommendation of the BFC special committee
and board of directors to vote in favor of the merger and the
related transactions and the recommendation of the Levitt
special committee and board of directors to vote in favor of the
approval of the merger agreement, shareholders should be aware
that certain directors and executive officers of each of BFC and
Levitt may have interests in the merger that are different from,
or are in addition to, the interests of BFCs and
Levitts respective shareholders, generally.
Alan B. Levan, the chairman of the board and chief executive
officer of each of BFC and Levitt, John E. Abdo, the vice
chairman of the board of each of BFC and Levitt, and their
affiliates collectively own shares of BFC common stock
representing approximately 77.1% of the general voting power and
52.7% of the total common stock of BFC, and, after the
completion of the merger, are expected to own shares of BFC
common stock representing approximately 71.6% of the general
voting power and 25.8% of the total common stock of BFC.
Additionally, in connection with the merger, BFC has agreed to
cause the seven current directors of Levitt who are not also
directors of BFC to be appointed to BFCs board of
directors to serve until BFCs 2008 annual meeting of
shareholders.
In considering these facts and the other information contained
in this joint proxy statement/prospectus, you should be aware of
these interests. Please see The Merger
Interests of Certain Persons in the Merger beginning on
page 71 for further information about these interests.
The Levitt special committee did not conduct an auction
with respect to the sale of Levitt.
Because of BFCs voting control of Levitt, which would
allow BFC to veto any sale of Levitt to a third party, and based
on BFCs expressed intention to maintain a long-term
relationship with Levitt, the Levitt special committee did not
conduct a market check or auction process with respect to the
possible sale of Levitt. Such a process may have resulted in
different terms for Levitts shareholders, and there is no
assurance that merger consideration having a higher value would
not have been received if Levitt had been in a position to
conduct a market check or auction. However, the merger agreement
provides Levitt with the right to furnish information about its
business to any person making a superior proposal to the merger
and participate in discussions or negotiations regarding, and,
in specific circumstances, to accept, such proposal in lieu of
the merger. See The Merger Agreement Superior
Proposal.
The merger agreement and BFCs existing control
position limit the ability of Levitt to pursue an alternative
transaction proposal to the merger.
Subject to certain exceptions, the merger agreement prohibits
Levitt from soliciting, initiating, encouraging or otherwise
facilitating certain alternative transaction proposals with any
party other than BFC. See The Merger Agreement
No Solicitation beginning on page 89. Further,
BFCs existing ownership of all of the shares of Levitt
Class B Common Stock provides BFC with the ability to veto
any alternative transaction. The no solicitation
provisions in the merger agreement limit the ability of Levitt
to pursue offers from third parties that could result in greater
value to its shareholders relative to the terms and conditions
of the merger agreement. Moreover, while a competing acquiror
could deliver a bona fide competing acquisition proposal in a
manner that would enable Levitt to negotiate the terms of the
competing offer, BFCs control position and ability to veto
any alternative transaction limits the likelihood that any
potential competing acquiror will come forward. Further, if the
merger agreement is terminated and the board of directors of
Levitt determines to seek another merger or business
combination, it may not be able to find a partner willing to
provide an equivalent or more attractive benefit to
Levitts shareholders than that which would have been
received by such shareholders pursuant to the merger agreement.
Even if such a partner were found, there is no assurance that
BFC will approve any such merger or business combination.
If significant numbers of holders of Levitt Class A
Common Stock exercise their appraisal rights, it could have an
adverse effect on the companies.
If holders of more than 10% of the outstanding shares of Levitt
Class A Common Stock exercise their appraisal rights, BFC
may elect not to consummate the merger, and, in that event, BFC
and Levitt will have incurred significant transaction costs
without consummating the transaction. Even if the merger is
consummated, the number
29
of shareholders exercising appraisal rights will impact
BFCs cash balances and cash flow as BFC will be required
to pay such shareholders in cash. BFC itself has no operations
other than activities relating to identifying, analyzing and in
appropriate cases, acquiring new investments, as well as the
monitoring of existing investments. Since BFC is dependent upon
dividends from its subsidiaries for a significant portion of its
cash flow, and since the declaration of dividends by BFCs
subsidiaries is not always within BFCs control, any
significant decrease in BFCs cash position as a result of
payments to shareholders who exercise their appraisal rights
could limit BFCs ability to support Levitts business
with additional capital and could have a material adverse effect
on BFCs and Levitts businesses.
Substantial sales of BFC Class A Common Stock could
adversely affect its market price.
It is anticipated that approximately 37,533,953 shares of
BFC Class A Common Stock will be issued in connection with
the merger and approximately 4,300,000 additional shares of BFC
Class A Common Stock will be issuable pursuant to Levitt
options outstanding as of December 31, 2006. Additionally,
on March 29, 2007, BFC filed a registration statement on
Form S-3
with the SEC for the issuance in a firm commitment underwritten
public offering of up to 11,500,000 shares of BFC
Class A Common Stock. The shares issuable and to be issued
in connection with the merger would represent approximately 51%
of the total number of shares of BFC Class A Common Stock
outstanding after the merger, including the
11,500,000 shares of BFC Class A Common Stock covered
by the registration statement on
Form S-3.
Other than the shares issued or to be issued to affiliates of
Levitt or BFC, which would represent approximately 28% of the
total number of shares of BFC Class A Common Stock
outstanding after the merger, including the
11,500,000 shares of BFC Class A Common Stock covered
by the registration statement on
Form S-3,
the shares issued or to be issued in connection with the merger
will not be subject to restrictions on resale. The issuance of
and potential resale of these new shares could have the effect
of depressing the market price of BFC Class A Common Stock.
The unaudited pro forma financial information included in
this joint proxy statement/prospectus may not be indicative of
what BFCs actual financial position or results of
operations would have been.
The unaudited pro forma financial information included in this
joint proxy statement/prospectus is presented for illustrative
purposes only and is not necessarily indicative of what
BFCs actual financial position or results of operations
would have been had the merger been completed on the dates
indicated. The unaudited pro forma financial information
reflects adjustments, which are based upon preliminary
estimates, to allocate the merger consideration to BFCs
net assets. The merger consideration allocation reflected in
this document is preliminary, and the final allocation will be
based upon the actual merger consideration value and the fair
value of the assets and liabilities of Levitt as of the date of
the effective time of the merger. In addition, subsequent to the
effective time of the merger, there may be further refinements
of the merger consideration allocation as additional information
becomes available. Accordingly, the final purchase accounting
adjustments may differ materially from the pro forma adjustments
reflected in this document. See Unaudited Pro Forma
Condensed Combined Financial Statements beginning on
page 93 for more information.
There is no assurance as to the value holders of
Class A Common Stock of Levitt will receive by exercising
their appraisal rights.
Under the FBCA, holders of Levitt Class A Common Stock are
entitled to appraisal rights in connection with the merger. If a
holder of Levitt Class A Common Stock exercises his, her or
its appraisal rights and follows the relevant procedures
specified in the FBCA, summarized in The
Merger Appraisal Rights, he, she or it will
have the right to receive a cash payment equal to the fair value
of his, her or its stock. The express procedures of the FBCA
must be followed and, if they are not, shareholders wishing to
exercise their appraisal rights may lose such rights. Moreover,
pursuant to the FBCA, the fair value of the shares of Levitt
Class A Common Stock held by a shareholder exercising
appraisal rights means the value of such shares determined
immediately preceding the consummation of the merger excluding
any appreciation or depreciation in anticipation of the merger
and could be more than, less than or equal to the value of the
shares of BFC Class A Common Stock that the shareholder
would otherwise have received in connection with the merger.
Further, the fair value cash payment for the Levitt Class A
Common Stock could potentially be determined in judicial
proceedings, the result of which cannot be predicted. As a
result, there can be no assurance that holders of Levitt
Class A Common Stock exercising appraisal rights will
receive consideration equal to or greater than the value of the
BFC Class A Common Stock which they would have received in
connection with the merger.
30
The Internal Revenue Service may disagree with the
parties description of the federal income tax consequences
of the merger.
Although BFC and Levitt will receive an opinion of legal counsel
as to the anticipated federal income tax consequences of the
merger, neither BFC nor Levitt has applied for, or expects to
obtain, a ruling from the Internal Revenue Service with respect
to the federal income tax consequences of the merger. No
assurance can be given that the Internal Revenue Service will
agree with the positions taken in the legal opinion or will not
challenge the income tax consequences of the merger.
Additional
Risks Related to the Business and Operations of BFC and
Levitt
For additional risks related to the operations of BFCs
business and Levitts business, see the sections entitled
Risk Factors in BFCs and Levitts
respective Annual Reports on
Form 10-K
for the year ended December 31, 2006, each of which is
incorporated by reference into this joint proxy
statement/prospectus. Because the risks and uncertainties facing
each of BFC and Levitt differ, the market price of shares of BFC
Class A Common Stock after the merger and the results of
operations and financial condition of BFC after the merger may
be affected by risks and uncertainties different from those that
currently affect each of BFC and Levitt separately.
31
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This joint proxy statement/prospectus contains certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 with respect to the
financial condition, results of operations, business strategies,
operating efficiencies or synergies, competitive positions,
growth opportunities, plans and objectives of management,
markets for stock of BFC and Levitt, the merger and the effects
thereof (if consummated) upon BFC and Levitt and other matters.
Statements in this joint proxy statement/prospectus that are not
historical facts are identified as forward-looking
statements for the purpose of the safe harbor provided by
Section 21E of the Exchange Act and Section 27A of the
Securities Act. These forward-looking statements, including,
without limitation, those relating to the future business
prospects, revenues and income and the merger and the effects
thereof (if consummated), in each case relating to BFC or
Levitt, wherever they occur in this joint proxy
statement/prospectus, are estimates reflecting the best judgment
of the senior management of BFC or Levitt, respectively, and
involve a number of risks and uncertainties that could cause
actual results to differ materially from those suggested by the
forward-looking statements. These forward-looking statements
should, therefore, be considered in light of various important
factors, including those set forth in this joint proxy
statement/prospectus. Important factors that could cause actual
results to differ materially from estimates or projections
contained in the forward-looking statements include, without
limitation, those factors described in the sections entitled
Risk Factors beginning on page 27 of this joint
proxy statement/prospectus, in BFCs Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006 and in
Levitts Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006.
Words such as estimate, project,
plan, intend, expect,
believe and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are found at various places throughout this joint
proxy statement/prospectus and the other documents incorporated
by reference. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this joint proxy statement/prospectus or as of the date
of the documents incorporated by reference, as applicable.
Readers also should understand that it is not possible to
predict or identify all such factors and that the risks and
uncertainties contained herein and in the documents incorporated
herein by reference should not be considered a complete
statement of all potential risks and uncertainties. Readers
should also realize that if underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual
results could vary materially from BFCs or Levitts
projections. BFC and Levitt undertake no obligation to update
any forward-looking statements as a result of future events or
developments.
32
THE BFC
ANNUAL MEETING
General
This joint proxy statement/prospectus is being provided to
BFCs shareholders as part of a solicitation of proxies by
the board of directors of BFC for use at BFCs 2007 annual
meeting of shareholders.
Date,
Time and Place
BFCs 2007 annual meeting of shareholders will be held
on ,
2007
at
local time, at The Westin Fort Lauderdale, 400 Corporate
Drive, Fort Lauderdale, Florida 33334.
Purposes
of the BFC Annual Meeting
The purposes of the BFC annual meeting are:
1. To consider and vote upon a proposal to approve the
merger and the transactions related thereto, including the
amendment of BFCs Articles of Incorporation to increase
the number of authorized shares of BFC Class A Common Stock
from 70,000,000 to 130,000,000 and the amendment of the BFC 2005
Stock Incentive Plan to increase the aggregate number of shares
of BFC Class A Common Stock authorized for issuance
pursuant to such plan from 3,000,000 to 8,000,000.
2. To consider and vote upon a proposal to elect two
directors to the board of directors of BFC to serve until
BFCs 2010 annual meeting of shareholders.
3. To transact such other business as may properly be
brought before the BFC annual meeting or any adjournment or
postponement thereof.
Recommendation
of the Board of Directors of BFC
For the reasons described in this joint proxy
statement/prospectus, the board of directors of BFC has
determined that the merger agreement and the transactions
contemplated thereby are advisable, fair to and in the best
interests of BFC and its shareholders, has approved the merger
agreement and the transactions contemplated thereby, and
recommends that BFCs shareholders vote FOR the
merger and the related transactions. See The
Merger Recommendation of the BFC Board and Its
Reasons for the Merger beginning on page 48.
The board of directors of BFC has determined that the election
of two directors for a three-year term to expire at BFCs
2010 annual meeting of shareholders is advisable and in the best
interests of BFC and its shareholders and recommends that
BFCs shareholders vote FOR both of the
nominees for director.
Record
Date; Shares Entitled to Vote; Quorum
Only shareholders of record of BFC at the close of business
on ,
2007, the record date for the BFC annual meeting, are entitled
to notice of, and to vote at, the BFC annual meeting and any
adjournment or postponement thereof. On the BFC record
date, shares
of BFC Class A Common Stock
and shares
of BFC Class B Common Stock were issued and outstanding and
held by
approximately
and
holders of record, respectively. A complete list of these
shareholders will be open for examination by any shareholder of
record at BFCs corporate offices, 2100 West Cypress
Creek Road, Fort Lauderdale, Florida 33309, during regular
business hours for a period of no less than ten days prior to
the BFC annual meeting. The list will also be available for
examination by any shareholder of record present at the BFC
annual meeting.
BFCs shareholders will vote together as a single class on
the merger and the related transactions and on the election of
directors. Each share of BFC Class A Common Stock entitles
the holder thereof to one vote on each proposal. BFC
Class A Common Stock represents in the aggregate 22% of the
general voting power of BFC. The number of votes represented by
each share of BFC Class B Common Stock, which represent in
the aggregate 78% of the general voting power of BFC, is
calculated in accordance with BFCs Articles of
Incorporation. At the BFC
33
annual meeting, each outstanding share of Class B Common
Stock will be entitled
to
votes on each proposal.
A quorum will be present at the BFC annual meeting if a majority
of the shares of BFC common stock outstanding on the BFC record
date are represented, in person or by proxy, at the BFC annual
meeting. In the event that a quorum is not present at the BFC
annual meeting, it is expected that the meeting will be
adjourned to solicit additional proxies. Broker
non-votes and abstentions will be counted for the purpose
of establishing a quorum at the BFC annual meeting.
Vote
Required to Approve the Merger and the Related
Transactions
The proposal to approve the merger and the related transactions
will be approved if it receives the affirmative vote of a
majority of the votes entitled to be cast on such proposal. In
the absence of instructions from the beneficial owners of shares
of BFC common stock, brokers, banks and other nominees will not
have discretionary voting authority with respect to the vote on
the merger and the related transactions. Shares represented by
such broker non-votes, failures to vote and
abstentions will have the same effect as votes against the
merger and the related transactions.
Alan B. Levan, the chairman of the board of directors and chief
executive officer of BFC, and John E. Abdo, the vice chairman of
the board of directors of BFC, collectively beneficially own
approximately 44.4% of the outstanding shares of BFC
Class A Common Stock and 86.4% of the outstanding shares of
BFC Class B Common Stock, representing approximately 77.1%
of the total voting power of BFC, and have indicated their
intention to vote their shares of BFC common stock in favor of
the merger and the related transactions at the BFC annual
meeting. If the shares of BFC common stock beneficially owned by
Messrs. Levan and Abdo are voted as expected to approve the
merger and the related transactions, then the approval of the
merger and the related transactions by BFCs shareholders
would be assured.
Vote
Required to Approve the Election of Directors
The affirmative vote of a plurality of the votes cast at the BFC
annual meeting is required to approve the election of directors.
In the absence of instructions from the beneficial owners of
shares of BFC common stock, brokers, banks and other nominees
will have discretionary voting authority with respect to the
vote on the election of directors. Broker non-votes,
failures to vote and abstentions will have no effect on the
election of directors.
Shares Owned
by Directors and Executive Officers of BFC
At the close of business on the BFC record date, directors and
executive officers of BFC and their affiliates collectively
beneficially owned and were entitled to vote
shares of BFC Class A Common Stock, representing
approximately % of the shares of BFC Class A
Common Stock outstanding on that date,
and shares
of BFC Class B Common Stock, representing
approximately % of the shares of BFC Class B
Common Stock outstanding on that date. Based on such share
ownership, as of the BFC record date, directors and executive
officers of BFC and their affiliates represent, in the
aggregate, % of the general voting power of BFC.
Voting by
Proxy
BFCs shareholders may vote their shares of BFC common
stock by proxy. The method of voting by proxy differs for shares
held as a record holder and shares held in street
name. A proxy card is enclosed for the use of BFCs
shareholders of record and voting instructions are included on
such proxy card. BFCs shareholders of record may vote by
completing, dating and signing the enclosed proxy card and
promptly returning it in the enclosed, pre-addressed,
postage-paid envelope or otherwise mailing it to BFC.
Shareholders of BFC who hold their shares in street
name, which means such shares are held of record by a
broker, bank or other nominee, will receive instructions from
their brokers, banks or other nominees that such shareholders
must follow in order to vote their shares. With respect to the
vote on the merger and the related transactions, failure to
provide voting instructions to the broker, bank or other nominee
will result in a broker non-vote for those shares
held in street name, and such broker
non-votes will have the same effect as votes against the
merger and the related transactions. In the absence of
instructions from the beneficial owners of shares of BFC common
stock, brokers, banks and other nominees will
34
have discretionary voting authority with respect to the vote on
the election of directors. All properly signed proxies that are
received prior to the BFC annual meeting and that are not
revoked will be voted at the BFC annual meeting according to the
instructions indicated on the proxies or, if no direction is
indicated, FOR the merger and the related
transactions and FOR the election of each of the
nominees for director.
Voting in
Person
Shareholders of record of BFC that plan to attend the BFC annual
meeting and wish to vote in person will be given a ballot at the
BFC annual meeting. It should be noted, however, that if a
shareholder of BFC holds his, her or its shares in street
name, which means such shares are held of record by a
broker, bank or other nominee, and the shareholder wishes to
vote at the BFC annual meeting, such shareholder must bring to
the BFC annual meeting proxies from the record holders of the
shares authorizing the shareholder to vote at such meeting.
BFCs shareholders should submit their proxies even if they
plan to attend the BFC annual meeting. They can always change
their votes at the meeting.
The votes of all shareholders of BFC are important.
Accordingly, all shareholders of BFC should sign and return the
enclosed proxy card whether or not they plan to attend the BFC
annual meeting in person.
Revocation
of Proxies
A BFC shareholder of record may revoke his, her or its proxy at
any time before such proxy is voted at the BFC annual meeting by
taking any of the following actions:
|
|
|
|
|
delivering to BFCs secretary a signed, written notice of
revocation bearing a date later than the date of the previously
executed proxy, stating that the proxy is revoked;
|
|
|
|
signing and delivering a new proxy, relating to the same shares
and bearing a later date; or
|
|
|
|
attending the BFC annual meeting and voting in person, although
attendance at the BFC annual meeting will not, by itself, revoke
a proxy.
|
If a shareholder of BFC holds his, her or its shares in
street name, the options described in the paragraph
above do not apply. Instead, such shareholder must contact his,
her or its broker, bank or other nominee to find out how to
change his, her or its vote.
Proxy
Solicitation
BFC is soliciting proxies for its 2007 annual meeting of
shareholders. BFC will bear the entire cost of soliciting
proxies from its shareholders, except that BFC and Levitt have
each agreed to share equally all expenses incurred in connection
with the printing, mailing and filing with the SEC of this joint
proxy statement/prospectus and the registration statement of
which this joint proxy statement/prospectus is a part. In
addition to the solicitation of proxies by mail, BFC will
request that brokers, banks and other nominees send proxies and
proxy materials to BFCs beneficial shareholders and secure
their voting instructions, if necessary. BFC will reimburse
those record holders for their reasonable expenses in so doing.
BFC also may use its directors, officers and other employees,
who will not be specially compensated, to solicit proxies from
BFCs shareholders, either personally or by telephone, the
Internet, telegram, facsimile or special delivery letter.
Other
Business
BFC does not expect that any matter other than the proposals
presented in this joint proxy statement/prospectus will be
brought before the BFC annual meeting. However, if other matters
are properly brought before the BFC annual meeting or any
adjournment or postponement thereof, the persons named as
proxies will vote in accordance with their best judgment with
respect to those matters.
35
Assistance
If you are a shareholder of BFC and you need assistance in
completing your proxy card or have questions regarding the BFC
annual meeting, please contact BFC Financial Corporation, Attn:
Investor Relations by mail at 2100 West Cypress Creek Road,
Fort Lauderdale, FL 33309 or by telephone at
(954) 940-4994.
If you are a shareholder of BFC and have questions regarding the
merger, you may also call Levitts information agent,
Georgeson Shareholder, toll-free at
(866) 877-6017.
36
THE
LEVITT ANNUAL MEETING
General
This joint proxy statement/prospectus is being provided to
Levitts shareholders as part of a solicitation of proxies
by the board of directors of Levitt for use at Levitts
2007 annual meeting of shareholders.
Date,
Time and Place
Levitts 2007 annual meeting of shareholders will be held
on ,
2007
at
local time, at The Westin Fort Lauderdale, 400 Corporate
Drive, Fort Lauderdale, Florida 33334.
Purposes
of the Levitt Annual Meeting
The purposes of the Levitt annual meeting are:
1. To consider and vote upon a proposal to approve the
merger agreement.
2. To consider and vote upon a proposal to elect three
directors to the board of directors of Levitt to serve until the
earlier of Levitts 2010 annual meeting of shareholders or
the consummation of the merger.
3. To transact such other business as may properly be
brought before the Levitt annual meeting or any adjournment or
postponement thereof.
Recommendation
of the Board of Directors of Levitt
For the reasons described in this joint proxy
statement/prospectus, the board of directors of Levitt has
determined that the merger and the other transactions
contemplated by the merger agreement are advisable, fair to and
in the best interests of Levitts shareholders, has
approved the merger agreement and the transactions contemplated
thereby and recommends that Levitts shareholders vote
FOR the approval of the merger agreement. See
The Merger Recommendation of the Levitt Board
and Its Reasons for the Merger beginning on page 50.
The board of directors of Levitt has determined that the
election of three directors to serve until the earlier of
Levitts 2010 annual meeting of shareholders and the
consummation of the merger is advisable and in the best
interests of Levitt and its shareholders and recommends that
Levitts shareholders vote FOR all of the
nominees for director.
Record
Date; Shares Entitled to Vote; Quorum
Only shareholders of record of Levitt at the close of business
on ,
2007, the record date for the Levitt annual meeting, are
entitled to notice of, and to vote at, the Levitt annual meeting
and any adjournment or postponement thereof. On the Levitt
record
date, shares
of Levitt Class A Common Stock were issued and outstanding
and owned by
approximately
holders of record, and 1,219,031 shares of Levitt
Class B Common Stock were issued and outstanding, all of
which were owned by BFC. A complete list of these shareholders
will be open for examination by any shareholder of record at
Levitts corporate offices, 2200 West Cypress Creek
Road, Fort Lauderdale, Florida 33309, during regular
business hours for a period of no less than ten days prior to
the Levitt annual meeting. The list will also be available for
examination by any shareholder of record present at the Levitt
annual meeting.
Holders of Levitt Class A Common Stock and Class B
Common Stock are entitled to vote as separate classes on the
approval of the merger agreement, with each such holder entitled
to one vote per share owned.
Holders of Levitt Class A Common Stock and Class B
Common Stock will vote as a single class on the election of
directors. Holders of Levitt Class A Common Stock are
entitled to one vote per share on the election of directors,
with all such holders having in the aggregate 53% of the general
voting power. The number of votes represented by each share of
Levitt Class B Common Stock, which represent in the
aggregate 47% of the general voting power, is
37
calculated each year in accordance with Levitts Articles
of Incorporation. At the Levitt annual meeting, each outstanding
share of Levitt Class B Common Stock will be entitled
to
votes on the election of directors.
With respect to the vote on the merger agreement, a quorum will
be present at the Levitt annual meeting if shares representing a
majority of the voting power of Levitt Class A Common Stock
outstanding on the Levitt record date and shares representing a
majority of the voting power of Levitt Class B Common Stock
outstanding on the Levitt record date are represented, in person
or by proxy, at the meeting. There is no independent quorum
needed for the majority of the minority vote
required by the terms of the merger agreement. With respect to
the vote on the election of directors, a quorum will be present
at the Levitt annual meeting if shares representing a majority
of the aggregate voting power of Levitt common stock outstanding
on the Levitt record date are represented, in person or by
proxy, at the meeting. In the event that a quorum with respect
to the vote on the merger agreement or election of directors is
not present at the Levitt annual meeting, it is expected that
the meeting will be adjourned to solicit additional proxies.
Broker non-votes and abstentions will be counted for
the purpose of establishing a quorum at the Levitt annual
meeting.
Vote
Required to Approve the Merger Agreement
Under the FBCA, both the affirmative vote of a majority of the
votes entitled to be cast by holders of Levitt Class A
Common Stock and the affirmative vote of a majority of the votes
entitled to be cast by holders of Levitt Class B Common
Stock are required to approve the merger agreement. In the
absence of instructions from the beneficial owners of shares of
Levitt Class A Common Stock, brokers, banks and other
nominees will not have discretionary voting authority with
respect to the approval of the merger agreement. With respect to
the vote required by the FBCA, shares represented by such
broker non-votes, abstentions and failures to vote
will have the same effect as votes against the approval of the
merger agreement.
In addition to the shareholder vote required under the FBCA, the
merger agreement requires the approval of a majority of
the minority of Levitts shareholders. Pursuant to
the terms of the merger agreement, the merger agreement will be
approved by a majority of the minority of
Levitts shareholders only if the number of shares of
Levitt Class A Common Stock voted in person or by proxy at
the Levitt annual meeting to approve the merger agreement
exceeds the number of shares of Levitt Class A Common Stock
voted in person or by proxy at the Levitt annual meeting against
the merger agreement, excluding for the purposes of this
approval, shares owned by BFC and directors of Levitt who are
not independent within the meaning of the rules and regulations
of the New York Stock Exchange. Abstentions, failures to vote
and broker non-votes will have no effect on the
approval of the merger agreement with respect to the
majority of the minority vote.
BFC is the owner of approximately 11% of the outstanding shares
of Levitt Class A Common Stock and all of the outstanding
shares of Levitt Class B Common Stock and has agreed to
vote such shares at the Levitt annual meeting in favor of the
approval of the merger agreement. It is also anticipated that
BFCs directors and executive officers, who collectively
own less than 1% of the outstanding shares of Levitt
Class A Common Stock (other than the shares beneficially
owned through BFC), will vote their shares of Levitt
Class A Common Stock in favor of the approval of the merger
agreement although they are not required to do so.
Vote
Required to Approve the Election of Directors
The affirmative vote of a plurality of the votes cast at the
Levitt annual meeting is required to approve the election of
directors. In the absence of instructions from the beneficial
owners of shares of Levitt common stock, brokers, banks and
other nominees will have discretionary voting authority with
respect to the vote on the election of directors. Broker
non-votes, failures to vote and abstentions will have no
effect on the election of directors.
Shares Owned
by Directors and Executive Officers of Levitt
At the close of business on the Levitt record date, directors
and executive officers of Levitt and their affiliates
beneficially owned and were entitled to vote
shares of Levitt Class A Common Stock, collectively,
representing approximately % of the shares of Levitt
Class A Common Stock outstanding on that date.
38
Voting by
Proxy
Levitts shareholders may vote their shares of Levitt
common stock by proxy. The method of voting by proxy differs for
shares held as a record holder and shares held in street
name. A proxy card is enclosed for the use of
Levitts shareholders of record and voting instructions are
included on such proxy card. Levitts shareholders of
record may vote by completing, dating and signing the enclosed
proxy card and promptly returning it in the enclosed,
pre-addressed, postage-paid envelope or otherwise mailing it to
Levitt. Shareholders of Levitt who hold their shares in
street name, which means such shares are held of
record by a broker, bank or other nominee, will receive
instructions from their brokers, banks or other nominees that
such shareholders must follow in order to vote their shares.
With respect to the vote on the merger agreement, failure to
provide voting instructions to the broker, bank or other nominee
will result in a broker non-vote for those shares
held in street name. In the absence of instructions
from the beneficial owners of shares of Levitt common stock,
brokers, banks and other nominees will have discretionary voting
authority with respect to the vote on the election of directors.
All properly signed proxies that are received prior to the
Levitt annual meeting and that are not revoked will be voted at
the Levitt annual meeting according to the instructions
indicated on the proxies or, if no direction is indicated,
FOR the approval of the merger agreement and
FOR each of the nominees for director.
Voting in
Person
Shareholders of record of Levitt that plan to attend the Levitt
annual meeting and wish to vote in person will be given a ballot
at the Levitt annual meeting. It should be noted, however, that
if a shareholder of Levitt holds his, her or its shares in
street name, which means such shares are held of
record by a broker, bank or other nominee, and the shareholder
wishes to vote at the Levitt annual meeting, such shareholder
must bring to the Levitt annual meeting proxies from the record
holders of the shares authorizing the shareholder to vote at
such meeting.
Shareholders of Levitt should submit their proxies even if they
plan to attend the Levitt annual meeting. They can always change
their votes at the meeting.
The votes of all shareholders of Levitt are important.
Accordingly, all such shareholders should sign and return the
enclosed proxy card whether or not they plan to attend the
Levitt annual meeting in person.
Revocation
of Proxies
A Levitt shareholder of record may revoke his, her or its proxy
at any time before such proxy is voted at the Levitt annual
meeting by taking any of the following actions:
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delivering to Levitts secretary a signed, written notice
of revocation bearing a date later than the date of the
previously executed proxy, stating that the proxy is revoked;
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signing and delivering a new proxy, relating to the same shares
and bearing a later date; or
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attending the Levitt annual meeting and voting in person,
although attendance at the Levitt annual meeting will not, by
itself, revoke a proxy.
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If a shareholder of Levitt holds his, her or its shares in
street name, the options described in the paragraph
above do not apply. Instead, such shareholder must contact his,
her or its broker, bank or other nominee to find out how to
change his, her or its vote.
Proxy
Solicitation
Levitt is soliciting proxies for its 2007 annual meeting of
shareholders. Levitt will bear the entire cost of soliciting
proxies from its shareholders, except that BFC and Levitt have
each agreed to share equally all expenses incurred in connection
with the printing, mailing and filing with the SEC of this joint
proxy statement/prospectus and the registration statement of
which this joint proxy statement/prospectus is a part. In
addition to the solicitation of proxies by mail, Levitt will
request that brokers, banks and other nominees send proxies and
proxy materials to Levitts beneficial shareholders and
secure their voting instructions, if necessary. Levitt will
reimburse those record holders for their reasonable expenses in
so doing. Additionally, Levitt has engaged Georgeson
Shareholder, a proxy solicitation firm, to assist in the
solicitation of proxies from its shareholders with respect to
vote on the merger
39
agreement. Levitt will pay Georgeson Shareholder
$ for its services and reimburse
its out of pocket expenses for such items as mailing, copying,
phone calls, faxes and other related matters, and will indemnify
Georgeson Shareholder against any losses arising out of its
proxy soliciting services on Levitts behalf. Levitt also
may use its directors, officers and other employees, who will
not be specially compensated, to solicit proxies from
Levitts shareholders, either personally or by telephone,
the Internet, telegram, facsimile or special delivery letter.
Other
Business
Levitt does not expect that any matter other than the proposals
presented in this joint proxy statement/prospectus will be
brought before the Levitt annual meeting. However, if other
matters are properly presented at the Levitt annual meeting or
any adjournment or postponement thereof, the persons named as
proxies will vote in accordance with their best judgment with
respect to those matters.
Assistance
If you are a shareholder of Levitt and you need assistance in
completing your proxy card or have questions regarding the
Levitt annual meeting, please contact Levitt Corporation, Attn:
Investor Relations by mail at 2200 West Cypress Creek Road,
Fort Lauderdale, FL 33309 or by telephone at
(954) 940-4995.
If you are a shareholder of Levitt and have questions regarding
the merger, you may also call Levitts information agent,
Georgeson Shareholder, toll-free at
(866) 413-8827.
40
THE
COMPANIES
BFC
BFC, a Florida corporation, is a holding company that invests in
and acquires businesses in diverse industries. BFCs
ownership interests include direct and indirect interests in
businesses in a variety of sectors, including consumer and
commercial banking, investment banking, homebuilding and
master-planned community development, time-share and vacation
ownership, Asian-themed restaurant chains and various real
estate and venture capital investments. BFCs activities
primarily relate to monitoring and managing its investments,
particularly the operations of its two largest investments,
Levitt and BankAtlantic Bancorp. BFC currently owns
approximately 11% of the outstanding shares of Levitt
Class A Common Stock and all of the outstanding shares of
Levitt Class B Common Stock, representing approximately 17%
of Levitts total common stock and 53% of the general
voting power of Levitt. BFC, itself, has no significant
operations other than activities relating to the monitoring and
managing of its existing investments and the identification,
analysis and, in appropriate cases, acquisition of new
investments.
BankAtlantic Bancorp is a Florida-based financial services
holding company which owns BankAtlantic, a federally chartered,
federally insured savings bank. BFC has held a controlling
interest in BankAtlantic since 1987. BFC owns
8,329,236 shares of BankAtlantic Bancorp Class A
Common Stock and all of the shares of BankAtlantic Bancorp
Class B Common Stock. Each share of BankAtlantic Bancorp
Class A Common Stock entitles the holder thereof to one
vote, and BankAtlantic Bancorps Class A Common Stock
represents in the aggregate 53% of the combined voting power of
BankAtlantic Bancorp. BankAtlantic Bancorp Class B Common
Stock represents the remaining 47% of the combined vote.
BankAtlantic Bancorp is consolidated in BFCs financial
statements.
Through December 31, 2003, Levitt was a wholly owned
subsidiary of BankAtlantic Bancorp. On December 2, 2003,
the board of directors of BankAtlantic Bancorp authorized the
spin-off of Levitt to the shareholders of BankAtlantic Bancorp
by declaring a stock dividend of all of BankAtlantic
Bancorps shares of Levitt. BankAtlantic Bancorps
shareholders, including BFC, each received one share of Levitt
Class A Common Stock for every four shares of BankAtlantic
Bancorp Class A Common Stock owned, and one share of Levitt
Class B Common Stock for every four shares of BankAtlantic
Bancorp Class B Common Stock owned. The shares were
distributed on December 31, 2003 to shareholders of record
on December 18, 2003. As a consequence of the spin-off,
BFCs ownership position in Levitt on December 31,
2003 was initially identical to its ownership position in
BankAtlantic Bancorp, including its control of more than 50% of
the vote of these companies. In April 2004, Levitt completed a
public offering of 5,000,000 shares of its Class A
Common Stock, resulting in net proceeds to Levitt of
approximately $114.8 million. As a result of this offering,
BFCs ownership position in Levitt was reduced to 16.6% of
its total equity and an approximately 53% voting interest as of
March 20, 2007. Accordingly, Levitt continues to be
consolidated in BFCs financial statements.
BFCs principal executive offices are located at
2100 West Cypress Creek Road, Fort Lauderdale, Florida
33309, and its telephone number is
(954) 940-4900.
Levitt
Levitt, a Florida corporation, engages in homebuilding and real
estate development with activities throughout the Southeastern
United States. Levitts principal real estate activities,
the development of single-family homes and master-planned
communities, are conducted through its Homebuilding and Land
Divisions. Levitts Homebuilding Division operates through
its homebuilding subsidiary, Levitt and Sons, and its Land
Division operates through its master-planned community
development subsidiary, Core Communities. In addition, Levitt
also owns approximately 31% of the outstanding common stock of
Bluegreen, which acquires, develops, markets and sells
time-share vacation ownership interests primarily in
drive-to vacation destinations as well as
residential home sites in some cases on properties featuring
golf courses or other related amenities.
Levitt and Sons is primarily a real estate developer of single
and multi-family home and townhome communities specializing in
both active adult and family communities in Florida, Georgia,
South Carolina and Tennessee. Levitt and Sons and its
predecessors have built more than 200,000 homes since 1929. It
has strong brand awareness as Americas oldest homebuilder
and is recognized nationally for having built the Levittown
41
communities in New York, New Jersey and Pennsylvania. Levitt
acquired Levitt and Sons in December 1999. Levitt and Sons
includes the operations of Bowden Building Corporation, a
builder of single family homes based in Tennessee, which was
acquired in April 2004. In the second quarter of 2006, Levitt
conducted an impairment review after profitability and cash
flows in Tennessee declined to a point where the carrying value
of the assets exceeded their market value. As a result of this
review, the $1.3 million of goodwill recorded in connection
with Levitts acquisition of Bowden Building Corporation
was fully written off in 2006 based on a determination that the
carrying value of the assets exceeding their current market
value.
Core Communities develops master-planned communities and is
currently developing Tradition, Florida, which is located in
Port St. Lucie, Florida and Tradition, South Carolina, which is
located in Hardeeville, South Carolina. Core Communities
original community is St. Lucie West. Substantially completed in
2006, it is a 4,600 acre community located in Port St.
Lucie, Florida consisting of approximately 6,000 built and
occupied homes, numerous businesses, a university campus and the
New York Mets spring training facility. Core
Communities second master-planned community, Tradition,
Florida also located in Port St. Lucie, Florida, encompasses
more than 8,200 total acres, including approximately five miles
of frontage on Interstate 95 and will have approximately 18,000
residential units and 8.5 million square feet of commercial
space. Core Communities Tradition, South Carolina
development consists of approximately 5,400 acres, and is
currently entitled for up to 9,500 residential units, with
1.5 million square feet of commercial space, in addition to
recreational areas, educational facilities and emergency
services. Land sales commenced in Tradition, South Carolina in
the fourth quarter 2006.
Levitts principal executive offices are located at
2200 West Cypress Creek Road, Fort Lauderdale, Florida
33309, and its telephone number is
(954) 958-1800.
42
THE
MERGER
General
The boards of directors of BFC and Levitt have each approved the
merger agreement and the transactions contemplated thereby. Upon
consummation of the merger, Levitt will merge with and into
Merger Sub, a wholly owned subsidiary of BFC. Merger Sub will be
the surviving corporation (the Surviving
Corporation) and will remain a wholly owned subsidiary of
BFC. Under the terms of the merger agreement and subject to
adjustment under limited circumstances pursuant to the terms of
the merger agreement, holders of Levitt Class A Common
Stock (other than BFC and holders who exercise and perfect their
appraisal rights) will be entitled to receive 2.27 shares
of BFC Class A Common Stock in exchange for each share of
Levitt Class A Common Stock owned by such holders and cash
in lieu of any fractional shares.
The terms and conditions of the merger are contained in the
merger agreement, which is attached as Annex A to this
joint proxy statement/prospectus. Please carefully read the
merger agreement, as it is the legal document that governs the
merger.
Background
of the Merger
As a holding company that invests in and acquires businesses in
diverse industries, BFCs management and board of directors
are focused on the companys long-term strategic goals and,
when appropriate, consider various strategic opportunities in
order to maximize shareholder value. As part of this focus,
BFCs management and board of directors review and assess
BFCs current investments as well as new investment
opportunities.
As a homebuilder and master-planned community developer, Levitt
has been affected by the current real estate market and
continuing weakness in the homebuilding industry. As a result of
declines in sales orders, increases in cancellations and a
general compression of margins, Levitt has experienced negative
cash flow.
On October 23, 2006, Levitts board of directors
authorized Levitts management to pursue alternatives with
a view to addressing the negative effects of the real estate and
homebuilding markets on the financial condition of Levitt.
Levitts board of directors authorized the company to
pursue a rights offering of its Class A Common Stock, to
sell additional subordinated investment notes and to attempt to
secure additional lines of credit. At the same time,
Levitts board of directors also authorized the formation
of a special committee of the board to consider a strategic
transaction involving Levitt, including a sale of Levitt to an
affiliate. The Levitt special committee was comprised of
Messrs. Blosser, Kahn, Joel Levy, Alan Levy and Nicholson,
representing all of the independent directors of Levitt.
Levitts board of directors delegated to the Levitt special
committee the authority to investigate and negotiate a potential
strategic transaction, including a transaction with an affiliate
of Levitt, and to take all other actions it deemed necessary to
pursue such strategic transaction, including the hiring of
independent legal and financial advisors.
On October 24, 2006, BFCs board of directors held a
meeting at which, among other things, a possible combination of
or merger between BFC and Levitt was discussed. The board
authorized the formation of a special committee in order to
review and evaluate such a transaction and to devise a plan for
such a combination so as to maximize liquidity and the ability
to raise capital for Levitt. The BFC special committee was
comprised of D. Keith Cobb, chairman, Earl Pertnoy, Oscar
Holzmann, and Neil Sterling. The board delegated to the BFC
special committee the ability to exercise all of the
boards power and authority in examining and evaluating the
merits, including the fairness to BFCs shareholders, of
any transaction involving BFC and Levitt, to negotiate on behalf
of BFC the terms and conditions of any such transaction, to
reject any proposal relating to any such transaction which the
committee determined it could not favorably recommend to the BFC
board, to select and retain such financial advisors and legal
counsel as the committee deemed appropriate and to take any
other actions necessary or incidental to the foregoing.
BFCs board specifically noted that it had no interest in
selling its shares of Levitt common stock and would, as a
shareholder of Levitt, vote against any transaction involving
the disposition of its interests in Levitt.
The BFC special committee selected Stearns Weaver, regular
outside counsel to BFC, as legal advisor to the BFC special
committee and BFC. The BFC special committee and Stearns Weaver
held an initial meeting on
43
November 1, 2006. At this meeting, Stearns Weaver discussed
generally with the BFC special committee the purpose of the
special committee, the relationships of Alan B. Levan and John
E. Abdo to both BFC and Levitt and the BFC boards reasons
for appointing a special committee to consider a potential
transaction between BFC and Levitt. Stearns Weaver then
discussed generally the process which would be followed if a
transaction was pursued, as well as the fiduciary and legal
duties that may be applicable to the members of the BFC special
committee in connection with its evaluation and negotiation of a
transaction between BFC and Levitt. Finally, Glen Gilbert,
BFCs chief financial officer at the time of the meeting,
presented a brief review of the pro forma financial statements
of a combined BFC and Levitt.
The Levitt special committee selected Blank Rome LLP
(Blank Rome) as its independent legal advisor and
Houlihan Lokey as its independent financial advisor, based on
each firms reputation and experience in representing
special committees in similar types of transactions. The Levitt
special committee and its financial and legal advisors held an
initial telephonic meeting on November 27, 2006. At this
meeting, Blank Rome discussed generally with the Levitt special
committee the process and procedure of conducting committee
meetings and generally discussed the fiduciary and legal duties
that may be applicable to the Levitt special committee in
connection with its evaluation of potential strategic
transaction alternatives, including with affiliated parties. At
this meeting, Houlihan Lokey discussed with the Levitt special
committee potential alternatives. Houlihan Lokey also generally
discussed with the Levitt special committee the diligence
process that it would undertake in connection with any proposed
transaction.
The BFC special committee held a meeting on December 1,
2006, which was attended by Sandler ONeill at the
invitation of the BFC special committee. At this meeting,
Sandler ONeill summarized for the BFC special committee
its background and qualifications. After discussion, the BFC
special committee authorized the retention of Sandler
ONeill as financial advisor. Sandler ONeill then
reviewed the potential advantages of the merger, including the
potential for more visibility and greater liquidity at BFC, a
more balanced portfolio mix and a diversity of risk, the
opportunity to increase BFCs investment in a well
respected brand, an increase in BFCs book value and the
fact that the transaction was expected to be accretive to
earnings in the long-term. Sandler ONeill also discussed
potential risks of the merger, including dilution to earnings in
the short-term, the risks associated with the condition of the
homebuilding industry and Levitts short-term cash needs.
Sandler ONeill then reviewed the possible structures of a
transaction, and the basis for a merger of equals
was discussed. Sandler ONeill discussed the fact that
BFCs current control position, shared management, shared
services and Levitts negative cash flows weighed in favor
of a merger of equals and reviewed other recently consummated
merger of equals transactions. The committee then reviewed near
term industry pressures affecting Levitt, including its asset
concentration in the Florida market, cash flow needs and margin
compression, as well as Levitts long-term potential.
Thereafter, the BFC special committee authorized Sandler
ONeill to proceed with the preparation of a preliminary
term sheet detailing BFCs proposed merger of equals to be
presented to the Levitt special committee and its financial
advisors.
On December 4, 2006, Sandler ONeill delivered to the
Levitt special committee BFCs initial offer to acquire
Levitt. The initial offer proposed a merger of equals in which
BFC would acquire Levitt in a
stock-for-stock
transaction with an exchange ratio that would be determined
based on the respective market capitalizations of each company.
Based on the market capitalizations of each company on the date
of the proposal, the exchange ratio would have been
1.9123 shares of BFC Class A Common Stock for each
share of Levitt Class A Common Stock outstanding. The offer
contemplated a tax-free reorganization, which would result in
Levitt becoming a wholly-owned subsidiary of BFC. The offer also
envisioned that the BFC board of directors would be fixed at 11
members, comprised of Messrs. Levan and Abdo as well as the
four existing independent directors of BFC and Levitts
five independent directors. Messrs. Levan and Abdo would
continue to serve in their respective capacities as officers of
BFC after the merger.
The Levitt special committee held a meeting on December 7,
2006 to discuss the BFC offer. This meeting was also attended by
Mr. Levan and representatives from Sandler ONeill,
Houlihan Lokey, Blank Rome and Stearns Weaver. Mr. Levan
made a presentation regarding BFCs proposal, including
alternatives that might be considered to the offer.
Mr. Levan noted that a sale of Levitt to a third party was
not a possibility, because BFC was not presently interested in
selling Levitt and BFCs approval would be required for a
sale because it owns all of the outstanding shares of Levitt
Class B Common Stock and approximately 53% of Levitts
total voting power. Mr. Levan stated that, in BFCs
view, the proposed transaction would enhance the combined
companies future prospects and provide
44
additional liquidity and capital resources to Levitt. Sandler
ONeill also made a presentation to the Levitt special
committee at this meeting regarding the offer and its
observations regarding its benefits, pro forma financial impact,
risks and challenges. The Levitt special committee then met
separately in executive session with its advisors at this
meeting to discuss the BFC offer and the presentations by BFC
and Sandler ONeill.
During the remainder of 2006 and into the beginning of 2007,
Blank Rome and Houlihan Lokey continued their due diligence
reviews of Levitt and BFC, including conducting a number of
management and due diligence review sessions that were held at
BankAtlantic Bancorps and Levitts headquarters in
Fort Lauderdale and elsewhere. Houlihan Lokey also
continued to review the initial BFC offer from a financial point
of view. Houlihan Lokey analyzed the exchange ratio and
conducted a financial review of the relevant companies,
including inquiries with regard to BFCs liquidity and
credit availability and the financial statements, projections
and other relevant data available regarding both BFC and Levitt.
The Levitt special committee held additional meetings with its
advisors during this period at which it discussed the proposed
transaction, its financial terms, alternatives to the
transaction and relevant information provided by its advisors.
On January 10, 2007, the Levitt special committee held a
telephonic meeting at which representatives of Blank Rome and
Houlihan Lokey participated. The Levitt special committee
initially discussed the announcement made on January 9,
2007 that BankAtlantic Bancorp had agreed to sell its Ryan Beck
Holdings, Inc. brokerage and investment banking subsidiary to
Stifel Financial Corp. and the potential impact of this
transaction on the valuation of BFC. Houlihan Lokey discussed
with the Levitt special committee information regarding its
preliminary valuation analyses for Levitt and other financial
information and analyses. After a lengthy discussion of the
valuation information and other factors, the Levitt special
committee took exception with BFCs view that the proposed
acquisition be structured as a merger of equals and determined
to request that BFC pay an appropriate premium for Levitts
stock. The Levitt special committee also authorized Houlihan
Lokey to propose to Sandler ONeill a counteroffer
including an acquisition price of approximately $17.00 per
share of Levitt Class A Common Stock (representing an
exchange ratio based upon market prices at that time of
approximately 2.59) and to have discussions with Sandler
ONeill regarding the implementation of a collar mechanism
that would aid in protecting Levitts shareholders from a
decrease in the stock price of BFC Class A Common Stock
prior to the closing of the transaction. On or about
January 11, 2007, Houlihan Lokey communicated such
counteroffer, including the collar mechanism, to Sandler
ONeill.
Over the course of the next week, the Levitt special committee
and BFC, primarily through their financial advisors, engaged in
negotiations and the BFC special committee, BFCs
management and Sandler ONeill discussed Levitts
counteroffer and potential responses. During these discussions
it became apparent that the transaction would not be consummated
as a merger of equals, and that if BFC wished to proceed, it
would have to pay a premium to Levitts shareholders. The
Levitt special committee also held a number of meetings during
this time with its advisors to discuss the results of Houlihan
Lokeys discussions with Sandler ONeill regarding the
Levitt special committees counteroffer. Sandler
ONeill communicated to Houlihan Lokey that BFC would be
amenable to paying a premium to Levitts shareholders, but
that the parties would not be able to reach an agreement on the
economic terms of the transaction if the merger consideration
were stated in terms of a fixed price. BFC, through Sandler
ONeill, communicated to Houlihan Lokey a counteroffer of a
2.22 fixed exchange ratio.
On January 15, 2007, Blank Rome provided information to the
Levitt special committee regarding various legal aspects of the
proposed transaction.
At a Levitt special committee meeting on January 16, 2007,
Houlihan Lokey discussed with the Levitt special committee the
status of negotiations regarding the economic terms of the
proposed transaction, including BFCs position that the
parties would not likely be able to reach an agreement on the
economic terms of the transaction if the merger consideration
were stated in terms of a fixed price. Houlihan Lokey informed
the Levitt special committee that BFC, through Sandler
ONeill, had proposed a counteroffer that included a 2.22
fixed exchange ratio.
Based on this information, the Levitt special committee agreed
to consider a fixed exchange ratio, and discussed with Houlihan
Lokey the relative valuations of Levitt and BFC in connection
with the negotiation of the exchange ratio, as well as
mechanisms that could provide holders of Levitt Class A
Common Stock some protection from decreases in the price of BFC
Class A Common Stock after execution and announcement of
the merger
45
agreement but before consummation of the merger. The Levitt
special committee agreed that Houlihan Lokey should approach
Sandler ONeill to discuss (1) a new counteroffer
containing a fixed exchange ratio in the range of 2.25 to 2.28,
which then was about a 30% premium to the trading price of
Levitt Class A Common Stock, (2) what price
protections, if any, the parties might consider, and (3) a
request to consider adding a majority of the
minority voting requirement with respect to the Levitt
Class A Common Stock. The Levitt special committee believed
that the latter two provisions were important to protect the
economic rights of the minority holders of Levitt Class A
Common Stock as well as to permit the shareholders who were not
affiliated with BFC to have a separate vote on the transaction.
Houlihan Lokey subsequently delivered a new counteroffer to
Sandler ONeill, which counteroffer included (1) a
fixed exchange ratio in the range of 2.25 to 2.28,
(2) potential price protections for Levitt shareholders and
(3) a majority of the minority voting
requirement with respect to the Levitt Class A Common
Stock. Negotiations continued between the parties, primarily
through their advisors.
On or about January 17, 2007, the parties preliminarily
agreed to an exchange ratio of 2.27 shares of BFC
Class A Common Stock for each share of Levitt Class A
Common Stock outstanding, subject to agreement upon other
material terms. On January 19, 2007, Stearns Weaver
distributed a preliminary draft of a merger agreement that
included this exchange ratio.
The Levitt special committee and BFC, through their legal and
financial advisors, began to negotiate the terms of the proposed
merger agreement. The Levitt and BFC special committees
continued to meet with their respective financial and legal
advisors to review and discuss the status and terms of the
proposed merger, including the financial and legal due diligence
conducted to date and the terms of the merger agreement and the
structure of the proposed merger. At these meetings, the Levitt
special committee also discussed with its advisors the strategic
implications and potential benefits and risks of the proposed
merger to the shareholders of Levitt other than BFC and its
affiliates. The Levitt special committee instructed Houlihan
Lokey to once again seek price protection for Levitts
minority shareholders and Blank Rome to negotiate for the
inclusion in the merger agreement of a majority of the
minority voting requirement with respect to the merger.
The parties continued to negotiate the terms of the merger, and
on January 23, 2007, the BFC special committee met with
representatives of Sandler ONeill and Stearns Weaver to
discuss the status of negotiations. Sandler ONeill
reviewed the history of the parties negotiations with
respect to the economic terms of the merger and reviewed the
proposed terms, including specifically a fixed exchange ratio of
2.27 shares of BFC Class A Common Stock for every
share of Levitt Class A Common Stock and a provision which
would give Levitt a termination right if the stock price of both
BFC and BankAtlantic Bancorp dropped by 30% or more. Stearns
Weaver then discussed the proposed vote required to approve the
transaction. Under Florida law, the holders of Levitt
Class A Common Stock would vote as a separate class, and in
order for the merger to be approved, a majority of the
outstanding shares of Levitt Class A Common Stock
(including shares held by BFC) would have to be voted in favor
of the merger. Stearns Weaver answered the BFC special
committees questions regarding the terms of the
transaction and the transaction generally but also noted that
the terms were still subject to negotiation.
On January 24, 2007, Blank Rome provided the Levitt special
committee with information relating to its due diligence review.
On January 25, 2007, Blank Rome delivered the Levitt
special committees initial comments to the merger
agreement to Stearns Weaver. Over the course of the next several
days, the Levitt special committee and its advisors and BFC,
through its legal and financial advisors, continued to review,
negotiate and discuss the terms and conditions of the merger
agreement and the potential merger.
On January 30, 2007, the Levitt special committee met with
its legal and financial advisors and the BFC special committee
separately met with its legal and financial advisors. A copy of
the proposed final draft of the merger agreement and materials
outlining Houlihan Lokeys analysis of the merger had
previously been delivered to the Levitt special committee prior
to its meeting and a copy of the proposed final draft of the
merger agreement and materials outlining Sandler
ONeills analysis of the merger had previously been
delivered to the BFC special committee prior to its meeting. The
proposed merger agreement included: (1) a 2.27 exchange
ratio, (2) a majority of the minority voting
provision, (3) a termination provision if the Levitt
special committee or the Levitt board of
46
directors has (a) finally determined to approve or
recommend a superior proposal to Levitts shareholders,
(b) withdrawn its recommendation of the merger and the
merger agreement or (c) modified or changed its
recommendation in a manner adverse to BFC, (4) as a form of
price protection, a condition that would permit Levitt to
terminate the agreement if both BankAtlantic Bancorps and
BFCs Class A Common Stock experienced greater than a
30% decline in its average stock price during the 10 consecutive
trading days ending two days prior to the effective time of the
merger, (5) a covenant by BFC to use commercially
reasonable efforts to support the liquidity of Levitt after the
merger and (6) a provision requiring all seven directors of
Levitt who are not also directors of BFC to be appointed to
BFCs board in connection with the merger.
At their respective meetings, the Levitt and BFC special
committees discussed with their respective advisors the proposed
final drafts of the merger agreement, and Blank Rome reviewed
the applicable fiduciary duty standards with the Levitt special
committee. Houlihan Lokey presented to the Levitt special
committee its analysis of the exchange ratio and provided its
written fairness opinion, dated as of January 30, 2007,
that the consideration to be received was, as of that date,
fair, from a financial point of view, to the holders of Levitt
Class A Common Stock, other than BFC and certain of its
affiliates. Sandler ONeill presented to the BFC special
committee its analysis of the merger and the exchange ratio and
provided its oral opinion, subsequently confirmed in writing,
that the consideration to be delivered was, as of that date,
fair, from a financial point of view, to BFCs
shareholders. After discussions and deliberations, the Levitt
special committee unanimously agreed to recommend that
Levitts board of directors approve and adopt the merger
agreement and the transactions contemplated thereby, and the BFC
special committee unanimously agreed to recommend that
BFCs board of directors approve and adopt the merger
agreement and the transactions contemplated thereby.
On January 30, 2007, following the Levitt special committee
meeting, Levitts board of directors met to consider the
merger, with Mr. Levan and Mr. Abdo, who are
affiliates of BFC, each in attendance. The Levitt special
committee informed the Levitt board of directors of its
recommendation to approve and adopt the merger agreement and the
transactions contemplated thereby. After additional discussions
and deliberations, Levitts board of directors, with
Mr. Levan and Mr. Abdo each abstaining, unanimously
approved the merger, the merger agreement and the transactions
contemplated thereby, and recommended that Levitts
shareholders approve the merger agreement.
On January 30, 2007, following the BFC special committee
meeting, BFCs full board of directors met to consider the
merger. The BFC special committee informed the BFC board of
directors of its recommendation to approve and adopt the merger
agreement and the transactions contemplated thereby. After
additional discussions and deliberations, BFCs board of
directors unanimously approved the merger, the merger agreement
and the transactions contemplated thereby, and recommended that
BFCs shareholders approve the merger and the transactions
related thereto.
The merger agreement was thereafter entered into on
January 30, 2007 and publicly announced on the morning of
January 31, 2007.
Role and
Recommendation of the BFC Special Committee
The board of directors of BFC designated a special committee
composed solely of independent directors of BFC to review and
evaluate the terms and conditions and determine the advisability
of a possible business transaction between BFC and Levitt. After
careful review and consideration, the BFC special committee
determined that the merger agreement and the transactions
contemplated thereby are advisable, fair to and in the best
interests of BFC and its shareholders and recommended that the
board of directors of BFC authorize and approve the merger
agreement and the transactions contemplated thereby and
recommend to the shareholders of BFC that they approve the
merger and the related transactions.
In arriving at its determination, the BFC special committee was
aware of the interests of certain officers and directors of BFC
in the merger, as described under The Merger
Interests of Certain Persons in the Merger, and consulted
with BFCs management, as well as Stearns Weaver,
BFCs outside legal counsel, and Sandler ONeill,
BFCs financial advisor, with respect to strategic,
operational, legal, regulatory and other matters. In arriving at
its determination, the BFC special committee also independently
considered the factors described below in The
Merger Recommendation of the BFC Board and Its
Reasons for the Merger. In light of the number and wide
47
variety of factors considered in connection with its evaluation
of the merger, the BFC special committee did not consider it
practicable to, and did not attempt to, quantify, rank or
otherwise assign relative weights to the specific factors
considered in reaching its determination. The BFC special
committee viewed its determination and recommendation as being
based on all of the information available and the factors
presented to and considered by it. In addition, individual
directors serving on the BFC special committee may have given
different weight to different factors.
Recommendation
of the BFC Board and Its Reasons for the Merger
The board of directors of BFC believes that there are
substantial benefits to BFCs shareholders that can be
obtained as a result of the merger. Accordingly, the board of
directors of BFC has determined that the merger agreement and
the transactions contemplated thereby are advisable, fair to and
in the best interests of BFC and its shareholders, has approved
the merger agreement and the transactions contemplated thereby,
and recommends that BFCs shareholders vote FOR
the merger and the related transactions.
The board of directors of BFC, in reaching its decision to
approve the merger agreement and the transactions contemplated
thereby, considered the recommendation of the BFC special
committee and consulted with Sandler ONeill, BFCs
financial advisor, and Stearns Weaver, BFCs outside legal
counsel, and considered a variety of material factors weighing
positively in favor of the merger, including, without
limitation, the following:
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the fact that, based on BFCs financial portfolio as of
September 30, 2006, upon consummation of the merger, BFC
will realize (i) an approximate 73% tangible book value
accretion from $2.61 per common share to $4.52 per
common share, (ii) an approximate 14% book value accretion
from $4.95 per common share to $5.67 per common share,
(iii) an increase in total equity from approximately
$177 million to approximately $416 million,
(iv) an increase in public float from approximately
16.4 million shares to approximately 53.9 million
shares, and (v) an increase in market capitalization from
approximately $228 million to approximately
$466 million;
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the fact that the merger will result in tax consolidation,
thereby eliminating the current double taxation on
BFCs share of Levitts earnings;
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the increased visibility and trading liquidity for BFCs
capital stock resulting from the merger;
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the fact that the merger will broaden the diverse mix of
BFCs earnings and increase its investment in a brand with
an established portfolio of companies, including Levitt and
Sons, Core Communities and Bluegreen;
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the opinion of Sandler ONeill, BFCs financial
advisor, to the effect that, as of the date of the opinion, and
subject to and based on the qualifications and assumptions set
forth in the opinion, the consideration to be exchanged by BFC
in the merger was fair, from a financial point of view, to BFC
(see the section entitled The Merger Opinion
of BFCs Financial Advisor beginning on page 52);
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the limited business integration risks due to the preexisting
relationships between BFC and Levitt, including, without
limitation, management commonality and BFCs long-term
investment in Levitt;
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information concerning BFCs and Levitts respective
businesses, prospects, financial condition and results of
operations, management and competitive position, including
information contained in public reports concerning results of
operations for the most recent fiscal year and fiscal quarters;
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current financial market conditions and historical market
prices, volatility and trading information with respect to BFC
Class A Common Stock and Levitt Class A Common
Stock; and
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the belief that the terms of the merger agreement, including the
parties respective representations, warranties and
covenants contained therein, are reasonable.
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The board of directors of BFC, in reaching its decision to
approve the merger agreement and the transactions contemplated
thereby, also considered potential detriments related to the
merger, including, without limitation, the following:
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the substantial costs to be incurred in connection with the
merger, including transaction expenses arising from the merger
whether or not the merger is consummated;
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the potential negative impact on BFCs cash flow if a
significant amount of Levitts shareholders exercise their
appraisal rights;
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the risks inherent in the fluctuating market price of BFC
Class A Common Stock on the NYSE Arca Stock Exchange, such
as the risk that the value of the shares of BFC Class A
Common Stock issuable in connection with merger at the effective
time of the merger may exceed the value of those shares as of
the date on which the board of directors of BFC approved the
merger;
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the risk that the current downturn in the homebuilding industry
which is currently impacting Levitt may be prolonged and the
effect that such a prolonged downturn could have on
Levitts financial condition and operating results;
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the terms of the merger agreement restricting the conduct of
BFCs business during the period between the execution of
the merger agreement and the completion of the merger;
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possible disruptions to BFCs operations and management
distractions that could arise from the merger;
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the possibility that the expected benefits from the merger
described above may not be realized;
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the interests that certain executive officers and directors of
BFC may have with respect to the merger in addition to their
interests as shareholders of BFC, generally, as described in the
section entitled The Merger Interests of
Certain Persons in the Merger beginning on
page 71; and
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various other risks associated with the merger and Levitts
business set forth under the section entitled Risk
Factors beginning on page 27.
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After consideration of these material factors, the board of
directors of BFC determined that the potential benefits of the
merger and the related transactions outweighed the potential
risks of such transactions.
This discussion of the information and factors considered by the
board of directors of BFC is not intended to be exhaustive and
may not include all of the factors considered by the BFC board.
In reaching its determination to approve the merger agreement
and the transactions contemplated thereby and recommend to
BFCs shareholders that they approve the merger and the
related transactions, the board of directors of BFC did not
quantify or assign any relative or specific weights to the
various factors that it considered. Rather, the board of
directors of BFC viewed its determination and recommendation as
being based on an overall analysis and on the totality of the
information presented to and factors considered by it. In
addition, in considering the factors described above, individual
members of the board of directors of BFC may have given
different weight to different factors or taken into account
other factors. After considering this information, the board of
directors of BFC approved the merger agreement and the
transactions contemplated thereby, and recommends that
BFCs shareholders approve the merger and the related
transactions.
Role and
Recommendation of the Levitt Special Committee
The board of directors of Levitt designated a special committee
composed solely of independent directors to, among other things,
negotiate, review and evaluate the terms and conditions of the
merger agreement and determine the advisability of the merger.
The Levitt special committee negotiated the terms and conditions
of the merger agreement on behalf of Levitt and, after careful
review and consideration, determined that the merger is
advisable, fair to and in the best interests of Levitts
shareholders and recommended that the board of directors of
Levitt approve the merger agreement and the transactions
contemplated thereby and recommend to the shareholders of Levitt
that they approve the merger agreement.
The Levitt special committee was aware of the interests of
certain officers and directors of Levitt in the merger, as
described under The Merger Interests of
Certain Persons in the Merger, including the fact that the
merger agreement contemplates that the members of the Levitt
special committee, together with the other directors of Levitt
who are not currently directors of BFC, are to be appointed to
the board of directors of BFC in connection with the merger.
In arriving at its determination, the Levitt special committee
consulted with Levitts senior management, as well as Blank
Rome, outside legal counsel to the Levitt special committee, and
Houlihan Lokey, Levitts financial advisor, with respect to
strategic, operational, legal, regulatory and other matters. In
arriving at its determination, the Levitt special committee also
independently considered the factors described below in
The Merger
49
Recommendation of the Levitt Board and Its Reasons for the
Merger. In light of the number and wide variety of factors
considered in connection with its evaluation of the merger, the
Levitt special committee did not consider it practicable to, and
did not attempt to, quantify, rank or otherwise assign relative
weights to the specific factors considered in reaching its
determination. The Levitt special committee viewed its
determination and recommendation as being based on all of the
information available and the factors presented to and
considered by it. In addition, individual directors serving on
the Levitt special committee may have given different weight to
different factors.
Recommendation
of the Levitt Board and Its Reasons for the Merger
The board of directors of Levitt believes that there are
substantial benefits to Levitts shareholders that can be
obtained as a result of the merger. Accordingly, the board of
directors of Levitt has determined that the merger agreement and
the transactions contemplated thereby are advisable, fair to and
in the best interests of Levitts shareholders, has
approved the merger agreement and the transactions contemplated
thereby, and recommends that Levitts shareholders vote
FOR the approval of the merger agreement.
The board of directors of Levitt, in reaching its decision to
approve the merger agreement and the transactions contemplated
thereby, considered the recommendation of the Levitt special
committee, consulted with Houlihan Lokey, Levitts
financial advisor, and considered a variety of material factors
weighing positively in favor of the merger, including, without
limitation, the following:
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the fact that shareholders of Levitt immediately prior to the
merger will own approximately 51% of the outstanding shares of
BFC Class A Common Stock immediately following the merger
(subject to reduction to the extent shareholders elect to
exercise and perfect their appraisal rights) and will therefore
have a significant economic interest in BFC;
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the implied value of Levitt Class A Common Stock of
$14.41 per share based on the closing price of BFC
Class A Common Stock on the NYSE Arca Stock Exchange and
Levitt Class A Common Stock on the New York Stock Exchange
on January 30, 2007, the last trading day prior to the
announcement of the signing of the merger agreement,
representing a premium of approximately 32% over the closing
price of Levitt Class A Common Stock on the New York Stock
Exchange on that day, a premium of approximately 8% and 52% over
the high and low sales prices, respectively, of Levitt
Class A Common Stock on the New York Stock Exchange during
the six-month period preceding the date of the merger agreement,
and a premium of approximately 21% over the average sales price
of Levitt Class A Common Stock on the New York Stock
Exchange during that six-month period;
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the fact that holders of Levitt Class A Common Stock who
receive shares of BFC Class A Common Stock in connection
with the merger will have the opportunity to participate in any
future homebuilding industry recovery as part of a more diverse
portfolio of assets and investments;
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the fact that, based on the number of shares of Levitt common
stock outstanding on the date of the merger agreement, BFC,
after the merger, will have a pro forma market capitalization of
$466 million compared to Levitts stand-alone market
capitalization of $216 million;
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the limited business integration risks due to the preexisting
relationships between BFC and Levitt, including, without
limitation, management commonality and BFCs long-term
investment in Levitt;
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the fact that, as of September 30, 2006, Levitt had a
debt-to-total
capitalization ratio of approximately 63% and that BFC currently
has no outstanding debt at its parent company level which could
provide access to a broader range of financial resources;
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the opinion of Houlihan Lokey, Levitts financial advisor,
to the effect that, as of the date of the opinion and subject to
and based on the qualifications, limitations and assumptions set
forth in the opinion, the consideration to be received by
holders of Levitt Class A Common Stock in the merger was
fair, from a financial point of view, to such holders (other
than BFC and directors of Levitt who are not
independent within the meaning of the rules and
regulations of the New York Stock Exchange) (see the section
entitled The Merger Opinion of Levitts
Financial Advisor beginning on page 56);
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information concerning BFCs and Levitts respective
businesses, prospects, financial condition and results of
operations, management and competitive position, including
information contained in public reports concerning results of
operations for the most recent fiscal year and fiscal quarters;
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current financial market conditions and historical market
prices, volatility and trading information with respect to BFC
Class A Common Stock and Levitt Class A Common Stock;
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the opportunity for holders of Levitt Class A Common Stock
to benefit from any increase in the trading price of BFC
Class A Common Stock between the date of the merger
agreement and the effective time of the merger because the
exchange ratio is fixed;
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the absence of any termination fee payable by Levitt to BFC if
the merger agreement is terminated prior to completion of the
merger;
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the fact that, in connection with the merger, the seven
directors of Levitt who are not currently directors of BFC are
to be appointed to BFCs board of directors, which is
expected to provide a degree of continuity and involvement by
directors of Levitt in BFC following the merger;
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the expected qualification of the merger as a
reorganization within the meaning of
Section 368(a) of the Code, resulting in the shares of BFC
Class A Common Stock to be received by holders of Levitt
Class A Common Stock in connection with the merger not
being subject to federal income tax, as described under the
section entitled The Merger Material
U.S. Federal Income Tax Consequences of the
Merger; and
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the belief that the terms of the merger agreement, including the
parties respective representations, warranties and
covenants contained therein, are reasonable.
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The board of directors of Levitt, in reaching its decision to
approve the merger agreement and the transactions contemplated
thereby also considered potential detriments related to the
merger, including, without limitation, the following:
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the substantial costs to be incurred in connection with the
merger, including transaction expenses arising from the merger
whether or not the merger is consummated;
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the possibility that holders of Levitt Class A Common Stock
could be adversely affected by a decrease in the trading price
of BFC Class A Common Stock between the date of the merger
agreement and the effective time of the merger;
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the terms of the merger agreement restricting the conduct of
Levitts business during the period between the execution
of the merger agreement and the completion of the merger;
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possible disruptions to Levitts operations and management
distractions that could arise from the merger;
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the possibility that the expected benefits from the merger
described above may not be realized, including the fact that
BFCs potentially greater access to financial resources may
not be realized and BFCs cash flow may be negatively
impacted as a result of Levitts shareholders exercising
their appraisal rights or otherwise;
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the limitations imposed in the merger agreement on the
solicitation or consideration by Levitt of alternative business
combinations prior to the consummation of the merger;
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the interests that certain executive officers and directors of
Levitt may have with respect to the merger in addition to their
interests as shareholders of Levitt, generally, as described in
the section entitled The Merger Interests of
Certain Persons in the Merger beginning on page 71;
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the fact that holders of Levitt Class A Common Stock who
receive shares of BFC Class A Common Stock in the merger
will become subject to the risks inherent to businesses in the
diverse mix of industries in which BFC has investments; and
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various other risks associated with the merger and the
operations of BFC following the merger set forth under the
section entitled Risk Factors beginning on
page 27.
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After consideration of these material factors, the board of
directors of Levitt determined that the potential benefits of
the merger agreement and the transactions contemplated thereby
outweighed the potential detriments of the merger agreement and
such transactions.
This discussion of the information and factors considered by the
board of directors of Levitt is not intended to be exhaustive
and may not include all of the factors considered by the Levitt
board. In reaching its determination to approve and recommend
the merger agreement and the transactions contemplated thereby,
the board of directors of Levitt did not quantify or assign any
relative or specific weights to the various factors that it
considered. Rather, the board of directors of Levitt viewed its
determination and recommendation as being based on an overall
analysis and on the totality of the information presented to and
factors considered by it. In addition, in considering the
factors described above, individual members of the board of
directors of Levitt may have given different weight to different
factors or taken into account other factors. After considering
this information, the board of directors of Levitt approved the
merger agreement and the transactions contemplated thereby and
recommends that Levitts shareholders approve the merger
agreement.
Opinion
of BFCs Financial Advisor
By letter dated November 8, 2006, BFC retained Sandler
ONeill to act as its financial advisor in connection with
a possible business combination with Levitt. Sandler
ONeill is a nationally recognized investment banking firm.
In the ordinary course of its investment banking business,
Sandler ONeill is regularly engaged in the valuation of
companies and their securities in connection with mergers and
acquisitions and other corporate transactions.
Sandler ONeill acted as financial advisor to BFC in
connection with the merger and participated in certain of the
negotiations leading to the execution of the merger agreement on
January 30, 2007. At the January 30, 2007 meeting at
which BFCs board of directors considered, and subject to
satisfactory resolution of certain outstanding issues, approved
the merger agreement, Sandler ONeill delivered to
BFCs board of directors its oral opinion, that, as of such
date, the merger consideration was fair to BFC from a financial
point of view. The full text of Sandler ONeills
opinion is attached as Annex B to this joint proxy
statement/prospectus. The opinion outlines the procedures
followed, assumptions made, matters considered and
qualifications and limitations on the review undertaken by
Sandler ONeill in rendering its opinion. The description
of the opinion set forth below is qualified in its entirety by
reference to the opinion. Sandler ONeill urges BFCs
shareholders to read the entire opinion carefully in connection
with their consideration of the merger and the related
transactions.
Sandler ONeills opinion speaks only as of the
date of the opinion. The opinion was directed to BFCs
board of directors and is directed only to the fairness of the
merger consideration to BFC from a financial point of view. It
does not address the underlying business decision of BFC to
engage in the merger or any other aspect of the merger and is
not a recommendation to any BFC shareholder as to how such
shareholder should vote at the BFC annual meeting.
In connection with rendering its January 30, 2007 opinion,
Sandler ONeill reviewed and considered, among other things:
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the merger agreement;
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certain publicly available financial statements and other
historical financial information of BFC that Sandler
ONeill deemed relevant;
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certain publicly available financial statements and other
historical financial information of Levitt that Sandler
ONeill deemed relevant;
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earnings per share estimates for BFC for the year ending
December 31, 2007 as provided by, and reviewed with, senior
management of BFC;
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internal financial projections for Levitt for the year ended
December 31, 2006 and the year ending December 31,
2007, as provided by and reviewed with senior management of
Levitt and an estimated net income under different economic and
operating conditions thereafter;
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a review of Levitts operating businesses, investments and
asset holdings, including Levitts land holdings and the
value of Levitts investment in Bluegreen;
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the pro forma financial impact of the merger on BFC, based on
assumptions relating to transaction expenses and purchase
accounting adjustments determined by the senior management of
BFC;
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the publicly reported historical price and trading activity for
each of BFCs and Levitts common stock, including a
comparison of certain financial and stock market information for
Levitt and similar publicly available information for certain
other companies, the securities of which are publicly traded;
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the financial terms of certain recent business combinations in
the real estate and financial services industries, to the extent
publicly available;
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the current market environment generally and the homebuilding
environment in particular; and
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such other information, financial studies, analyses and
investigations and financial, economic and market criteria as
Sandler ONeill considered relevant.
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Sandler ONeill also discussed with certain members of
senior management of BFC the business, financial condition,
results of operations and prospects of BFC and held similar
discussions with the senior management of Levitt regarding the
business, financial condition, results of operations and
prospects of Levitt.
In performing its reviews and analyses and in rendering its
opinion, Sandler ONeill relied upon the accuracy and
completeness of all the financial and other information that was
available to Sandler ONeill from public sources, that was
provided to Sandler ONeill by BFC or Levitt or their
respective representatives or that was otherwise reviewed by
Sandler ONeill and Sandler ONeill has assumed such
accuracy and completeness for purposes of rendering its opinion.
Sandler ONeill further relied on the assurances of the
management of each of BFC and Levitt that they are not aware of
any facts or circumstances that would make any of such
information inaccurate or misleading. Sandler ONeill has
not been asked to undertake, and has not undertaken, an
independent verification of any of such information and Sandler
ONeill does not assume any responsibility or liability for
the accuracy or completeness thereof. Sandler ONeill did
not make an independent evaluation or appraisal of the specific
assets, the collateral securing the assets or the liabilities
(contingent or otherwise) of BFC or Levitt or any of their
respective subsidiaries, or the collectibility of any such
assets, nor has Sandler ONeill been furnished with any
such evaluations or appraisals.
The earnings per share estimates used and relied upon by Sandler
ONeill in its analyses for BFC were provided by BFC senior
management who confirmed to Sandler ONeill that those
estimates reflected the best currently available estimates of
the future financial performance of BFC. With respect to the
internal projections for Levitt, with BFCs consent,
Sandler ONeill used and relied on such projections
provided by the senior management of Levitt and those
projections reflected the best currently available projections
of the future financial performance of Levitt. All projections
of transaction costs, purchase accounting adjustments and
expected cost savings related to the merger were provided by or
reviewed with senior management of BFC who confirmed to Sandler
ONeill that those projections reflected the best currently
available estimates and judgments. Sandler ONeill assumed
that the financial performances reflected in all budgets,
estimates and projections used by it in its analyses would be
achieved. Sandler ONeill expressed no opinion as to such
estimates and projections or the assumptions on which they were
based. Sandler ONeill also assumed that there has been no
material change in the assets, financial condition, results of
operations, business or prospects of BFC or Levitt since the
date of the last financial statements made available to them and
that BFC and Levitt will remain as going concerns for all
periods relevant to the analyses.
Sandler ONeill assumed that all of the representations and
warranties contained in the merger agreement and all related
agreements are true and correct, that each party to such
agreements will perform all of the covenants required to be
performed by such party under the agreements, that the
conditions precedent contained in the merger agreement are not
waived and that the merger will be a tax-free reorganization for
federal income tax purposes. Finally, with BFCs consent,
Sandler ONeill relied upon the advice received from
BFCs legal, accounting and tax advisors as to all legal,
accounting and tax matters relating to the merger agreement and
the other transactions contemplated by the merger agreement.
53
Sandler ONeills opinion was necessarily based upon
market, economic and other conditions as they existed on, and
could be evaluated as of, the date of its opinion. Events
occurring after the date thereof could materially affect its
opinion. Sandler ONeill has not undertaken to update,
revise, reaffirm or withdraw its opinion or otherwise comment
upon events occurring after the date of its opinion. Sandler
ONeill expressed no opinion as to what the value of the
BFC Class A Common Stock will be when issued to
Levitts shareholders pursuant to the merger agreement or
the prices at which the common stock of BFC or Levitt may trade
at any time.
In rendering its January 30, 2007 opinion, Sandler
ONeill performed a variety of financial analyses. The
following is a summary of the material analyses performed by
Sandler ONeill, but is not a complete description of all
the analyses underlying Sandler ONeills opinion. The
summary includes information presented in tabular format. In
order to fully understand the financial analyses, these tables
must be read together with the accompanying text. The tables
alone do not constitute a complete description of the financial
analyses. The preparation of a fairness opinion is a complex
process involving subjective judgments as to the most
appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances.
The process, therefore, is not necessarily susceptible to a
partial analysis or summary description. Sandler ONeill
believes that its analyses must be considered as a whole and
that selecting portions of the factors and analyses to be
considered without considering all factors and analyses, or
attempting to ascribe relative weights to some or all of such
factors and analyses, could create an incomplete view of the
evaluation process underlying its opinion. Also, no company
included in Sandler ONeills comparative analyses
described below is identical to BFC or Levitt and no transaction
is identical to the merger. Accordingly, an analysis of
comparable companies or transactions involves complex
considerations and judgments concerning differences in financial
and operating characteristics of the companies and other factors
that could affect the public trading values or merger
transaction values, as the case may be, of BFC and Levitt and
the companies to which they are being compared.
In performing its analyses, Sandler ONeill also made
numerous assumptions with respect to industry performance,
business and economic conditions and various other matters, many
of which cannot be predicted and are beyond the control of BFC,
Levitt and Sandler ONeill. The analyses performed by
Sandler ONeill are not necessarily indicative of actual
values or future results, which may be significantly more or
less favorable than suggested by such analyses. Sandler
ONeill prepared its analyses solely for purposes of
rendering its opinion and provided such analyses to the board of
directors of BFC at its January 30, 2007 meeting. Estimates
on the values of companies do not purport to be appraisals or
necessarily reflect the prices at which such companies or their
securities may actually be sold. Such estimates are inherently
subject to uncertainty and actual values may be materially
different. Accordingly, Sandler ONeills analyses do
not necessarily reflect the value of the BFC Class A Common
Stock or the prices at which such stock may be sold at any time.
Summary of Proposal. Sandler ONeill
reviewed the financial terms of the merger. Using the fixed
exchange ratio of 2.27 shares of BFC Class A Common
Stock for each share of Levitt Class A Common Stock, and
the closing price of BFC Class A Common Stock of $6.22 for
calculating the merger consideration, Sandler ONeill
calculated a transaction value of $14.12 per share. Based
upon the financial information for Levitt as of or for the
twelve-month period ended September 30, 2006, Sandler
ONeill calculated the following transaction ratios:
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|
|
Transaction
|
|
|
|
Multiples
|
|
|
Transaction Value / 2005 EPS(1)
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|
|
5.2
|
x
|
Transaction Value / Estimated 2006
EPS(1)
|
|
|
108.6
|
x
|
Transaction Value / Book Value(1)
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|
|
79.2
|
%
|
Transaction Value / Tangible Book
Value(1)
|
|
|
79.2
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%
|
Premium to Market
|
|
|
29.5
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%
|
|
|
|
(1) |
|
Pricing data as of January 26, 2007. |
The aggregate transaction value was approximately
$280.0 million, based upon the offer price per share of
$14.12, 19,828,055 shares of Levitts common stock
outstanding and the intrinsic value of options to acquire
1,838,581 shares of Levitt Class A Common Stock at a
weighted-average exercise price of $21.04. The transaction
54
value excluding the 3,393,274 shares of Levitt common stock
already owned by BFC is approximately $233.5 million.
Discounted Cash Flow and Terminal Value
Analysis. Sandler ONeill performed an
analysis that estimated the future stream of net income of
Levitt through December 31, 2009 under various
circumstances. The analysis assumed (i) a
3-year
recession of the housing market and (ii) a
2-year
recession of the housing market, and used the guidance provided
by Levitts management regarding 2007 net income
projections and earnings per share growth. To approximate the
terminal value of Levitts common stock at
December 31, 2009, Sandler ONeill applied price to
tangible book value multiples of .5x to 1.25x. The net income
and terminal values were then discounted to present values using
different discount rates ranging from 12.0% to 16.0%, chosen to
reflect different assumptions regarding required rates of return
of holders or prospective buyers of Levitts common stock.
As illustrated in the following tables, this analysis indicated
an imputed range of values per share for Levitts common
stock of $7.01 to $20.36 when applying the price to tangible
book value multiples to the matched budget.
Tangible
Book Value Per Share Multiples
3-Year
Housing Recession
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|
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|
|
|
|
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|
|
|
|
|
|
Price / Tangible Book Value
|
|
Discount Rate
|
|
50.0%
|
|
|
62.5%
|
|
|
75.0%
|
|
|
87.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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12.00%
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|
$
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7.63
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|
$
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9.41
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|
|
$
|
11.20
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|
|
$
|
12.98
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|
13.00%
|
|
|
7.47
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|
|
|
9.21
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|
|
|
10.96
|
|
|
|
12.70
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|
14.00%
|
|
|
7.31
|
|
|
|
9.02
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|
|
|
10.72
|
|
|
|
12.43
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|
15.00%
|
|
|
7.16
|
|
|
|
8.83
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|
|
|
10.50
|
|
|
|
12.17
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|
16.00%
|
|
|
7.01
|
|
|
|
8.65
|
|
|
|
10.28
|
|
|
|
11.92
|
|
Tangible
Book Value Per Share Multiples
2-Year
Housing Recession
(Normalized Growth in 2009)
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price / Tangible Book Value
|
|
Discount Rate
|
|
75.0%
|
|
|
87.5%
|
|
|
100.0%
|
|
|
112.5%
|
|
|
125.0%
|
|
|
12.00%
|
|
$
|
12.68
|
|
|
$
|
14.60
|
|
|
$
|
16.52
|
|
|
$
|
18.44
|
|
|
$
|
20.36
|
|
13.00%
|
|
|
12.41
|
|
|
|
14.29
|
|
|
|
16.16
|
|
|
|
18.04
|
|
|
|
19.92
|
|
14.00%
|
|
|
12.15
|
|
|
|
13.98
|
|
|
|
15.82
|
|
|
|
17.65
|
|
|
|
19.49
|
|
15.00%
|
|
|
11.89
|
|
|
|
13.69
|
|
|
|
15.48
|
|
|
|
17.28
|
|
|
|
19.07
|
|
16.00%
|
|
|
11.64
|
|
|
|
13.40
|
|
|
|
15.16
|
|
|
|
16.92
|
|
|
|
18.67
|
|
In connection with its analyses, Sandler ONeill considered
and discussed with the board of directors of BFC how the present
value analyses would be affected by changes in the underlying
assumptions, including variations with respect to net income.
Sandler ONeill noted that the discounted cash flow and
terminal value analysis is a widely used valuation methodology,
but the results of such methodology are highly dependent upon
the numerous assumptions that must be made, and the results
thereof are not necessarily indicative of actual values or
future results.
Analysis of Selected Merger
Transactions. Sandler ONeill reviewed 59
merger transactions announced from January 1, 2004 through
January 26, 2007 involving real estate and financial
services companies as the acquired institution with a
transaction value between $250 million and
$1.0 billion. Sandler ONeill reviewed the market
premium multiples for each of the selected merger transactions
and derived a median market premium multiple. The multiple
derived was 21.6%. The median market premium multiple was
applied to Levitts financial information as of
January 26, 2007. The implied transaction market premium
multiple of the merger as calculated by Sandler ONeill was
29.5% as of January 26, 2007.
Stock Trading History. Sandler ONeill
reviewed the history of the reported trading prices and volume
of Levitt Class A Common Stock and the relationship between
the movements in the price of Levitt Class A Common Stock
and the movements in the prices of the Standard &
Poors 500 Index and SNL Homebuilder Index.
55
Sandler ONeill analyzed Levitt Class A Common Stock
for the one-year period ended January 26, 2007 and the
three-year period ended January 26, 2007. During both of
these periods, Levitt Class A Common Stock generally
underperformed each of the indices.
Levitts
One-Year Class A Common Stock Performance
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|
|
|
|
|
|
|
|
Beginning Index Value
|
|
|
Ending Index Value
|
|
|
|
January 26, 2006
|
|
|
January 26, 2007
|
|
|
Levitt
|
|
|
100.00
|
%
|
|
|
45.30
|
%
|
S&P Index
|
|
|
100.00
|
|
|
|
111.65
|
|
SNL Homebuilder Index
|
|
|
100.00
|
|
|
|
76.87
|
|
Levitts
Three-Year Class A Common Stock Performance
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|
|
|
|
|
|
|
|
Beginning Index Value
|
|
|
Ending Index Value
|
|
|
|
January 26, 2004
|
|
|
January 26, 2007
|
|
|
Levitt
|
|
|
100.00
|
%
|
|
|
49.02
|
%
|
S&P Index
|
|
|
100.00
|
|
|
|
121.62
|
|
SNL Homebuilder Index
|
|
|
100.00
|
|
|
|
123.29
|
|
Pro Forma Merger Analysis. Sandler
ONeill analyzed certain potential pro forma effects of the
merger, assuming the following: (1) the merger closes on
June 30, 2007; (2) 100.0% of the shares of Levitt
Class A Common Stock are exchanged for BFC Class A
Common Stock at a fixed exchange ratio of 2.27x; (3) the
gain on Levitt options are converted into BFC Class A
Common Stock at a fixed exchange ratio of 2.27x;
(4) Levitts 2006 and 2007 net income projections
and earnings per share growth rates for 2007 provided by and
reviewed with BFCs management; (5) BFCs 2006
budgeted net income and earnings per share growth rate
projections for 2007 provided by and reviewed with BFCs
management; (6) purchase accounting adjustments, charges
and transaction costs associated with the merger and cost
savings determined by the senior managements of BFC and Levitt.
The analyses indicated that for the year ending
December 31, 2007 (the first year of combined operations),
the merger would be accretive to BFCs projected earnings
per share and, at June 30, 2007 (the assumed closing date
of the merger), the merger would be accretive to BFCs
tangible book value per share. The actual results achieved by
BFC following the merger may vary from projected results and the
variations may be material.
BFC has agreed to pay Sandler ONeill a transaction fee in
connection with the merger of approximately $1,500,000, of which
$250,000 has been paid and the balance of which is contingent,
and payable, upon closing of the merger. BFC has also agreed to
reimburse certain of Sandler ONeills reasonable
out-of-pocket
expenses incurred in connection with its engagement and to
indemnify Sandler ONeill and its affiliates and their
respective partners, directors, officers, employees, agents, and
controlling persons against certain expenses and liabilities,
including liabilities under securities laws.
Sandler ONeill may provide investment banking services to
BFC in the future and may receive compensation for such
services. The services may include raising capital in connection
with the merger
and/or other
services to be performed during the period prior to the closing
of the merger.
In the ordinary course of its business as a broker-dealer,
Sandler ONeill may purchase securities from and sell
securities to BFC and Levitt and their respective affiliates.
Sandler ONeill may also actively trade the debt
and/or
equity securities of BFC or Levitt or their respective
affiliates for its own account and for the accounts of its
customers and, accordingly, may at any time hold a long or short
position in such securities.
Opinion
of Levitts Financial Advisor
The Levitt special committee retained Houlihan Lokey to render
to it and the Levitt board a written opinion as to whether the
consideration per share of Levitt Class A Common Stock to
be received by the minority shareholders of Levitt in the merger
is fair to such holders from a financial point of view. As used
in this section, the term
56
minority shareholders means the holders of Levitt
Class A Common Stock other than BFC and certain of its
affiliates.
On January 30, 2007, Houlihan Lokey delivered to the Levitt
special committee, and subsequently to the Levitt board, its
oral opinion, which was subsequently confirmed in writing, to
the effect that as of the date of the opinion, on the basis of
Houlihan Lokeys analysis summarized below, and subject to
the assumptions, factors and limitations set forth in the
written opinion and described below under Summary of
Financial Analyses Performed by Houlihan Lokey, that
assuming the completion of the merger, the consideration to be
exchanged by BFC in the merger is fair to the minority
shareholders from a financial point of view.
The full text of Houlihan Lokeys opinion, which is
attached to this joint proxy statement/prospectus as
Annex C, describes, among other things, the assumptions
made, general procedures followed, matters considered and
limitations on the review undertaken by Houlihan Lokey in
rendering its opinion. The opinion was furnished for the Levitt
special committee, and at that committees request, to the
Levitt board in evaluating the merger. This opinion does not
constitute a recommendation to any shareholder on whether to
support the merger and it does not constitute a recommendation
to any shareholder on whether or not to vote in favor of or
against the approval of the merger agreement. The opinion was
furnished for the use and benefit of the Levitt special
committee and the Levitt board in connection with its
consideration of the merger, and, by its terms, is not intended
to be used, and may not be used, for any other purpose, without
the written consent of Houlihan Lokey, except to the extent
required by applicable law. The summary of Houlihan Lokeys
opinion in this joint proxy statement/prospectus is qualified in
its entirety by reference to the full text of its opinion, which
is attached to this joint proxy statement/prospectus as
Annex C. Levitts shareholders are urged to read the
opinion carefully and in its entirety.
Houlihan Lokey has not been requested to, and did not initiate
any discussions with, or solicit any indications of interest
from, third parties with respect to the merger or any
alternatives to the merger. Houlihan Lokey also did not advise
the Levitt special committee, the Levitt board or any other
party with respect to alternatives to the merger. The merger
consideration was determined on the basis of negotiations
between the Levitt special committee and BFC, and Houlihan Lokey
did not recommend the amount or type of consideration to be paid
in the merger to holders of Levitt Class A Common Stock.
Houlihan Lokeys opinion is necessarily based on financial,
economic, market and other conditions as in effect on, and the
information made available to Houlihan Lokey as of, the date of
the opinion. Houlihan Lokey has not undertaken, and is under no
obligation, to update, revise or withdraw the opinion, or
otherwise comment on or consider events occurring after the date
of the opinion, unless the Levitt special committee requests
Houlihan Lokey to do so.
Houlihan Lokey was not requested to opine as to, and did not
address, among other things:
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|
|
|
the underlying business decision of Levitt, the Levitt special
committee, the Levitt board, or any other party to proceed with
or effect the merger;
|
|
|
|
the terms of any arrangements, understandings, agreements or
documents related to, or the form of any other portion or aspect
of, the merger or otherwise, except as expressly addressed in
the opinion;
|
|
|
|
the fairness of any portion or aspect of the merger to the
holders of any class of securities, creditors or other
constituencies of Levitt, or any other party not expressly
addressed in the opinion;
|
|
|
|
the relative merits of the merger as compared to any alternative
business strategies that might exist for Levitt or any other
party or the effect of any other transaction in which Levitt,
BFC, their respective security holders, or any other party might
engage;
|
|
|
|
the tax or legal consequences of the merger to either Levitt,
BFC, their respective security holders, or any other party;
|
|
|
|
the fairness of any portion or aspect of the merger to any one
class or group of Levitts or any other partys
security holders vis-à-vis any other class or group of
Levitts or such other partys security holders
(including without limitation the allocation of any
consideration among such classes or groups of security
holders); or
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57
|
|
|
|
|
the solvency, creditworthiness or fair value of Levitt, BFC or
any other participant in the merger under any applicable laws
relating to bankruptcy, insolvency, fraudulent conveyance or
similar matters.
|
Furthermore, no opinion, counsel or interpretation is intended
in matters that require legal, regulatory, accounting,
insurance, tax or other similar professional advice. It is
assumed that such opinions, counsel or interpretations have been
or will be obtained from the appropriate professional sources.
Furthermore, Houlihan Lokey relied, with the consent of the
Levitt special committee, on the assessment by that committee,
Levitt and BFC and their respective advisors, as to all legal,
regulatory, accounting, insurance and tax matters with respect
to Levitt, BFC and the merger.
Houlihan Lokey has not been requested to make, and has not made,
any physical inspection or independent appraisal or evaluation
of any of the assets, properties or liabilities (fixed,
contingent or otherwise) of Levitt, BFC or any other party.
Houlihan Lokey has reviewed certain information prepared by
Levitts management or third parties regarding certain
landholdings of Levitt and Houlihan Lokey has assumed, without
independent verification, the accuracy of such information.
Houlihan Lokey is not an appraiser and does not express any
opinion with respect to such subject matter. Houlihan Lokey
expresses no opinion regarding the liquidation value of any
entity. Furthermore, Houlihan Lokey has undertaken no
independent analysis of any potential or actual litigation,
regulatory action, possible unasserted claims or other
contingent liabilities, to which Levitt or BFC is or may be a
party or is or may be subject and, at the Levitt special
committees request and with that committees consent,
Houlihan Lokeys opinion makes no assumption concerning,
and therefore does not consider, the possible assertion of
claims, outcomes or damages arising out of any such matters.
In connection with the opinion, Houlihan Lokey made such
reviews, analyses and inquiries as it deemed necessary and
appropriate under the circumstances. Among other things,
Houlihan Lokey:
|
|
|
|
|
reviewed Annual Reports on
Form 10-K
for the fiscal years ended December 31, 2003,
December 31, 2004, and December 31, 2005 and Quarterly
Reports on
Form 10-Q
for the quarters ended September 30, 2005, and
September 30, 2006 for each of Levitt, BFC, BankAtlantic
Bancorp, Bluegreen and Benihana;
|
|
|
|
reviewed preliminary company-prepared interim financial
statements for the year ended December 31, 2006 for Levitt,
BankAtlantic Bancorp and Bluegreen, which each of their
respective managements identified at the time of Houlihan
Lokeys review as being the most current financial
statements then available;
|
|
|
|
held discussions with certain members of the management of
Levitt, BFC, BankAtlantic Bancorp and Bluegreen regarding the
operations, financial condition, future prospects and projected
operations and performance of each company;
|
|
|
|
held discussions with the management of Levitt and BFC regarding
the merger;
|
|
|
|
held discussions with representatives of Blank Rome regarding
Levitt, BFC, the merger and related matters;
|
|
|
|
reviewed internal financial forecasts and projections prepared
by the management of Levitt for each of the fiscal years ended
December 31, 2007 through December 31, 2009;
|
|
|
|
reviewed internal financial forecasts and projections prepared
by the management of Bluegreen for the fiscal year ended
December 31, 2007;
|
|
|
|
reviewed certain other publicly available financial data for
certain companies that Houlihan Lokey deemed relevant for
companies in industries related to each of the entities stated
above;
|
|
|
|
reviewed publicly available transaction prices and premiums paid
in other comparable transactions including those in industries
related to Levitts business;
|
|
|
|
reviewed the historical market prices and trading volume for the
publicly traded securities of each of the entities stated above
and those of certain other publicly traded companies which
Houlihan Lokey deemed relevant;
|
|
|
|
reviewed Levitts internal management presentation dated
November 13, 2006;
|
58
|
|
|
|
|
reviewed the following documents in connection with the merger:
|
|
|
|
|
|
a term sheet prepared by BFC for the proposed transaction dated
December 4, 2006; and
|
|
|
|
the draft of the merger agreement, in substantially the form
presented at the Levitt special committee meeting held on
January 30, 2007;
|
|
|
|
|
|
reviewed certain of Levitts internal management operating
reports prepared in December 2006;
|
|
|
|
reviewed certain information prepared by management or third
parties regarding Levitts landholdings;
|
|
|
|
reviewed a BankAtlantic Bancorp internal management presentation
dated December 12, 2006; and
|
|
|
|
conducted such other studies, analyses and inquiries as Houlihan
Lokey deemed appropriate.
|
Summary
of Financial Analyses Performed by Houlihan Lokey
The following is a summary of the material financial analyses
used by Houlihan Lokey in connection with providing its opinion.
This summary is qualified in its entirety by reference to the
full text of such opinion, which is attached to this joint proxy
statement/prospectus as Annex C. Levitts shareholders
are urged to read the full text of the opinion carefully and in
its entirety.
In connection with rendering its opinion, Houlihan Lokey
performed the financial, comparative and other analyses
described below. The preparation of an opinion, such as the
Houlihan Lokey opinion, involves various determinations as to
the most appropriate and relevant methods of financial and
comparative analysis and the application of those methods to the
particular circumstances. Such opinion is not, therefore,
readily susceptible to summary description. Furthermore, in
arriving at its opinion, Houlihan Lokey did not attribute any
particular weight to any analysis or factor considered by it,
but rather made qualitative judgments as to the significance and
relevance of each analysis and factor. Accordingly, Houlihan
Lokey believes that its analyses must be considered as a whole
and that consideration of any portion of such analyses and
factors, without consideration of all analyses and factors as a
whole, could create a misleading or incomplete view of the
process underlying its opinion. In its analyses, Houlihan Lokey
made numerous assumptions with respect to industry performance,
general business and economic conditions and other matters, many
of which are beyond the control of Levitt. None of Levitt,
Houlihan Lokey or any other person assumes responsibility if
future results are materially different from those discussed.
Any estimates contained in these analyses were not necessarily
indicative of actual values or predictive of future results or
values, which may be significantly more or less favorable than
those suggested by these analyses. In addition, analyses
relating to the value of businesses do not purport to be
appraisals or to reflect the prices at which businesses actually
may be sold.
The following is a summary of the material financial analyses
used by Houlihan Lokey in connection with the delivery of its
opinion to the Levitt special committee and the Levitt board.
Unless otherwise noted, the financial analyses summarized below
were based upon publicly available financial data for comparable
companies as of September 30, 2006 and on market prices as
of January 26, 2007, the second trading day immediately
preceding announcement by BFC and Levitt of the merger and the
resulting significant movement in the price and trading volume
of Levitts common stock. The financial analyses summarized
below include information presented in tabular format. In order
to fully understand the financial analyses used by Houlihan
Lokey, the tables must be read together with the text of each
summary. The tables alone do not constitute a complete
description of the financial analyses. Accordingly, the analyses
listed in the tables and described below must be considered as a
whole. Consideration of any portion of such analyses and the
factors considered, without consideration of all analyses and
factors, could create a misleading or incomplete view of the
process underlying the Houlihan Lokey opinion.
Overview
of Analyses Completed
To evaluate the fairness of the consideration in the merger to
the minority shareholders from a financial point of view,
Houlihan Lokey performed a variety of analyses, including the
following: (a) valued the equity of Levitt and BFC, as
further described below, (b) divided the value per share of
Levitt by the value per share of BFC to derive an
59
implied exchange ratio, and (c) analyzed the implied
premium paid in the merger. The purpose of these analyses was to
evaluate the adequacy of the consideration being offered to the
minority shareholders.
To determine the equity value ranges of Levitt and BFC, Houlihan
Lokey conducted a number of financial analyses. In valuing
Levitt, Houlihan Lokey conducted (a) a book multiple
analysis including Levitts interest in Bluegreen,
(b) a book multiple approach excluding Levitts
interest in Bluegreen, (c) a
sum-of-the-parts
analysis, and (d) a normalized net income analysis, each as
described in further detail below. In valuing the equity of
Bluegreen, which was subsequently used to value Levitts
equity interest in Bluegreen, Houlihan Lokey conducted a market
multiple analysis as described below. In valuing the equity of
BFC, Houlihan Lokey conducted a valuation relying on a
build-up or
sum-of-the-parts
method in which it considered the value of BFCs equity
interest in Levitt (including Levitts interest in
Bluegreen), BankAtlantic Bancorp and Benihana, as well as the
net value of BFCs corporate and other assets as described
below. For BankAtlantic Bancorp, Houlihan Lokey considered the
value of its banking segment and the estimated sale value of
Ryan Beck & Co., Inc. (Ryan Beck), the
former wholly-owned full service broker-dealer subsidiary of
BankAtlantic Bancorp, which BankAtlantic Bancorp sold to Stifel
Financial Corp. on February 28, 2007. For the banking
segment, Houlihan Lokey conducted a market multiple analysis and
a comparable transaction analysis. The combined values of the
banking segment and the estimated sale value of Ryan Beck were
used to determine the equity value of BankAtlantic Bancorp, as
described below. For Benihana, Houlihan Lokey conducted a market
multiple analysis as described below. Finally, Houlihan Lokey
valued BFCs net corporate and other assets, liabilities
and expenses, including BFCs 5% Cumulative Convertible
Preferred Stock, overhead costs, tax assets and liabilities and
certain other investments and interests as described below. The
purpose of evaluating these various components was to compare
the consideration per share of BFC Class A Common Stock
being offered to the minority shareholders in the merger against
the per share value of the Levitt Class A Common Stock held
by the minority shareholders.
Because the consideration to be received by the minority
shareholders consists of BFC Class A Common Stock, Houlihan
Lokeys independent valuation of Levitt was then compared
to the appropriate portion of BFC Class A Common Stock to
be received by the minority shareholders in the merger. After
concluding on ranges of value for the equity of both Levitt and
BFC, Houlihan Lokey divided the value per share of Levitt
Class A Common Stock by the value per share of BFC
Class A Common Stock at both the low-end and high-end of
their respective valuation ranges to determine a range of
implied exchange ratios. Houlihan Lokey then compared the
exchange ratio agreed upon in the merger to such implied
exchange ratio range. Finally, Houlihan Lokey analyzed the
implied premium with respect to the merger above the current
trading price of Levitt Class A Common Stock and compared
such premium to the other transaction premiums observed in the
market.
The following analyses assume, based on management estimates,
that none of Levitt, BFC, Bluegreen, BankAtlantic Bancorp or
Benihana has any material contingent liabilities. The purpose of
these analyses was to determine the equity values of these
entities to assist in evaluating the consideration to be
received by the minority shareholders in the merger. It is
Houlihan Lokeys view that these analyses are appropriate
and reflective of generally accepted valuation methodologies
given the availability of information regarding comparable
publicly-traded companies, the availability of forecasts from
management of Levitt, BFC, Bluegreen, BankAtlantic Bancorp and
Benihana, and the availability of information regarding similar
transactions, as applicable. Each analysis provides an
indication of the standalone equity values of Levitt, BFC,
Bluegreen, BankAtlantic Bancorp and Benihana, respectively. No
single analysis was considered to be more appropriate than any
other analysis, and therefore Houlihan Lokey considered all of
the aforementioned analyses in arriving at its conclusion.
Levitt
Valuation
A valuation analysis was conducted for Levitt utilizing four
valuation approaches. These approaches were selected after
giving consideration to certain other commonly applied valuation
approaches such as the capitalization of earnings before
interest, taxes, depreciation and amortization, or EBITDA, and
net income. Since Levitt does not have a material amount of
earnings either over the past year or on a projected basis the
application of valuation approaches based upon actual or
projected earnings was not practicable.
Levitt consists primarily of the companys wholly-owned
operating business, which, for the purposes of this section,
shall be referred to as the Levitt operations, and
an approximately 31% equity interest in Bluegreen. The
60
Levitt operations can be further segmented into the
Levitt and Sons homebuilding segment and the Core
Communities land development segment. An investor may either
analyze the company in the aggregate, analyze the Levitt
operations and the Bluegreen interest independently, or analyze
each of the Levitt and Sons homebuilding segment, the Core
Communities land development segment and the interest in
Bluegreen independently. Such different approaches, as described
below, were utilized by Houlihan Lokey in order to derive an
aggregate value for Levitt.
Houlihan Lokeys analyses included both qualitative and
quantitative considerations such as size, profitability, growth
history and prospects. Among other things, Houlihan Lokeys
analyses took into consideration information provided by
Levitts management regarding the present challenging state
of the homebuilding industry, Levitts significant exposure
to the depressed Florida homebuilding market, certain
unfavorable operating metrics for Levitt during the latter part
of 2006, Levitts high level of debt and potential for
financial liquidity constraints in the future if there is not a
material improvement in the markets in which it participates,
and the uncertainty regarding the level of interest that
prospective buyers would have should Levitt choose to pursue a
sale of certain of its land holdings. However, no single factor
was determinative in these analyses.
As mentioned above, valuation approaches relying upon recent or
projected earnings were not practical due to the lack of
material or projected earnings by Levitt. Therefore, it is
common for investors and analysts to value homebuilding
companies during periods such as this based on a multiple of
book equity. In the first valuation approach, a book multiple is
applied to the total book equity of Levitt including the
companys interest in Bluegreen. Book equity figures for
Levitt, as of December 31, 2006, as estimated by
Levitts management, were utilized in the analysis.
Houlihan Lokeys selection of market multiples for each of
Levitt and Bluegreen was based upon Houlihan Lokeys
analysis of:
|
|
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|
|
financial information of certain publicly-traded companies
listed below that Houlihan Lokey considered to be reasonably
comparable to each company;
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|
the industries in which each company operates;
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|
each companys principal competitors; and
|
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|
each companys business risk profiles.
|
Houlihan Lokeys market multiple analyses included both
qualitative and quantitative considerations such as size,
profitability, growth history and prospects. However, no single
factor was determinative in these analyses.
Houlihan Lokey reviewed publicly-available financial information
of the following comparable companies for the Levitt operations:
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Avatar Holdings, Inc.;
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Comstock Homebuilding Companies, Inc.;
|
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Dominion Homes, Inc.;
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Meritage Homes Corp.;
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M/I Homes, Inc.;
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Orleans Homebuilders, Inc.;
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Technical Olympic USA, Inc.; and
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WCI Communities, Inc.
|
Houlihan Lokey also reviewed the following comparable companies
for Bluegreen:
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ILX Resorts, Inc.;
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Silverleaf Resorts, Inc.;
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Sunterra Corporation; and
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61
|
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Wyndham Worldwide Corporation.
|
The projections used in Houlihan Lokeys analysis of these
comparable companies were based on publicly available analyst
reports. The analysis indicated that the lowest, mean, median
and highest multiples of stock price to net book value for these
comparable companies as of approximately January 26, 2007
were as follows:
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|
Price/Net
|
|
|
|
Book Value
|
|
|
Low
|
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|
0.22
|
x
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Mean
|
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|
1.00
|
x
|
Median
|
|
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0.91
|
x
|
High
|
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|
1.67
|
x
|
Houlihan Lokey derived Levitts total equity value by
multiplying selected price to book multiples of 0.80x to 1.10x
by Levitts estimated total book equity value as of
December 31, 2006 of $340.2 million. This resulted in
an indicated equity value range for Levitt (including its
Bluegreen interest) of $272.1 million to
$374.2 million, or $13.72 to $18.87 per share of
Levitt common stock based on approximately 19.8 million
fully diluted shares of Levitt common stock outstanding.
In its second valuation approach, Houlihan Lokey applied a book
value multiple approach to only the Levitt operations and then
added the estimated value of Levitts interest in Bluegreen
based on its valuation analysis (discussed below). Book equity
figures of the Levitt operations, as of December 31, 2006,
as estimated by Levitts management, were utilized in the
analysis. Houlihan Lokeys selection of market multiples
for Levitt was based upon its analysis of financial information
of the publicly-traded companies listed above that Houlihan
Lokey viewed to be comparable to Levitt. Houlihan Lokeys
market multiple analyses included both qualitative and
quantitative considerations such as size, profitability, growth
history and prospects. However, no single factor was
determinative in these analyses.
The projections used in Houlihan Lokeys analysis of the
companies viewed as comparable to Levitt were based on public
analyst reports. The analysis indicated that the lowest, mean,
median and highest multiples for these comparable companies as
of approximately January 26, 2007 were as follows:
|
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|
|
|
|
|
Price/Net
|
|
|
|
Book Value
|
|
|
Low
|
|
|
0.22
|
x
|
Mean
|
|
|
0.92
|
x
|
Median
|
|
|
0.82
|
x
|
High
|
|
|
1.67
|
x
|
Houlihan Lokey derived the total equity value of the Levitt
operations by multiplying selected price to book multiples of
0.70x to 0.95x by $233.3 million, which was the estimated
total book equity value of the Levitt operations as of
December 31, 2006. This resulted in an indicated equity
value range for the Levitt operations of $163.3 million to
$221.7 million. The estimated value of Levitts
interest in Bluegreen of $93.6 million to
$122.4 million was then added. This resulted in an
indicated equity value range for Levitt (including its Bluegreen
interest) of $257.0 million to $344.1 million, or
$12.96 to $17.35 per share of Levitt common stock based on
approximately 19.8 million fully diluted shares of Levitt
common stock outstanding.
In its third valuation approach, Houlihan Lokey applied a book
value multiple approach to only the Levitt and Sons
homebuilding segment, utilized an adjusted book value approach
for the Core Communities land development segment and then added
the estimated value of Levitts Bluegreen interest based on
its valuation analysis (discussed below). Book equity figures of
the Levitt and Sons homebuilding segment, as of
December 31, 2006, as estimated by Levitts
management, were utilized in the analysis. Houlihan Lokeys
selection of market multiples for the Levitt and Sons
homebuilding segment was based upon its analysis of financial
information of certain publicly-traded companies listed below
that it considered to be reasonably comparable to the operation
of such segment, based on the homebuilding industry, the
segments principal competitors and the segments
business risk profiles, including:
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Comstock Homebuilding Companies, Inc.;
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62
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Dominion Homes, Inc.;
|
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|
Meritage Homes Corp.;
|
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|
M/I Homes, Inc.;
|
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|
Orleans Homebuilders, Inc.;
|
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|
Technical Olympic USA, Inc.; and
|
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WCI Communities, Inc.
|
Houlihan Lokeys market multiple analyses included both
qualitative and quantitative considerations such as size,
profitability, growth history and prospects. However, no single
factor was determinative in these analyses. For the foregoing
analysis related to the Levitt and Sons homebuilding
segment, Houlihan Lokey reviewed publicly-available financial
information of the same comparable companies as indicated above
for the second valuation approach.
Houlihan Lokey derived the total equity value of the
Levitt and Sons homebuilding segment by multiplying
selected price to book multiples of 0.55x to 0.70x by the
segments estimated total book equity value as of
December 31, 2006 of $118.5 million. This resulted in
an indicated equity value range for the Levitt and Sons
homebuilding segment of $65.1 million to
$82.9 million. Houlihan Lokey then utilized certain
financial data provided by Levitt and others relating to the
Core Communities land development segment. In this analysis, the
book value of the land of such segment was based on such data in
order to arrive at an adjusted book value for the segment of
$127.5 million to $349.4 million. A 1.0x book value
multiple was applied to the foregoing adjusted book value range
to arrive at an indication of value for this segment. The
indicated equity value ranges of the Levitt and Sons
homebuilding segment and Core Communities land development
segment were then summed and the estimated value of
Levitts interest in Bluegreen of $93.6 million to
$122.4 million was added. This resulted in an indicated
equity value range for Levitt (including its interest in
Bluegreen) of $274.6 million to $543.0 million, or
$13.84 to $27.38 per share of Levitt common stock based on
approximately 19.8 million fully diluted shares of Levitt
common stock outstanding.
Finally, Houlihan Lokey conducted a fourth valuation approach
referred to as the normalized net income approach. This approach
has been promulgated by certain equity analysts for use in the
valuation of homebuilding companies during times of depressed or
negative earnings. Homebuilding operators are deemed to have
significant fluctuations in earnings between favorable and less
favorable economic and homebuilding cycles. In this approach,
Houlihan Lokey estimated a normalized net income for the Levitt
operations, or the estimated average level of net income the
Levitt operations could be expected to generate over a full
homebuilding cycle. In order to make an estimate of normalized
net income, an estimated normalized return on equity was
multiplied by the current book equity value of the Levitt
operations. Return on equity is calculated as annual net income
divided by book equity value. Houlihan Lokey utilized a selected
normalized return on equity of 10% to 15% based on Levitts
reported return on equity from 1998 through 2005 and estimated
return on equity from 2006 through 2009. This analysis yielded
an estimated normalized net income for the Levitt operations of
$23.3 million to $35.0 million. Houlihan Lokey then
multiplied the foregoing normalized net income levels by a
selected price to earnings multiple range of 6.0x to 7.0x. The
selected price to earnings range was based upon an analysis of
the comparable companies price to earnings multiple over
the period from 1998 through 2006 and taking into consideration
the fact that the homebuilding industry is currently in a less
favorable part of the homebuilding cycle. This analysis resulted
in an indicated equity value range for the Levitt operations of
$140.0 million to $245.0 million. The estimated value
of Levitts interest in Bluegreen of $93.6 million to
$122.4 million was then added as in the second and third
valuation approaches. This resulted in an indicated equity value
range for Levitt (including its interest in Bluegreen) of
$233.6 million to $367.4 million, or $11.78 to
$18.52 per share of Levitt common stock based on
approximately 19.8 million fully diluted shares of Levitt
common stock outstanding.
After consideration of each of the valuation indications
detailed above, Houlihan Lokey determined the appropriate range
of equity value for Levitt (including Levitts interest in
Bluegreen) to be $260 million to $380 million, or
$13.11 to $19.16 per share of Levitt common stock based on
approximately 19.8 million fully diluted shares of Levitt
common stock outstanding.
63
The implied transaction value per share for Levitt of
$14.41 per share of Levitt common stock (based upon the
exchange ratio of 2.27x and the BFC Class A Common Stock
closing price of $6.35 on January 30, 2007) is within
each of the foregoing indicated ranges of Levitt equity value
per share.
Bluegreen
Valuation
A market multiple analysis was used to provide an indication of
enterprise value derived from multiples of EBITDA, earnings
before interest and taxes, or EBIT, and net income of selected
comparable public companies. The purpose of the market multiple
analysis is to calculate the enterprise value of Bluegreen using
valuation multiples of publicly-traded comparable companies as
specified below.
Houlihan Lokeys selection of market multiples for
Bluegreen was based upon its analysis of financial information
of certain publicly-traded companies listed below that it
considered to be reasonably comparable to Bluegreen, based on
the industries in which this company operates, its principal
competitors and its business risk profiles. Houlihan
Lokeys market multiple analyses included both qualitative
and quantitative considerations such as size, profitability,
growth history and prospects. However, no single factor was
determinative in these analyses.
Houlihan Lokey calculated certain financial ratios of these
comparable companies based on the most recent publicly available
information regarding these companies, including the multiples
of enterprise value to EBITDA, enterprise value to EBIT, and
market value of equity, or MVE, to net income in the next fiscal
year, or NFY, which generally refers to the fiscal year ended
December 31, 2006, and projected amounts in the subsequent
fiscal year ending December 31, 2007, or NFY+1.
After reviewing various representative indications of operating
performance prepared by Houlihan Lokey, it considered EBITDA,
EBIT and net income as the most meaningful measures of operating
performance applicable to Bluegreen. Houlihan Lokey derived
indications of Bluegreens enterprise value by applying
selected multiples to those actual and projected operating
results that were deemed to be most appropriate for each company.
Houlihan Lokey reviewed publicly available financial information
of the following comparable companies:
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ILX Resorts, Inc.;
|
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|
Silverleaf Resorts, Inc.;
|
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|
Sunterra Corporation; and
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|
Wyndham Worldwide Corporation.
|
The projections used in Houlihan Lokeys analysis of these
comparable companies were based on public analyst reports.
The analysis indicated that the mean and median multiples for
these comparable companies as of approximately January 26,
2007 were as follows:
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EV/EBITDA
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EV/EBIT
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Price/Earnings
|
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NFY
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NFY + 1
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NFY
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NFY + 1
|
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NFY
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NFY + 1
|
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Mean
|
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|
8.6
|
x
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|
|
8.1
|
x
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|
10.2
|
x
|
|
|
NA
|
|
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|
13.2
|
x
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|
|
11.10
|
x
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Median
|
|
|
8.0
|
x
|
|
|
7.0
|
x
|
|
|
8.6
|
x
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|
NA
|
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13.5
|
x
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9.30
|
x
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For purposes of determining the appropriate level of EBITDA,
EBIT and net income for Bluegreen, Houlihan Lokey used publicly
available financial information as well as historical and
projected financial statements provided by Bluegreens
management, and adjusted for certain nonrecurring expenses.
Houlihan Lokey derived Bluegreens enterprise value by
multiplying selected EBITDA, EBIT and net income multiples by
Bluegreens adjusted EBIT, EBITDA, and net income results
for NFY and NFY+1. With respect to enterprise
value-to-EBITDA
multiples, Houlihan Lokey selected multiples in the range of
5.5x to 6.0x and 5.0x to 5.5x for NFY and NFY +1, respectively.
For enterprise
value-to-EBIT
multiples, Houlihan Lokey selected multiples from 6.0x to 6.5x
and 5.5x to 6.0x for NFY and NFY +1, respectively, and for
price-to-earnings,
Houlihan Lokey selected multiples from 8.5x to 10x and 6.5x to
8.0x for NFY and NFY +1, respectively. In determining enterprise
value from its applied net income multiples, Houlihan Lokey
added net debt and minority interest to its capitalized
64
net income figures. Based on the selected multiples, the
indicated enterprise value range for Bluegreen was
$570 million to $630 million. Concluded equity value
ranges were generated by adding excess cash and marketable
securities to enterprise value and subtracting financial
liabilities and minority interest, resulting in an indicated
equity value range of $340 million to $400 million, or
$10.84 per share to $12.76 per share of Bluegreen
common stock based on 31.4 million fully diluted shares of
Bluegreen common stock outstanding. This compares to the trading
price of Bluegreen common stock of $12.43 on January 26,
2007. It is noted that Houlihan Lokeys analysis included
data for the fourth quarter of 2006 which was generally below
managements expectations and which was not publicly
available at the date of its opinion, and, therefore,
Bluegreens common stock price may not have reflected such
information. In addition, because Levitt holds a large but
non-controlling interest in Bluegreen, for purposes of valuing
Levitts interest in Bluegreen, Houlihan Lokey applied a
10% block discount to the low end of the indicated range to take
into account the possible market impact should Levitt choose to
exit its position.
BankAtlantic
Bancorp Valuation
Prior to February 28, 2007, BankAtlantic Bancorp consisted
of BankAtlantic, which provides consumer and commercial banking,
and Ryan Beck, a full service broker-dealer. On
February 28, 2007, BankAtlantic Bancorp completed the sale
of Ryan Beck to Stifel Financial Corp. The following is a
summary of the financial analyses performed by Houlihan Lokey
regarding the valuation of BankAtlantic Bancorp.
Market Multiple Analysis. Houlihan Lokey
reviewed and compared selected financial information for
BankAtlantic to corresponding financial information and market
data for the following six publicly-traded bank and thrift
institutions set forth below, selected on the basis of
operational and economic similarity with the principal business
operations of BankAtlantic:
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BankUnited Financial Corporation;
|
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Capital City Bank Group, Inc.;
|
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|
Seacoast Banking Corporation of Florida;
|
|
|
|
CenterState Banks of Florida, Inc.;
|
|
|
|
Commercial Bankshares, Inc.; and
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|
TIB Financial Corporation.
|
Houlihan Lokeys market multiple analysis included both
qualitative and quantitative considerations such as size,
profitability, growth history and prospects. However, no single
factor was determinative in these analyses.
Houlihan Lokey calculated various financial multiples and ratios
for the peer group based on the most recent publicly available
financial data and market data as of January 26, 2007. This
information was obtained from filings with the SEC and the
Institutional Brokers Estimate Systems, a data service that
compiles earnings estimates issued by securities analysts. The
analysis compared publicly available information for
BankAtlantic with that of each company in the peer group. The
table below sets forth mean and median data for the peer group.
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|
|
|
|
|
|
|
|
|
|
|
As of January 26, 2007
|
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|
|
|
|
|
|
|
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Price/
|
|
|
Tangible Book
|
|
|
|
Price/
|
|
|
Price/
|
|
|
Tangible
|
|
|
Premium/
|
|
|
|
2007E Earnings
|
|
|
Book Value
|
|
|
Book Value
|
|
|
Core Deposits
|
|
|
Mean
|
|
|
18.0
|
x
|
|
|
2.2
|
x
|
|
|
2.5
|
x
|
|
|
19.2
|
%
|
Median
|
|
|
18.6
|
x
|
|
|
2.1
|
x
|
|
|
2.6
|
x
|
|
|
18.2
|
%
|
After observing the metrics of the peer group, Houlihan Lokey
selected multiples of
price-to-fiscal
year 2007 estimated earnings in the range of 15.0x to 19.0x,
multiples of book value in the range of 1.6x to 2.1x, multiples
of tangible book value in the range of 1.9x to 2.4x and a
percentage of tangible book premium to core deposits in the
range of 6.0% to 10.0%. Based on the selected multiples and
percentages, the indicated equity value range for BankAtlantic
was $660 million to $830 million.
65
Transaction Multiple Analysis. Houlihan Lokey
reviewed and compared the financial information for BankAtlantic
to the following 32 transactions announced from January 1,
2002 through December 26, 2006 involving controlling
interests in thrift institutions located in the Southeast.
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Date Announced
|
|
Acquiror
|
|
Target
|
|
12/26/06
|
|
Coastal Community Investments Inc.
|
|
Bayside Financial Corp.
|
12/20/06
|
|
BB&T Corp.
|
|
Coastal Financial Corp.
|
10/23/06
|
|
Community Bank Investors of America
|
|
Bay Financial Savings Bank FSB
|
07/26/06
|
|
IBERIABANK Corp.
|
|
Pocahontas Bancorp Inc.
|
07/26/06
|
|
National City Corp.
|
|
Fidelity Bankshares Inc.
|
07/10/06
|
|
National City Corp.
|
|
Harbor Florida Bancshares Inc.
|
07/10/06
|
|
Soutern National Bancorp of VA Inc.
|
|
1st Service Bank
|
06/09/06
|
|
Republic Bancorp Inc.
|
|
Gulfstream Community Bank
|
01/26/06
|
|
Mercantil Servicios
|
|
Florida Savings Bank
|
08/28/05
|
|
RLJ Companies LLC
|
|
Worldwide Financial Investors, Inc.
|
05/25/05
|
|
Northwest Bancorp Inc. (MHC)
|
|
Equinox Financial Corp.
|
04/18/05
|
|
Boston Private Financial Holdings,
Inc.
|
|
Gibraltar Financial Corp.
|
03/31/05
|
|
Omni Financial Services, Inc.
|
|
Georgia Community Bankshares Inc.
|
02/03/05
|
|
HomeTrust Bank
|
|
Home Savings Bank SSB of Eden
|
01/14/05
|
|
Colonial BancGroup Inc.
|
|
FFLC Bancorp Inc.
|
12/21/04
|
|
Atlanta Bancorporation, Inc.
|
|
Gibsonville Community Bank
|
09/30/04
|
|
Firstrust Corporation
|
|
Central Bank for Savings
|
09/01/04
|
|
Parkvale Financial Corp.
|
|
Advance Financial Bancorp
|
04/12/04
|
|
First Community Corp.
|
|
DutchFork Bancshares Inc.
|
03/16/04
|
|
United Community Banks Inc.
|
|
Fairbanco Holding Co. Inc.
|
02/04/04
|
|
SouthTrust Corp.
|
|
FloridaFirst Bancorp Inc.
|
01/13/04
|
|
Rock Bancshares Inc.
|
|
HCB Bancshares Inc.
|
07/24/03
|
|
Southern Financial Bancorp
|
|
Essex Bancorp Inc.
|
05/16/03
|
|
Arvest Bank Group Inc.
|
|
Superior Financial Corp.
|
03/21/03
|
|
FNB Corp.
|
|
Bedford Bancshares Inc.
|
01/29/03
|
|
Private Investor
|
|
Monticello Bank
|
01/22/03
|
|
SunTrust Banks Inc.
|
|
Lighthouse Financial Services, Inc.
|
10/25/02
|
|
Security Savings Bank, Ssb
|
|
Liberty S&LA
|
08/06/02
|
|
Worldwide Financial Investors, Inc.
|
|
Metro Savings Bank, FSB
|
05/30/02
|
|
Citizens Bancshares Corp.
|
|
CFS Bancshares Inc.
|
05/22/02
|
|
BB&T Corp.
|
|
Regional Financial Corp.
|
03/26/02
|
|
Royal Bank of Canada
|
|
Eagle Bancshares, Inc.
|
For each of these transactions, Houlihan Lokey relied on
information from public filings, press releases, and investor
presentations as well as other publicly available sources.
Houlihan Lokey reviewed the multiples of transaction price to
forward estimated earnings, transaction price to book value,
transaction price to tangible book value and tangible book
premium to core deposits as of the most recent period available
at the time of the announcement date of the transaction. The
table below sets forth the data for the selected transactions.
66
|
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|
|
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|
Price/
|
|
|
Tangible Book
|
|
|
|
Price/
|
|
|
Price/
|
|
|
Tangible
|
|
|
Premium/
|
|
|
|
2007E Earnings
|
|
|
Book Value
|
|
|
Book Value
|
|
|
Core Deposits
|
|
|
Low
|
|
|
10.9
|
x
|
|
|
1.0
|
x
|
|
|
1.0
|
x
|
|
|
0.20
|
%
|
Mean
|
|
|
21.1
|
x
|
|
|
2.1
|
x
|
|
|
2.3
|
x
|
|
|
17.00
|
%
|
Median
|
|
|
21.3
|
x
|
|
|
1.8
|
x
|
|
|
2.0
|
x
|
|
|
17.80
|
%
|
High
|
|
|
29.0
|
x
|
|
|
3.7
|
x
|
|
|
3.7
|
x
|
|
|
47.70
|
%
|
After observing the metrics of the selected transactions,
Houlihan Lokey selected multiples of price to 2007 estimated
earnings in the range of 18.0x to 22.0x, multiples of book value
in the range of 1.4x to 1.9x, multiples of tangible book value
in the range of 1.6x to 2.1x and a percentage of tangible book
premium to core deposits in the range of 10.0% to 14.0%. Based
on the selected multiples and percentages, the indicated equity
value range for BankAtlantic was approximately $660 million
to $840 million.
On January 8, 2007, BankAtlantic Bancorp announced that it
had entered into a definitive agreement under which Ryan
Becks parent company, Ryan Beck Holdings, Inc., would be
sold to Stifel Financial Corp. This sale was completed on
February 28, 2007. In determining the estimated range of
value attributable to BankAtlantic Bancorp from the sale of Ryan
Beck., Houlihan Lokey relied on information from public filings,
press releases, and investor presentations as well as other
publicly available sources. Based on transaction consideration
and contingent payments, Houlihan Lokey estimated the equity
value range for Ryan Beck was $124 million to
$144 million.
The consolidated equity value for BankAtlantic Bancorp including
the estimated range in sale value of Ryan Beck of
$124 million to $144 million was $784 million to
$984 million or $12.54 per share to $15.75 per
share of BankAtlantic Bancorp common stock based on
62.5 million fully diluted shares of BankAtlantic Bancorp
common stock outstanding. This compares to the trading price of
BankAtlantic Bancorp Class A Common Stock of $13.01 on
January 26, 2007.
Benihana
Valuation
A market multiple analysis was used to provide an indication of
enterprise value derived from multiples of EBITDA and revenues.
The purpose of the market multiple analysis is to calculate the
value of Benihana enterprise value using valuation multiples of
publicly-traded comparable companies as specified below.
Houlihan Lokeys selection of market multiples for Benihana
was based upon Houlihan Lokeys analysis of financial
information of certain publicly-traded companies listed below
that it considered to be reasonably comparable to Benihana,
based on the industries in which this company operates, its
principal competitors and its business risk profiles. Houlihan
Lokeys market multiple analyses included both qualitative
and quantitative considerations such as size, profitability,
growth history and prospects. However, no single factor was
determinative in these analyses.
Houlihan Lokey calculated certain financial ratios of these
comparable companies based on the most recent publicly available
information regarding these companies, including the multiples
of enterprise value to EBITDA and enterprise value to revenue
for the last twelve month, or LTM, period.
After reviewing various representative indications of operating
performance, Houlihan Lokey considered EBITDA and revenue as the
most meaningful measures of operating performance. Houlihan
Lokey derived indications of enterprise value by applying
selected multiples to those actual and projected operating
results that were deemed to be most appropriate for each company.
Houlihan Lokey reviewed publicly-available financial information
of the following comparable companies:
|
|
|
|
|
CEC Entertainment Inc.;
|
|
|
|
Texas Roadhouse, Inc.;
|
|
|
|
BJs Restaurants Inc.;
|
|
|
|
Ruths Chris Steak House, Inc.;
|
67
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|
|
|
|
Lubys Inc.;
|
|
|
|
Mortons Restaurant Group, Inc.;
|
|
|
|
Frischs Restaurant Inc.;
|
|
|
|
BUCA, Inc.;
|
|
|
|
Champps Entertainment, Inc.; and
|
|
|
|
Prandium Inc.
|
The projections used in Houlihan Lokeys analysis of these
comparable companies were based on public analyst reports.
For purposes of determining the appropriate level of EBITDA and
revenue, Houlihan Lokey used historical financial statements and
adjusted for certain nonrecurring expenses. The analysis
indicated that the mean and median multiples of Benihanas
enterprise value as compared to LTM EBITDA and revenue for these
comparable companies as of approximately January 26, 2007
were as follows:
|
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|
|
|
|
|
|
|
|
EV/EBITDA
|
|
|
EV/Revenue
|
|
|
|
LTM
|
|
|
LTM
|
|
|
Mean
|
|
|
12.1
|
x
|
|
|
1.19
|
x
|
Median
|
|
|
10.1
|
x
|
|
|
0.98
|
x
|
Houlihan Lokey derived Benihanas enterprise value by
multiplying selected EBITDA and revenue multiples by
Benihanas adjusted EBITDA and revenue results for the LTM
as of January 26, 2007. Houlihan Lokey selected multiples
of enterprise value to EBITDA in the range of 10.0x to 11.0x and
multiples of enterprise value to revenue in the range of 1.35x
to 1.55x. Based on the selected multiples, the indicated
enterprise value range for Benihana was $349 million to
$393 million. Adjustments for cash and debt were made by
adding cash and subtracting debt from Benihanas total
enterprise value in order to arrive at Benihanas equity
value. Based on Benihanas latest publicly available
financial information, Houlihan Lokey arrived at a concluded
equity value range for Benihana of $360 million to
$400 million, or $31.18 to $34.64 per share of Benihana
common stock based on 11.5 million fully diluted shares of
Benihana common stock outstanding. This compares to the trading
price of Benihana common stock of $33.13 on January 26,
2007.
BFC
Valuation
BFC and its underlying holdings were valued using a
build-up, or
sum-of-the-parts,
method. In reaching a consolidated equity value range for BFC,
Houlihan Lokey relied on its valuations for each of BFCs
primary holdings, including Levitt (which holds an interest in
Bluegreen), BankAtlantic Bancorp and Benihana, as well as
Houlihan Lokeys estimate of the net value of BFCs
corporate and other assets. BFC holds an approximate 17%
interest in Levitt, the aggregate equity value of which Houlihan
Lokey determined is reasonably stated at $260 million to
$380 million (including Levitts interest in
Bluegreen), leading to a total value, prior to the proposed
merger, of BFCs interest in Levitt of $43 million to
$63 million. BFC holds an approximate 21% interest in
BankAtlantic Bancorp, which Houlihan Lokey determined is
reasonably stated at $784 million to $984 million,
leading to a total value of BFCs interest of
$166 million to $208 million. BFC also holds an
approximate 9% interest in Benihana. Houlihan Lokey valued this
interest by valuing BFCs $20 million face value
interest in Benihana convertible preferred stock on an
as-converted basis, resulting in an ownership equivalent to
1.05 million shares of Benihana Class A Common Stock.
Houlihan Lokey valued Benihanas total equity at
$360 million to $400 million, resulting in a range of
value for BFCs equity interest in Benihana of
$33 million to $36 million. Finally, Houlihan Lokey
valued BFCs corporate and other assets and liabilities,
including BFCs 5% Cumulative Convertible Preferred Stock,
overhead costs, tax assets and liabilities and certain other
investments and interests outside of BFCs ownership of
Levitt, BankAtlantic Bancorp and Benihana. This resulted in a
range of negative $20 million to negative $40 million,
which is consistent with the observed discount of BFCs
market value to the aggregate value of BFCs combined
equity interests in Levitt, BankAtlantic Bancorp and Benihana.
Houlihan Lokey summed the foregoing components of BFC which
resulted in a total equity value range from $222 million to
$267 million, or $6.13 to $7.39 per share of BFC
common stock based on 36.2 million fully diluted shares of
BFC
68
common stock outstanding. This compares to the trading price of
BFC Class A Common Stock of $6.22 on January 26, 2007.
Exchange Ratio and Premium Paid Analysis. The
foregoing analyses resulted in an indicated range for Levitt of
$13.11 to $19.16 per share and a valuation range for BFC of
$6.13 to $7.39 per share. Houlihan Lokey then divided the
low-end and high-end Levitt values by the respective low-end and
high-end BFC values, resulting in an implied pre-merger exchange
ratio range of 2.14x to 2.59x. Houlihan Lokey noted that the
merger exchange ratio of 2.27x falls within the indicated range.
Houlihan Lokey also observed that the merger exchange ratio of
2.27x reflects a premium above the market-implied exchange ratio
of 1.75x as of January 26, 2007 and the six-month average
market-implied exchange ratio of 2.04x.
Houlihan Lokey also conducted an estimated post-merger exchange
ratio analysis taking into account BFCs full
ownership of Levitt, the pro forma fully diluted number of
shares of BFC common stock outstanding post-merger and Houlihan
Lokeys valuation ranges for the aggregate equity value of
Levitt and BFC. Houlihan Lokey estimated a post-merger value
range for BFC of $5.95 to $7.93 per share, which, when
multiplied by the 2.27x merger exchange ratio, values the
consideration to be received by the minority shareholders at
$13.50 to $18.00 per share of Levitt Class A Common
Stock as compared to Houlihan Lokeys value range for
Levitt of $13.11 to $19.16 per share on a stand-alone
basis. It is also noted that Houlihan Lokeys estimated
value range for Levitt of $13.11 to $19.16 on a stand-alone
basis reflects premiums of 20.5% and 76.1%, respectively, above
the January 30, 2007 Levitt Class A Common Stock price.
It is noted that based on the BFC Class A Common Stock
closing price of $6.22 on January 26, 2007, the implied
transaction value per share for Levitt is $14.12 per share,
representing a 29.5% premium above the January 26, 2007
Levitt Class A Common Stock closing price of
$10.90 per share. The implied premiums based on
10-day,
20-day and
30-day
average prices for Levitt and BFC are 25.4%, 24.9% and 23.8%,
respectively. It is noted that based on the BFC Class A
Common Stock closing price of $6.35 on January 30, 2007,
the day prior to the announcement of the merger agreement, the
implied transaction value per share for Levitt is
$14.41 per share, representing a 32.4% premium above the
January 30, 2007 Levitt Class A Common Stock closing
price of $10.88 per share. Houlihan Lokey observes that
such implied premiums are in line with those observed in the
market for both cash and stock transactions and stock-only
transactions across all industries, as well as for stock and
cash transactions in the homebuilding industry. The table below
highlights Houlihan Lokeys observations of mean and median
premiums for periods of one day and 30 days prior to
announcement, based on transactions involving public companies
in the United States during the past three years with
transaction values greater than $100 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Industries
|
|
|
|
|
All Industries
|
|
|
|
|
Homebuilding
|
|
|
|
Cash & Stock Deal(1)
|
|
|
|
|
Stock Only Deals(1)
|
|
|
|
|
Cash & Stock Deal(1)
|
|
|
|
Premium
|
|
|
Premium
|
|
|
|
|
Premium
|
|
|
Premium
|
|
|
|
|
Premium
|
|
|
Premium
|
|
|
|
1 Day
|
|
|
30 Day
|
|
|
|
|
1 Day
|
|
|
30 Day
|
|
|
|
|
1 Day
|
|
|
30 Day
|
|
|
Mean
|
|
|
26
|
%
|
|
|
34
|
%
|
|
Mean
|
|
|
27
|
%
|
|
|
33
|
%
|
|
Mean
|
|
|
26
|
%
|
|
|
24
|
%
|
Median
|
|
|
21
|
%
|
|
|
26
|
%
|
|
Median
|
|
|
21
|
%
|
|
|
27
|
%
|
|
Median
|
|
|
27
|
%
|
|
|
27
|
%
|
|
|
|
(1) |
|
Deal premiums calculated relative to target company price
1 day and 30 days prior to announcement. |
Houlihan Lokey also notes that when excluding the value of
Levitts interest in Bluegreen based on the market prices
of Levitt and Bluegreen shares on January 26, 2007, the
implied market equity value of the Levitt operations less
Levitts interest in Bluegreen is approximately
$98 million. Based on the implied transaction value for
Levitt of $14.12 per share, when excluding the value of
Levitts interest in Bluegreen, the implied value of the
Levitt operations is approximately $162 million, or a 65%
premium to the implied market equity value of the Levitt
operations on January 26, 2007.
Assumptions
Houlihan Lokey relied upon and assumed, without independent
verification, the accuracy and completeness of all data,
material and other information furnished, or otherwise made
available, to Houlihan Lokey, discussed with or reviewed by
Houlihan Lokey, or publicly available, and does not assume any
responsibility for independently verifying such data, material
and other information. In addition, management of each of Levitt
and BFC or their
69
respective subsidiaries have advised Houlihan Lokey, and
Houlihan Lokey has assumed, that the financial forecasts and
projections have been reasonably prepared in good faith on bases
reflecting the best currently available estimates and judgments
of such managements as to the future financial results and
condition of Levitt, BFC and their respective subsidiaries, and
Houlihan Lokey expresses no opinion with respect to such
forecasts and projections or the assumptions on which they are
based. Houlihan Lokey has relied upon and assumed, without
independent verification, that there has been no material change
in the assets, liabilities, financial condition, results of
operations, business or prospects of Levitt or BFC and their
respective subsidiaries since the date of the most recent
financial statements provided to Houlihan Lokey and that there
are no information or facts that would make any of the
information reviewed by Houlihan Lokey incomplete or misleading.
Houlihan Lokey has not considered any aspect or implication of
any transaction to which Levitt or BFC or their respective
subsidiaries is a party, other than the merger.
Houlihan Lokey has relied upon and assumed, without independent
verification, that (a) the representations and warranties
of all parties to the agreements identified above and all other
related documents and instruments that are referred to above are
true and correct, (b) each party to all such agreements
will fully and timely perform all of the covenants and
agreements required to be performed by such party, (c) all
conditions to the consummation of the merger will be satisfied
without waiver thereof, and (d) the merger will be
consummated in a timely manner in accordance with the terms
described in the agreements provided to Houlihan Lokey, without
any amendments or modifications thereto or any adjustment to the
aggregate consideration (through offset, reduction, indemnity
claims, post-closing purchase price adjustments or otherwise).
Houlihan Lokey also has relied upon and assumed, without
independent verification, that (i) the merger will be
consummated in a manner that complies in all respects with all
applicable federal and state statutes, rules and regulations,
and (ii) all governmental, regulatory, and other consents
and approvals necessary for the consummation of the merger will
be obtained and that no delay, limitations, restrictions or
conditions will be imposed or amendments, modifications or
waivers made that would result in the disposition of any
material portion of the assets of Levitt or BFC, or otherwise
have an adverse effect on Levitt or BFC or any expected benefits
of the merger. In addition, Houlihan Lokey has relied upon and
assumed, without independent verification, that the final forms
of the draft documents identified above will not differ in any
material respect from such draft documents. Levitt and BFC also
have informed Houlihan Lokey, and Houlihan Lokey has relied upon
and assumed, without independent verification, that the merger
will qualify as a tax-free reorganization for federal income tax
purposes.
Miscellaneous
Houlihan Lokey has not considered, nor did Houlihan Lokey
express any opinion with respect to, the prices at which the
common stock of Levitt or BFC has traded or may trade at any
time. Houlihan Lokey has assumed that the BFC Class A
Common Stock to be issued in the merger to the shareholders of
Levitt will be listed on the NYSE Arca Stock Exchange.
Subsequent events that could materially affect the conclusions
set forth in the Houlihan Lokey opinion include, without
limitation, changes in industry performance or market
conditions; changes to the business, financial condition and
results of operations of Levitt, BFC and their respective
subsidiaries; changes in the terms of the merger; and the
failure to consummate the merger within a reasonable period of
time.
As a matter of course, neither Levitt nor its subsidiaries
publicly discloses financial projections. However, in connection
with its analyses, Houlihan Lokey considered financial
projections prepared by the managements of Levitt and its
subsidiaries. These financial projections were prepared under
market conditions as they existed before the date of the
Houlihan Lokey opinion and do not take into account any
circumstances or events occurring after the date they were
prepared. In addition, factors such as industry performance and
general business, economic, regulatory, market and financial
conditions, as well as changes to the business, financial
condition or results of operation of Levitt or its subsidiaries,
as the case may be, may cause these financial projections or the
assumptions underlying these financial projections to be
inaccurate. As a result, these financial projections should not
be relied upon as necessarily indicative of future results.
In the ordinary course of business and in compliance with
applicable laws, certain of Houlihan Lokeys affiliates, as
well as investment funds in which Houlihan Lokey or its
affiliates may have financial interests, may acquire, hold or
sell long or short positions, or trade or otherwise effect
transactions, in debt, equity, and other
70
securities and financial instruments (including bank loans and
other obligations) of, or investments in, Levitt, BFC, any other
party that may be involved in the merger and their respective
affiliates.
Houlihan Lokey and its affiliates have in the past provided, are
currently providing, and in the future may provide, investment
banking and other financial services to Levitt, for which they
have received, and would expect to receive, compensation.
Houlihan Lokey has received a fee of $250,000 for rendering its
opinion, which is not contingent upon the successful completion
of the merger. Houlihan Lokey Howard & Zukin Capital,
an affiliate of Houlihan Lokey, has also acted as financial
advisor to the Levitt special committee with respect to the
merger and has received a retainer fee of $150,000, which is not
contingent upon the successful completion of the merger, and
will receive an additional $850,000 fee upon the successful
completion of the merger. Levitt will also reimburse Houlihan
Lokey and its affiliates for a portion of their legal expenses,
as well as all of their reasonable
out-of-pocket
expenses incurred from time to time in connection with rendering
the opinion described in this section and providing financial
advisory services to the Levitt special committee. Levitt has
agreed to indemnify Houlihan Lokey and its affiliates for
certain liabilities that may arise in connection with their
engagement.
Houlihan Lokeys opinion was delivered subject to the
conditions, scope of engagement, limitations and understandings
set forth in the opinion and Houlihan Lokeys engagement
letter, and subject to the understanding that the obligations of
Houlihan Lokey in the transaction are solely corporate
obligations, and no officer, director, employee, agent,
affiliate, shareholder or controlling person of Houlihan Lokey
or its affiliates will be subject to any personal liability
whatsoever to any person, nor will any such claim be asserted by
or on behalf of the Levitt special committee, the Levitt board
of directors or their affiliates.
The Levitt special committee chose to retain Houlihan Lokey to
serve as its financial advisor based upon Houlihan Lokeys
experience in the valuation of businesses and their securities
in connection with mergers, acquisitions, recapitalizations and
similar transactions. In addition, the Levitt special committee
considered that it had engaged Houlihan Lokey in the past and
that Houlihan Lokey was familiar with Levitt and several members
of the Levitt special committee. Houlihan Lokey is an
internationally recognized investment banking firm that is
engaged in providing financial advisory services and rendering
fairness opinions in connection with mergers and acquisitions,
leveraged buyouts, and business and securities valuation for a
variety of regulatory and planning purposes, recapitalizations,
financial restructurings and private placements of debt and
equity securities.
Interests
of Certain Persons in the Merger
In considering the recommendation of the board of directors of
BFC to vote in favor of the merger and the related transactions
and the recommendation of the board of directors of Levitt to
vote in favor of the approval of the merger agreement,
shareholders should be aware that certain directors and
executive officers of each of BFC and Levitt may have interests
in the merger that are different from, or are in addition to,
the interests of BFCs and Levitts respective
shareholders, generally. The special committees and boards of
directors of each of BFC and Levitt were aware of these
interests during their deliberations on the merits of the merger
agreement and the transactions contemplated thereby and in
determining to make their recommendations.
Stock
Ownership of Alan B. Levan, John E. Abdo and their
Affiliates
Alan B. Levan, the chairman of the board of directors and chief
executive officer of each of BFC and Levitt, John E. Abdo, the
vice chairman of the board of directors of each of BFC and
Levitt, and their affiliates collectively own approximately
44.4% of the outstanding shares of BFC Class A Common Stock
and 86.4% of the outstanding shares of BFC Class B Common
Stock, representing approximately 77.1% of the general voting
power and 52.7% of the total common stock of BFC.
After completion of the merger, Alan B. Levan and John E. Abdo,
together with their affiliates, are expected to own
approximately 19.3% of the outstanding shares of BFC
Class A Common Stock and approximately 86.4% of the
outstanding shares of BFC Class B Common Stock, which would
represent in the aggregate approximately 71.6% of the general
voting power and 25.8% of the total common stock of BFC.
71
Appointment
of Directors of Levitt to BFCs Board of
Directors
As described in further detail below in Board of Directors
and Executive Officers of BFC Following the Merger, in
connection with the merger, BFC has agreed to cause
Messrs. James Blosser, Darwin Dornbush, S. Lawrence
Kahn, III, Alan J. Levy, Joel Levy, William Nicholson and
William Scherer, all of whom are members of the board of
directors of Levitt, to be appointed to BFCs board of
directors to serve until BFCs 2008 annual meeting of
shareholders.
Indemnification
and Insurance Provisions in the Merger Agreement
The merger agreement provides that the Surviving Corporation
will indemnify, defend and hold harmless each present and former
director and officer of Levitt for each such directors and
officers liabilities with respect to acts or omissions
occurring prior to the effective time of the merger, to the same
extent as provided for under the FBCA and in Levitts
Articles of Incorporation or By-laws.
The merger agreement also provides that for six years after the
effective time of the merger, the Surviving Corporation will
maintain or cause to be maintained in effect the current
policies of directors and officers liability
insurance maintained by Levitt or a substitute policy of at
least the same coverage and amount as, and containing terms and
conditions which are substantially no less advantageous than,
the Levitt policy, in each case, with respect to claims arising
from facts or events which occurred before the effective time of
the merger. Alternatively, the Surviving Corporation may obtain
single limit tail directors and officers liability
insurance coverage providing at least the same coverage and
amount as, and containing terms and conditions which are
substantially no less advantageous than, the Levitt policy for
such six-year period with respect to claims arising from facts
or events which occurred before the effective time of the merger.
Articles
of Incorporation and By-laws of BFC Following the
Merger
In connection with the merger, BFCs Articles of
Incorporation will be amended to increase the authorized number
of shares of BFC Class A Common Stock from 70,000,000 to
130,000,000 and BFCs By-laws will be amended to increase
the maximum number of members of the board of directors of BFC
from 12 to 17. The Articles of Amendment to BFCs Articles
of Incorporation and the Amended and Restated By-laws of BFC to
be adopted in connection with the merger are as set forth on
Annexes D and E hereto, respectively, and you are urged to
read them carefully.
Board of
Directors and Executive Officers of BFC Following the
Merger
Currently, there are six persons serving on the board of
directors of BFC, each of whom will continue to serve as
directors of BFC following the merger. A summary of the
background and experience of each of these individuals is set
forth under Management of BFC Board of
Directors of BFC beginning on page 105. Additionally,
in connection with the merger, BFC has agreed to cause each of
Messrs. James Blosser, Darwin Dornbush, S. Lawrence
Kahn, III, Alan J. Levy, Joel Levy, William Nicholson and
William Scherer, the seven current directors of Levitt who are
not also directors of BFC, to be appointed to the board of
directors of BFC to serve until BFCs 2008 annual meeting
of shareholders. A summary of the background and experience of
each such Levitt director to be appointed to the board of
directors of BFC in connection with the merger is set forth
under Management of Levitt Board of Directors
of Levitt beginning on page 128.
Upon the completion of the merger, the executive officers of BFC
in office immediately prior to the effective time of the merger
will be the executive officers of BFC.
Ownership
of BFC Following the Merger
Based on the number of shares of Levitt Class A Common
Stock (other than shares owned by BFC) and BFC Class A
Common Stock outstanding as of March 20, 2007, and assuming
no holders of Levitt Class A Common Stock choose to
exercise and perfect their appraisal rights, immediately
following the merger, Levitts shareholders will own
approximately 51% and BFCs shareholders will own
approximately 49% of the then-outstanding shares of BFC
Class A Common Stock. Immediately following the merger,
shares of BFC Class A Common Stock and Class B Common
Stock will represent in the aggregate 22% and 78%, respectively,
of the general voting power of BFC and approximately 90% and
10%, respectively, of the total outstanding common equity of BFC.
72
Amendment
of the BFC 2005 Stock Incentive Plan
If the merger is completed, Levitts employees will be
eligible to receive options to purchase shares of BFC
Class A Common Stock and restricted stock awards of shares
of BFC Class A Common Stock if and when granted pursuant to
the BFC 2005 Stock Incentive Plan. Because Levitt has
significantly more employees than BFC, the BFC 2005 Stock
Incentive Plan will be amended in connection with the merger
solely to increase the maximum number of shares of BFC
Class A Common Stock authorized for issuance pursuant to
such plan from 3,000,000 to 8,000,000. The BFC 2005 Stock
Incentive Plan is referred to within this section as the
plan.
Background
and Purpose of the Plan
The plan was adopted by BFCs board of directors and
approved by BFCs shareholders in 2005. The following
summary is qualified in its entirety by reference to the Form of
Amended and Restated BFC Financial Corporation 2005 Stock
Incentive Plan, which is attached to this joint proxy
statement/prospectus as Annex F.
The purpose of the plan is to attract and retain the best
available personnel for positions of substantial responsibility
at BFC, to provide additional long term incentives to the
employees of BFC and its subsidiaries as well as other
individuals who perform services for BFC and its subsidiaries
and to promote the success and profitability of BFCs
business.
Description
of the Plan
Types of Awards. The plan allows BFC to grant
stock options (both incentive stock options and non-qualified
stock options) and restricted stock. The plan provides BFC with
flexibility to respond to changes in equity compensation
practices.
Administration. The plan is administered by a
committee consisting of no less than two members of BFCs
board of directors. BFCs board of directors may exercise
any power or discretion conferred on the administrative
committee.
Stock Subject to the Plan. BFC will at all
times reserve and keep available such number of shares as may be
required to meet the needs of the plan. Currently, a maximum of
3,000,000 shares of BFC Class A Common Stock may be
issued for restricted stock awards and upon the exercise of
options granted under the plan. In connection with the merger,
the plan will be amended solely to increase the aggregate number
of shares of BFC Class A Common Stock authorized for
issuance pursuant to such plan from 3,000,000 to 8,000,000. Any
shares subject to stock awards or option grants under the plan
which expire or are terminated, forfeited or cancelled without
having been exercised or vested in full, shall be available for
further grant under the plan.
Eligibility. The administrative committee
selects the people who will receive stock option grants and
restricted stock awards under the plan. Any employee or director
of BFC or of any of BFCs subsidiaries or parent, and any
independent contractor or agent of BFC, may be selected to
receive restricted stock awards and stock option grants.
Restricted Stock Awards. The administrative
committee may, in its discretion, grant awards of restricted
stock to eligible individuals and eligible directors; provided
that no more than an aggregate of 300,000 shares of BFC
Class A Common Stock shall be issuable in any calendar year
to persons who are covered employees under
Section 162(m) of the Code. The administrative committee
determines at the time of the grant whether the award is a
performance-based restricted stock award, the number of shares
of BFC Class A Common Stock subject to an award, the
vesting schedule applicable to the award and may, in its
discretion, establish other terms and conditions applicable to
the award.
As a general rule, shares of BFC Class A Common Stock that
are subject to a restricted stock award are held by the
administrative committee for the benefit of the award recipient
until vested and, when vested, are transferred to the award
recipient. Unless the administrative committee determines
otherwise with respect to any restricted stock award, before the
shares subject to a restricted stock award are vested and
transferred to the award recipient, the administrative committee
exercises any voting or tender rights in its discretion and
holds and accumulates any dividends or distributions for
distribution at the same time and terms as the underlying
shares. In the alternative, the
73
administrative committee may authorize the immediate
distribution of the restricted shares to the award recipient in
the form of a stock certificate bearing a legend containing the
applicable vesting restrictions or the immediate distribution of
dividends paid on the underlying shares.
Vesting. All restricted stock awards are
subject to a vesting schedule specified by the administrative
committee when the award is made. If the administrative
committee does not specify a vesting schedule, the award vests
on the first anniversary of the grant date. In the event of
death or termination due to disability before the vesting date,
unvested awards that would have vested within six months after
death or termination for disability are deemed vested. All other
awards that are unvested at termination of employment are
forfeited, with the award recipient receiving a refund equal to
the lesser of the fair market value of the unvested shares at
termination of employment or the amount (if any) paid when the
award was made.
Performance-Based Restricted Stock Awards. At
the time of grant of a restricted stock award, the
administrative committee may designate a restricted stock award
as a performance-based restricted stock award. If it does so, it
establishes, in addition to or in lieu of service-based vesting
requirements, one or more performance goals which must be
attained as a condition of retention of the shares. The
performance goal(s) are based on one or more of the following:
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earnings per share;
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net income;
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EBITDA;
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return on equity;
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return on assets;
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core earnings;
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stock price;
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strategic business objectives, consisting of one or more
objectives based on meeting specified cost targets, business
expansion goals, goals relating to acquisitions or divestitures,
revenue targets or business development goals; and
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except in the case of a covered employee under
Section 162(m) of the Code, any other performance criteria
established by the administrative committee.
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Performance goals are established on the basis of reported
earnings or cash earnings, and consolidated results or
individual business units and may, in the discretion of the
administrative committee, include or exclude extraordinary items
and/or the
results of discontinued operations. Each performance goal may be
expressed on an absolute
and/or
relative basis, may be based on or otherwise employ comparisons
based on internal targets, the past performance of BFC (or
individual business units)
and/or the
past or current performance of other companies. Attainment of
the performance goals is measured over a performance measurement
period specified by the administrative committee when the award
is made. At least 75% of any performance measurement period
occurs after the performance goal(s) are established.
The administrative committee determines in its discretion
whether the award recipient has attained the goals. If they have
been attained, the administrative committee certifies that fact
in writing. If the performance goals are not satisfied during
the performance measurement period, the relevant awards are
forfeited. If the performance goals and any service-based
vesting schedule are satisfied, the award is distributed (or any
vesting-related legend is removed from any stock certificates
previously delivered to the award recipient). No
performance-based restricted stock awards will be granted after
May 17, 2010, unless the list of permissible performance
goals is re-approved by the shareholders.
74
Terms and Conditions of Stock Option
Grants. The administrative committee sets the
terms and conditions of the stock options that it grants. In
setting such terms and conditions, the administrative committee
may not:
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grant during any calendar year options to purchase more than
1,500,000 shares in the aggregate to individuals who are
covered employees under Section 162(m) of the
Code;
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grant a stock option with a purchase price that is less than the
fair market value of a share of BFC Class A Common Stock on
the date it grants the stock option; or
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grant a stock option with a term that is longer than
10 years.
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The administrative committee may grant incentive stock options
that qualify for special federal income tax treatment or
non-qualified stock options that do not qualify for special
federal income tax treatment. Incentive stock options are
subject to certain additional restrictions under the Code and
the plan. Unless otherwise designated by the administrative
committee, options granted are exercisable for a period of
10 years after the date of grant (or for a shorter period
ending three months after the option holders termination
of employment due to disability, one year after termination of
employment due to death, or immediately upon termination for any
other reason). The exercise period may be further extended for
limited periods in the administrative committees
discretion.
Upon the exercise of an option, the exercise price of the option
must be paid in full. Payment may be made in cash, BFC
Class A Common Stock already owned by the option holder, or
in such other consideration as the administrative committee
authorizes. Options may be transferred prior to exercise only to
certain family members, trusts or other entities owned by the
option holder
and/or such
family members, charitable organizations and on death of the
option holder.
Mergers and Reorganizations. The number of
shares available under the plan, the maximum limits on option
grants and restricted stock awards to persons or groups of
persons, individually and in the aggregate, any outstanding
awards and the number of shares subject to outstanding options
may be adjusted to reflect any merger, consolidation or business
reorganization in which BFC is the surviving entity and any
stock split, stock dividend, spin-off or other event where the
administrative committee determines an adjustment is appropriate
in order to prevent the enlargement or dilution of an award
recipients rights. If a merger, consolidation or other
business reorganization occurs and BFC is not the surviving
entity, any outstanding options, at the discretion of the
administrative committee or BFCs board, may be canceled
and payment made to the option holder in an amount equal to the
value of the canceled options or modified to provide for
alternative, nearly equivalent securities. Any outstanding
restricted stock award shall be adjusted by allocating to the
award recipient any money, stock, securities or other property
received by the other shareholders of record, and such money,
stock, securities or other property shall be subject to the same
terms and conditions of the restricted stock award that applied
to the shares for which it has been exchanged.
Termination or Amendment. BFCs board of
directors has the authority to suspend or terminate the plan in
whole or in part at any time by giving written notice to the
administrative committee. However, no amendment or termination
may affect any option or restricted stock award granted prior to
the amendment or termination without the recipients
consent, unless the administrative committee finds that such
amendment or termination is in the best interests of the award
recipients or BFCs shareholders.
BFCs board of directors has the authority to amend or
revise the plan in whole or part at any time. As a company
listed on the NYSE Arca Stock Exchange, however, BFC is required
to seek shareholder approval for amendments to the plan that are
deemed material under the rules and regulations of such
exchange. No material amendments affecting the terms of stock
options or performance-based restricted stock awards may be made
without shareholder approval.
Term of Plan. The plan will expire on
May 17, 2015 unless terminated sooner. No performance-based
restricted stock awards will be granted after May 17, 2010
unless the list of permissible performance goals is re-approved
by BFCs shareholders.
Federal Income Tax Consequences. The following
discussion is intended to be a summary and is not a
comprehensive description of the federal tax laws, regulations
and policies affecting BFC and recipients of restricted stock
awards or stock option grants under the plan. Any descriptions
of the provisions of any law,
75
regulation or policy are qualified in their entirety by
reference to the particular law, regulation or policy. Any
change in applicable law or regulation or in the policies of
various taxing authorities may have a significant effect on this
summary. The plan is not a qualified plan under
Section 401(a) of the Code.
Restricted Stock Awards. The restricted stock
awards under the plan do not result in federal income tax
consequences to either BFC or the award recipient. Once the
award is vested and the shares subject to the award are
distributed, the award recipient is generally required to
include in ordinary income, for the taxable year in which the
vesting date occurs, an amount equal to the fair market value of
the shares on the vesting date. BFC will generally be allowed to
claim a deduction, for compensation expense, in a like amount.
Dividends paid on unvested shares held under the plan will also
be included in the ordinary income of the recipient. BFC is
generally allowed to claim a deduction for compensation expense
for this amount as well.
In certain cases, a recipient of a restricted stock award may
elect to include the value of the shares subject to a restricted
stock award in income for federal income tax purposes when the
award is made instead of when it vests.
Stock Options. Incentive stock options do not
create federal income tax consequences when they are granted. If
incentive stock options are exercised during employment or
within three months after termination of employment (one year
for termination due to death or disability), the exercise will
not create federal income tax consequences either. When the
shares acquired on exercise of an incentive stock option are
sold, the seller must pay federal income taxes on the amount by
which the sales price exceeds the purchase price. This amount
will be taxed at capital gains rates if the sale occurs at least
two years after the option was granted and at least one year
after the option was exercised. Otherwise, it is taxed as
ordinary income.
Incentive stock options that are exercised more than one year
after termination of employment due to death or disability or
three months after termination of employment for other reasons
are treated as non-qualified stock options. Non-qualified stock
options do not create federal income tax consequences when they
are granted. When non-qualified stock options are exercised,
federal income taxes at ordinary income tax rates must be paid
on the amount by which the fair market value of the shares
acquired by exercising the option exceeds the exercise price.
When an option holder sells shares acquired by exercising a
non-qualified stock option, he or she must pay federal income
taxes on the amount by which the sales price exceeds the
purchase price plus the amount included in ordinary income at
option exercise. This amount will be taxed at capital gains
rates, which will vary depending upon the time that has elapsed
since the exercise of the option.
When a non-qualified stock option is exercised, BFC may be
allowed a federal income tax deduction for the same amount that
the option holder includes in his or her ordinary income. When
an incentive stock option is exercised, BFC is not allowed to
claim a deduction unless the shares acquired are resold sooner
than two years after the option was granted or one year after
the option was exercised.
Deduction Limits. The Code places an annual
limit of $1 million each on the tax deduction that BFC may
claim in any fiscal year for the compensation of its chief
executive officer and any other executive officers named in
BFCs summary compensation table included on page 112.
There is an exception to this limit for qualified
performance-based compensation. The plan has been designed
with the intention that all stock options and performance-based
restricted stock awards granted constitute qualified
performance-based compensation. As a result, BFC does not
believe that the $1 million limit will impair its ability
to claim federal income tax deductions for compensation
attributable to future performance-based restricted stock awards
and stock options granted under the plan. The $1 million
limit would apply to future restricted stock awards, if any,
made to covered employees that are not designated as
performance-based restricted stock awards.
Importance of Consulting Tax Advisor. The
information set forth above is a summary only and does not
purport to be complete. In addition, the information is based
upon current federal income tax rules and therefore is subject
to change when those rules change. Moreover, because the tax
consequences to any optionee or award recipient may depend on
his or her particular situation, each optionee or award
recipient should consult his or her tax advisor as to the
federal, state, local and other tax consequences of the grant or
exercise of an option, the grant of a restricted stock award or
the disposition of the BFC Class A Common Stock acquired on
exercise of an option or subject to the restricted stock award.
76
Option
Grants and Restricted Stock Awards Under the Plan
As of March 31, 2007, non-qualified stock options to
purchase an aggregate of 356,134 shares of BFC Class A
Common Stock have been granted to four employees under the plan,
incentive stock options to purchase an aggregate of
111,866 shares of BFC Class A Common Stock have been
granted to nine employees under the plan and restricted stock
awards of 52,552 shares of BFC Class A Common Stock
have been granted to four directors under the plan. The options
were granted at exercise prices ranging from $6.36 to $8.92, in
all cases the exercise price was equal to the closing price of
BFC Class A Common Stock on the NYSE Arca Stock Exchange or
NASDAQ National Market, as applicable, on the date of grant. As
of the date of this joint proxy statement/prospectus,
2,479,448 shares remain available for grant under the plan.
BFCs board of directors believes that the options granted
under the plan have been and future option and restricted stock
awards will be awarded primarily to those persons who the
administrative committee believes possess a capacity to
contribute significantly to the successful performance of BFC.
Because persons to whom grants of options and restricted stock
awards are to be made are to be determined from time to time by
the administrative committee, it is impossible at this time to
indicate the precise number, name or positions of persons who
will hereafter receive options or restricted stock awards or the
number of shares for which options or restricted stock awards
will be granted or which will be the subject of restricted stock
awards.
Stock
Exchange Listing of BFC Class A Common Stock
It is a condition to the completion of the merger that the
shares of BFC Class A Common Stock to be issued to holders
of Levitt Class A Common Stock in connection with the
merger have been approved for listing on the NYSE Arca Stock
Exchange, subject to official notice of issuance.
If the merger is consummated, BFC intends to seek approval for
the listing of BFC Class A Common Stock on the New York
Stock Exchange. There is no assurance that the listing of BFC
Class A Common Stock on the New York Stock Exchange will be
approved.
Delisting
and Deregistration of Levitt Class A Common Stock
If the merger is consummated, all of the shares of Levitt common
stock will be canceled and Levitt Class A Common Stock will
no longer be listed on the New York Stock Exchange and will be
deregistered under the Exchange Act.
Appraisal
Rights
Holders of Levitt Class A Common Stock who do not vote to
approve the merger agreement and who properly assert and
exercise appraisal rights with respect to their shares will be
entitled to appraisal rights in connection with the merger under
the FBCA. Under the FBCA, BFCs shareholders will not be
entitled to appraisal rights in connection with the merger.
Each holder of Levitt Class A Common Stock who complies
with the procedures set forth in Sections 607.1301 to
607.1333 of the FBCA relating to appraisal rights is entitled to
receive in cash the fair value of his, her or its shares of
Levitt Class A Common Stock. A holder of Levitt
Class A Common Stock must comply strictly with the
procedures set forth in such sections. Failure to follow these
procedures will result in a termination or waiver of a
shareholders appraisal rights.
To assert appraisal rights, a holder of Levitt Class A
Common Stock must not vote in favor of the approval of the
merger agreement and must provide written notice to Levitt
before the vote is taken at the Levitt annual meeting indicating
that such shareholder intends to demand payment if the merger is
effectuated. Such written notification should be delivered
either in person or by mail (certified mail, return receipt
requested, being the recommended form of transmittal) to Levitt
Corporation, 2200 West Cypress Creek Road,
Fort Lauderdale, Florida 33309, Attention: Secretary. All
such notices must be signed in the same manner as the shares are
registered on the books of Levitt. If a holder of Levitt
Class A Common Stock has not provided written notice of
his, her or its intent to demand payment before the vote is
taken at the Levitt annual meeting, the shareholder will be
deemed to have waived his, her or its appraisal rights.
77
Within ten days after the date the merger becomes effective, the
Surviving Corporation will provide each former holder of Levitt
Class A Common Stock who has properly provided a notice of
intent to demand payment of fair value a written appraisal
notice and form, which will indicate the Surviving
Corporations estimate of the per share fair value of
Levitt Class A Common Stock, as well as a copy of
Levitts financial statements and a copy of
Sections 607.1301 to 607.1333 of the FBCA.
A holder of Levitt Class A Common Stock asserting appraisal
rights must execute and return the form to the Surviving
Corporation and deposit the holders certificates in
accordance with the terms of the notice before the date
specified in the appraisal notice, which will not be fewer than
40 or more than 60 days after the date on which the
appraisal notice and form were sent to the holder. A holder of
Levitt Class A Common Stock who deposits shares in
accordance with the assertion of appraisal rights has no further
rights as a shareholder of Levitt, but only has the right to
receive fair value for the shares in accordance with
the appraisal procedures, unless the appraisal demand is
withdrawn. The fair value of the shares of Levitt Class A
Common Stock held by a shareholder exercising appraisal rights
means the value of such shares determined immediately preceding
the consummation of the merger excluding any appreciation or
depreciation in anticipation of the merger and could be more
than, less than or equal to the value of the shares of BFC
Class A Common Stock that the shareholder would otherwise
have received in connection with the merger.
A holder of Levitt Class A Common Stock who does not
execute and return the form and deposit his, her or its
certificates by the date set forth in the appraisal notice will
no longer be entitled to appraisal rights, will be bound by the
terms of the merger agreement and, pursuant to the merger
agreement, will be entitled to receive 2.27 shares of BFC
Class A Common Stock in exchange for each share of Levitt
Class A Common Stock owned by such holder (subject to
adjustment in accordance with the terms of the merger agreement)
and cash in lieu of any fractional shares. A holder of Levitt
Class A Common Stock who complies with the requirements and
wishes to withdraw from the appraisal process may do so by
notifying the Surviving Corporation in writing before the date
set forth in the appraisal notice as the due date to execute and
return the form. A shareholder who fails to withdraw from the
appraisal process may not thereafter withdraw without the
Surviving Corporations written consent.
A holder of Levitt Class A Common Stock must assert
appraisal rights with respect to all of the shares registered in
his, her or its name, except that a record shareholder may
assert appraisal rights as to fewer than all of the shares
registered in the record shareholders name but which are
owned by a beneficial shareholder, if the record shareholder
objects with respect to all shares owned by the beneficial
shareholder. A record shareholder must notify the Surviving
Corporation in writing of the name and address of each
beneficial shareholder on whose behalf appraisal rights are
being asserted. A beneficial shareholder may assert appraisal
rights as to any shares held on behalf of the shareholder only
if the shareholder submits to the Surviving Corporation the
record shareholders written consent to the assertion of
such appraisal rights before the date specified in the appraisal
notice and does so with respect to all shares that are
beneficially owned by the beneficial shareholder.
If a holder of Levitt Class A Common Stock timely accepts
the offer to pay the fair value of the shares of Levitt
Class A Common Stock as set forth in the appraisal notice,
payment will be made within 90 days after the Surviving
Corporation receives the form from the holder. A holder of
Levitt Class A Common Stock who is dissatisfied with the
offer must include in his, her or its returned form a demand for
payment of that holders estimate of the fair value of the
shares plus interest, otherwise the holder will be entitled to
payment of only the amount offered. Interest shall accrue from
the effective date of the merger until the date of payment at
the interest rate on judgments in Florida on the effective date
of the merger, as determined by the court. Once the Surviving
Corporation has made payment of an agreed upon value to a holder
of Levitt Class A Common Stock, such holder will cease to
have any interest in his, her or its shares.
If the Surviving Corporation and a holder of Levitt Class A
Common Stock who has exercised appraisal rights are unable to
agree on the fair value of the shares of Levitt Class A
Common Stock owned by such holder, the Surviving Corporation
would be required to file an appraisal action within
60 days after receiving the payment demand in a court of
competent jurisdiction in Broward County, Florida, requesting
that the fair value of the shares of Levitt Class A Common
Stock be determined. If the Surviving Corporation fails to file
such proceeding within the
60-day
period, any shareholder who has exercised appraisal rights may
do so in the name of Levitt. All such shareholders, other than
shareholders who have agreed upon a value with the Surviving
Corporation, are deemed to
78
be parties to the proceeding. In such proceeding, 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 Surviving Corporation shall pay each shareholder
that is a party to such proceeding the amount found to be due
within ten days after final determination of the proceeding.
Upon payment of such judgment, all such shareholders will cease
to have any interest with respect to their shares of Levitt
Class A Common Stock.
The court in an appraisal proceeding will determine the cost and
expense of such proceeding and such costs and expenses will be
assessed against the Surviving Corporation. However, all or any
part of such costs and expenses may be apportioned and assessed
against all or some of the shareholders that are parties to the
proceeding in such amount as the court deems equitable if the
court determines that such shareholders acted arbitrarily,
vexatiously or not in good faith with respect to their appraisal
rights. The court may also assess the fees and expenses of
counsel and experts for the respective parties in the amounts
the court finds equitable against the Surviving Corporation if
the court finds that the Surviving Corporation did not
substantially comply with the requirements applicable to it
under Sections 607.1320 and 607.1322 of the FBCA, or,
against any party which the court finds acted arbitrarily,
vexatiously, or not in good faith with respect to the appraisal
rights. In the event the Surviving Corporation fails to make any
required payments, the shareholders to which such payments are
due may sue directly for the amount owed, and to the extent
successful, will be entitled to recover all costs and expenses
of the suit, including attorneys fees.
The foregoing discussion is not a complete statement of the
law pertaining to appraisal rights under the FBCA and is
qualified in its entirety by the full text of
Sections 607.1301 to 607.1333 of the FBCA, which is
attached to this joint proxy statement/prospectus as
Annex G. The foregoing discussion does not constitute any
legal or other advice nor does it constitute a recommendation
that holders of Levitt Class A Common Stock exercise or
waive their appraisal rights.
Material
U.S. Federal Income Tax Consequences of the
Merger
General
The following summary discusses the material U.S. federal
income tax consequences of the merger to U.S. holders of
shares of Levitt Class A Common Stock. This discussion is
based upon the Code, Treasury regulations, administrative
rulings and judicial decisions currently in effect, all of which
are subject to change, possibly with retroactive effect. Any
such change could affect the accuracy of this discussion. This
discussion assumes that holders of Levitt Class A Common
Stock hold their shares of Levitt Class A Common Stock, and
will hold their shares of BFC Class A Common Stock, as
capital assets within the meaning of Section 1221 of the
Code. Further, this discussion does not constitute tax advice
and does not address all aspects of U.S. federal income
taxation that may be relevant to a particular holder of Levitt
Class A Common Stock in light of his, her or its personal
investment circumstances or to holders of Levitt Class A
Common Stock subject to special treatment under the
U.S. federal income tax laws such as:
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insurance companies;
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tax-exempt organizations;
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dealers in securities or foreign currency;
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banks or trusts;
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persons that hold Levitt Class A Common Stock as part of a
straddle, a hedge against currency risk, a constructive sale or
conversion transaction;
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persons that have a functional currency other than the
U.S. dollar;
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investors in pass-through entities;
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holders who acquired their shares of Levitt Class A Common
Stock through the exercise of options or otherwise as
compensation or through a tax-qualified retirement plan; or
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holders of options or restricted shares granted under any Levitt
benefit plan.
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Furthermore, this discussion does not consider the potential
effects of any state, local or foreign tax laws.
You should consult your own tax advisor regarding the
specific tax consequences to you of the merger, including the
applicability and effect of federal, state, local and foreign
income and other tax laws, in light of your particular
circumstances.
For purposes of this discussion, you are a
U.S. Holder if you beneficially own Levitt
Class A Common Stock and you are:
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a citizen or resident of the United States;
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a corporation or other entity taxable as a corporation created
or organized under the laws of the United States or any of its
political subdivisions;
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a trust, if a United States court is able to exercise primary
supervision over the administration of the trust and one or more
United States fiduciaries have the authority to control all
substantial decisions of the trust; or
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an estate that is subject to United States federal income tax on
its income regardless of its source.
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Neither BFC nor Levitt has requested a ruling from the United
States Internal Revenue Service (the IRS) with
respect to any of the U.S. federal income tax consequences
of the merger and, as a result, there can be no assurance that
the IRS will not disagree with any of the conclusions described
below. Stearns Weaver will issue an opinion to BFC and Levitt as
of the date on which the merger is consummated to the effect
that the merger will qualify as a tax-free
reorganization under Section 368(a) of the Code
and that BFC and Levitt will each be a party to that
reorganization under Section 368(b) of the
Code. This opinion will be given in reliance on customary
representations of BFC and Levitt and customary assumptions as
to certain factual matters and will not bind the courts or the
IRS, nor will it preclude the IRS from adopting a position
contrary to those expressed in the opinion.
Holders
of Levitt Class A Common Stock who Receive Shares of BFC
Class A Common Stock in the Merger
Exchange of Levitt Class A Common Stock for BFC
Class A Common Stock. Except as discussed
below under Cash in Lieu of Fractional Shares of BFC
Class A Common Stock, U.S. Holders who receive
shares of BFC Class A Common Stock in exchange for shares
of Levitt Class A Common Stock will not recognize gain or
loss in the merger. Such U.S. Holders aggregate tax
basis in the BFC Class A Common Stock received in
connection with the merger will be equal to the aggregate tax
basis of the Levitt Class A Common Stock surrendered
(excluding any portion of such U.S. Holders basis in
Levitt Class A Common Stock that is allocated to cash that
he, she or it receives in lieu of fractional shares of BFC
Class A Common Stock), and his, her or its holding period
in shares of BFC Class A Common Stock will include his, her
or its holding period in the Levitt Class A Common Stock
surrendered.
Cash in Lieu of Fractional Shares of BFC Class A Common
Stock. A U.S. Holder who receives cash
instead of a fractional share of BFC Class A Common Stock
will recognize a taxable gain or loss based upon the difference
between the amount of cash received with respect to such
fractional share and such U.S. Holders tax basis in
his, her or its shares of Levitt Class A Common Stock that
is allocated to such fractional share. Such gain or loss will be
a long-term capital gain or loss if the U.S. Holders
holding period is more than one year from the date of the merger.
Information Reporting and Backup
Withholding. A U.S. Holder may be subject to
information reporting with respect to the cash received in lieu
of a fractional share of BFC Class A Common Stock. A
U.S. Holder may also be subject to backup withholding,
unless (i) such holder is an exempt holder (such as a
corporation or a tax-exempt organization), (ii) such holder
furnishes a correct taxpayer identification number and certifies
that he, she or it is not subject to backup withholding on the
substitute
Form W-9
or successor form or (iii) such holder is otherwise exempt
from backup withholding. A U.S. Holder may credit any
amount withheld under the backup withholding rules against his,
her or its U.S. federal income tax liability and may seek a
refund of any excess amount withheld under the backup
withholding rules by filing the appropriate form with the IRS.
Miscellaneous. Under recently promulgated
Treasury
regulation Section 1.368-3T,
if a U.S. Holder owned immediately before the merger either
(i) five percent or more, by vote or value, of the publicly
traded stock of Levitt
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or (ii) securities of Levitt with a tax basis of
$1.0 million or more, such U.S. Holder will be
required to file a statement with his, her or its
U.S. federal income tax return for the year of the
consummation of the merger. That statement must set forth such
U.S. Holders tax basis in, and the fair market value
of, the shares of Levitt Class A Common Stock that he, she
or it surrendered pursuant to the merger, the date of the
merger, and the name and employer identification number of BFC
and Levitt, and the U.S. Holder will be required to retain
permanent records of these facts.
Treatment
of the Companies
No gain or loss will be recognized by BFC or Levitt as a result
of the merger.
Cash
Received by Shareholders who Exercised Appraisal
Rights
An eligible holder of Levitt Class A Common Stock that
asserts and exercises his, her or its appraisal rights should
generally recognize capital gain or loss in an amount equal to
the difference between the amount realized and the tax basis of
such shareholders shares of Levitt Class A Common
Stock. Such gain or loss will be a long-term capital gain or
loss if the holders holding period is more than one year
from the date that the holder asserts and exercises his, her or
its appraisal rights. In addition, a portion of any proceeds
received following the effective time of the merger may be
characterized as interest, taxable as ordinary income, thus
reducing the amount of such capital gain or increasing the
amount of such capital loss (as the case may be). Holders of
Levitt Class A Common Stock are encouraged to consult their
tax advisors as to the tax consequences of asserting and
exercising appraisal rights.
Anticipated
Accounting Treatment
The merger will be accounted for as a purchase transaction by
BFC for financial reporting and accounting purposes under
U.S. generally accepted accounting principles. The results
of operations of Levitt will continue to be included in the
consolidated financial statements of BFC.
Regulatory
Matters
BFC must comply with applicable federal and state securities
laws and the rules and regulations of the NYSE Arca Stock
Exchange in connection with the issuance of shares of BFC
Class A Common Stock in connection with the merger and the
filing of this joint proxy statement/prospectus with the SEC.
Resale of
BFC Class A Common Stock
The shares of BFC Class A Common Stock to be received by
holders of Levitt Class A Common Stock in connection with
the merger will be registered under the Securities Act and,
except as described in this section, may be freely traded
without restriction. BFCs registration statement on
Form S-4,
of which this joint proxy statement/prospectus forms a part,
does not cover the resale of shares of BFC Class A Common
Stock to be received in connection with the merger by persons
who are deemed to be affiliates of Levitt or BFC. The shares of
BFC Class A Common Stock to be issued in the merger and
received by persons who are deemed to be affiliates of Levitt or
BFC may be resold by them only in transactions permitted by the
resale provisions of Rule 145 under the Securities Act or
as otherwise permitted under the Securities Act. Persons who are
deemed to be affiliates of Levitt or BFC include individuals or
entities that control, are controlled by, or are under common
control with Levitt or BFC, as applicable, and may include
officers, directors and principal shareholders of Levitt or BFC,
as applicable.
The merger agreement provides that Levitt shall have used its
best efforts to cause each shareholder of Levitt who may be
deemed to be an affiliate of Levitt to execute and deliver to
BFC on or prior to the date of this joint proxy
statement/prospectus an affiliate letter which provides, among
other things, that such shareholder will not sell, transfer or
otherwise dispose of his, her or its shares of BFC Class A
Common Stock received in connection with the merger unless he,
she or it does so in compliance with securities laws governing
sales by affiliates.
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Litigation
With Respect to the Merger
On February 28, and March 1, 2007, two identical
complaints were filed in the 17th Judicial Circuit in and
for Broward County, Florida against Levitt, the members of
Levitts board of directors and BFC in (i) Samuel
Flamholz, on behalf of himself and all others similarly
situated, v. James Blosser, Darwin Dornbush, Alan B. Levan,
William Scherer, S. Lawrence Kahn, III, Joel Levy, John E.
Abdo, William Nicholson, Alan J. Levy, Levitt Corporation, and
BFC Financial Corp. and (ii) Elaine Mount, on behalf
of herself and all others similarly situated, v. James
Blosser, Darwin Dornbush, Alan B. Levan, William Scherer, S.
Lawrence Kahn, III, Joel Levy, John E. Abdo, William
Nicholson, Alan J. Levy, Levitt Corporation, and BFC Financial
Corp., respectively. The complaints allege that the members
of Levitts board of directors breached their fiduciary
duty to Levitts minority shareholders by approving the
merger agreement. The plaintiffs apparently are incorrectly
suggesting that BFC controls the outcome of the vote of
Levitts shareholders with respect to the merger agreement.
However, the merger will be consummated only if, as required by
the FBCA, it is approved by the holders of a majority of the
outstanding shares of Levitt Class A Common Stock (of which
BFC holds only approximately 11%) and, as required by the terms
of the merger agreement, it is approved by the holders of a
majority of Levitt Class A Common Stock voted at the Levitt
annual meeting without counting the shares of Levitt
Class A Common Stock voted by BFC. In both complaints, the
plaintiffs seek to enjoin the merger or, if it is completed, to
rescind it. BFC and Levitt believe that the lawsuits are without
merit.
82
THE
MERGER AGREEMENT
The following summary describes certain material provisions
of the merger agreement, which is attached to this joint proxy
statement/prospectus as Annex A and is incorporated by
reference into this joint proxy statement/prospectus. This
summary may not contain all the information about the merger
agreement that is important to you and is qualified in its
entirety by reference to the merger agreement. You are
encouraged to carefully read the merger agreement in its
entirety.
The representations, warranties and covenants contained in
the merger agreement were made only for purposes of such
agreement and as of specific dates, were solely for the benefit
of the parties to such agreement and may be subject to
limitations agreed by the contracting parties, including being
qualified by disclosures exchanged between the parties in
connection with the execution of the merger agreement. The
representations and warranties may have been made for the
purposes of allocating contractual risk between the parties to
the agreement instead of establishing these matters as facts and
may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to
investors.
Form of
the Merger
Upon the terms and subject to the conditions of the merger
agreement and in accordance with Florida law, at the effective
time of the merger, Levitt will be merged with and into Merger
Sub, a wholly owned subsidiary of BFC. As a result of the
merger, the separate corporate existence of Levitt will cease
and Merger Sub will survive and continue as a direct, wholly
owned subsidiary of BFC.
Effective
Time of the Merger
The consummation of the merger will occur as promptly as
practicable after the satisfaction or waiver of the conditions
to consummation of the merger set forth in the merger agreement.
The merger will become effective as of 5:00 p.m., Eastern
Time, on the date on which the merger is consummated.
Consideration
to be Received Pursuant to the Merger
Upon consummation of the merger, subject to adjustment under
limited circumstances pursuant to the terms of the merger
agreement, each holder of Levitt Class A Common Stock
(other than BFC and holders who exercise and perfect their
appraisal rights) will be entitled to receive 2.27 shares
of BFC Class A Common Stock for each share of Levitt
Class A Common Stock that such holder owns and cash in lieu
of any fractional shares of BFC Class A Common Stock that
such holder would otherwise be entitled to receive in connection
with the merger. Cash received in lieu of fractional shares of
BFC Class A Common Stock will be in an amount equal to the
product of (i) the average closing price of BFC
Class A Common Stock as quoted on the NYSE Arca Stock
Exchange for the twenty consecutive trading days ending on and
including the trading day that is two days prior to the day of
the effective time of the merger and (ii) the fractional
share of BFC Class A Common Stock to which the holder of
Levitt Class A Common Stock would otherwise be entitled
(after taking into account all shares of Levitt Class A
Common Stock then held of record by such holder).
In addition, upon consummation of the merger, the Levitt
Corporation Amended and Restated 2003 Stock Incentive Plan will
be assumed by BFC and each option granted by Levitt to purchase
shares of Levitt Class A Common Stock that is outstanding
and unexercised immediately prior to the effective time of the
merger will be assumed by BFC and converted into an option to
purchase shares of BFC Class A Common Stock. The number of
shares of BFC Class A Common Stock to be subject to the new
option will be equal to the product of (i) the number of
shares of Levitt Class A Common Stock subject to the
original option immediately prior to the effective time of the
merger and (ii) 2.27 (subject to adjustment in accordance
with the terms of the merger agreement). The exercise price per
share of BFC Class A Common Stock under the new option will
be equal to (i) the exercise price per share of Levitt
Class A Common Stock in effect under the original option
immediately prior to the effective time of the merger divided by
(ii) 2.27 (subject to adjustment in accordance with the
terms of the merger agreement). Moreover, at the effective time
of the merger, each outstanding restricted stock award issued
under the Levitt Corporation Amended and Restated 2003 Stock
Incentive Plan will be converted into the right to receive a
restricted stock award of shares of BFC Class A Common
Stock. The number of shares of BFC Class A Common Stock
covered by the new
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restricted stock award will be equal to the product of
(i) the number of shares of Levitt Class A Common
Stock covered by the original restricted stock award immediately
prior to the effective time of the merger and (ii) 2.27
(subject to adjustment in accordance with the terms of the
merger agreement).
Procedures
for Exchange of Certificates
The merger agreement contemplates that, as promptly as
practicable following the effective time of the merger, but in
no event later than three business days after the effective time
of the merger, the exchange agent for the merger will mail to
each record holder of Levitt Class A Common Stock
immediately prior to the effective time of the merger (other
than BFC and holders of Levitt Class A Common Stock who
have exercised and perfected their appraisal rights) a letter of
transmittal and instructions for surrendering and exchanging the
record holders Levitt Class A Common Stock
certificates. The merger agreement provides that, upon surrender
of such stock certificates for exchange to the exchange agent,
together with a duly signed letter of transmittal and such other
customary documents as may be required, the holder of the Levitt
Class A Common Stock certificates will be entitled to
receive, and the exchange agent will deliver to such holder,
(i) certificates representing the number of whole shares of
BFC Class A Common Stock to which such holder is entitled,
(ii) cash in lieu of any fractional share of BFC
Class A Common Stock to which such holder is entitled and
(iii) any dividends or other distributions declared or paid
on shares of BFC Class A Common Stock after the effective
time of the merger.
After the effective time of the merger, all holders of
certificates representing shares of Levitt Class A Common
Stock that were outstanding immediately prior to the effective
time of the merger will cease to have any rights as shareholders
of Levitt, and until such certificates are surrendered, each
such certificate will evidence only the right to receive the
merger consideration and any dividends or other distributions
declared or paid on shares of BFC Class A Common Stock
after the effective time of the merger. In addition, no transfer
of Levitt Class A Common Stock after the effective time of
the merger will be registered on the stock transfer books of
Levitt.
If any Levitt Class A Common Stock certificate has been
lost, stolen or destroyed, as a condition to the delivery of the
merger consideration in exchange therefor, the owner of such
certificate must deliver an affidavit claiming that such
certificate has been lost, stolen or destroyed and, if requested
by BFC, post a bond in such amount as BFC may reasonably direct
as indemnity against any claim that may be made with respect to
that certificate.
Certificates representing shares of Levitt Class A
Common Stock should not be surrendered for exchange by holders
of Levitt Class A Common Stock before the effective time of
the merger and should be sent only pursuant to instructions
mailed to holders of such certificates by the exchange agent,
which the merger agreement provides will be mailed to such
holders as promptly as practicable following the effective time
of the merger, but in no event later than three business days
after the effective time of the merger. In all cases, the
certificates representing shares of BFC Class A Common
Stock, cash in lieu of fractional shares of BFC Class A
Common Stock and dividends or other distributions declared or
paid on shares of BFC Class A Common Stock after the
effective time of the merger will be delivered only in
accordance with the procedures set forth in the letter of
transmittal and exchange instructions provided by the exchange
agent.
The merger agreement contemplates that the exchange agent will
deliver to BFC any certificates representing BFC Class A
Common Stock and any funds which have not been disbursed to
holders of Levitt Class A Common Stock certificates as of
nine months after the effective time of the merger. Any holders
of Levitt Class A Common Stock certificates who have not
surrendered such certificates in compliance with the
above-described procedures may thereafter look only to BFC for
certificates representing shares of BFC Class A Common
Stock, cash in lieu of fractional shares of BFC Class A
Common Stock and any dividends or distributions with respect to
such BFC Class A Common Stock. If any certificate
representing shares of Levitt Class A Common Stock are not
surrendered prior to the date that is seven years after the
effective time of the merger (or immediately prior to such
earlier date on which any merger consideration would otherwise
escheat to, or become the property of, any governmental entity),
any certificates representing shares of BFC Class A Common
Stock, cash in lieu of fractional shares of BFC Class A
Common Stock and dividends or distributions with respect to BFC
Class A Common Stock that the holder of the Levitt
Class A Common Stock certificate would otherwise have been
entitled to receive will, to the extent permitted by applicable
law, become the property of BFC, free and clear of all claims or
interest.
84
Conditions
to Consummation of the Merger
Each of BFC and Levitt is required to consummate the merger only
if specific conditions are satisfied or waived, including the
following:
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the approval of the merger and the related transactions and the
merger agreement, respectively, by BFCs and Levitts
shareholders, including the approval of the merger agreement by
a majority of the minority of Levitts
shareholders as required under the terms of the merger agreement;
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the absence of any legal restraints or prohibitions preventing
the completion of the merger or litigation or other proceeding
seeking to enjoin or prohibit the merger;
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the declaration by the SEC that the registration statement of
which this joint proxy statement/prospectus is a part is
effective and the absence of any stop order or proceeding,
initiated or threatened in writing by the SEC, suspending or
threatening to suspend such effectiveness;
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the receipt of all consents, approvals, assignments and
authorizations reasonably necessary to consummate the merger and
continue in full force and effect certain material contracts to
which Levitt is a party; and
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the receipt by BFC and Levitt from Stearns Weaver of an opinion,
dated as of the date on which the merger is consummated, stating
that the merger will be treated for U.S. federal income tax
purposes as a reorganization within the meaning of
Section 368(a) of the Code.
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The obligation of BFC to consummate the merger is subject to the
satisfaction or waiver at or prior to the closing of the merger
of the following additional conditions:
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the representations and warranties of Levitt contained in the
merger agreement being true and correct, subject to certain
materiality qualifications;
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the performance in all material respects by Levitt of all
obligations required to be performed by it under the merger
agreement;
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the delivery by Levitt to BFC of a certificate, dated as of the
date on which the merger is consummated and signed by the
president and chief financial officer of Levitt, certifying the
satisfaction of each of the two foregoing conditions;
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the fairness opinion of Sandler ONeill, BFCs
financial advisor, not being withdrawn, revoked or materially
modified; and
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holders of not more than 10% of the outstanding shares of Levitt
Class A Common Stock duly and validly exercising, or
remaining entitled to exercise, their appraisal rights in
accordance with the FBCA.
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The obligations of Levitt to consummate the merger are subject
to the satisfaction or waiver at or prior to the closing of the
merger of the following additional conditions:
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the representations and warranties of BFC contained in the
merger agreement being true and correct, subject to certain
materiality qualifications;
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the performance in all material respects by BFC of all
obligations required to be performed by it under the merger
agreement;
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the delivery by BFC to Levitt of a certificate, dated as of the
date on which the merger is consummated and signed by the chief
executive officer and chief financial officer of BFC, certifying
the satisfaction of each of the two foregoing conditions;
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the approval for listing of the shares of BFC Class A
Common Stock to be issued in the merger on the NYSE Arca Stock
Exchange, subject only to official notice of issuance; and
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the fairness opinion of Houlihan Lokey, Levitts financial
advisor, not being withdrawn, revoked or materially modified.
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Representations
and Warranties
The merger agreement contains customary representations and
warranties of each of BFC and Levitt, including representations
and warranties relating to, among other things:
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organization, good standing and similar corporate matters;
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capitalization;
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due authorization, execution, delivery and enforceability of the
merger agreement and the transactions contemplated thereby;
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absence of conflicts with each such partys governing
documents, applicable laws and contracts;
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documents filed with the SEC, compliance with applicable SEC
filing requirements and accuracy of information contained in
such documents;
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absence of any event or occurrence of any condition since
September 30, 2006 that (i) has had or could
reasonably be expected to have a material adverse effect with
respect to such party, (ii) could reasonably be expected to
render any of the representations and warranties of such party
contained in the merger agreement incorrect or untrue as of the
effective time of the merger or (iii) would result in a
violation of the covenants of such party contained in the merger
agreement had such event or condition occurred after the date of
the merger agreement;
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filing of tax returns and payment of taxes;
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material contracts, and the enforceability of such contracts;
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pending or, to the knowledge of such party, threatened
litigation;
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engagement and payment of fees of brokers, finders and
investment bankers;
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accuracy of information supplied by such party in connection
with this joint proxy statement/prospectus and the registration
statement of which it is a part;
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the qualification of the merger as a reorganization
under Section 368(a) of the Code;
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the receipt of fairness opinions from BFCs and
Levitts respective financial advisors; and
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accuracy and sufficiency of information contained in the merger
agreement.
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The merger agreement contains additional customary
representations and warranties of BFC, including representations
and warranties relating to:
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compliance with laws;
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related party transactions;
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insurance;
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its compliance with the Sarbanes-Oxley Act of 2002;
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certain business practices;
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employee benefit plans; and
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labor and employment matters.
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Conduct
of Business by BFC and Levitt Prior to Consummation of the
Merger
BFC and Levitt have each agreed that, during the period from the
date of the merger agreement to the earlier of the consummation
of the merger and the termination of the merger agreement,
except as expressly contemplated by the merger agreement or
consented to in writing by BFC or Levitt, as the case may be,
each of BFC and Levitt will not, among other things:
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conduct its business in a manner that is not consistent with its
ordinary course of business and past practice or in a manner
that would cause it to default under certain material contracts
to which it is a party;
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change or amend its Articles of Incorporation or By-laws (except
that BFC may amend its Articles of Incorporation to increase the
authorized number of shares of BFC Class A Common Stock and
amend its By-laws to increase the maximum size of its board of
directors);
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divide, combine or reclassify any of its capital stock or
otherwise make any changes in its capital structure;
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declare, pay or set aside for payment any dividend or other
distribution in respect of its capital stock, except as
consistent with past practice;
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adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization;
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engage in any action that could reasonably be expected to cause
the merger to fail to qualify as a reorganization
under Section 368(a) of the Code;
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take any action that would cause its representations and
warranties contained in the merger agreement to be untrue in any
material respect;
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take any action that would reasonably be likely to materially
delay the merger; or
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agree to take, or make any commitment to take, any of the
foregoing actions.
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In addition, Levitt has agreed that, during the period from the
date of the merger agreement to the earlier of the consummation
of the merger and the termination of the merger agreement,
except as expressly contemplated by the merger agreement or
consented to in writing by BFC, Levitt will not:
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issue, sell, or grant any shares of its capital stock (except
shares of Levitt Class A Common Stock to be issued upon
exercise of options to purchase shares of Levitt Class A
Common Stock which are outstanding on the date of the merger
agreement); or
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issue, sell or grant any options, warrants, or rights to
purchase or subscribe to, or enter into any arrangement or
contract with respect to the issuance or sale of, any of its
capital stock or rights or obligations convertible into or
exchangeable for any such shares of capital stock, except in the
ordinary course of business consistent with past practices.
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BFC has also agreed that, during the period from the date of the
merger agreement to the earlier of the consummation of the
merger and the termination of the merger agreement, except as
expressly contemplated by the merger agreement or consented to
in writing by Levitt, BFC will not cause its directors and
officers liability insurance policy, and any excess
liability policy related thereto, to be canceled, terminated or
otherwise not be renewed or replaced with at least an equivalent
amount of coverage and on other terms no less favorable to BFC
and its officers and directors.
Other
Covenants and Agreements
The merger agreement contains other covenants and agreements
relating to the period of time between the date of the merger
agreement and the earlier of the consummation of the merger and
the termination of the merger agreement, whereby each of BFC and
Levitt has agreed to, among other things:
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give prompt notice to the other party of (i) any event
known to such party which has or is reasonably likely to have a
material adverse effect on such party, (ii) any event or
circumstance that constitutes or could reasonably be expected to
constitute a breach of any of the representations, warranties,
or covenants of such
|
87
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party contained in the merger agreement or (iii) any event
or circumstance which could materially and adversely affect such
partys ability to satisfy the conditions to the merger;
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permit the other party and its authorized representatives
reasonable access during regular business hours to the
properties of such party and make their respective directors,
management and other employees and agents and authorized
representatives (including counsel and independent public
accountants) available to confer with the other party and its
authorized representatives at reasonable times and upon
reasonable request;
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disclose and make available to the other party, and cause its
agents and authorized representatives to disclose and make
available to the other party, all books, papers and records
relating to the assets, properties, operations, obligations and
liabilities of such party, and to maintain the confidentiality
of such information, except as otherwise required by law;
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consult with the other party before issuing, and provide the
other party the opportunity to review, comment upon and approve,
subject to applicable law, regulation or stock exchange rules,
any press release or other public announcement with respect to
the merger agreement or the merger;
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use its reasonable efforts (i) in good faith to take or
cause to be taken as promptly as practicable all reasonable
actions within its control to cause the conditions precedent to
its obligations to consummate the merger to be fulfilled and
(ii) to obtain all consents and approvals required in
connection with the consummation of the transactions
contemplated by the merger agreement;
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hold a meeting of its shareholders as promptly as reasonably
practicable after the effectiveness of the registration
statement of which this joint proxy statement/prospectus is a
part and use its reasonable efforts to secure the required vote
or consent of its shareholders;
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provide the other party with the information pertaining to such
party required by the Securities Act or the Exchange Act, as the
case may be, for inclusion or incorporation by reference in this
joint proxy statement/prospectus and the registration statement
of which this joint proxy statement/prospectus is a part;
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use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary,
proper or advisable on the part of such party, to consummate and
make effective the transactions contemplated by the merger
agreement at the earliest practicable date, including obtaining
all required consents, approvals, waivers, exemptions,
amendments and authorizations, giving all notices, and making or
effecting all filings, registrations, applications, designations
and declarations;
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use reasonable best efforts to cause the merger to qualify as a
reorganization under Section 368(a) of the Code
and use reasonable best efforts not to, and not to permit or
cause any of its affiliates (or subsidiaries, in the case of
BFC) to, take any action or cause any action to be taken which
would cause the merger to fail to so qualify as a
reorganization under Section 368(a) of the Code;
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use its commercially reasonable efforts to cause to be delivered
to the other party reasonable and customary comfort letters from
its independent accountant; and
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cooperate and consult with the other party, to the fullest
extent possible, in connection with any shareholder litigation
against it or any of its directors or officers with respect to
the transactions contemplated by the merger agreement.
|
In addition, between the date of the merger agreement and the
earlier of the consummation of the merger and the termination of
the merger agreement, BFC has agreed to, among other things:
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prepare and file with the SEC, with Levitts assistance,
the registration statement of which this joint proxy
statement/prospectus is a part and use all commercially
reasonable efforts to cause the registration statement to become
effective as promptly as practicable after filing and to
maintain such effectiveness until all of the shares of BFC
Class A Common Stock to be issued in connection with the
merger have been issued and distributed;
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88
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indemnify, defend and hold harmless each present and former
director and officer of Levitt for each such directors and
officers liabilities with respect to acts or omissions
occurring prior to the effective time of the merger, to the same
extent as provided for under the FBCA and in Levitts
Articles of Incorporation or By-laws;
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for six years after the effective time of the merger, maintain
or cause to be maintained in effect the current policies of
directors and officers liability insurance
maintained by Levitt or a substitute policy of at least the same
coverage and amount as, and containing terms and conditions
which are substantially no less advantageous than, the Levitt
policy, in each case, with respect to claims arising from facts
or events which occurred before the effective time of the merger
or, alternatively, obtain single limit tail directors and
officers liability insurance coverage providing at least
the same coverage and amount as, and containing terms and
conditions which are substantially no less advantageous than,
the Levitt policy for such six-year period with respect to
claims arising from facts or events which occurred before the
effective time of the merger;
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use commercially reasonable efforts to support the liquidity
needs of the operations and business of Levitt and its
subsidiaries after the effective time of the merger, consistent
with the reasonable business judgment and fiduciary duties of
BFCs board of directors;
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use its best efforts to cause the seven directors of Levitt who
are not also directors of BFC to be appointed to the board of
directors of BFC;
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take any action required under applicable federal or state
securities laws in connection with the issuance of the shares of
BFC Class A Common Stock in connection with the
merger; and
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prepare and submit to the NYSE Arca Stock Exchange a listing
application covering all of the shares of BFC Class A
Common Stock to be issued to holders of Levitt Class A
Common Stock in connection with the merger and pursuant to
options to purchase, and restricted stock awards of, shares of
Levitt Class A Common Stock and use its reasonable best
efforts to obtain approval for the listing of all such shares,
subject to official notice of issuance.
|
Further, between the date of the merger agreement and the
earlier of the consummation of the merger and the termination of
the merger agreement, Levitt has agreed to, among other things:
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discontinue the sale or contribution (for any applicable period
not commenced as of January 30, 2007) of Levitt common
stock pursuant to any of Levitts employee benefit plans
which are subject to Section 401(a) of the Code; and
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not later than the 15th day prior to the mailing of this
joint proxy statement/prospectus, deliver to BFC a schedule of
each shareholder of Levitt not previously disclosed to BFC that
is or is reasonably likely to be, as of such date, an affiliate
of Levitt and use commercially reasonable efforts to cause each
shareholder of Levitt that is or is reasonably likely to be an
affiliate of Levitt to execute and deliver an affiliate letter
to BFC on or before the date of mailing of this joint proxy
statement/prospectus.
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No
Solicitation
The merger agreement provides that, from and after the date of
the merger agreement until the effective time of the merger,
without the prior written consent of BFC, and subject to its
rights described under Superior Proposal below,
Levitt will not, and will not permit its directors, officers,
employees, investment bankers, attorneys, accountants or other
representatives, agents or affiliates to, directly or indirectly:
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|
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solicit, initiate, or knowingly encourage any acquisition
proposal or any inquiries or proposals that could reasonably be
expected to lead to any acquisition proposal;
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engage in negotiations or discussions concerning, or provide any
non-public information to any person in connection with, any
acquisition proposal or under circumstances that could
reasonably be expected to result in an acquisition
proposal; or
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agree to, approve, recommend or otherwise endorse or support any
acquisition proposal.
|
89
As defined in the merger agreement, the term acquisition
proposal means, other than the merger or any proposal or
modification thereof submitted by BFC or certain of its
affiliates, any proposal relating to a possible:
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|
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merger, consolidation, share exchange, business combination or
similar transaction involving Levitt or any of its subsidiaries;
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sale, lease, exchange, transfer or other disposition (other than
sales of inventory in the ordinary course of business consistent
with past practices), directly or indirectly, by merger,
consolidation, share exchange or otherwise (whether in one or
more transactions), of all or substantially all of the assets of
Levitt and its subsidiaries on a consolidated basis;
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liquidation, dissolution, recapitalization or other similar type
of transaction; or
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transaction which is similar in form, substance or purpose to
any of the foregoing transactions.
|
The merger agreement further provides that, with respect to an
acquisition proposal, Levitt will:
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notify BFC immediately, and in any event within 24 hours,
if (i) an acquisition proposal is made or is modified in
any respect (including any written material provided by the
offeror, the principal terms and conditions of any such
acquisition proposal or modification thereto and the identity of
the offeror), in which case Levitt will provide a copy of the
acquisition proposal concurrently with such notice or
(ii) if Levitt furnishes non-public information to, or
enters into discussions or negotiations with respect to an
acquisition proposal with, any person other than BFC or any of
its affiliates;
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as promptly as practicable, advise BFC orally and in writing of
any request for information that could reasonably be expected to
lead to an acquisition proposal as well as the material terms
and conditions of such request or inquiry and keep BFC informed
in all respects of the status of any such request or
inquiry; and
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provide BFC with prior telephonic (promptly confirmed in
writing) or written notice of any meeting of Levitts board
of directors (or any committee thereof) at which Levitts
board of directors (or any committee thereof) is expected or
could reasonably be expected to consider an acquisition
proposal, together with a copy of the documentation relating to
such acquisition proposal to the extent such documentation is
then available (and otherwise provide such documentation as soon
as available).
|
Superior
Proposal
The merger agreement provides further that, notwithstanding the
restrictions described above, if at any time prior to the
effective time of the merger, any person other than BFC or any
of its affiliates submits to the Levitt special committee or
board of directors an unsolicited, bona fide, written
acquisition proposal not resulting from a breach of the no
solicitation provisions of the merger agreement, and the
Levitt special committee or board of directors reasonably
determines in good faith, (i) after consultation with their
financial, legal and other advisors, that such acquisition
proposal will result in, or upon further discussion with or due
diligence by such person could reasonably be expected to
constitute or result in, a superior proposal and (ii) after
consultation with their outside legal counsel, that the failure
to take the following actions may be inconsistent with their
fiduciary duties under applicable law, then Levitt may:
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|
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furnish information about its business to such person under
protection of an appropriate confidentiality agreement
containing customary limitations on the use and disclosure of
all non-public written or oral information furnished to such
person, provided that Levitt contemporaneously furnishes to BFC
all the non-public information furnished to such person; and
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negotiate and participate in discussions and negotiations with
such person.
|
The merger agreement provides that the term superior
proposal means any unsolicited, bona fide, written
acquisition proposal for consideration consisting of cash (not
subject to a financing contingency)
and/or
securities, and otherwise on terms which the Levitt special
committee or board of directors determines, after consultation
with their legal, financial and other advisors, are more
favorable to the shareholders of Levitt (other than BFC and the
directors of Levitt who are not independent within
the meaning of the rules and regulations of the New York Stock
Exchange) from a financial point of view than the merger or
other revised proposal submitted by BFC prior to such
90
determination, taking into account the ability of the offeror to
consummate the superior proposal on substantially the terms
proposed.
Nothing contained in the merger agreement will prohibit Levitt
from taking, and disclosing to its shareholders, a position
required by
Rule 14d-9
or
Rule 14e-2(a)
of the Exchange Act or Item 1012(a) of
Regulation M-A
promulgated thereunder.
Change of
Recommendation
The merger agreement provides that the board of directors of
Levitt may withhold, withdraw, modify or change its approval or
recommendation of the merger agreement or approve or recommend
to Levitts shareholders a superior proposal if after the
date of the merger agreement and prior to the effective time of
the merger, Levitt receives a superior proposal not in violation
of the no solicitation provisions of the merger
agreement and the Levitt special committee or board of directors
determines, in good faith and after consultation with their
financial advisors and legal counsel, that the failure to do so
would be inconsistent with their fiduciary duties under
applicable law. In the case of such an event, Levitt must
provide BFC with at least two business days prior written notice
stating that its board of directors intends to take such actions
and such notice must include the principal terms and conditions
of any such superior proposal and the identity of the offeror.
Termination
of the Merger Agreement
The merger agreement may be terminated at any time prior to the
effective time of the merger by the mutual written consent of
Levitt and BFC. In addition, the merger agreement may be
terminated by Levitt or BFC in certain circumstances, including
if:
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|
|
the merger has not been consummated by July 31, 2007;
provided, however, that if BFC proceeds in good faith to
consummate the merger, this date may be extended to a date not
later than October 1, 2007;
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|
|
the shareholders of BFC or Levitt do not approve the merger and
the related transactions;
|
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|
|
any order, decree, ruling or other judgment issued by any court
or other governmental entity prohibiting the consummation of the
merger is in effect and has become final and nonappealable;
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|
|
any law is enacted which makes consummation of the merger
illegal; or
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|
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the Levitt special committee or board of directors determines to
approve or recommend a superior proposal after complying with
the no solicitation provisions of the merger
agreement or withholds or withdraws its recommendation of the
merger agreement or the merger in a manner adverse to BFC.
|
The merger agreement also may be terminated by Levitt if:
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|
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|
|
BFC breaches or fails to perform in any material respect any of
its representations, warranties, covenants or other agreements
contained in the merger agreement, which breach is incapable of
being cured or is not cured within 15 days following the
giving of written notice to BFC and which breach or failure to
perform would result in the failure of a condition to
Levitts obligation to consummate the merger;
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|
the average closing price of BFC Class A Common Stock as
quoted on the NYSE Arca Stock Exchange and the average closing
price of the Class A Common Stock of BankAtlantic Bancorp as
quoted on the New York Stock Exchange, in each case for the ten
consecutive trading days ending on and including the trading day
that is two days prior to the day of the effective time of the
merger, are less than $4.45 and $9.44, respectively, which are
equal to 70% of the respective closing prices for such shares on
the date of the merger agreement; provided however, that after
receiving written notice from Levitt of termination as a result
of such decline in stock prices, BFC may avoid such termination
and extend the date of the effective time of the merger for up
to two business days by promptly providing written notice to
Levitt of its election to increase the value of the
consideration delivered to holders of Levitt Class A Common
Stock to equal the value such holders would have received if the
value of BFC Class A Common Stock at the effective time of
the merger was $4.45; or
|
91
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|
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Houlihan Lokey, Levitts financial advisor, withdraws,
revokes, annuls or materially modifies its fairness opinion.
|
The merger agreement also may be terminated by BFC if:
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Levitt breaches or fails to perform in any material respect any
of its representations, warranties, covenants or other
agreements contained in the merger agreement, which breach is
incapable of being cured or is not cured within 15 days
following the giving of written notice to Levitt and which
breach or failure to perform would result in the failure of a
condition to BFCs obligation to consummate the merger;
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Sandler ONeill, BFCs financial advisor, withdraws,
revokes, annuls or materially modifies its fairness
opinion; or
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a tender offer or exchange offer for ten percent or more of the
outstanding shares of Levitt common stock is commenced or a
registration statement or statement on Schedule TO with
respect thereto is filed (other than by BFC or certain of its
affiliates) and the board of directors of Levitt,
notwithstanding its obligations under the merger agreement,
recommends that the shareholders of Levitt tender their shares
in such tender or exchange offer or publicly announces its
intention to take no position with respect to such tender offer.
|
Expenses
All fees and expenses incurred in connection with the merger
will be paid by the party incurring such fees or expenses,
except that BFC and Levitt have each agreed to share equally all
expenses incurred in connection with the printing, mailing and
filing with the SEC of this joint proxy statement/prospectus and
the registration statement of which this joint proxy
statement/prospectus is a part.
Indemnification
and Insurance
The merger agreement provides that the Surviving Corporation
will indemnify, defend and hold harmless each present and former
director and officer of Levitt for each such directors and
officers liabilities with respect to acts or omissions
occurring prior to the effective time of the merger, to the same
extent as provided for under the FBCA and in Levitts
Articles of Incorporation or By-laws.
The merger agreement also provides that for six years after the
effective time of the merger, the Surviving Corporation will
maintain or cause to be maintained in effect the current
policies of directors and officers liability
insurance maintained by Levitt or a substitute policy of at
least the same coverage and amount as, and containing terms and
conditions which are substantially no less advantageous than,
the Levitt policy, in each case, with respect to claims arising
from facts or events which occurred before the effective time of
the merger. Alternatively, the Surviving Corporation may obtain
single limit tail directors and officers liability
insurance coverage providing at least the same coverage and
amount as, and containing terms and conditions which are
substantially no less advantageous than, the Levitt policy for
such six-year period with respect to claims arising from facts
or events which occurred before the effective time of the
merger, in which event and upon the request of BFC, Levitt shall
purchase such coverage immediately prior to the consummation of
the merger.
Amendment
and Waiver
The merger agreement may be amended or modified in whole or in
part at any time only by a writing signed by BFC and Levitt.
However, except as may be required by applicable law, prior to
the effective time of the merger, any consent, waiver or other
determination to be made, or action to be taken, by Levitt under
the merger agreement will be made or taken only upon the
approval of the Levitt special committee.
92
UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial
statements present the pro forma combined financial position and
results of operations of BFC, with Levitt as its wholly-owned
subsidiary, based upon the historical financial statements of
BFC and Levitt, after giving effect to the merger and
adjustments described in the accompanying footnotes, and are
intended to reflect the impact of the merger on BFC. The
unaudited pro forma condensed combined financial statements are
based upon and have been developed from the historical audited
consolidated financial statements of BFC contained in its Annual
Report on
Form 10-K
for the year ended December 31, 2006 and the historical
audited consolidated financial statements of Levitt contained in
its Annual Report on
Form 10-K
for the year ended December 31, 2006, each of which is
incorporated by reference into this joint proxy
statement/prospectus. The unaudited pro forma condensed combined
financial statements are prepared using the purchase method of
accounting, with BFC treated as the acquiror and as if the
merger had been consummated on December 31, 2006, for
purposes of preparing the unaudited pro forma condensed combined
balance sheet as of December 31, 2006, and on
January 1, 2006, for purposes of preparing the unaudited
pro forma condensed combined statements of operations for the
year ended December 31, 2006.
The following unaudited pro forma condensed combined financial
statements are provided for illustrative purposes only and do
not purport to represent what the actual consolidated results of
operations or the actual consolidated financial position of BFC
would have been had the merger occurred on the dates assumed,
nor are they necessarily indicative of the future consolidated
results of operations or consolidated financial position of BFC
following the merger. The unaudited pro forma condensed combined
financial statements should be read in conjunction with the
separate historical consolidated financial statements and
accompanying notes of BFC and Levitt that are incorporated by
reference into this joint proxy statement/prospectus.
93
UNAUDITED
PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2006
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC
|
|
|
Pro forma
|
|
|
|
|
|
|
Consolidated
|
|
|
Adjustments(a)
|
|
|
Pro forma
|
|
|
|
(In thousands, except for share data)
|
|
|
ASSETS
|
Cash and due from depository
institutions
|
|
$
|
195,401
|
|
|
$
|
|
|
|
$
|
195,401
|
|
Federal funds sold and other
short-term investments
|
|
|
5,722
|
|
|
|
|
|
|
|
5,722
|
|
Securities available for sale (at
fair value)
|
|
|
653,659
|
|
|
|
|
|
|
|
653,659
|
|
Investment securities
|
|
|
227,208
|
|
|
|
|
|
|
|
227,208
|
|
Tax certificates net of allowance
of $3,699
|
|
|
195,391
|
|
|
|
|
|
|
|
195,391
|
|
Federal Home Loan Bank stock,
at cost which approximates fair value
|
|
|
80,217
|
|
|
|
|
|
|
|
80,217
|
|
Discontinued operations assets held
for sale
|
|
|
190,763
|
|
|
|
|
|
|
|
190,763
|
|
Loans receivable, net of allowance
for loan losses of $44,173
|
|
|
4,594,192
|
|
|
|
|
|
|
|
4,594,192
|
|
Residential loans held for sale
|
|
|
9,313
|
|
|
|
|
|
|
|
9,313
|
|
Accrued interest receivable
|
|
|
47,676
|
|
|
|
|
|
|
|
47,676
|
|
Real estate held for development
and sale
|
|
|
847,492
|
|
|
|
(78,816
|
)(b)
|
|
|
768,676
|
|
Real estate owned
|
|
|
21,747
|
|
|
|
|
|
|
|
21,747
|
|
Investments in unconsolidated
affiliates
|
|
|
124,521
|
|
|
|
(4,139
|
)(c)
|
|
|
120,382
|
|
Properties and equipment, net
|
|
|
298,513
|
|
|
|
(9,257
|
)(d)
|
|
|
289,256
|
|
Goodwill
|
|
|
70,490
|
|
|
|
|
|
|
|
70,490
|
|
Core deposit intangible asset
|
|
|
6,834
|
|
|
|
|
|
|
|
6,834
|
|
Deferred income tax asset
|
|
|
|
|
|
|
47,701
|
(e)(f)
|
|
|
47,701
|
|
Other assets
|
|
|
36,627
|
|
|
|
(7,734
|
)(g)
|
|
|
28,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
7,605,766
|
|
|
$
|
(52,245
|
)
|
|
$
|
7,553,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS EQUITY
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits
|
|
$
|
2,871,116
|
|
|
$
|
|
|
|
$
|
2,871,116
|
|
Non-interest bearing deposits
|
|
|
995,920
|
|
|
|
|
|
|
|
995,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits
|
|
|
3,867,036
|
|
|
|
|
|
|
|
3,867,036
|
|
Customer deposits on real estate
held for sale
|
|
|
42,696
|
|
|
|
|
|
|
|
42,696
|
|
Advances from FHLB
|
|
|
1,517,058
|
|
|
|
|
|
|
|
1,517,058
|
|
Securities sold under agreements to
repurchase
|
|
|
96,385
|
|
|
|
|
|
|
|
96,385
|
|
Federal funds purchased and other
short term borrowings
|
|
|
32,026
|
|
|
|
|
|
|
|
32,026
|
|
Subordinated debentures, notes and
bonds payable and junior subordinated debentures
|
|
|
908,942
|
|
|
|
455
|
(h)
|
|
|
909,397
|
|
Deferred tax liabilities, net
|
|
|
10,646
|
|
|
|
(10,646
|
)(e)(f)
|
|
|
0
|
|
Discontinued operations liabilities
held for sale
|
|
|
95,246
|
|
|
|
|
|
|
|
95,246
|
|
Other liabilities
|
|
|
159,823
|
|
|
|
836
|
(i)
|
|
|
160,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
6,729,858
|
|
|
|
(9,355
|
)
|
|
|
6,720,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
698,323
|
|
|
|
(286,230
|
)
|
|
|
412,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock of $.01 par
value; authorized 10,000,000 shares; 5% Cumulative
Convertible Preferred Stock issued and outstanding
15,000 shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Common Stock of
$.01 par value, authorized 70,000,000 shares; issued
and outstanding 28,755,882, issued and outstanding, pro forma
66,289,835
|
|
|
266
|
|
|
|
375
|
|
|
|
641
|
|
Class B Common Stock of
$.01 par value, authorized 20,000,000 shares; issued
and outstanding 7,090,652
|
|
|
69
|
|
|
|
|
|
|
|
69
|
|
Additional paid-in capital
|
|
|
93,910
|
|
|
|
242,965
|
|
|
|
336,875
|
|
Retained earnings
|
|
|
81,889
|
|
|
|
|
|
|
|
81,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
before accumulated other comprehensive income
|
|
|
176,134
|
|
|
|
243,340
|
(j)
|
|
|
419,474
|
|
Accumulated other comprehensive
income
|
|
|
1,451
|
|
|
|
|
|
|
|
1,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
177,585
|
|
|
|
243,340
|
|
|
|
420,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders equity
|
|
$
|
7,605,766
|
|
|
$
|
(52,245
|
)
|
|
$
|
7,553,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Pro forma adjustments represent
BFCs acquisition of 83.4% of Levitts net assets
acquired at its estimated fair value as compared to book value,
adjusted by negative goodwill. Negative goodwill was allocated
to various non-financial assets on a pro-rata basis to reduce
the value assigned to non-financial assets. The assumed purchase
price of Levitt was based on the exchange ratio of
2.27 shares of BFC Class A Common Stock for each share
of Levitt Class A Common Stock and the closing price of BFC
Class A Common Stock on January 30, 2007.
|
|
(b)
|
|
Represents a decrease of
$99.7 million associated with the allocation of negative
goodwill, partially offset by an increase of approximately
$20.9 million to its estimated fair value.
|
|
(c)
|
|
Represents a decrease of
$14.0 million associated with the allocation of negative
goodwill, partially offset by an increase of $9.9 million
resulting from Bluegreen market value at January 30, 2007.
|
|
(d)
|
|
Represents the allocation of
negative goodwill.
|
|
(e)
|
|
Includes BFCs parent company
recovery of Levitts deferred tax liability at
December 31, 2006 of approximately $19.3 million which
was allocated in the purchase price.
|
|
(f)
|
|
Reclassifed to deferred income tax
asset.
|
|
(g)
|
|
Represents write-off of debt
financing cost and allocation of negative goodwill of
$2.4 million.
|
|
(h)
|
|
Represents a fair value adjustment
based on current borrowing rates for similar types of borrowing
arrangements.
|
|
(i)
|
|
Represents estimated accruals.
|
|
(j)
|
|
Represents the issuance of
37,533,953 shares of BFC Class A Common Stock based
upon the closing price of $6.35 for such stock on
January 30, 2007, the date of the merger agreement, as
quoted on the NYSE Arca Stock Exchange, plus other fees and
expenses.
|
94
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
|
|
|
Pro forma
|
|
|
|
|
|
|
Presented
|
|
|
Adjustments
|
|
|
Pro forma
|
|
|
|
(In thousands, except for share and per share data)
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income
|
|
$
|
2,249
|
|
|
$
|
|
|
|
$
|
2,249
|
|
Other income, net
|
|
|
1,433
|
|
|
|
|
|
|
|
1,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,682
|
|
|
|
|
|
|
|
3,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Services Interest and
dividend income
|
|
|
367,177
|
|
|
|
|
|
|
|
367,177
|
|
Service charges on deposits
|
|
|
90,472
|
|
|
|
|
|
|
|
90,472
|
|
Other service charges and fees
|
|
|
27,542
|
|
|
|
|
|
|
|
27,542
|
|
Other income
|
|
|
22,555
|
|
|
|
|
|
|
|
22,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
507,746
|
|
|
|
|
|
|
|
507,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding & Real
Estate Development
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of real estate
|
|
|
566,086
|
|
|
|
|
|
|
|
566,086
|
|
Interest and dividend income
|
|
|
2,474
|
|
|
|
|
|
|
|
2,474
|
|
Other income
|
|
|
14,592
|
|
|
|
|
|
|
|
14,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
583,152
|
|
|
|
|
|
|
|
583,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
1,094,580
|
|
|
|
|
|
|
|
1,094,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
30
|
|
|
|
|
|
|
|
30
|
|
Employee compensation and benefits
|
|
|
9,407
|
|
|
|
|
|
|
|
9,407
|
|
Other expenses
|
|
|
2,933
|
|
|
|
|
|
|
|
2,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,370
|
|
|
|
|
|
|
|
12,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of interest
capitalized
|
|
|
166,578
|
|
|
|
|
|
|
|
166,578
|
|
Provision for loan losses
|
|
|
8,574
|
|
|
|
|
|
|
|
8,574
|
|
Employee compensation and benefits
|
|
|
150,804
|
|
|
|
|
|
|
|
150,804
|
|
Occupancy and equipment
|
|
|
57,308
|
|
|
|
|
|
|
|
57,308
|
|
Advertising and promotion
|
|
|
35,067
|
|
|
|
|
|
|
|
35,067
|
|
Amortization of intangible assets
|
|
|
1,561
|
|
|
|
|
|
|
|
1,561
|
|
Cost associated with debt redemption
|
|
|
1,457
|
|
|
|
|
|
|
|
1,457
|
|
Other expenses
|
|
|
52,962
|
|
|
|
|
|
|
|
52,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
474,311
|
|
|
|
|
|
|
|
474,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding & Real
Estate Development
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales of real estate
|
|
|
482,961
|
|
|
|
|
|
|
|
482,961
|
|
Selling, general and administrative
expenses
|
|
|
120,017
|
|
|
|
|
|
|
|
120,017
|
|
Other expenses
|
|
|
3,677
|
|
|
|
|
|
|
|
3,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
606,655
|
|
|
|
|
|
|
|
606,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
1,093,336
|
|
|
|
|
|
|
|
1,093,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity earnings from unconsolidated
affiliates
|
|
|
10,935
|
|
|
|
|
|
|
|
10,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and
noncontrolling interest
|
|
|
12,179
|
|
|
|
|
|
|
|
12,179
|
|
Benefit for income taxes
|
|
|
(528
|
)
|
|
|
|
|
|
|
(528
|
)
|
Noncontrolling interest
|
|
|
13,404
|
|
|
|
7,643
|
(a)
|
|
|
21,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(697
|
)
|
|
|
(7,643
|
)
|
|
|
(8,340
|
)
|
Loss from discontinued operations
less noncontrolling interest and income tax benefit of $8,958
|
|
|
(1,524
|
)
|
|
|
0
|
|
|
|
(1,524
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(2,221
|
)
|
|
|
(7,643
|
)
|
|
|
(9,864
|
)
|
5% Preferred Stock dividends
|
|
|
750
|
|
|
|
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss allocable to common stock
|
|
$
|
(2,971
|
)
|
|
$
|
(7,643
|
)
|
|
$
|
(10,614
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average number of
common shares outstanding
|
|
|
33,249
|
|
|
|
37,534
|
(b)
|
|
|
70,783
|
|
Diluted loss per share
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
$
|
(0.15
|
)
|
|
|
|
(a) |
|
Eliminate non-controlling interest for the year ended
December 31, 2006. |
|
(b) |
|
Represents shares of BFC Class A Common Stock that will be
issued to Levitts shareholders in the merger. |
95
COMPARATIVE
STOCK PRICES AND DIVIDENDS
BFC Class A Common Stock is listed for trading on the NYSE
Arca Stock Exchange under the trading symbol BFF.
Prior to June 22, 2006, BFC Class A Common Stock was
quoted on the NASDAQ National Market under the trading symbol
BFCF. Levitt Class A Common Stock is listed for
trading on the New York Stock Exchange under the trading symbol
LEV. The tables below set forth, for the periods
indicated, dividends declared and the high and low per share
sales prices for BFC Class A Common Stock as reported on
the NASDAQ National Market, with respect to the time period
prior to June 22, 2006, and as reported on the NYSE Arca
Stock Exchange, with respect to the time period on and after
such date, and for Levitt Class A Common Stock as reported
on the New York Stock Exchange.
BFC
Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends
|
|
|
|
High
|
|
|
Low
|
|
|
Per Share
|
|
|
Calendar Year 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
11.34
|
|
|
$
|
9.04
|
|
|
|
|
|
Second quarter
|
|
|
10.29
|
|
|
|
7.81
|
|
|
|
|
|
Third quarter
|
|
|
9.00
|
|
|
|
6.81
|
|
|
|
|
|
Fourth quarter
|
|
|
7.05
|
|
|
|
4.90
|
|
|
|
|
|
Calendar Year 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
6.64
|
|
|
$
|
5.35
|
|
|
|
|
|
Second quarter
|
|
|
8.16
|
|
|
|
5.69
|
|
|
|
|
|
Third quarter
|
|
|
7.10
|
|
|
|
4.35
|
|
|
|
|
|
Fourth quarter
|
|
|
7.06
|
|
|
|
4.80
|
|
|
|
|
|
Calendar Year 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
6.90
|
|
|
$
|
4.17
|
|
|
|
|
|
Second quarter
(through ,
2007)
|
|
|
[ ]
|
|
|
|
[ ]
|
|
|
|
[ ]
|
|
Levitt
Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends
|
|
|
|
High
|
|
|
Low
|
|
|
Per Share
|
|
|
Calendar Year 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
33.85
|
|
|
$
|
24.67
|
|
|
$
|
.02
|
|
Second quarter
|
|
|
30.66
|
|
|
|
24.60
|
|
|
|
.02
|
|
Third quarter
|
|
|
33.20
|
|
|
|
22.00
|
|
|
|
.02
|
|
Fourth quarter
|
|
|
23.69
|
|
|
|
18.86
|
|
|
|
.02
|
|
Calendar Year 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
25.50
|
|
|
$
|
20.10
|
|
|
$
|
.02
|
|
Second quarter
|
|
|
22.33
|
|
|
|
14.15
|
|
|
|
.02
|
|
Third quarter
|
|
|
16.10
|
|
|
|
9.22
|
|
|
|
.02
|
|
Fourth quarter
|
|
|
13.70
|
|
|
|
11.54
|
|
|
|
.02
|
|
Calendar Year 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
15.44
|
|
|
$
|
9.19
|
|
|
$
|
.02
|
|
Second quarter
(through ,
2007)
|
|
|
[ ]
|
|
|
|
[ ]
|
|
|
|
[ ]
|
|
The above tables show only historical comparisons. Because the
market prices of BFC Class A Common Stock and Levitt
Class A Common Stock likely will fluctuate prior to the
merger, these comparisons may not provide meaningful information
to BFCs or Levitts shareholders in determining how
to vote at their respective annual
96
meetings. Shareholders are encouraged to obtain current market
quotations for BFC Class A Common Stock and Levitt
Class A Common Stock and to review carefully the other
information contained or incorporated by reference in this joint
proxy statement/prospectus. See Where You Can Find More
Information beginning on page 147.
While there are no restrictions on the payment of cash dividends
by BFC, BFC has never paid cash dividends. BFC issued a 25%
stock dividend on March 1, 2004, May 25, 2004 and
March 7, 2005, each of which was payable in shares of BFC
Class A Common Stock. BFC may consider declaring and paying
a dividend in the future with respect to BFC Class A Common
Stock; however, there can be no assurance that it will do so.
Future declaration and payment of cash dividends with respect to
BFC Class A Common Stock, if any, will be determined in
light of the then-current financial condition of BFC and other
factors deemed relevant by the board of directors of BFC.
Levitt has declared and paid regular quarterly dividends of
$.02 per share with respect to Levitt Class A Common
Stock since July 26, 2004. There is no assurance that
Levitt will continue to pay cash dividends on its Class A
Common Stock. Future declaration and payment of cash dividends
with respect to Levitt Class A Common Stock, if any, will
be determined in light of the then-current financial condition
of Levitt and other factors deemed relevant by the board of
directors of Levitt. After completion of the merger, other than
BFC, which may receive dividends as the parent company of
Levitt, shareholders of Levitt will not continue to receive
dividends from Levitt.
The following table sets forth the closing prices for BFC
Class A Common Stock and Levitt Class A Common Stock
as reported on the NYSE Arca Stock Exchange and the New York
Stock Exchange, respectively, on January 30, 2007, the last
trading day before BFC and Levitt announced the merger
agreement, and
on ,
2007, the last trading day before the date of this joint proxy
statement/prospectus. The table also includes the equivalent
prices per share of Levitt Class A Common Stock that
holders of such stock would receive in connection with the
merger if the merger were completed on either of these dates,
applying the exchange ratio of 2.27 shares of BFC
Class A Common Stock for each share of Levitt Class A
Common Stock.
|
|
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Equivalent Value
|
|
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|
|
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of
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BFC Class A
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|
|
Levitt Class A
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|
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Levitt Class A
|
|
|
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Common Stock
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|
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Common Stock
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|
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Common Stock
|
|
|
January 30, 2007
|
|
$
|
6.35
|
|
|
$
|
10.88
|
|
|
$
|
14.41
|
|
,
2007
|
|
$
|
[ ]
|
|
|
$
|
[ ]
|
|
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$
|
[ ]
|
|
97
COMPARISON
OF RIGHTS OF COMMON SHAREHOLDERS OF BFC AND LEVITT
BFC and Levitt are Florida corporations subject to the
provisions of Florida law. Levitts shareholders, whose
rights are currently governed by Levitts Articles of
Incorporation and By-laws, will, if the merger is completed,
become holders of BFC Class A Common Stock and their rights
will be governed by BFCs Articles of Incorporation and
By-laws. The Articles of Amendment to BFCs Articles of
Incorporation and the Amended and Restated By-laws of BFC to be
adopted in connection with the merger are as set forth on
Annexes D and E hereto, respectively, and you are urged to
read such annexes carefully.
The following description summarizes the material differences
that may affect the rights of shareholders of BFC and Levitt but
does not purport to be a complete statement of all those
differences or a complete description of the specific provisions
referred to in this summary and is qualified in its entirety by
reference to the FBCA and the governing corporate instruments of
BFC and Levitt, to each of which you are referred. The
identification of specific differences is not intended to
indicate that other equally or more significant differences do
not exist. Levitts shareholders should read carefully the
relevant provisions of Florida law, BFCs Articles of
Incorporation, the Form of Amendment to BFCs Articles of
Incorporation, which is attached hereto as Annex D, and the
Amended and Restated By-laws of BFC, which are attached hereto
as Annex E, as well as Levitts Articles of
Incorporation and By-laws. Copies of the governing corporate
instruments are available, without charge, to any person,
including any beneficial owner to whom this document is
delivered, by following the instructions listed under
Where You Can Find More Information beginning on
page 147.
Authorized
Capital Stock
BFC. The authorized capital stock of BFC
consists of 100,000,000 shares of capital stock, consisting
of (i) 70,000,000 shares of BFC Class A Common
Stock, par value $0.01 per share,
(ii) 20,000,000 shares of BFC Class B Common
Stock, par value $0.01 per share, and
(iii) 10,000,000 shares of preferred stock, par value
$0.01 per share. In connection with the merger, the number
of authorized shares of BFC Class A Common Stock under
BFCs Articles of Incorporation will be increased from
70,000,000 to 130,000,000, thereby increasing the total number
of shares of authorized capital stock of BFC from 100,000,000 to
160,000,000.
Levitt. The authorized capital stock of Levitt
consists of 65,000,000 shares of capital stock, consisting
of (i) 50,000,000 shares of Levitt Class A Common
Stock, par value $0.01 per share,
(ii) 10,000,000 shares of Levitt Class B Common
Stock, par value $0.01 per share, and
(iii) 5,000,000 shares of preferred stock, par value
$0.01 per share.
Voting
Rights
BFC. Each share of BFC Class A Common
Stock is entitled to one vote, and the BFC Class A Common
Stock represents in the aggregate 22% of the total voting power
of BFC. Each share of BFC Class B Common Stock is entitled
to the number of votes per share which will represent in the
aggregate 78% of the total voting power of BFC. These fixed
voting percentages will remain in effect until the total number
of outstanding shares of BFC Class B Common Stock falls
below 1,800,000. If the total number of outstanding shares of
BFC Class B Common Stock is less than 1,800,000 but greater
than 1,400,000, then the BFC Class A Common Stock will hold
a voting percentage equal to 40% and the BFC Class B Common
Stock will hold a voting percentage equal to the remaining 60%.
If the total number of outstanding shares of BFC Class B
Common Stock is less than 1,400,000 but greater than 500,000,
then the BFC Class A Common Stock will hold a voting
percentage equal to 53% and the BFC Class B Common Stock
will hold a voting percentage equal to the remaining 47%. If the
total number of outstanding shares of BFC Class B Common
Stock is less than 500,000, then each share of BFC Class A
Common Stock and Class B Common Stock will be entitled to
one vote.
Levitt. Each share of Levitt Class A
Common Stock is entitled to one vote and the Levitt Class A
Common Stock represents in the aggregate 53% of the total voting
power of Levitt. Each share of Levitt Class B Common Stock
is entitled to the number of votes per share which will
represent in the aggregate 47% of the total voting power of
Levitt. The fixed voting percentages will be eliminated, and
shares of Levitt Class B Common Stock will be entitled to
only one vote per share, from and after the date that BFC or its
affiliates no longer own in the aggregate at least
600,000 shares of Levitt Class B Common Stock.
98
Shares of
Preferred Stock Outstanding; Conversion Rights of Preferred
Stock
BFC. BFCs Articles of Incorporation
provide that the board of directors of BFC has the power to
authorize the issuance of preferred shares and to fix the
designation, powers, preferences, rights, qualifications,
limitations and restrictions thereof. Currently, there are
15,000 shares outstanding of 5% Cumulative Convertible
Preferred Stock of BFC. Holders of such preferred stock have the
option at any time on or after April 30, 2007 to convert
their shares into shares of BFC Class A Common Stock, with
the number of shares determined by dividing the stated value of
$1,000 per share by the conversion price of $9.60 per
share of BFC Class A Common Stock. The conversion price is
subject to customary anti-dilution adjustments. The holders may
convert their shares of 5% Cumulative Convertible Preferred
Stock of BFC before April 30, 2007 if (i) BFC
Class A Common Stock has a closing price equal to 150% of
the conversion price then in effect for the 20 consecutive
trading days prior to the delivery of a conversion notice or
(ii) BFC has delivered a redemption notice.
Levitt. Levitts Articles of
Incorporation provide that the board of directors of Levitt has
the power to authorize the issuance of preferred shares and to
fix the designations, voting powers, preferences, rights,
qualifications, limitations and restrictions thereof. Currently,
there are no outstanding shares of preferred stock of Levitt.
Ownership
Restrictions on Class B Common Stock
BFC. There are no restrictions on the
ownership of BFC Class B Common Stock.
Levitt. Only BFC and its affiliates may hold
Levitt Class B Common Stock and accordingly sales of Levitt
Class B Common Stock to unaffiliated parties would require
the conversion of those shares to Levitt Class A Common
Stock prior to or contemporaneously with the sale. However, the
sale of BFC or any other change in control of BFC would not
result in the conversion of the shares of Levitt Class B
Common Stock held by BFC into shares of Levitt Class A
Common Stock.
Dividends
and Other Distributions; Liquidation Rights
BFC. No dividend or other distribution (other
than a dividend or distribution payable solely in common stock)
shall be paid on or set apart for payment on BFC Class A
Common Stock or Class B Common Stock until such time as all
accrued and unpaid dividends on the 5% Cumulative Convertible
Preferred Stock of BFC have been or contemporaneously are
declared or paid and a sum is set apart sufficient for payment
of such accrued and unpaid dividends. Subject to the foregoing,
holders of BFC Class A Common Stock and Class B Common
Stock are entitled to receive cash dividends, when and as
declared by the board of directors of BFC out of legally
available assets. Any distribution per share with respect to BFC
Class A Common Stock will be identical to the distribution
per share with respect to BFC Class B Common Stock, except
that a stock dividend or other non-cash distribution to holders
of BFC Class A Common Stock may be declared and issued only
in the form of BFC Class A Common Stock while a dividend or
other non-cash distribution to holders of BFC Class B
Common Stock may be declared and issued in the form of either
BFC Class A Common Stock or Class B Common Stock at
the discretion of the board of directors of BFC, provided that
the number of any shares so issued or any non-cash distribution
is the same on a per share basis.
Upon any liquidation of BFC, the assets legally available for
distribution to shareholders will be distributed ratably among
the holders of BFC Class A Common Stock and Class B
Common Stock after payment of the liquidation preference to
which the holders of shares of 5% Cumulative Convertible
Preferred Stock of BFC are entitled.
Levitt. Holders of Levitt Class A Common
Stock and Class B Common Stock are entitled to receive cash
dividends, when and as declared by the board of directors of
Levitt out of legally available assets. Any distribution per
share with respect to Levitt Class A Common Stock will be
identical to the distribution per share with respect to Levitt
Class B Common Stock, except that a stock dividend or other
non-cash distribution to holders of Levitt Class A Common
Stock may be declared and issued only in the form of Levitt
Class A Common Stock while a dividend or other non-cash
distribution to holders of Levitt Class B Common Stock may
be declared and issued in the form of either Levitt Class A
Common Stock or Class B Common Stock at the discretion of
the board of directors of Levitt, provided that the number of
any shares so issued or any non-cash distribution is the same on
a per share basis.
99
Upon any liquidation of Levitt, the assets legally available for
distribution to shareholders will be distributed ratably among
the holders of Levitt Class A Common Stock and Class B
Common Stock.
Number
and Classification of Board of Directors
BFC. BFCs By-laws provide for a board of
directors composed of between three and twelve members, as
determined by the board of directors. As of the date of this
joint proxy statement/prospectus, the board of directors of BFC
consists of six members. In connection with the merger,
BFCs By-laws will be amended to provide for a board of
directors composed of between three and seventeen members, as
determined by the board of directors, and seven directors of
Levitt are to be appointed to the board of directors of BFC such
that it will consist of thirteen members. See The
Merger Board of Directors and Executive Officers of
BFC Following the Merger beginning on page 72. The
board of directors of BFC is divided into three classes, as
nearly equal in number as possible, with the term of office of
one class expiring each year.
Levitt. Levitts By-laws provide for a
board of directors composed of between three and twelve members,
as determined by the board of directors. As of the date of this
joint proxy statement/prospectus, the board of directors of
Levitt consists of nine members and is divided into three
classes with the term of office of one class expiring each year.
Newly
Created Directorships and Vacancies
BFC. BFCs By-laws provide that any
vacancy occurring in the board of directors of BFC, including
any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority
of the remaining directors although less than a quorum of the
board of directors. A director elected to fill a vacancy caused
by the resignation or removal of a director will hold office for
the same term as to which such directors predecessor was
elected. In the case of a director elected to fill a vacancy
created by reason of an increase in the number of directors, the
director will serve for the term designated by the board of
directors, but in no event will such term exceed three years.
Levitt. Levitts By-laws provide that any
vacancy occurring in the board of directors may be filled only
by the affirmative vote of a majority of the remaining directors
although less than a quorum of the board of directors, or by a
sole remaining director. A director elected to fill a vacancy
will serve until the next election of directors by Levitts
shareholders.
Removal
of Directors
BFC. BFCs By-laws provide that any
director or the entire board of directors of BFC may be removed,
with or without cause, at a meeting of BFCs shareholders
called expressly for such purpose, by vote of the holders of a
majority of the shares entitled to vote on such removal.
Levitt. Under Florida law, Levitts
shareholders may remove one or more directors, with or without
cause, at a meeting of Levitts shareholders, provided the
notice of the meeting states that the purpose, or one of the
purposes, of the meeting is the removal of such director or
directors. The director or directors will be removed by
Levitts shareholders at the meeting called for such
purpose if the votes cast favoring removal exceed the votes cast
against removal.
Special
Meetings of Shareholders
BFC. BFCs By-laws provide that special
meetings of BFCs shareholders may be held when directed by
the president or the board of directors or when requested in
writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A special meeting
requested by shareholders will be called for a date not less
than 10 nor more than 60 days after the request is made,
unless (in the case of the
60-day
maximum) the shareholders requesting the meeting designate a
later date and unless (in the case of the
10-day
minimum) the number of shareholders constituting a quorum waive
the 10-day
minimum notice period. The call for the meeting will be issued
by the secretary, unless the president, board of directors or
shareholders requesting the meeting designate another person to
do so.
100
Levitt. Levitts By-laws provide that
special meetings of Levitts shareholders for any purpose
or purposes may be held when called by the chairman of the
board, the president, or a majority of the board of directors or
upon the written request of the holders of outstanding shares
representing not less than fifty percent of the votes entitled
to be cast at the meeting. Such written request shall state the
purpose of the meeting and shall be delivered at the principal
office of Levitt addressed to the chairman of the board of
directors, the president or the secretary. No business other
than that stated in the notice of a special meeting will be
transacted at such meeting. Written notice stating the place,
day and hour of the meeting and the purpose or purposes for
which the meeting is called shall be delivered not less than 10
nor more than 60 days before the date of the meeting,
either personally or by mail, by or at the direction of the
chairman of the board, the president, the secretary or the
directors calling the meeting, to each shareholder of record
entitled to vote at such meeting.
Amendment
of Articles of Incorporation
BFC. In addition to the requirements under
Florida law, BFCs Articles of Incorporation require the
affirmative vote of the holders of at least two-thirds of
BFCs stock entitled to vote to amend such articles;
provided, however, that if an amendment is recommended to
BFCs shareholders by at least two-thirds of the members of
the board of directors of BFC, then such amendment will be
approved upon the affirmative vote of a simple majority of
BFCs stock entitled to vote.
Levitt. In its Articles of Incorporation,
Levitt reserved to its shareholders the right to amend or repeal
any provisions contained therein. Pursuant to Florida law and
subject to the exceptions thereof, such amendment or repeal will
be approved if the votes cast favoring the action exceed the
votes cast opposing the action.
101
CORPORATE
GOVERNANCE OF BFC
Pursuant to BFCs By-laws and the FBCA, BFCs business
and affairs are managed under the direction of its board of
directors. Directors are kept informed of BFCs 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.
Determination
of Director Independence
BFCs full board of directors undertook a review of each
directors independence on February 12, 2007. During
these reviews, BFCs board considered transactions and
relationships between each director or any member of his
immediate family and the company and its subsidiaries and
affiliates, including those reported below under Certain
Relationships and Related Transactions BFC.
BFCs board also examined transactions and relationships
between directors or their affiliates and members of BFCs
senior management or their affiliates. The purpose of these
reviews was to determine whether any such relationship or
transaction was inconsistent with a determination that the
director is independent under applicable laws and regulations
and NYSE Arca Stock Exchange listing standards. As permitted by
the NYSE Arca Stock Exchange listing standards, BFCs board
determined that the following categories of relationships will
not constitute material relationships that impair a
directors independence: (i) banking relationships
with BankAtlantic in the ordinary course of BankAtlantics
business; (ii) serving on third party boards of directors
with other members of the board; (iii) payments or
charitable gifts by BFC to entities of which a director is an
executive officer or employee where such payments or gifts do
not exceed the greater of $1 million or 2% of such
companys or charitys consolidated gross revenues;
and (iv) investments by directors in common with each other
or BFC, its affiliates or executive officers. As a result of its
review of the relationships of each of the members of BFCs
board, and considering these categorical standards, BFCs
board has affirmatively determined that a majority of BFCs
directors, including D. Keith Cobb, Oscar Holzmann, Earl Pertnoy
and Neil Sterling, are independent directors within
the meaning of the listing standards of the NYSE Arca Stock
Exchange and applicable law.
Committees
of the Board of Directors and Meeting Attendance
The board of directors of BFC has established audit,
compensation and nominating/corporate governance committees.
BFCs 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. BFCs board has also adopted a
Code of Business Conduct and Ethics that applies to all of
BFCs 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 BFCs website at
www.bfcfinancial.com, and each is available in print,
without charge, to any BFC shareholder.
BFCs board met twelve times and executed one unanimous
written consent in lieu of a meeting during 2006. Each of the
members of BFCs board of directors attended at least 75%
of the meetings of the board and committees on which he served,
and all of the then-serving members of BFCs board of
directors attended BFCs 2006 annual meeting of
shareholders, although BFC has no formal policy requiring them
to do so.
BFCs
Audit Committee
BFCs audit committee consists of Oscar Holzmann, chairman,
D. Keith Cobb, Earl Pertnoy and Neil Sterling. BFCs board
has determined that all of the members of BFCs audit
committee are financially literate and
independent within the meaning of the listing
standards of the NYSE Arca Stock Exchange and applicable SEC
rules and regulations. Mr. Holzmann, the chairman of this
committee, and D. Keith Cobb are both qualified as audit
committee financial experts within the meaning of SEC
regulations and BFCs board has determined that each of
them has finance and accounting expertise which results in their
financial sophistication within the meaning of the
listing standards of the NYSE Arca Stock Exchange. BFCs
audit committee met six times during the 2006 fiscal year and
its members also held various informal conference calls and
meetings as a committee. BFCs audit committee is directly
responsible for the appointment, compensation, retention and
oversight of BFCs independent auditor. Additionally,
BFCs audit committee assists board oversight of:
(i) the integrity of BFCs financial
102
statements; (ii) BFCs compliance with legal and
regulatory requirements; (iii) the qualifications,
performance and independence of BFCs independent auditor;
and (iv) the performance of BFCs internal audit
function. In connection with these oversight functions,
BFCs audit committee receives reports from and meets with
BFCs internal audit group, management and BFCs
independent auditor. BFCs audit committee receives
information concerning internal controls over financial
reporting and any deficiencies in such controls and has adopted
a complaint monitoring procedure that enables confidential and
anonymous reporting to the committee of concerns regarding
questionable accounting or auditing matters. A report from
BFCs audit committee is included in this joint proxy
statement/prospectus on page 121.
BFCs
Compensation Committee
BFCs compensation committee consists of Earl Pertnoy,
chairman, D. Keith Cobb, Oscar Holzmann and Neil Sterling. All
of the members of the committee are independent
within the meaning of the listing standards of the NYSE Arca
Stock Exchange. In addition, each committee member is a
Non-Employee Director as defined in
Rule 16b-3
under the Exchange Act and an outside director as
defined for purposes of Section 162(m) of the Code.
BFCs compensation committee met five times during 2006.
BFCs compensation committee provides assistance to
BFCs board in fulfilling its responsibilities relating to
the compensation of BFCs executive officers. It determines
the compensation of BFCs chief executive officer and,
after reviewing the compensation recommendations of BFCs
chief executive officer, determines the compensation of
BFCs other executive officers. It also administers
BFCs equity-based compensation plans.
BFCs
Nominating/Corporate Governance Committee
BFCs nominating/corporate governance committee consists of
Neil Sterling, chairman, D. Keith Cobb, Oscar Holzmann and Earl
Pertnoy. All of the members of BFCs nominating/corporate
governance committee are considered to be
independent within the meaning of the listing
standards of the NYSE Arca Stock Exchange. The committee met two
times in 2006. BFCs nominating/corporate governance
committee is responsible for assisting BFCs board in
identifying individuals qualified to become directors, making
recommendations of candidates for directorships, developing and
recommending to BFCs board a set of corporate governance
principles for BFC, overseeing the evaluation of BFCs
board and management, overseeing the selection, composition and
evaluation of the committees of BFCs board of directors
and overseeing the management continuity and succession planning
process.
Generally, the committee will identify director 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 BFCs 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 candidates
background and accomplishments, candidates for director nominees
are reviewed in the context of the current composition of
BFCs board and the evolving needs of BFC. BFC also
requires that its board members be able to dedicate the time and
resources sufficient to ensure the diligent performance of their
duties on BFCs behalf, including attending board and
applicable committee meetings. If the committee believes a
candidate would be a valuable addition to BFCs board, it
will recommend the candidates election to BFCs full
board.
Under BFCs By-laws, nominations for directors may be made
only by or at the direction of the board of directors of BFC or
by a shareholder entitled to vote who delivers written notice
(along with certain additional information specified in
BFCs By-laws) not less than 90 nor more than 120 days
prior to the anniversary of the preceding years annual
meeting of shareholders. For BFCs 2008 annual meeting of
shareholders, BFC must receive this notice
between
and ,
2008.
Executive
Sessions of Non-Management and Independent Directors
In accordance with applicable NYSE Arca Stock Exchange rules,
the non-management directors of BFC met two times in executive
session of the board in which management directors and other
members of management did
103
not participate. Earl Pertnoy was selected to be the presiding
director for these sessions. The non-management directors have
scheduled regular meetings in February and July of each year,
and may schedule additional meetings without management present
as they determine to be necessary.
Director
and Management Indebtedness
In February 2001, John E. Abdo, vice chairman of the board of
directors of BFC, borrowed $500,000 from BFC on a recourse basis
and Glen R. Gilbert, former executive vice president and chief
financial officer of BFC, and Earl Pertnoy, a director of BFC,
each borrowed $50,000 on a non-recourse basis in each case to
make investments in a technology company sponsored by BFC. In
July 2002, John E. Abdo borrowed an additional $3.0 million
from BFC on a recourse basis. All borrowings bore interest at
the prime rate plus 1%, which interest was, except for interest
on the Abdo borrowing, payable annually. The entire principal
balance under the borrowings, except for the Abdo borrowing, was
due in February 2006. The Abdo borrowing required monthly
interest payments, was due on demand and was secured by
2,127,470 shares of BFC Class A Common Stock and
370,750 shares of BFC Class B Common Stock. In
February 2006, Mr. Gilbert and Mr. Pertnoy paid in
full their outstanding loan balances of $19,151 and $24,854,
respectively. The amount outstanding at December 31, 2006
for Mr. Abdo was $425,000. In March 2007, Mr. Abdo
paid in full his outstanding loan balance of $425,000.
Communications
with the Board of Directors and Non-Management
Directors
Interested parties who wish to communicate with the BFCs
board of directors, any individual director or the
non-management directors as a group can write to BFCs
corporate secretary at BFC Financial Corporation, 2100 West
Cypress Creek Road, Fort Lauderdale, Florida 33309. If the
person submitting the letter is a BFC shareholder, the letter
should include a statement indicating such. Depending on the
subject matter, BFC will:
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forward the letter to the director or directors to whom it is
addressed;
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attempt to handle the inquiry directly if it relates to routine
or ministerial matters, including requests for
information; or
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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 BFCs
board, present a summary of all letters received since the last
meeting that were not forwarded to the board and will make those
letters available to the board upon request.
Code of
Ethics
BFC has a Code of Business Conduct and Ethics that applies to
all directors, officers and employees of the company, including
its principal executive officer, principal financial officer and
principal accounting officer. BFC will post amendments to or
waivers from its Code of Business Conduct and Ethics (to the
extent applicable to the companys principal executive
officer, principal financial officer or principal accounting
officer) on its website at
www.bfcfinancial.com. There were no such
waivers from BFCs Code of Business Conduct and Ethics
during 2006. BFC made ministerial amendments to its Code of
Business Conduct and Ethics on November 6, 2006. The
amended Code of Business Conduct and Ethics has been posted on
BFCs website.
Compensation
Committee Interlocks and Insider Participation
BFCs board of directors has designated directors D. Keith
Cobb, Oscar Holzmann, Earl Pertnoy and Neil Sterling, none of
whom are employees of the company or any of its subsidiaries, to
serve on BFCs compensation committee. Messrs. Levan
and Abdo also received compensation from Levitt and BankAtlantic
Bancorp and received stock option grants from Bluegreen.
Mr. Cobb also serves on the board of directors of
BankAtlantic Bancorp and receives compensation from BankAtlantic
Bancorp for his service on such board and its committees,
including its audit committee and nominating/corporate
governance committee. Mr. Cobb does not serve on the
compensation committee of BankAtlantic Bancorp.
104
Section 16(a)
Beneficial Ownership Reporting Compliance
Based solely upon a review of the copies of the forms furnished
to BFC and written representations that no other reports were
required, BFC believes that during the year ended
December 31, 2006, all filing requirements under
Section 16(a) of the Exchange Act applicable to its
officers, directors and greater than 10% beneficial owners were
complied with on a timely basis.
MANAGEMENT
OF BFC
Board of
Directors of BFC
BFCs board of directors currently consists of six
directors divided into three classes, each of which has a
three-year term, expiring in annual succession. BFCs
By-laws currently provide that the companys board of
directors shall consist of no less than three nor more than
twelve directors. The specific number of directors is set from
time to time by resolution of BFCs board. In connection
with the merger, BFC has agreed to amend its By-laws to increase
the maximum number of directors to seventeen and cause the seven
directors of Levitt who are not also directors of BFC to be
appointed to BFCs board of directors to serve until
BFCs 2008 annual meeting of shareholders. See The
Merger Appointments to the Board of Directors
of BFC in Connection with the Merger.
A total of two directors will be elected at the BFC annual
meeting, both of whom will be elected for the term expiring in
2010. Each of the nominees was recommended for re-election by
BFCs nominating/corporate governance committee and has
consented to serve for the term indicated. If either of them
should become unavailable to serve as a director, BFCs
board may designate a substitute nominee. In that case, the
persons named as proxies will vote for the substitute nominee
designated by the board. Except as otherwise indicated, the
nominees and directors listed below have had no change in
principal occupation or employment during the past five years.
The
Directors Standing For Election Are:
TERMS
ENDING IN
2010:
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ALAN B. LEVAN
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Director since 1978
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Alan B. Levan, age 62, formed the I.R.E. Group
(predecessor to BFC) in 1972. Since 1978, he has been chairman
of the board, president and chief executive officer of BFC or
its predecessors. He has been chairman of the board and chief
executive officer of BankAtlantic Bancorp since 1994 and
chairman of the board of BankAtlantic since 1987. He has been
chairman of the board and chief executive officer of Levitt
since 1985 and chairman of Bluegreen since 2002.
|
|
|
|
|
NEIL STERLING
|
|
|
Director since 2003
|
|
Neil Sterling, age 55, has been the principal of The
Sterling Resources Group, a business development-consulting firm
in Fort Lauderdale, Florida, since 1998.
THE BOARD OF DIRECTORS OF BFC RECOMMENDS THAT HOLDERS OF
BFC CLASS A COMMON STOCK AND HOLDERS OF BFC CLASS B
COMMON STOCK
VOTE FOR THE ELECTION OF EACH OF THE NOMINEES FOR
DIRECTOR.
The
Directors Continuing In Office Are:
TERMS
ENDING IN
2008:
|
|
|
|
|
JOHN E. ABDO
|
|
|
Director since 1988
|
|
John E. Abdo, age 63, has been vice chairman of
BankAtlantic since April 1987 and chairman of the executive
committee of BankAtlantic since October 1985. He has been a
director of BFC since 1988 and vice chairman of the board of BFC
since 1993. He has been a director and vice chairman of the
board of BankAtlantic Bancorp since 1994 and vice chairman of
the board of Levitt since April 2001. He has been president and
chief executive officer of
105
Abdo Companies, Inc., a real estate development, construction
and brokerage firm, for more than five years. He is also a
director of Benihana and has been a director and vice chairman
of Bluegreen since 2002.
|
|
|
|
|
OSCAR HOLZMANN
|
|
|
Director since 2002
|
|
Oscar Holzmann, age 64, 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.
TERMS
ENDING IN
2009:
|
|
|
|
|
D. KEITH COBB
|
|
|
Director since 2004
|
|
D. Keith Cobb, age 66, has served as a business
consultant and strategic advisor to a number of companies since
1996. In addition, Mr. Cobb completed a six-year term on
the board of the Federal Reserve Bank of Miami in 2002.
Mr. Cobb spent thirty-two years as a practicing certified
public accountant at KPMG LLP, and was vice chairman and chief
executive officer of Alamo Rent A Car, Inc. from 1995 until its
sale in 1996. Mr. Cobb also serves on the boards of
BankAtlantic Bancorp, Alliance Data Systems, Inc. and several
private companies.
|
|
|
|
|
EARL PERTNOY
|
|
|
Director since 1978
|
|
Earl Pertnoy, age 80, is a real estate investor and
developer. He has been a director of BFC and its predecessor
companies since 1978.
Executive
Officers of BFC
The following individuals are executive officers of BFC:
|
|
|
Name
|
|
Position
|
|
Alan B. Levan
|
|
Chairman of the Board, Chief
Executive Officer, President and Director
|
John E. Abdo
|
|
Vice Chairman of the Board and
Director
|
Phil Bakes
|
|
Managing Director and Executive
Vice President
|
George P. Scanlon
|
|
Executive Vice President and Chief
Financial Officer
|
Maria R. Scheker
|
|
Chief Accounting Officer
|
All officers serve until they resign or are replaced or removed
by BFCs board of directors.
The following additional information is provided for the
executive officers shown above who are not directors of BFC or
director nominees:
Phil Bakes, age 61, joined BFC as an
executive vice president in January 2004 and was named managing
director in October 2004. Immediately before joining BFC, he
served from
1991-2003 as
president and co-founder of Sojourn Enterprises, a Miami and New
York-based merchant banking and advisory firm, as well as
chairman, chief executive officer and co-founder from
1999-2003 of
FAR&WIDE Travel Corp., an international leisure travel
company, which in September 2003 liquidated under
Chapter 11 of the U.S. Bankruptcy Code. From
1980-1990,
Mr. Bakes was a senior airline industry executive,
including serving as president and chief executive officer of
Continental Airlines and Eastern Airlines. Mr. Bakes began
his professional career in Washington, D.C. serving as an
assistant Watergate prosecutor, counsel to the Senate Antitrust
Subcommittee and general counsel of a federal agency.
Mr. Bakes holds a Juris Doctor degree from Harvard Law
School and a Bachelor of Arts degree from Loyola University
(Chicago).
George P. Scanlon, age 49, joined BFC as executive
vice president and chief financial officer in April 2007.
Mr. Scanlon has served as executive vice president and
chief financial officer of Levitt since August 2004 and now
serves as executive vice president and chief financial officer
of each of BFC and Levitt. Prior to joining Levitt,
Mr. Scanlon was the chief financial officer of Datacore
Software Corporation from December 2001 to August 2004. Datacore
is a privately-owned independent software vendor specializing in
storage control, storage management and storage consolidation.
Prior to joining Datacore, Mr. Scanlon was the chief
financial officer of Seisint, Inc. from November 2000 to
September 2001. Seisint was a privately-owned technology company
specializing in providing
106
data search and processing products. Prior to joining Seisint,
Mr. Scanlon was employed at Ryder System, Inc. from August
1982 to June 2000, serving in a variety of financial positions,
including senior vice president planning and
controller. Ryder is a publicly-traded Fortune 500 provider of
transportation, logistics and supply chain management services.
Maria R. Scheker, age 49, was appointed chief
accounting officer of BFC in April 2007. Ms. Scheker joined
BFC in 1985 and has held various positions with the company
during this time, including assistant controller from 1993
through 2003. Ms. Scheker was appointed controller of BFC
in 2003 and senior vice president of BFC in March 2006.
Ms. Scheker has been a certified public accountant in the
State of Florida since 2003.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS BFC
Review,
Approval or Ratification of Transactions with Related
Persons
BFCs board of directors reviews and approves transactions
in which BFC was or is to be a participant, the amount involved
exceeded or will exceed $120,000 annually and any of BFCs
directors or executive officers, or their immediate family
members, had or will have a direct or indirect material
interest. When considering a related person transaction,
BFCs board of directors analyzes, among other factors it
deems appropriate, whether such related person transaction was
or is to be for the benefit of BFC and upon terms no less
favorable to BFC than if the related person transaction was with
an unrelated party. During 2006, no related person transaction
occurred where this process was not followed.
Transactions
with Related Persons
BFC is the controlling shareholder of BankAtlantic Bancorp and
Levitt. BFC also has a direct non-controlling interest in
Benihana and, through Levitt, an indirect ownership interest in
Bluegreen. The majority of BFCs capital stock is owned or
controlled by BFCs chairman, chief executive officer and
president, and by BFCs vice chairman, both of whom are
also directors of BFC, executive officers and directors of
BankAtlantic Bancorp and Levitt, and directors of Bluegreen.
BFCs vice chairman is also a director of Benihana.
The following table presents BFC, BankAtlantic Bancorp, Levitt
and Bluegreen related person transactions at, and for the year
ended, December 31, 2006. Such amounts were eliminated in
BFCs consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At and For the Year Ended December 31,
|
|
|
|
2006
|
|
|
|
BFC
|
|
|
BankAtlantic Bancorp
|
|
|
Levitt
|
|
|
Bluegreen
|
|
|
|
(In thousands)
|
|
|
Cash and cash equivalents and
(securities sold under agreements to repurchase)(1)
|
|
$
|
996
|
|
|
$
|
(5,547
|
)
|
|
$
|
4,552
|
|
|
$
|
|
|
Shared service receivable
(payable)(2)
|
|
|
312
|
|
|
|
(142
|
)
|
|
|
(107
|
)
|
|
|
(63
|
)
|
Shared service income (expense)(2)
|
|
|
2,035
|
|
|
|
(647
|
)
|
|
|
(1,134
|
)
|
|
|
(254
|
)
|
Interest income (expense) from
cash balance/securities sold under agreements to repurchase(1)
|
|
|
43
|
|
|
|
(479
|
)
|
|
|
436
|
|
|
|
|
|
|
|
|
(1) |
|
BFC and Levitt entered into securities sold under agreements to
repurchase with BankAtlantic. The balance in those accounts in
the aggregate was approximately $5.5 million at
December 31, 2006, and interest in connection with these
repurchase agreements was approximately $479,000 for the year
ended December 31, 2006. These transactions have the same
terms as other BankAtlantic repurchase agreements with unrelated
parties. |
|
(2) |
|
Effective January 1, 2006, BFC maintained arrangements with
BankAtlantic Bancorp, Levitt and Bluegreen to provide shared
service operations in the areas of human resources, risk
management, investor relations and executive office
administration. Pursuant to this arrangement, certain employees
from BankAtlantic were transferred to BFC to staff BFCs
shared service operations. The costs of shared services are
allocated based |
107
|
|
|
|
|
upon the usage of the respective services. Also as part of the
shared service arrangement, BFC reimburses BankAtlantic Bancorp
and Bluegreen for office facilities costs relating to BFC and
its shared service operations. |
BankAtlantic Bancorp in prior periods issued options to acquire
shares of BankAtlantic Bancorp Class A Common Stock to
employees of Levitt prior to the spin-off and to BankAtlantic
Bancorp employees that were transferred to BFC on
January 1, 2006. BankAtlantic Bancorp has elected, in
accordance with the terms of its stock option plans, not to
cancel the stock options held by those former employees.
BankAtlantic Bancorp accounts for these options to former
employees as employee stock options because these individuals
were employees of BankAtlantic Bancorp on the grant date. During
the year ended December 31, 2006, former employees
exercised 51,464 options to acquire BankAtlantic Bancorp
Class A Common Stock at a weighted average exercise price
of $3.28.
BankAtlantic Bancorp options outstanding to former employees
consisted of the following as of December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
BankAtlantic Bancorp
|
|
|
|
|
|
|
Class A
|
|
|
Weighted
|
|
|
|
Common
|
|
|
Average
|
|
|
|
Stock
|
|
|
Price
|
|
|
Options outstanding
|
|
|
306,598
|
|
|
$
|
10.48
|
|
Options unvested
|
|
|
245,143
|
|
|
$
|
11.39
|
|
During the year ended December 31, 2006, BankAtlantic
Bancorp issued to BFC employees that perform services for
BankAtlantic Bancorp options to acquire 50,300 shares of
BankAtlantic Bancorp Class A Common Stock at an exercise
price of $14.69. These options vest in five years and expire ten
years from the grant date. BFC recognized an expense of $26,000
for the twelve months ended December 31, 2006.
BFC and its subsidiaries 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, was of counsel
until September 30, 2006. Fees aggregating $526,000 were
paid by BankAtlantic Bancorp to Ruden, McClosky during the year
ended December 31, 2006. In addition, fees aggregating
$1.6 million were paid to Ruden, McClosky by Levitt in
2006. 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 Levitts board of directors, is a
member. Levitt paid fees aggregating $470,000 to this firm
during the year ended December 31, 2006.
Certain of BFCs affiliates, including its executive
officers, have independently made investments with their own
funds in both public and private entities in which BFC holds
investments.
Included in BFCs other assets at December 31, 2006
was approximately $7,000 due from affiliates.
BFCS
COMPENSATION DISCUSSION AND ANALYSIS
Overview
of Compensation Program
BFCs compensation committee (referred to within this
section as the committee) administers the
compensation program for the executive officers of BFC. The
committee reviews and determines all executive officer
compensation, administers BFCs equity incentive plans
(including reviewing and approving grants to BFCs
executive officers), makes recommendations to shareholders with
respect to proposals related to compensation matters and
generally consults with management regarding employee
compensation programs.
The committees charter reflects these responsibilities,
and the committee and BFCs board of directors periodically
review and, if appropriate, revise the charter. The board of
directors of BFC determines the committees membership,
which is composed entirely of independent directors. The
committee meets at regularly scheduled times during the year,
and it may also hold specially scheduled meetings and take
action by written consent. At
108
board meetings, the chairman of the committee reports on
committee actions and recommendations, as he deems appropriate.
Executive compensation is reviewed at executive sessions of the
board.
Throughout this joint proxy statement/prospectus, the term
BFCs named executive officers is used to refer
collectively to the individuals included on BFCs Summary
Compensation Table on page 112.
Compensation
Philosophy and Objectives
BFCs compensation program for executive officers consists
of a base salary, an annual cash incentive and bonus program,
periodic grants of restricted stock or stock options, and health
and welfare benefits. The committee believes that the most
effective executive officer compensation program is one that is
designed to align the interests of the executive officers with
those of shareholders by compensating the executive officers in
a manner that advances both the short- and long-term interests
of BFC and its shareholders. The committee believes that
BFCs compensation program for executive officers is
appropriately based upon BFCs performance, the performance
and level of responsibility of the executive officer and the
market, generally, with respect to executive officer
compensation.
Messrs. Levan and Abdo hold executive positions at
BankAtlantic Bancorp and Levitt and received compensation for
their services directly from these BFC subsidiaries in 2006.
While the committee does not determine the compensation paid to
Messrs. Levan and Abdo by BFCs public company
subsidiaries, the committee considers such compensation and the
fact that Messrs. Levan and Abdo devote time to the
operations of BankAtlantic Bancorp and Levitt when determining
the compensation BFC pays to Messrs. Levan and Abdo.
Role of
Executive Officers in Compensation Decisions
The committee makes all compensation decisions for BFCs
named executive officers and other executive officers, and
approves recommendations regarding equity awards to all of
BFCs employees. BFCs chief executive officer
annually reviews the performance of each of BFCs named
executive officers (other than himself, whose performance is
reviewed by the committee). The conclusions reached and
recommendations based on these reviews, including those with
respect to setting and adjusting base salary, annual cash
incentive awards and bonuses and stock option awards, are
presented to the committee. The committee can exercise its
discretion in modifying upward or downward any recommended
amounts or awards to executive officers. In 2006, the committee
accepted without modification the recommendations of BFCs
chief executive officer.
Executive
Officer Compensation Components
For the fiscal year ended December 31, 2006, the principal
components of compensation for BFCs named executive
officers were:
|
|
|
|
|
base salary;
|
|
|
|
BFCs annual incentive and bonus program; and
|
|
|
|
long-term equity incentive compensation.
|
Base
Salary
The committee believes that the base salaries offered by BFC are
competitive based on a review of market practices and the duties
and responsibilities of each named executive officer. In setting
base salaries, the committee periodically examines market
compensation levels and trends observed in the market for
executives of comparable experience and skills. Market
information is used as an initial frame of reference for
establishing and adjusting base salaries. The committee believes
that BFCs named executive officers base salaries
should be competitive with those of other executives with
comparable experience at organizations similar to BFC.
In addition to examining market compensation levels and trends,
the committee makes base salary decisions for BFCs named
executive officers based on an annual review by the committee
with input and recommendations from BFCs chief executive
officer. The committees review includes, among other
things, the functional and decision-making responsibilities of
each position, the significance of each named executive
officers specific area
109
of individual responsibility to BFCs financial performance
and achievement of overall goals, and the contribution,
experience and work performance of each named executive officer.
With respect to base salary decisions for BFCs chief
executive officer, the committee makes an assessment of
Mr. Levans past performance as chief executive
officer and its expectations as to his future contributions to
BFC and its subsidiaries, as well as the factors described above
for BFCs other named executive officers, including
examining market compensation levels and trends and evaluating
his individual performance and BFCs financial condition,
operating results and attainment of strategic objectives. In
evaluating the performance of Mr. Levan for purposes of not
only his base salary, but also his cash bonus under BFCs
annual incentive and bonus program and stock option awards under
BFCs long-term equity incentive compensation program, the
committee considered BFCs 2006 operating results and its
financial condition. In its review, the committee also
considered Mr. Levans considerable effort and
attention in connection with the operations of BFCs
principal investments, including BankAtlantic Bancorp and
Levitt, and that the performance of such principal investments
has been a substantial factor in the success of BFC. In its
review, the committee also noted, among other things,
Mr. Levans leadership during 2006, including
leadership actions taken at Levitt and BankAtlantic Bancorp with
a view toward positioning both companies for long-term growth
and future success and Mr. Levans efforts to increase
the visibility of, and institutional interest in, each of BFC,
BankAtlantic Bancorp and Levitt.
Each of BFCs named executive officers 2006 base
salary increased approximately 4% from 2005. For 2007, the
committee has approved an increase of 4% in the base salaries of
each of Messrs. Levan, Abdo and Bakes. The committee has
also approved a 2007 base salary of $175,000 for George P.
Scanlon, who, effective April 2, 2007, was appointed
BFCs new executive vice president and chief financial
officer following Mr. Gilberts retirement from such
positions on March 29, 2007. Mr. Scanlon will continue
to receive a base salary of $175,000 during 2007 as chief
financial officer of Levitt.
Annual
Incentive and Bonus Program
BFCs annual incentive and bonus program is a cash bonus
plan designed to promote high performance and achievement of
shorter-term corporate strategic goals and initiatives,
encourage the growth of shareholder value, and allow executives,
including BFCs named executive officers, to participate in
the growth and profitability of BFC. This program includes
elements tied to the achievement of pre-established, objective
individual and company-wide annual financial performance goals.
These goals are established each year during BFCs annual
budget cycle, and the portion of an executive officers
cash bonus under the plan that is related to financial
performance goals varies upon the impact that the executive
officer has on the overall financial performance of BFC as well
as the financial performance of his or her division. Generally,
a minimum corporate profitability threshold must be achieved
before any bonus will be paid. However, BFCs annual
incentive and bonus program also includes a discretionary
element tied to a subjective evaluation of overall performance
in areas outside those that can be objectively measured based on
financial results. Each executive officers bonus is
intended to take into account corporate and individual
components, which are weighted according to the executive
officers responsibilities.
In 2006, a total of $1,165,564 in cash bonuses were awarded to
BFCs named executive officers under BFCs annual
incentive and bonus program, each of which was based on a
subjective evaluation of overall performance in areas outside
those that can be objectively measured. Mr. Levan was paid
a discretionary bonus notwithstanding that BFC did not generate
profits upon which a bonus under the objective criteria of the
Companys annual incentive program would be paid. The
bonuses paid were as follows:
|
|
|
|
|
Alan B. Levan
|
|
$
|
466,891
|
|
John E. Abdo
|
|
|
343,200
|
|
Glen R. Gilbert
|
|
|
209,873
|
|
Phil J. Bakes
|
|
|
145,600
|
|
Mr. Gilbert ceased to be an executive officer of BFC upon
his retirement, effective March 29, 2007. He continues to
serve BFC in a non-executive position.
In 2007, Mr. Levan has the potential to be awarded a bonus
under BFCs annual incentive program of up to 100% of his
base salary and BFCs other named executive officers have
the potential to be awarded bonuses under
110
BFCs annual incentive program, ranging from 60% to 100% of
base salary, in each case, to be payable on BFCs
achievement of certain book value or share price targets.
Long-Term
Equity Incentive Compensation
BFCs long-term equity incentive compensation program
provides an opportunity for BFCs named executive officers,
and BFCs other executive officers, to increase their stake
in BFC through grants of options to purchase shares of BFC
Class A Common Stock and encourages executive officers to
focus on long-term company performance by aligning the executive
officers interests with those of BFCs shareholders,
since the ultimate value of such compensation is directly
dependent on the stock price. The committee believes that
providing executive officers with opportunities to acquire an
interest in the growth and prosperity of the company through the
grant of stock options enables BFC to attract and retain
qualified and experienced executive officers and offer
additional long-term incentives.
The committees grant of stock options to executive
officers is discretionary based on an assessment of the
individual executive officers contribution to the success
and growth of BFC, subject in any event to the limitations set
by BFCs 2005 Stock Incentive Plan. Decisions by the
committee regarding grants of stock options to executive
officers, including BFCs named executive officers (other
than its chief executive officer), are generally made based upon
the recommendation of BFCs chief executive officer, the
level of the executive officers position with BFC, an
evaluation of the executive officers past and expected
future performance, the number of outstanding and previously
granted stock options to the executive officer and discussions
with the executive officer.
In 2006, all of BFCs named executive officers were granted
options to purchase shares of BFC Class A Common Stock,
with an exercise price equal to the market value of such stock
on the date of grant, and which vest on the fifth anniversary of
the date of grant. The committee believes that such stock
options serve as a significant aid in the retention of executive
officers, since these stock option awards do not vest until five
years after the grant date.
Internal
Revenue Code Limits on Deductibility of Compensation
Section 162(m) of the Code generally disallows a tax
deduction to public corporations for compensation over
$1,000,000 paid for any fiscal year to the corporations
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
from the deduction limit if certain requirements are met.
The committee believes that it is generally in BFCs best
interest to attempt to structure performance-based compensation,
including stock option grants or performance-based restricted
stock awards and annual bonuses, to executive officers who may
be subject to Section 162(m) in a manner that satisfies the
statutes requirements for full tax deductibility for the
compensation. However, the committee also recognizes the need to
retain flexibility to make compensation decisions that may not
meet Section 162(m) standards when appropriate for
BFCs overall objectives, even if the company may not
deduct all of the compensation. While BFC adopted its
Performance-Based Annual Incentive Plan to provide for bonus
payments based on objective standards as contemplated by
Section 162(m), bonuses paid in 2006 were subjective
bonuses paid in the committees discretion outside of the
Performance-Based Annual Incentive Plan. No assurance can be
given that compensation paid by BFC in the future will satisfy
the requirements for deductibility under Section 162(m).
111
BFCS
SUMMARY COMPENSATION TABLE 2006
The following table sets forth information with respect to the
annual compensation paid or accrued by BFC, BankAtlantic
Bancorp, BankAtlantic and Levitt, for services rendered in all
capacities during the year ended December 31, 2006 to each
of BFCs named executive officers.
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Change in
|
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|
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Pension
|
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|
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|
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|
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|
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Value
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|
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|
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|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Non-equity
|
|
|
Nonqualified
|
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Incentive
|
|
|
Deferred
|
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|
|
|
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|
|
|
|
|
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|
|
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Stock
|
|
|
Option
|
|
|
Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name and Principal
|
|
Source
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Position
|
|
(1)
|
|
|
Year
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
|
($)
|
|
|
Alan B. Levan,
|
|
|
BFC
|
|
|
|
2006
|
|
|
|
648,983
|
|
|
|
466,891
|
|
|
|
|
|
|
|
268,817
|
|
|
|
|
|
|
|
|
|
|
|
270,460
|
|
|
|
1,655,151
|
|
Chairman of the Board and
|
|
|
BBX
|
|
|
|
2006
|
|
|
|
567,769
|
|
|
|
11,688
|
|
|
|
|
|
|
|
348,152
|
|
|
|
248,655
|
|
|
|
104,639
|
|
|
|
22,269
|
|
|
|
1,303,172
|
|
Chief Executive Officer(7)
|
|
|
LEV
|
|
|
|
2006
|
|
|
|
515,833
|
|
|
|
6.769
|
|
|
|
|
|
|
|
230,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
753,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,732,585
|
|
|
|
485,348
|
|
|
|
|
|
|
|
847,797
|
|
|
|
248,655
|
|
|
|
104,639
|
|
|
|
292,729
|
|
|
|
3,711,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John E. Abdo,
|
|
|
BFC
|
|
|
|
2006
|
|
|
|
567,769
|
|
|
|
343,200
|
|
|
|
|
|
|
|
268,817
|
|
|
|
|
|
|
|
|
|
|
|
41,000
|
|
|
|
1,220,786
|
|
Vice Chairman
|
|
|
BBX
|
|
|
|
2006
|
|
|
|
385,585
|
|
|
|
8,170
|
|
|
|
|
|
|
|
232,101
|
|
|
|
172,174
|
|
|
|
47,221
|
|
|
|
29,484
|
|
|
|
874,735
|
|
Of the Board(7)
|
|
|
LEV
|
|
|
|
2006
|
|
|
|
628,672
|
|
|
|
9,582
|
|
|
|
|
|
|
|
333,573
|
|
|
|
|
|
|
|
|
|
|
|
291,244
|
|
|
|
1,263,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,582,026
|
|
|
|
360,952
|
|
|
|
|
|
|
|
834,491
|
|
|
|
172,174
|
|
|
|
47,221
|
|
|
|
361,728
|
|
|
|
3,358,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glen R. Gilbert,
|
|
|
BFC
|
|
|
|
2006
|
|
|
|
347,202
|
|
|
|
209,873
|
|
|
|
|
|
|
|
100,184
|
|
|
|
|
|
|
|
33,016
|
|
|
|
8,800
|
|
|
|
699,075
|
|
Chief Financial
|
|
|
BBX
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer(8)
|
|
|
LEV
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
347,202
|
|
|
|
209,873
|
|
|
|
|
|
|
|
100,184
|
|
|
|
|
|
|
|
33,016
|
|
|
|
8,800
|
|
|
|
699,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phil J. Bakes,
|
|
|
BFC
|
|
|
|
2006
|
|
|
|
361,308
|
|
|
|
145,600
|
|
|
|
|
|
|
|
76,116
|
|
|
|
|
|
|
|
|
|
|
|
26,220
|
|
|
|
609,244
|
|
Managing Director
|
|
|
BBX
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEV
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
361,308
|
|
|
|
145,600
|
|
|
|
|
|
|
|
76,116
|
|
|
|
|
|
|
|
|
|
|
|
26,220
|
|
|
|
609,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts identified as BFC represent
amounts paid or accrued by BFC, amounts identified as BBX
represent amounts paid or accrued by BankAtlantic Bancorp and
BankAtlantic and amounts identified as LEV represent amounts
paid or accrued by Levitt.
|
|
(2)
|
|
Represents the discretionary
component of cash awards under BFCs and BankAtlantic
Bancorps respective annual incentive and bonus programs
and Levitts Corporate Goal Bonus Plan. The Companys
annual incentive and bonus program is more fully described in
the section above entitled BFCs Compensation
Discussion and Analysis, and Levitts Corporate Goal
Bonus Plan is more fully described in the section below entitled
Levitts Compensation Discussion and Analysis.
|
|
(3)
|
|
All options are to purchase shares
of the respective companys Class A Common Stock. The
dollar amount represents the amount recognized for financial
statement reporting purposes for the fiscal year ended
December 31, 2006, in accordance with FAS 123(R),
without taking into account an estimate of forfeitures related
to service-based vesting, of stock option grants, including
amounts from awards granted prior to 2006. Other than with
respect to forfeitures of options to purchase shares of Levitt
common stock, assumptions used in the calculation of these
amounts are included in footnote 21 to BFCs audited
financial statements for the fiscal year ended December 31,
2006 included in BFCs Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 16, 2007. There were no forfeitures during 2006.
Additional information regarding these stock options awarded to
BFCs named executive officers in 2006, including the grant
date fair value of such stock options, is set forth in
BFCs Grants of Plan-Based Awards
2006 below.
|
|
(4)
|
|
Represents the formula-based
component of cash awards under BankAtlantic Bancorps
annual incentive program, which is tied to financial performance
goals, and cash awards under the BankAtlantic Profit Sharing
Stretch Plan as follows: Mr. Levan $217,112
under BankAtlantic Bancorps annual incentive program and
$31,543 under the BankAtlantic Profit Sharing Stretch Plan; and
Mr. Abdo $151,830 under BankAtlantic
Bancorps annual incentive program and $20,344 under the
BankAtlantic Profit Sharing Stretch Plan.
|
|
(5)
|
|
Represents the increase in the
actuarial present value of accumulated benefits under the
Retirement Plan for Employees of BankAtlantic (the
BankAtlantic Retirement Plan) and the Executive
Retirement Plan for Glen Gilbert (the Executive Retirement
Plan). Additional information regarding the BankAtlantic
Retirement Plan is set forth in the narrative accompanying
BFCs Pension Benefits 2006 table
below. Additional information regarding the Executive Retirement
Plan is set forth under BFCs Pension
Benefits 2006 and Potential Payments
upon Termination or
Change-in-Control
of BFC below.
|
112
|
|
|
(6)
|
|
Items included under All
Other Compensation for each of BFCs named executive
officers are set forth in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Levan
|
|
|
Abdo
|
|
|
Gilbert
|
|
|
Bakes
|
|
|
BFC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites and other benefits
|
|
$
|
79,655
|
|
|
$
|
10,000
|
|
|
$
|
|
|
|
$
|
26,220
|
|
Amounts paid for life and
disability insurance premiums
|
|
|
122,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount paid for automobile expenses
|
|
|
2,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions to 401(k) savings plan
|
|
|
|
|
|
|
|
|
|
|
8,800
|
|
|
|
|
|
Amounts paid for intangible tax
|
|
|
65,000
|
|
|
|
31,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
270,460
|
|
|
$
|
41,000
|
|
|
$
|
8,800
|
|
|
$
|
26,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BankAtlantic Bancorp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites and other benefits
|
|
$
|
4,695
|
|
|
$
|
2,044
|
|
|
$
|
|
|
|
$
|
|
|
Insurance premiums
|
|
|
8,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BankAtlantic Bancorp contributions
to retirement and 401(k) plans
|
|
|
8,800
|
|
|
|
8,800
|
|
|
|
|
|
|
|
|
|
Dividends on restricted stock, REIT
shares
|
|
|
40
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
Payment for service as trustee of
the BankAtlantic pension plan
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
Auto allowance
|
|
|
|
|
|
|
9,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22,269
|
|
|
$
|
29,484
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Levitt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees paid to Abdo
Companies, Inc.
|
|
$
|
|
|
|
$
|
291,244
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
291,244
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts included under
BankAtlantic Bancorp Insurance Premiums
in the table above were paid in connection with the BankAtlantic
Split-Dollar Life Insurance Plan (the BankAtlantic
Split-Dollar Plan). Additional information regarding the
BankAtlantic Split-Dollar Plan is set forth in the narrative
accompanying BFCs Pension Benefits
2006 table below.
|
|
|
|
The value of perquisites and other
benefits included in the rows entitled Perquisites and
other benefits in the table above is calculated based on
their incremental cost to the respective company, which is
determined based on the actual cost of providing these
perquisites and other benefits. During 2006
(i) Mr. Levan received perquisites and other benefits
from BFC which totaled $79,665, including $69,655 related to his
use of BFCs tickets to entertainment and sporting events
and $10,000 in charitable contributions made in his name;
(ii) Mr. Abdo received perquisites and other benefits
from BFC which totaled $10,000, all of which represented
charitable contributions made in his name; and
(iii) Mr. Bakes received perquisites and other
benefits from BFC which totaled $26,220, all of which related to
his personal use of BFCs tickets to entertainment and
sporting events.
|
|
|
|
Mr. Abdo is the principal
shareholder and chief executive officer of Abdo Companies, Inc.
|
|
(7)
|
|
Each of Messrs. Levan and Abdo
received non-qualified options to acquire 50,000 shares of
Bluegreen common stock during 2006 at an exercise price of
$12.07. The options vest on the fifth anniversary of the grant
date and have a ten year term. The grant date fair value of the
options computed in accordance with FAS 123(R) was $336,500.
|
|
(8)
|
|
Effective March 29, 2007,
Mr. Gilbert retired from his executive positions with BFC.
Mr. Gilbert continues to serve BFC in a non-executive
position.
|
113
BFCS
GRANTS OF PLAN-BASED AWARDS 2006
The following table sets forth certain information concerning
awards granted by BFC to its named executive officers pursuant
to BFCs non-equity incentive plans in the fiscal year
ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise or
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Base Price
|
|
|
of Stock
|
|
|
|
|
|
|
Estimated Possible Payouts
|
|
|
Shares of
|
|
|
Securities
|
|
|
of Option
|
|
|
and
|
|
|
|
|
|
|
Under Non-Equity Incentive Plan Awards(1)
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Grant Date
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options(2)
|
|
|
($ / Sh)
|
|
|
Awards(3)
|
|
|
Alan B. Levan(4)
|
|
|
3/29/2006
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
389,390
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
N/A
|
|
|
$
|
N/A
|
|
|
|
|
6/5/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
75,000
|
|
|
|
6.36
|
|
|
|
265,500
|
|
John E. Abdo
|
|
|
6/5/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
75,000
|
|
|
|
6.36
|
|
|
|
265,500
|
|
Glen R. Gilbert
|
|
|
6/5/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
30,000
|
|
|
|
6.36
|
|
|
|
106,200
|
|
Phil Bakes
|
|
|
6/5/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
25,000
|
|
|
|
6.36
|
|
|
|
88,500
|
|
|
|
|
(1) |
|
Represents the estimated possible payouts of cash awards under
the formula-based component of BFCs annual incentive
program which is tied to financial performance goals. BFCs
named executive officers did not receive any payments under the
formula-based component of BFCs annual incentive program
for 2006. BFCs annual incentive program is more fully
described above in the section entitled BFCs
Compensation Discussion and Analysis. |
|
(2) |
|
All options are to purchase shares of BFC Class A Common
Stock, were granted under BFCs 2005 Stock Incentive Plan,
vest on the fifth anniversary of the grant date and expire on
the tenth anniversary of the grant date. |
|
(3) |
|
Represents the grant date fair value computed in accordance with
FAS 123(R). |
|
(4) |
|
Mr. Levans award under BFCs annual incentive
program was to be paid based on BFCs 2006 pre-tax income,
not to exceed 60% of his base salary, subject to reduction in
the sole discretion of BFCs compensation committee. As the
conditions for payment were not met, no payments were made based
on the objective criteria of BFCs annual incentive program. |
The following table sets forth information concerning awards
granted by BankAtlantic Bancorp to BFCs named executive
officers pursuant to BankAtlantic Bancorps non-equity
incentive plans in the fiscal year ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise or
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Base Price
|
|
|
of Stock
|
|
|
|
|
|
|
Estimated Possible Payouts
|
|
|
Shares of
|
|
|
Securities
|
|
|
of Option
|
|
|
and
|
|
|
|
|
|
|
Under Non-Equity Incentive Plan Awards(1)
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Grant Date
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options(2)
|
|
|
($ / Sh)
|
|
|
Awards(3)
|
|
|
Alan B. Levan
|
|
|
3/30/2006
|
|
|
$
|
|
|
|
$
|
572,000
|
|
|
$
|
651,488
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
N/A
|
|
|
$
|
N/A
|
|
|
|
|
7/11/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
60,000
|
|
|
|
14.81
|
|
|
|
362,400
|
|
John E. Abdo
|
|
|
4/20/2006
|
|
|
|
|
|
|
|
400,100
|
|
|
|
455,700
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
7/11/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
14.81
|
|
|
|
241,600
|
|
|
|
|
(1)
|
|
Represents the estimated possible
payouts of cash awards under the formula-based component of
BankAtlantic Bancorps annual incentive plan which is tied
to financial performance goals. Cash awards made under the
formula-based component of BankAtlantic Bancorps annual
incentive plan for 2006 are included under Non-Equity
Incentive Plan Compensation in BFCs Summary
Compensation Table-2006 above.
|
|
(2)
|
|
All options are to purchase shares
of BankAtlantic Bancorp Class A Common Stock, were granted
under BankAtlantic Bancorps 2005 Restricted Stock and
Option Plan, and vest on the fifth anniversary of the date of
grant.
|
|
(3)
|
|
Represents the grant date fair
value computed in accordance with FAS 123(R).
|
Messrs. Levan and Abdo were also granted plan-based awards
by Levitt during 2006. See Levitts Grants of
Plan-Based Awards-2006 below.
114
BFCS
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
2006
The following table sets forth certain information regarding
equity-based of BFC awards held by BFCs named executive
officers as of December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Market or
|
|
|
|
Option Awards
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
Number
|
|
|
Value
|
|
|
Shares,
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
of Shares
|
|
|
Units
|
|
|
Units
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
orUnits
|
|
|
or Units
|
|
|
or Other
|
|
|
or Other
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
of Stock
|
|
|
Rights
|
|
|
Rights
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
That
|
|
|
That
|
|
|
That
|
|
|
That
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have
|
|
|
Have
|
|
|
Have
|
|
|
Have
|
|
|
|
Options
|
|
|
Options
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Not
|
|
|
Not
|
|
|
Not
|
|
|
Not
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options
|
|
|
Price
|
|
|
Date
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan B. Levan
|
|
|
|
|
|
|
210,579
|
(1)(2)
|
|
|
N/A
|
|
|
$
|
1.84
|
|
|
|
2/7/2013
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
93,750
|
(1)(3)
|
|
|
|
|
|
|
8.40
|
|
|
|
7/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(4)(5)
|
|
|
|
|
|
|
8.92
|
|
|
|
7/11/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(4)(6)
|
|
|
|
|
|
|
6.36
|
|
|
|
6/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John E. Abdo
|
|
|
|
|
|
|
210,579
|
(1)(2)
|
|
|
N/A
|
|
|
|
1.84
|
|
|
|
2/7/2013
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
93,750
|
(1)(3)
|
|
|
|
|
|
|
8.40
|
|
|
|
7/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(4)(5)
|
|
|
|
|
|
|
8.92
|
|
|
|
7/11/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(4)(6)
|
|
|
|
|
|
|
6.36
|
|
|
|
6/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glen R. Gilbert
|
|
|
24,481
|
(1)(7)
|
|
|
|
|
|
|
N/A
|
|
|
|
1.45
|
|
|
|
7/1/2007
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
84,230
|
(1)(8)
|
|
|
|
|
|
|
|
|
|
|
3.68
|
|
|
|
1/13/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,191
|
(1)(9)
|
|
|
|
|
|
|
|
|
|
|
2.14
|
|
|
|
4/6/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,159
|
(1)(2)
|
|
|
|
|
|
|
1.84
|
|
|
|
2/7/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,501
|
(1)(3)
|
|
|
|
|
|
|
8.40
|
|
|
|
7/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(4)(5)
|
|
|
|
|
|
|
8.92
|
|
|
|
7/11/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(4)(6)
|
|
|
|
|
|
|
6.36
|
|
|
|
6/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phil Bakes
|
|
|
|
|
|
|
29,301
|
(1)(10)
|
|
|
N/A
|
|
|
|
7.68
|
|
|
|
1/5/2014
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
12,500
|
(1)(3)
|
|
|
|
|
|
|
8.40
|
|
|
|
7/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(4)(5)
|
|
|
|
|
|
|
8.92
|
|
|
|
7/11/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(4)(6)
|
|
|
|
|
|
|
6.36
|
|
|
|
6/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents options to purchase shares of BFC Class B Common
Stock. |
|
(2) |
|
Vests on February 7, 2008. |
|
(3) |
|
Vests on July 28, 2009. |
|
(4) |
|
Represents options to purchase shares of BFC Class A Common
Stock. |
|
(5) |
|
Vests on July 11, 2010. |
|
(6) |
|
Vests on June 5, 2011. |
|
(7) |
|
Vested on July 1, 2002. |
|
(8) |
|
Vested on January 13, 2003. |
|
(9) |
|
Vested on April 6, 2004. |
|
(10) |
|
Vests on January 5, 2009. |
115
The following table sets forth certain information regarding
equity-based awards of BankAtlantic Bancorp held by BFCs
named executive officers as of December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Market or
|
|
|
|
Option Awards
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
Number
|
|
|
Value
|
|
|
Shares,
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
of Shares
|
|
|
Units
|
|
|
Units
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
orUnits
|
|
|
or Units
|
|
|
or Other
|
|
|
or Other
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
of Stock
|
|
|
Rights
|
|
|
Rights
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
That
|
|
|
That
|
|
|
That
|
|
|
That
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have
|
|
|
Have
|
|
|
Have
|
|
|
Have
|
|
|
|
Options
|
|
|
Options
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Not
|
|
|
Not
|
|
|
Not
|
|
|
Not
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options
|
|
|
Price
|
|
|
Date
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan B. Levan
|
|
|
|
|
|
|
78,377
|
(2)
|
|
|
N/A
|
|
|
$
|
8.56
|
|
|
|
3/4/2012
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
78,377
|
(3)
|
|
|
|
|
|
|
7.41
|
|
|
|
3/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(4)
|
|
|
|
|
|
|
18.20
|
|
|
|
7/5/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(5)
|
|
|
|
|
|
|
19.02
|
|
|
|
7/11/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(6)
|
|
|
|
|
|
|
14.81
|
|
|
|
7/10/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John E. Abdo
|
|
|
|
|
|
|
52,251
|
(2)
|
|
|
N/A
|
|
|
|
8.56
|
|
|
|
3/4/2012
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
52,251
|
(3)
|
|
|
|
|
|
|
7.41
|
|
|
|
3/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(4)
|
|
|
|
|
|
|
18.20
|
|
|
|
7/5/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(5)
|
|
|
|
|
|
|
19.02
|
|
|
|
7/11/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(6)
|
|
|
|
|
|
|
14.81
|
|
|
|
7/10/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All options are to purchase shares of BankAtlantic Bancorp
Class A Common Stock. |
|
(2) |
|
Vested on March 4, 2007. |
|
(3) |
|
Vests on March 31, 2008. |
|
(4) |
|
Vests on July 5, 2009. |
|
(5) |
|
Vests on July 11, 2010. |
|
(6) |
|
Vests on July 10, 2011. |
As of December 31, 2006, Messrs. Levan and Abdo also
held equity-based awards of Levitt. See Levitts
Outstanding Equity Awards at Fiscal Year-End-2006 below.
BFCS
OPTION EXERCISES AND STOCK VESTED 2006
The following table sets forth certain information regarding
exercises of options to purchase shares of BFCs common
stock by BFCs named executive officers in the fiscal year
ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
Name
|
|
Acquired on Exercise(1)
|
|
|
on Exercise(2)
|
|
|
Acquired on Vesting
|
|
|
on Vesting
|
|
|
Alan B. Levan
|
|
|
1,895,150
|
|
|
$
|
5,974,143
|
|
|
|
|
|
|
$
|
|
|
John E. Abdo
|
|
|
1,895,150
|
|
|
|
5,974,143
|
|
|
|
|
|
|
|
|
|
Glen R. Gilbert
|
|
|
138,682
|
|
|
|
546,604
|
|
|
|
|
|
|
|
|
|
Phil Bakes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the number of shares of BFC Class B Common Stock
acquired upon exercise of stock options. |
|
(2) |
|
Value realized on exercise is the product of (a) the
difference between the market prices of the shares acquired on
the dates of exercise and the option exercise prices and
(b) the number of shares acquired upon exercise of stock
options. |
116
The following table sets forth certain information regarding
exercises of options to purchase shares of BankAtlantic
Bancorps common stock by BFCs named executive
officers in the fiscal year ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
Name
|
|
Acquired on Exercise(1)
|
|
|
on Exercise(2)
|
|
|
Acquired on Vesting
|
|
|
on Vesting
|
|
|
Alan B. Levan
|
|
|
599,912
|
|
|
$
|
5,716,863
|
|
|
|
|
|
|
$
|
|
|
John E. Abdo
|
|
|
348,955
|
|
|
|
3,256,085
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the number of shares of BankAtlantic Bancorp
Class A Common Stock acquired upon exercise of stock
options. |
|
(2) |
|
Value realized on exercise is the product of (a) the
difference between the market prices of the shares acquired on
the dates of exercise and the option exercise prices and
(b) the number of shares acquired upon exercise of stock
options. |
BFCS
PENSION BENEFITS 2006
The following table sets forth certain information with respect
to accumulated benefits as of December 31, 2006 under any
BFC plan that provides for payments or other benefits to
BFCs named executive officers at, following, or in
connection with, retirement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value
|
|
|
|
|
|
|
|
|
of Accumulated
|
|
|
Payments During
|
|
Name
|
|
Plan Name
|
|
Benefit(1)
|
|
|
Last Fiscal Year
|
|
|
Alan B. Levan
|
|
N/A
|
|
$
|
N/A
|
|
|
$
|
N/A
|
|
John E. Abdo
|
|
N/A
|
|
|
N/A
|
|
|
|
N/A
|
|
Glen R. Gilbert
|
|
Executive Retirement Plan(2)
|
|
|
525,998
|
|
|
|
0
|
|
Phil Bakes
|
|
N/A
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
(1) |
|
Assumptions used in the calculation of these amounts are
included in footnote 22 to BFCs audited financial
statements for the fiscal year ended December 31, 2006
included in BFCs Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 16, 2007. |
|
(2) |
|
Information regarding the Executive Retirement Plan is set forth
under Potential Payments upon Termination or
Change-in-Control
of BFC below. |
The following table sets forth certain information with respect
to accumulated benefits as of December 31, 2006 under any
BankAtlantic Bancorp plan that provides for payments or other
benefits to BFCs named executive officers at, following,
or in connection with, retirement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Present
|
|
|
Payments
|
|
|
|
|
|
|
of Years
|
|
|
Value of
|
|
|
During
|
|
|
|
|
|
|
Credited
|
|
|
Accumulated
|
|
|
Last Fiscal
|
|
Name
|
|
Plan Name
|
|
|
Service
|
|
|
Benefit(1)
|
|
|
Year
|
|
|
Alan B. Levan
|
|
|
Retirement Plan for Employees of BankAtlantic
|
|
|
|
26
|
|
|
$
|
1,415,595
|
|
|
$
|
0
|
|
John E. Abdo
|
|
|
Retirement Plan for Employees of BankAtlantic
|
|
|
|
14
|
|
|
|
625,673
|
|
|
|
0
|
|
|
|
|
(1) |
|
Assumptions used in the calculation of these amounts are
included in footnote 16 to BankAtlantic Bancorps
audited financial statements for the fiscal year ended
December 31, 2006 included in BankAtlantic Bancorps
Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 1, 2007, except that retirement age was assumed to be
65, the normal retirement age as defined in the BankAtlantic
Retirement Plan. |
117
BankAtlantic
Retirement Plan
Alan B. Levan and John E. Abdo are participants in the
BankAtlantic Retirement Plan, which is a defined benefit plan.
Effective December 31, 1998, BankAtlantic Bancorp froze the
benefits under the BankAtlantic Retirement Plan. Participants
who were employed at December 1, 1998, became fully vested
in their benefits under the BankAtlantic Retirement Plan. While
the BankAtlantic Retirement Plan is frozen, there will be no
future benefit accruals. None of BFCs other named
executive officers is a participant in the BankAtlantic
Retirement Plan. The BankAtlantic Retirement Plan was designed
to provide retirement income based on an employees salary
and years of active service, determined as of December 31,
1998. The cost of the BankAtlantic Retirement Plan is paid by
BankAtlantic and all contributions are actuarially determined.
In general, the BankAtlantic Retirement Plan provides for
monthly payments to or on behalf of each covered employee upon
such employees retirement (with provisions for early or
postponed retirement), death or disability. As a result of the
freezing of future benefit accruals, the amount of the monthly
payments is based generally upon two factors: (1) the
employees average regular monthly compensation for the
five consecutive years out of the last ten years ended
December 31, 1998, or prior retirement, death or
disability, that produces the highest average monthly rate of
regular compensation and (2) upon the employees years
of service with BankAtlantic at December 31, 1998. Benefits
are payable for the retirees life, with ten years
worth of payments guaranteed. The benefits are not subject to
any reduction for Social Security or any other external benefits.
In 1996, BankAtlantic amended the BankAtlantic Retirement Plan
and adopted a supplemental benefit for certain executives, as
permitted by the Employee Retirement Income Security Act of 1974
and the Code. This was done because of a change in the Code that
operated to restrict the amount of the executives
compensation that may be taken into account for plan purposes,
regardless of the executives actual compensation. The
intent of the supplemental benefit, when added to the regular
plan benefit, was to provide to certain executives the same
retirement benefits that they would have received had the Code
limits not been enacted, subject to other requirements of the
Code. The approximate targeted percentage of pre-retirement
compensation for which Mr. Levan will be eligible under the
BankAtlantic Retirement Plan as a result of the supplemental
benefit at age 65 is 33%. None of BFCs other named
executive officers is entitled to the supplemental benefit. The
supplemental benefit also was frozen as of December 31,
1998. Because the percentage of pre-retirement compensation
payable from the BankAtlantic Retirement Plan to Mr. Levan,
including the plans supplemental benefit, fell short of
the benefit that Mr. Levan would have received under the
plan absent the Code limits, BankAtlantic adopted the
BankAtlantic Split-Dollar Plan, an employee benefit plan
described below.
The following table illustrates annual pension benefits at
age 65 for various levels of compensation and years of
service at December 31, 1998, the date on which
BankAtlantic Retirement Plan benefits were frozen.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Annual Benefits
|
|
Average Five Year Compensation
|
|
Years of Credited Service at December 31, 1998
|
|
at December 31, 1998
|
|
5 Years
|
|
|
10 Years
|
|
|
20 Years
|
|
|
30 Years
|
|
|
40 Years
|
|
|
$120,000
|
|
$
|
10,380
|
|
|
$
|
20,760
|
|
|
$
|
41,520
|
|
|
$
|
62,280
|
|
|
$
|
83,160
|
|
$150,000
|
|
|
13,005
|
|
|
|
26,010
|
|
|
|
52,020
|
|
|
|
78,030
|
|
|
|
104,160
|
|
$160,000 and above
|
|
|
13,880
|
|
|
|
27,760
|
|
|
|
55,520
|
|
|
|
83,280
|
|
|
|
111,160
|
|
BankAtlantic
Split-Dollar Plan
BankAtlantic adopted the BankAtlantic Split-Dollar Plan in 1996
to provide additional retirement benefits to Mr. Levan,
whose monthly benefits under the BankAtlantic Retirement Plan
were limited by changes to the Code. Under the BankAtlantic
Split-Dollar Plan and its accompanying agreement with
Mr. Levan, BankAtlantic arranged for the purchase of an
insurance policy insuring the life of Mr. Levan. Pursuant
to its agreement with Mr. Levan, BankAtlantic will make
premium payments for this policy. The policy is anticipated to
accumulate significant cash value over time, which cash value is
expected to supplement Mr. Levans retirement benefit
payable from the BankAtlantic Retirement Plan. Mr. Levan
owns the insurance policy, but BankAtlantic will be reimbursed
for the amount of premiums that BankAtlantic pays for such
policy upon the earlier of his retirement or death. The portion
of the amount paid in prior years attributable to the 2006
premium for the insurance policy that is considered compensation
to Mr. Levan is included under All Other
Compensation in BFCs Summary Compensation
Table 2006 above. The BankAtlantic
Split-Dollar Plan was not included in the freezing of the
BankAtlantic Retirement Plan and BankAtlantic has continued to
make premium payments for the insurance policy since 1998.
118
POTENTIAL
PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL
OF BFC
In September 2005, BFC entered into an agreement with
Mr. Gilbert pursuant to which BFC has agreed to pay
Mr. Gilbert a monthly retirement benefit of $5,672
beginning January 1, 2010, regardless of his actual
retirement date. The monthly payments will continue through
Mr. Gilberts life, or if he dies before receiving
120 monthly payments, until such time as at least
120 monthly payments have been made to Mr. Gilbert and
his beneficiaries. However, as permitted by the agreement,
Mr. Gilbert may elect to choose an available actuarially
equivalent form of payment. BFCs obligation under the
agreement is unfunded. Based on an aggregate retirement benefit
payment of $980,296, in September 2005, BFC recorded the present
value of the retirement benefit payment in the amount of
$482,444. Assumptions used in the calculation of these amounts
are included in footnote 22 to BFCs audited financial
statements for the fiscal year ended December 31, 2006
included in BFCs Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 16, 2007. BFC will recognize monthly the amortization
of interest on the retirement benefit as compensation expense.
Effective March 29, 2007, Mr. Gilbert retired from his
executive positions with BFC. He continues to serve BFC in a
non-executive position.
COMPENSATION
OF BFCS DIRECTORS
BFCs compensation committee recommends director
compensation to BFCs board based on factors it considers
appropriate and based on the recommendations of management. In
2006, non-employee directors of BFC each received $100,000 for
service on BFCs board of directors, payable in cash,
restricted stock or non-qualified stock options, in such
combinations as the directors may elect, provided that no more
than $50,000 may be payable in cash. The restricted stock and
stock options are granted in BFC Class A Common Stock under
the BFC 2005 Stock Incentive Plan. Restricted stock vests
monthly over the
12-month
service period and stock options are fully vested on the date of
grant, have a ten-year term and have an exercise price equal to
the closing market price of the BFC Class A Common Stock on
the date of grant. The number of stock options and restricted
stock granted is determined by BFC based on assumptions and
formulas typically used to value these types of securities. For
2006, BFC paid an aggregate of $200,000 in cash and granted
30,028 shares of restricted BFC Class A Common Stock
to its non-employee directors pursuant to this plan. BFC did not
grant any stock options to its non-employee directors in 2006
pursuant to this plan. No director receives additional
compensation for attendance at board of directors meetings
or meetings of committees on which he serves except as follows.
In 2006, members of the audit committee, other than its
chairman, received an annual cash amount of $10,000. The
chairman of the audit committee received an annual cash amount
of $15,000 during 2006. The chairman of the nominating/corporate
governance committee and the chairman of the compensation
committee each received $3,500 during 2006. Directors who are
also officers of BFC or its subsidiaries do not receive
additional compensation for their service as directors or for
attendance at board of directors or committee meetings.
119
BFCS
DIRECTOR COMPENSATION TABLE 2006
The following table sets forth certain information regarding the
compensation paid to BFCs non-employee directors for their
service during the fiscal year ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value and
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
Earned
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name
|
|
in Cash($)
|
|
|
Awards($)(1)(2)
|
|
|
Awards($)
|
|
|
Compensation($)
|
|
|
Earnings($)
|
|
|
Compensation($)
|
|
|
Total($)
|
|
|
D. Keith Cobb
|
|
|
60,000
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,000
|
|
Oscar Holzmann
|
|
|
65,000
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115,000
|
|
Earl Pertnoy
|
|
|
63,500
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,500
|
|
Neil Sterling
|
|
|
63,500
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,500
|
|
|
|
|
(1) |
|
All restricted stock awards are in shares of BFC Class A
Common Stock. The dollar amount represents the amount recognized
for financial statement reporting purposes for the fiscal year
ended December 31, 2006, in accordance with
FAS 123(R), including amounts from awards granted prior to
2006. There were no forfeitures during 2006. The grant date fair
value of the restricted stock awards computed in accordance with
FAS 123(R) is $49,997 for each of Messrs. Cobb,
Holzmann, Pertnoy and Sterling. |
|
(2) |
|
The table below sets forth the aggregate number of stock options
and the aggregate number of shares of restricted stock held by
each non-employee director of BFC as of December 31, 2006: |
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Restricted
|
|
Name
|
|
Options(1)
|
|
|
Stock(2)
|
|
|
D. Keith Cobb
|
|
|
6,250
|
|
|
|
3,754
|
|
Oscar Holzmann
|
|
|
20,290
|
|
|
|
3,754
|
|
Earl Pertnoy
|
|
|
181,735
|
(3)
|
|
|
3,754
|
|
Neil Sterling
|
|
|
20,290
|
|
|
|
3,754
|
|
|
|
|
(1) |
|
All options are to purchase shares of BFC Class B Common
Stock. |
|
(2) |
|
All restricted stock awards are in shares of BFC Class A
Common Stock. |
|
(3) |
|
Mr. Pertnoys stock options are held by Pertnoy
Limited Partnership. Mr. Pertnoy is the president of
Pertnoy Parent, Inc., the general partner of Pertnoy Limited
Partnership. |
120
REPORT OF
BFCS AUDIT COMMITTEE
The following Report of BFCs audit committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other BFC filing under the
Securities Act or the Exchange Act, except to the extent BFC
specifically incorporates this Report by reference therein.
The charter of BFCs audit committee sets forth the
committees responsibilities, which include oversight of
BFCs financial reporting on behalf of BFCs board of
directors and shareholders. BFCs audit committee held
seven meetings during 2006. These meetings were designed, among
other things, to facilitate and encourage communication among
BFCs audit committee, management, internal auditors and
independent auditors for 2006, PricewaterhouseCoopers LLP
(PwC). BFCs audit committee discussed with the
companys internal and independent auditors the overall
scope and plans for their respective audits and met with the
internal and independent auditors, with and without management
present, to discuss the results of their examinations and their
evaluations of BFCs internal controls and compliance
matters. At its meeting on March 12, 2007, the audit
committee approved the continued engagement of PwC as BFCs
independent auditor.
BFCs audit committee reviewed and discussed the
companys audited consolidated financial statements for the
fiscal year ended December 31, 2006 with management and PwC.
Management has primary responsibility for BFCs financial
statements and the overall reporting process, including the
companys system of internal controls. The independent
auditors audit the annual financial statements prepared by
management, express an opinion as to whether those financial
statements present fairly, in all material respects, the
financial position, results of operations and cash flows of BFC
in conformity with accounting principles generally accepted in
the United States of America, and discuss with BFCs audit
committee their independence and any other matters that they are
required to discuss with the committee or that they believe
should be raised with it. BFCs 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.
BFCs 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 audit of
BFCs consolidated financial statements and the matters
required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees), as
amended by Statement on Auditing Standards No. 90 (Audit
Committee Communications).
BFCs 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 PwC its independence from BFC. When
considering PwCs independence, BFCs audit committee
considered whether their provision of services to BFC beyond
those rendered in connection with their audit and review of the
companys consolidated financial statements was compatible
with maintaining their independence. The 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,
BFCs audit committee recommended to BFCs board of
directors that the companys audited consolidated financial
statements for the fiscal year ended December 31, 2006 be
included in BFCs Annual Report on
Form 10-K
for the year ended December 31, 2006.
Submitted by the Members of BFCs Audit Committee:
Oscar Holzmann, Chairman
D. Keith Cobb
Earl Pertnoy
Neil Sterling
121
FEES TO
BFCS INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING
FIRM FOR
FISCAL 2006 AND 2005
PwC served as the independent registered certified accounting
firm for BFC, BankAtlantic Bancorp and Levitt for 2006 and 2005.
The following table presents for each of these companies fees
for professional services rendered by PwC for the audit of each
companys annual financial statements for fiscal 2006 and
2005 and fees billed for audit-related services, tax services
and all other services rendered by PwC for fiscal 2006 and 2005.
|
|
|
|
|
|
|
|
|
|
|
Fiscal
|
|
|
Fiscal
|
|
|
|
2006
|
|
|
2005
|
|
|
|
(In thousands)
|
|
|
BFC Financial
Corporation
|
|
|
|
|
|
|
|
|
Audit fees(1)
|
|
$
|
248
|
|
|
|
369
|
(2)
|
Audit related fees
|
|
|
|
|
|
|
|
|
Tax fees
|
|
|
|
|
|
|
|
|
All other fees
|
|
|
|
|
|
|
|
|
BankAtlantic Bancorp
|
|
|
|
|
|
|
|
|
Audit fees(1)
|
|
$
|
1,783
|
|
|
|
1,739
|
|
Audit related fees(3)
|
|
|
425
|
(4)
|
|
|
25
|
|
Tax fees
|
|
|
|
|
|
|
|
|
All other fees
|
|
|
3
|
|
|
|
|
|
Levitt
|
|
|
|
|
|
|
|
|
Audit fees(1)
|
|
$
|
1,060
|
|
|
|
1,073
|
(5)
|
Audit related fees
|
|
|
|
|
|
|
|
|
Tax fees
|
|
|
|
|
|
|
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes primarily fees for
services related to each companys respective annual
financial statement audits, the 2006 and 2005 audit of
effectiveness of internal control over financial reporting and
review of quarterly financial statements filed in each of the
companys Quarterly Reports on
Form 10-Q.
|
|
(2)
|
|
Includes additional billing of
$79,000, which was incurred during 2006 as final settlement of
fees for BFCs 2005 audit.
|
|
(3)
|
|
Principally audits of employee
benefit plans and consultations regarding generally accepted
accounting principles.
|
|
(4)
|
|
Includes fees for services related
to the previously proposed initial public offering of Ryan Beck.
|
|
(5)
|
|
Includes additional billing of
$300,000 which was incurred during 2006 as final settlement of
fees for Levitts 2005 audit.
|
All audit related services, tax services and other services were
pre-approved by the audit committee of the respective company,
which concluded that the provision of such services by PwC was
compatible with the maintenance of that firms independence
in the conduct of its auditing functions. Under its charter,
BFCs 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 auditors retention
to audit BFCs financial statements, including the
associated fee, is approved by BFCs audit committee before
the filing of the preceding years Annual Report on
Form 10-K.
Under its current practices, BFCs 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 committee receives updates on
the services actually provided by the independent auditor, and
management may present additional services for pre-approval.
BFCs audit committee has delegated to the chairman of the
committee the authority to evaluate and approve engagements
involving projected fees of $10,000 or less on behalf of the
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 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.
BFCs audit committee has determined that the provision of
the services, other than audit services, as described above are
compatible with maintaining the principal independent
auditors independence.
122
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF
BFC
The following table sets forth, as of April 18, 2007,
certain information as to BFC Class A Common Stock and
Class B Common 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 BFCs (i) named executive
officers, (ii) directors as of April 18, 2007 and
(iii) directors and executive officers as of April 18,
2007 as a group. BFCs management knows of no person,
except as listed below, who beneficially owned more than 5% of
the outstanding shares of BFC Class A Common Stock or
Class B Common Stock as of April 18, 2007. Except as
otherwise indicated, the information provided in the following
table was obtained from filings with the SEC and with BFC
pursuant to 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 (1) which he or she has or shares,
directly or indirectly, voting or investment power, or
(2) which he or she has the right to acquire beneficial
ownership of at any time within 60 days after
April 18, 2007. As used herein, voting power is
the power to vote, or direct the voting of, shares, and
investment power includes the power to dispose of,
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
|
|
|
Class B
|
|
|
Percent of
|
|
|
Percent of
|
|
|
|
|
|
Common Stock
|
|
|
Common Stock
|
|
|
Class A Common
|
|
|
Class B Common
|
|
Name of Beneficial Owner
|
|
Notes
|
|
Ownership
|
|
|
Ownership
|
|
|
Stock
|
|
|
Stock
|
|
|
I.R.E. Realty Advisory Group,
Inc.
|
|
(2,3,5)
|
|
|
4,764,285
|
|
|
|
500,000
|
|
|
|
16.6
|
%
|
|
|
7.1
|
%
|
Florida Partners Corporation
|
|
(3,5)
|
|
|
1,270,302
|
|
|
|
133,314
|
|
|
|
4.4
|
%
|
|
|
1.9
|
%
|
I.R.E. Properties, Inc.
|
|
(3,5)
|
|
|
2,928,727
|
|
|
|
379,017
|
|
|
|
10.2
|
%
|
|
|
5.3
|
%
|
Levan Enterprises, Ltd.
|
|
(3,5)
|
|
|
431,649
|
|
|
|
55,865
|
|
|
|
1.5
|
%
|
|
|
0.8
|
%
|
Alan B. Levan
|
|
(3,5,6,10)
|
|
|
11,437
|
|
|
|
2,101,906
|
|
|
|
0.0
|
%
|
|
|
29.6
|
%
|
John E. Abdo
|
|
(3,5,6,10)
|
|
|
3,371,771
|
|
|
|
2,954,468
|
|
|
|
11.7
|
%
|
|
|
41.7
|
%
|
Glen R. Gilbert
|
|
(5,7)
|
|
|
|
|
|
|
253,584
|
|
|
|
0.0
|
%
|
|
|
3.5
|
%
|
Phil Bakes
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
Earl Pertnoy
|
|
(1,5,8)
|
|
|
106,812
|
|
|
|
188,635
|
|
|
|
0.4
|
%
|
|
|
2.6
|
%
|
Oscar Holzmann
|
|
(1,5)
|
|
|
13,138
|
|
|
|
20,290
|
|
|
|
0.0
|
%
|
|
|
0.3
|
%
|
D. Keith Cobb
|
|
(1,5)
|
|
|
16,155
|
|
|
|
6,250
|
|
|
|
0.1
|
%
|
|
|
0.1
|
%
|
Neil Sterling
|
|
(1,5)
|
|
|
13,138
|
|
|
|
20,290
|
|
|
|
0.0
|
%
|
|
|
0.3
|
%
|
Dr. Herbert A. Wertheim
|
|
(4)
|
|
|
3,968,157
|
|
|
|
416,448
|
|
|
|
13.8
|
%
|
|
|
5.9
|
%
|
All directors and executive
officers of BFC as of April 18, 2007 as a group
(9 persons)
|
|
(1,3,9)
|
|
|
12,927,414
|
|
|
|
6,381,095
|
|
|
|
45.0
|
%
|
|
|
86.9
|
%
|
|
|
|
(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 BFC Class B Common
Stock as follows: Earl Pertnoy 181,735 shares, Oscar
Holzmann 20,290 shares, D. Keith Cobb 6,250 shares,
Neil Sterling 20,290 shares and Maria Scheker
21,060 shares. |
|
(2) |
|
BFC owns 45.5% of I.R.E. Realty Advisory Group, Inc. |
|
(3) |
|
BFC 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 52.7% of the outstanding common stock of
BFC. I.R.E. Properties, Inc. is 100% owned by Levan Enterprises,
Ltd. and Levan Enterprises, Ltd. 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 BFC common stock owned by each of such entities. In
addition to his personal holdings of BFC common |
123
|
|
|
|
|
stock, Mr. Levan may be deemed to be the beneficial owner
of 11,437 shares of BFC Class A Common Stock and
1,200 shares of BFC Class B Common Stock held of
record by Mr. Levans wife, for an aggregate
beneficial ownership of 9,406,400 shares (32.7%) of BFC
Class A Common Stock and 3,170,102 shares (44.7%) of
BFC Class B Common Stock. |
|
(4) |
|
Dr. Wertheims 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, BFC. Dr. Wertheims mailing
address is 191 Leucadendra Drive, Coral Gables, Florida 33156. |
|
(5) |
|
Mailing address is 2100 West Cypress Creek Road,
Fort Lauderdale, Florida 33309. |
|
(6) |
|
Messrs. Levan and Abdo have entered into a Shareholders
Agreement and Irrevocable Proxy with respect to the shares of
BFC Class B Common Stock controlled by them. Under the
agreement, they have agreed to vote their shares of BFC
Class B Common Stock in favor of the election of each other
to BFCs board of directors for so long as they are willing
and able to serve as directors of BFC. Additionally,
Mr. Abdo has granted an irrevocable proxy to an entity
controlled by Mr. Levan and will obtain the consent of
Mr. Levan prior to the sale or conversion of certain of his
shares of BFC Class B Common Stock. |
|
(7) |
|
Amount and nature of beneficial ownership and percent of class
include 114,902 shares that may be acquired within
60 days pursuant to exercise of stock options to purchase
BFC Class B Common Stock. |
|
(8) |
|
On April 13, 2007, Mr. Pertnoy assigned and
transferred his options to purchase 181,735 shares of BFC
Class B Common stock to Pertnoy Limited Partnership.
Mr. Pertnoy is the president of Pertnoy Parent, Inc., the
general partner of Pertnoy Limited Partnership. |
|
(9) |
|
Does not include shares beneficially owned by Mr. Gilbert,
who retired from his executive positions with BFC on
March 29, 2007. |
|
(10) |
|
Includes beneficial ownership of shares of BFC Class B
Common Stock subject to plans adopted under
Rule 10b5-1
of the Exchange Act as follows: Mr. Levan
71,250 shares and Mr. Abdo
75,000 shares. |
BFCS
EQUITY COMPENSATION PLAN INFORMATION
Set forth below is certain information, as of December 31,
2006, concerning BFCs equity compensation plans for which
BFC has previously obtained shareholder approval and those
equity compensation plans for which BFC has not previously
obtained shareholder approval.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
Weighted Average
|
|
|
|
|
|
|
to be Issued Upon
|
|
|
Exercise Price of
|
|
|
|
|
|
|
Exercise of
|
|
|
Outstanding
|
|
|
Number of Securities
|
|
|
|
Outstanding Options,
|
|
|
Options, Warrants
|
|
|
Remaining Available
|
|
Plan Category
|
|
Warrants or Rights
|
|
|
and Rights
|
|
|
for Future Issuance
|
|
|
Equity compensation plans approved
by security holders
|
|
|
1,607,087
|
|
|
$
|
4.88
|
|
|
|
2,479,448
|
|
Equity compensation plans not
approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,607,087
|
|
|
$
|
4.88
|
|
|
|
2,479,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
124
CORPORATE
GOVERNANCE OF LEVITT
Pursuant to Levitts By-laws and the FBCA, Levitts
business and affairs are managed under the direction of its
board of directors. Directors are kept informed of Levitts
business through discussions with management, including
Levitts 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.
Determination
of Director Independence
Levitts full board undertook a review of each of the
directors independence and the facts underlying those
determinations on February 26, 2007. During this review,
Levitts board considered transactions and relationships
between each director or any member of his immediate family and
Levitt and its subsidiaries and affiliates, including those
reported below under Certain Relationships and Related
Transactions Levitt. It also examined
transactions and relationships between directors or their
affiliates and members of Levitts senior management or
their affiliates. The purpose of this review was to determine
whether any such relationship or transaction was inconsistent
with a determination that the director is independent under
applicable laws and regulations and the listing standards of the
New York Stock Exchange. As permitted by the listing standards
of the New York Stock Exchange, Levitts board has
determined that the following categories of relationships will
not constitute material relationships that impair a
directors independence: (i) serving on third party
boards of directors with other members of the board;
(ii) payments or charitable gifts by Levitt to entities
with which a director is an executive officer or employee where
such payments or gifts do not exceed the greater of
$1 million or 2% of such companys or charitys
consolidated gross revenues; and (iii) investments by
directors in common with each other or Levitt, its affiliates or
executive officers. As a result of its review of the
relationships of each of its members, and considering these
categorical standards, Levitts board has affirmatively
determined that a majority of its members, including James
Blosser, S. Lawrence Kahn, III, Alan Levy, Joel Levy, and
William Nicholson, are independent directors within the meaning
of the listing standards of the New York Stock Exchange and
applicable law.
Committees
of Levitts Board of Directors and Meeting
Attendance
Levitts board of directors has established audit,
compensation and nominating and corporate governance committees.
Levitts 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 Levitts
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 Levitts website at
www.levittcorporation.com/investor/governance/index.php,
and each is available in print without charge to any shareholder
of Levitt.
Levitts board met nine times and executed one unanimous
written consent in lieu of a meeting during 2006. Except James
Blosser, who attended six board meetings and four nominating and
corporate governance committee meetings in 2006, each member of
Levitts board attended at least 75% of the meetings of the
board and committees on which he served. All of the members of
the board of directors attended Levitts 2006 annual
meeting of shareholders, although Levitt has no formal policy
requiring them to do so.
Levitts
Audit Committee
Levitts audit committee consists of Joel Levy, chairman,
William Nicholson and S. Lawrence Kahn, III. Levitts
board has determined that all current members of the audit
committee are financially literate and
independent within the meaning of the listing
standards of the New York Stock Exchange and applicable SEC
regulations. Mr. Levy, the chairman of the committee, is
qualified as an audit committee financial expert as
such term is defined in Item 407(d)(5) of
Regulation S-K,
and the board has determined that he has accounting and related
financial management expertise within the meaning of the listing
standards of the New York Stock Exchange. Levitts audit
committee met nine times during the 2006 fiscal year, and its
members also held various informal conference calls as a
committee. The committee is directly responsible for the
appointment, compensation, retention and oversight of
Levitts independent auditor. Additionally, the committee
assists board oversight of: (i) the integrity of
Levitts financial statements; (ii) Levitts
compliance with legal and regulatory requirements;
125
(iii) the qualifications, performance and independence of
Levitts independent auditor; and (iv) the performance
of Levitts internal audit function. In connection with
these oversight functions, Levitts audit committee
receives reports from the companys outsourced internal
audit group, periodically meets with management and the
companys independent auditors to receive information
concerning internal controls over financial reporting and any
deficiencies in such controls, and has adopted a complaint
monitoring procedure that enables confidential and anonymous
reporting to the committee of concerns regarding questionable
accounting or auditing matters. A report from Levitts
audit committee is included in this joint proxy
statement/prospectus on page 139.
Levitts
Compensation Committee
Levitts compensation committee consists of S. Lawrence
Kahn, III, chairman, Alan Levy and William Nicholson. All
of the members of the committee are independent within the
meaning of the listing standards of the New York Stock Exchange.
In addition, each committee member is a Non-Employee
Director as defined in
Rule 16b-3
under the Exchange Act and an outside director as
defined for purposes of Section 162(m) of the Code.
Levitts compensation committee met nine times during 2006.
The committee provides assistance to the board in fulfilling its
responsibilities relating to the compensation of Levitts
executive officers. It determines the compensation of
Levitts chief executive officer and, after reviewing the
compensation recommendations of Levitts chief executive
officer, determines the compensation of Levitts other
executive officers. It also administers Levitts
equity-based and performance-based compensation plans.
Levitts
Nominating and Corporate Governance Committee
Levitts nominating and corporate governance committee
consists of James Blosser, chairman, Alan Levy and Joel Levy,
each of whom has been determined by Levitts board of
directors to meet the New York Stock Exchanges standards
for independence. Levitts nominating and corporate
governance committee met five times during 2006. The committee
is responsible for assisting the board 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 Levitt, 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 candidates background and accomplishments,
candidates for director nominees are reviewed in the context of
the current composition of Levitts board and the evolving
needs of the company. Levitt 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
companys 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
candidates election to the full board. Since Levitts
last annual meeting of shareholders, the committee has not
nominated a new candidate for election as director.
Under Levitts By-laws, nominations for directors may be
made only by or at the direction of Levitts board of
directors or by a shareholder entitled to vote who delivers
written notice (along with certain additional information
specified in Levitts By-laws) not less than 90 nor more
than 120 days prior to the first anniversary of the
preceding years annual meeting of shareholders. For
Levitts 2008 annual meeting of shareholders, Levitt must
receive this notice
between
and ,
2008.
Levitts
Investment Committee
Levitts investment committee was established by the
companys board of directors by resolution in September
2003 and consists of Alan B. Levan, chairman, John E. Abdo,
William Nicholson and two outside, non-voting
126
advisory members. The committee met 17 times in 2006.
Levitts investment committee assists the board in
supervising and overseeing the management of the companys
investments in capital assets. Specifically, the committee
(i) reviews and approves all real property transactions,
(ii) authorizes new project and working capital debt
subject to guidelines established by the board, and
(iii) authorizes refinancing and other modifications to
existing project and other working capital debt subject to
limits established by the board.
Executive
Sessions of Non-Management and Independent Directors
On January 23, and July 24, 2006, Levitts
non-management directors met in an executive session of the
board in which management directors and other members of
management did not participate. Mr. Dornbush was the
presiding director for these sessions. The non-management
directors will meet at semi-annual scheduled meetings each year
and may schedule additional meetings without management present
as they determine to be necessary.
Director
and Management Indebtedness
Levitt has not made any loans to its executive officers or
directors.
Communications
with the Board of Directors and Non-Management
Directors
Interested parties who wish to communicate with Levitts
board of directors, any individual director or the
non-management directors as a group, can write to Levitts
secretary at Levitt Corporation, 2200 West Cypress Creek
Road, Fort Lauderdale, Florida 33309. If the person
submitting the letter is a Levitt shareholder, the letter should
include a statement indicating such. Depending on the subject
matter, an officer of Levitt will:
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forward the letter to the director or directors to whom it is
addressed;
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attempt to handle the inquiry directly if it relates to routine
or ministerial matters, including requests for
information; or
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not forward the letter if it is primarily commercial in nature
or if it is determined to relate to an improper or irrelevant
topic.
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A member of Levitts 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 board and will make
those letters available to the board upon request.
Code of
Ethics
Levitt has a Code of Business Conduct and Ethics that applies to
all directors, officers and employees of the company, including
its principal executive officer, principal financial officer and
principal accounting officer. The Code of Business Conduct and
Ethics is available on Levitts website at
www.levittcorporation.com. Levitt will post amendments to
or waivers from its Code of Business Conduct and Ethics to the
extent applicable to the companys principal executive
officer, principal financial officer or principal accounting
officer on its website.
Compensation
Committee Interlocks and Insider Participation
Levitts board of directors has designated Alan Levy, S.
Lawrence Kahn, III and William Nicholson, none of whom are
employees of Levitt or any of its subsidiaries, to serve on
Levitts compensation committee. Levitts chairman and
vice chairman are also executive officers of BFC. In addition,
Levitts chairman and vice chairman also serve as chairman
and vice chairman, respectively, of each of BankAtlantic Bancorp
and Bluegreen, each of which is an affiliate of Levitt. Each of
Levitts chairman and vice chairman also receives
compensation from BFC and BankAtlantic Bancorp and each was
granted stock options by Bluegreen.
Section 16(a)
Beneficial Ownership Reporting Compliance
Based solely upon a review of the copies of the forms furnished
to Levitt and written representations that no other reports were
required, Levitt believes that during the year ended
December 31, 2006, all filing requirements under
Section 16(a) of the Exchange Act applicable to its
officers, directors and greater than 10% beneficial owners were
complied with on a timely basis.
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MANAGEMENT
OF LEVITT
Board of
Directors of Levitt
Levitts board of directors currently consists of nine
directors divided into three classes, each of which has a
three-year term expiring in annual succession. Levitts
By-laws provide that the board of directors shall consist of no
less than three or more than twelve directors. The specific
number of directors is set from time to time by resolution of
the board.
A total of three directors will be elected at the Levitt annual
meeting, all of whom will be elected for the term expiring at
the earlier of Levitts 2010 annual meeting of shareholders
and the consummation of the merger. Each of the nominees was
recommended for nomination by Levitts nominating and
corporate governance committee and has consented to serve the
term indicated. If any of them should become unavailable to
serve as a director, the board may designate a substitute
nominee. In that case, the persons named as proxies will vote
for the substitute nominee designated by the board. Except as
otherwise indicated, the nominees and directors listed below
have had no change in principal occupation or employment during
the past five years.
The
Directors Standing For Election Are:
TERMS
ENDING AT THE EARLIER OF THE CONSUMMATION OF THE MERGER AND
2010:
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WILLIAM
SCHERER
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Director
since 2001
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William Scherer, age 59, has been an attorney in the
law firm of Conrad & Scherer, P.A. since 1974.
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S. LAWRENCE
KAHN, III
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Director
since 2003
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S. Lawrence Kahn, III, age 60, has been
the president and chief executive officer since 1986 of Lowell
Homes, Inc., a Florida corporation engaged in the business of
homebuilding. Mr. Kahn also serves as a director of the
Great Florida Bank.
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JOEL LEVY
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Director
since 2003
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Joel Levy, age 67, has been the vice chairman of the
board of The Adler Group, Inc., a commercial real estate
company, since 1984, and served as the chief operating officer
of The Adler Group, Inc. from 1984 through 2006.
LEVITTS
BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF LEVITT
CLASS A
COMMON STOCK AND HOLDERS OF LEVITT CLASS B COMMON STOCK
VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
The
Directors Continuing In Office Are:
TERMS
ENDING AT THE EARLIER OF THE CONSUMMATION OF THE MERGER AND
2008:
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JOHN E. ABDO
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Director
since 1985
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Information with respect to the background and experience of
Mr. Abdo is set forth above in Management of
BFC Board of Directors of BFC on page 105.
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WILLIAM
NICHOLSON
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Director
since 2003
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William Nicholson, age 61, has been a principal with
Heritage Capital Group since 2003. Previously,
Mr. Nicholson served as managing director of Bank of
America Securities and Bank of America in the real estate
advisory group.
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ALAN J. LEVY
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Director
since 2005
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Alan J. Levy, age 67, is the founder and, since
1980, has served as the president and chief executive officer of
Great American Farms, Inc., an agricultural company involved in
the farming, marketing and distribution of a variety of fruits,
vegetables and meat products.
128
TERMS
ENDING AT THE EARLIER OF THE CONSUMMATION OF THE MERGER AND
2009:
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ALAN B. LEVAN
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Director
since 1987
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Information with respect to the background and experience of
Mr. Levan is set forth above in Management of
BFC Board of Directors of BFC on page 105.
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JAMES BLOSSER
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Director
since 2001
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James Blosser, age 69, has been an attorney with the
law firm of Blosser & Sayfie since 2001. Additionally,
from 1999 to 2004 he was a partner with the governmental
relations firm of Poole, McKinley & Blosser. Prior to
1999, he was an executive vice president of Huizenga Holdings, a
sports, investment and entertainment conglomerate in
Fort Lauderdale, Florida.
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DARWIN
DORNBUSH
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Director
since 2003
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Darwin Dornbush, age 77, is a senior partner in the
law firm of Dornbush Schaeffer Strongin & Weinstein,
LLP. He has served as secretary of Benihana and its predecessor
since 1983, and he has been a director of Benihana since 1995.
Mr. Dornbush has served as secretary and since 1980 he has
been a director of Benihana of Tokyo, the parent company of
Benihana. Mr. Dornbush is also a director of Cantel Medical
Corp., a healthcare company.
Executive
Officers of Levitt
The following individuals are executive officers of Levitt:
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Name
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Position
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Alan B. Levan
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Chairman of the Board and Chief
Executive Officer
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John E. Abdo
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Vice Chairman
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Paul J. (Pete) Hegener
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President of Core Communities
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Jeanne T. Prayther
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Chief Accounting Officer
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George P. Scanlon
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Executive Vice President and Chief
Financial Officer
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Seth M. Wise
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President of Levitt and Chief
Operating Officer of Levitt and Sons
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The following additional information is provided for the
executive officers shown above that are not directors of Levitt:
Paul J. (Pete) Hegener, age 66, joined
Core Communities in 1992 as its president.
Jeanne T. Prayther, age 40, has been employed by
Levitt since May 2006 and was appointed chief accounting officer
of Levitt in July 2006. Ms. Prayther was employed by KPMG
LLP from 1988 to 2000. Ms. Prayther was subsequently
employed by Daleen Technologies, Inc., a global provider of high
performance billing and customer care software solutions, as
vice president finance from June 2000 to August 2001
and as chief financial officer from August 2001 to May 2004.
From May 2004 to May 2006, Ms. Prayther was vice president
of finance and corporate controller of Mastec, Inc., a leading
specialty contractor for communications companies, utilities and
governments.
Seth M. Wise, age 37, was named president of Levitt
in July 2005. He previously served as executive vice president
beginning in September 2003. He became chief operating officer
of Levitt and Sons in 2006. Previously, Mr. Wise was a vice
president of Abdo Companies, Inc., a South-Florida-based private
real estate development company controlled by John E. Abdo.
Information with respect to the background and experience of
George P. Scanlon is set forth above in Management of
BFC Executive Officers of BFC on page 106.
129
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
LEVITT
Review,
Approval or Ratification of Transactions with Related
Persons
Levitts board of directors reviews and approves
transactions in which Levitt was or is to be a participant, the
amount involved exceeded or will exceed $120,000 annually and
any of Levitts directors or executive officers, or their
immediate family members, had or will have a direct or indirect
material interest. When considering a related person
transaction, Levitts board of directors analyzes, among
other factors it deems appropriate, whether such related person
transaction was or is to be for the benefit of Levitt and upon
terms no less favorable to Levitt than if the related person
transaction was with an unrelated party. During 2006, no related
person transaction occurred where this process was not followed.
Transactions
with Related Persons
Levitt and BankAtlantic Bancorp are under the common control of
BFC. BankAtlantic Bancorp is the parent company of BankAtlantic.
The majority of BFCs capital stock is owned or controlled
by Levitts chairman and chief executive officer, Alan B.
Levan, and by Levitts vice chairman, John E. Abdo, both of
whom are also directors of Levitt and executive officers and
directors of each of BFC, BankAtlantic Bancorp and BankAtlantic.
Mr. Levan and Mr. Abdo are the chairman and vice
chairman, respectively, of Bluegreen.
Levitt, BFC, BankAtlantic Bancorp and Bluegreen entered into a
shared services arrangement, pursuant to which BFC provides
Levitt, BankAtlantic Bancorp and Bluegreen with various
executive and administrative services. In 2006, Levitt paid
$912,000 for risk management, investor relations and human
resources services provided to it by BFC, including the sublease
of office space which is leased by BFC from BankAtlantic Bancorp
on a
month-to-month
basis. An additional $185,000 was paid in 2006 to BankAtlantic
Bancorp for miscellaneous expense reimbursements and similar
services provided in 2005.
Levitt maintains securities sold under repurchase agreements at
BankAtlantic. The balance in its accounts at December 31,
2006 was $4.6 million, and BankAtlantic paid interest to
Levitt on its accounts in 2006 of $436,000.
Levitt utilizes the services of Conrad & Scherer,
P.A., a law firm in which William R. Scherer, a member of
Levitts board of directors, is a member. Levitt paid fees
aggregating $470,000 to this firm during the year ended
December 31, 2006.
Certain of Levitts executive officers separately receive
compensation from Levitts affiliates for services rendered
to those affiliates. Members of Levitts board of directors
and executive officers also have banking relationships with
BankAtlantic in the ordinary course of BankAtlantics
business.
During the year ended December 31, 2005 and 2004, actions
were taken by Levitt with respect to the development of certain
property owned by BankAtlantic. Levitts efforts included
the successful rezoning of the property and obtaining the
permits necessary to develop the property for residential and
commercial use. At December 31, 2005, BankAtlantic had
agreed to reimburse Levitt $438,000 for the
out-of-pocket
costs incurred by it in connection with these efforts. As of
December 31, 2006 this balance had been paid in full and no
other amounts remain outstanding.
LEVITTS
COMPENSATION DISCUSSION AND ANALYSIS
Overview
of Compensation Program
Levitts compensation committee (referred to within this
section as the committee) administers the
compensation program for the executive officers of Levitt. The
committee reviews and determines all executive officer
compensation, administers Levitts equity incentive plans
(including reviewing and approving grants to Levitts
executive officers), makes recommendations to shareholders with
respect to proposals related to compensation matters and
generally consults with management regarding employee
compensation programs.
The committees charter reflects these responsibilities,
and the committee and Levitts board of directors
periodically review and, if appropriate, revise the charter.
Levitts board of directors determines the committees
130
membership, which is composed entirely of independent directors.
The committee meets at regularly scheduled times during the
year, and it may also hold specially scheduled meetings and take
action by written consent. At board meetings, the chairman of
the committee reports on committee actions and recommendations,
as he deems appropriate. Executive compensation is reviewed at
executive sessions of the board.
Throughout this joint proxy statement/prospectus, the term
Levitts named executive officers is used to
refer collectively to the individuals included on Levitts
Summary Compensation Table on page 134.
Compensation
Philosophy and Objectives
Levitts compensation program for executive officers
consists of a base salary, an annual cash incentive and bonus
program, periodic grants of restricted stock or stock options
and health and welfare benefits. The committee believes that the
most effective executive officer compensation program is one
that is designed to align the interests of the executive
officers with those of shareholders by compensating the
executive officers in a manner that advances both the short- and
long-term interests of Levitt and its shareholders. The
committee believes that Levitts compensation program for
executive officers is appropriately based upon Levitts
performance, the performance and level of responsibility of the
executive officer and the market, generally, with respect to
executive officer compensation.
Messrs. Levan and Abdo hold executive positions at BFC and
BankAtlantic Bancorp and receive compensation from BFC and
BankAtlantic Bancorp. While the committee does not determine the
compensation paid to Messrs. Levan and Abdo from BFC or
BankAtlantic Bancorp, the committee considers the fact that
Messrs. Levan and Abdo each devote time to the operations
of BFC and BankAtlantic Bancorp when determining the
compensation Levitt pays to them.
Role of
Executive Officers in Compensation Decisions
The committee makes all compensation decisions for Levitts
named executive officers and other executive officers and
approves recommendations regarding equity awards to all of
Levitts employees. Levitts chief executive officer
annually reviews the performance of each of Levitts named
executive officers (other than himself, whose performance is
reviewed by the committee). The conclusions reached and
recommendations based on these reviews, including those with
respect to setting and adjusting base salary, annual cash
incentive awards and stock option awards, are presented to the
committee. The committee can exercise its discretion in
modifying upward or downward any recommended amounts or awards
to executive officers. In 2006, the committee accepted without
modification the recommendations of Levitts chief
executive officer with respect to the base salary, annual cash
incentive awards and stock option awards paid or to be paid by
Levitt to its executive officers.
Executive
Officer Compensation Components
For the fiscal year ended December 31, 2006, the principal
components of compensation for Levitts named executive
officers were:
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base salary;
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Levitts annual incentive and bonus program; and
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long-term equity incentive compensation.
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Base
Salary
The committee believes that the base salaries offered by Levitt
are competitive based on a review of market practices and the
duties and responsibilities of each named executive officer. In
setting base salaries, the committee periodically examines
market compensation levels and trends observed in the market for
executives of comparable experience and skills. Market
information is used as an initial frame of reference for
establishing and adjusting base salaries. The committee believes
that Levitts named executive officers base salaries
should be competitive with those of other executives with
comparable experience at organizations similar to Levitt.
131
In addition to examining market compensation levels and trends,
the committee makes base salary decisions for Levitts
named executive officers based on an annual review by the
committee with input and recommendations from Levitts
chief executive officer. The committees review includes,
among other things, the functional and decision-making
responsibilities of each position, the significance of each
named executive officers specific area of individual
responsibility to Levitts financial performance and
achievement of overall goals, and the contribution, experience
and work performance of each named executive officer.
With respect to base salary decisions for Levitts chief
executive officer, the committee made an assessment of
Mr. Levans past performance as chief executive
officer and its expectations as to his future contributions to
Levitt, as well as the factors described above for Levitts
other named executive officers, including examining market
compensation levels and trends and evaluating his individual
performance and Levitts financial condition, operating
results and attainment of strategic objectives. In evaluating
the performance of Mr. Levan for purposes of not only his
base salary, but also his cash bonus under Levitts annual
incentive program and stock option awards under Levitts
long-term equity incentive compensation program, the committee
considered Levitts 2006 operating results and its
financial condition. In its review, the committee noted several
specific items relative to Mr. Levans performance,
including his leadership and critical assessment of the issues
facing Levitt.
The 2006 base salary of each of Messrs. Levan, Abdo and
Scanlon increased approximately 4% from 2005. The 2006 base
salary of Mr. Weiner, former chief executive officer of
Levitt and Sons, increased approximately 19% from 2005.
Mr. Hegeners 2006 base salary did not increase from
2005. For 2007, the committee has approved increases of
approximately 4% in Messrs. Levans and Abdos
respective base salaries from 2006 and an increase of
approximately 49% in Mr. Hegeners base salary from
2006. The committee has also approved a 2007 base salary of
$175,000 for Mr. Scanlon, a decrease of approximately 39%
from his 2006 base salary from Levitt. However, Mr. Scanlon
is also now serving as chief financial officer of BFC and will
receive a salary of $175,000 in that capacity. Effective
April 1, 2007, Mr. Weiner retired as chief executive
officer of Levitt and Sons, and accordingly he no longer serves
as an executive officer of Levitt. Mr. Weiner continues to
serve Levitt in a non-executive position.
Annual
Incentive and Bonus Program
Levitts annual incentive and bonus program is a cash bonus
plan designed to promote high performance and achievement of
shorter-term corporate strategic goals and initiatives,
encourage the growth of shareholder value, and allow executives,
including Levitts named executive officers, to participate
in the growth and profitability of Levitt. This program includes
elements tied to the achievement of pre-established, objective
individual and company-wide annual financial performance goals.
These goals are established each year during Levitts
annual budget cycle, and the portion of an executive
officers cash bonus under the plan that is related to
financial performance goals varies upon the impact that he or
she has on the overall corporate and respective division
financial performance. Levitts annual incentive program
also includes a discretionary element tied to a subjective
evaluation of overall performance in areas outside those that
can be objectively measured from financial results. Each
executive officers bonus is intended to take into account
corporate and individual components, which are weighted
according to the executive officers responsibilities.
Levitt paid a bonus of $100,000 to Mr. Scanlon for his
service to Levitt during 2006, all of which was based on a
subjective evaluation of overall performance in areas other than
those that can be objectively measured from specific financial
goals. While Levitts other named executive officers
achieved many of the goals set for them, the objective financial
criteria set for 2006 under Levitts annual incentive
program were not met and given Levitts reduction in
workforce and its goal of reducing expenses, in accordance with
the chief executive officers recommendation, no
discretionary bonus was paid by Levitt to Messrs. Levan,
Abdo, Hegener or Weiner for their services to the company during
2006. Because of the current challenging economic and market
conditions, no objective financial criteria was set under
Levitts annual incentive and bonus program for 2007 and
accordingly any bonus paid to Levitts named executive
officers in 2007, which may range from 60% to 150% of base
salary, will be paid at the discretion of the committee based on
a number of subjective factors,which may include Levitts
performance, market conditions and the level of compensation
paid to executives with similar responsibilities at comparable
companies. As described above, effective April 1, 2007,
Mr. Weiner ceased to be an executive officer of
132
Levitt and accordingly will not be eligible to receive a bonus
under Levitts annual incentive and bonus program for 2007.
In addition to being eligible for a cash bonus under
Levitts annual incentive and bonus program, Levitts
named executive officers are eligible for a cash award under the
Levitt Corporation Corporate Goal Bonus Plan (the Goals
Plan). The Goals Plan provides a quarterly payout to all
Levitt employees, including Levitts named executive
officers, in an amount equal to a percentage of not more than 6%
of an employees quarterly base salary payable at the
discretion of Levitt after taking into account certain
pre-established quarterly goals. In 2006, a total of $35,284 in
cash was awarded to Levitts named executive officers under
the Goals Plan as follows:
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Alan B. Levan
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$
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6,769
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John E. Abdo
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9,582
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Paul J. Hegener
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6,354
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Elliott M. Wiener
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8,195
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George P. Scanlon
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4,384
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Long-Term
Equity Incentive Compensation
Levitts long-term equity incentive compensation program
provides an opportunity for Levitts named executive
officers, and Levitts other executive officers, to
increase their stake in the company through grants of options to
purchase shares of Levitt Class A Common Stock and
encourages executive officers to focus on long-term company
performance by aligning the executive officers interests
with those of Levitts shareholders, since the ultimate
value of such compensation is directly dependent on the stock
price. The committee believes that providing executive officers
with opportunities to acquire an interest in the growth and
prosperity of the company through the grant of stock options
enables Levitt to attract and retain qualified and experienced
executive officers and offer additional long-term incentives.
The committees grant of stock options to executive
officers is discretionary based on an assessment of the
individual executive officers contribution to the success
and growth of Levitt, subject in any event to the limitations of
Levitts Amended and Restated 2003 Stock Incentive Plan.
Decisions by the committee regarding grants of stock options to
executive officers, including Levitts named executive
officers (other than its chief executive officer), are generally
made based upon the recommendation of Levitts chief
executive officer, the level of the executive officers
position with Levitt, an evaluation of the executive
officers past and expected future performance, the number
of outstanding and previously granted stock options to the
executive officer and discussions with the executive officer.
In 2006, all of Levitts named executive officers were
granted options to purchase shares of Levitt Class A Common
Stock, with an exercise price equal to the market value of such
stock on the date of grant, and which vest on the fifth
anniversary of the date of grant. The committee believes that
such stock options serve as a significant aid in the retention
of executive officers, since these stock option awards do not
vest until five years after the grant date.
Internal
Revenue Code Limits on Deductibility of Compensation
Section 162(m) of the Code generally disallows a tax
deduction to public corporations for compensation over
$1,000,000 paid for any fiscal year to the corporations
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
from the deduction limit if certain requirements are met.
The committee believes that it is generally in Levitts
best interest to attempt to structure performance-based
compensation, including stock option grants or performance-based
restricted stock awards and annual bonuses, to executive
officers who may be subject to Section 162(m) in a manner
that satisfies the statutes requirements for full tax
deductibility for the compensation. 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 Levitt to meet its overall objectives, even
if the company may not deduct all of the compensation. In an
effort to meet the requirements of Section 162(m), Levitt
adopted its Performance-Based Annual Incentive Plan in 2004 to
provide performance based goals for the payment of cash bonuses
to certain named executive officers. The objective criteria
133
were not met in 2006. The bonus paid to Mr. Scanlon for his
service to Levitt during 2006 was paid based on subjective
criteria. No assurance can be given that compensation paid by
Levitt in the future will satisfy the requirements for
deductibility under Section 162(m).
LEVITTS
SUMMARY COMPENSATION TABLE 2006
The following table sets forth certain summary information
concerning compensation paid or accrued by Levitt to or on
behalf of each of Levitts named executive officers for the
fiscal year ended December 31, 2006. Levitts named
executive officers who also serve as officers or directors of
affiliates receive compensation from such affiliates for
services rendered on behalf of the affiliates.
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|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus(1)
|
|
|
Awards
|
|
|
Awards(2)
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation(3)
|
|
|
Total
|
|
|
Alan B. Levan,
Chief Executive Officer(4)
|
|
|
2006
|
|
|
$
|
515,833
|
|
|
$
|
6,769
|
|
|
$
|
|
|
|
$
|
230,828
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
753,430
|
|
John E. Abdo,
Vice Chairman(4)
|
|
|
2006
|
|
|
|
628,672
|
|
|
|
9,582
|
|
|
|
|
|
|
|
333,573
|
|
|
|
|
|
|
|
|
|
|
|
291,244
|
|
|
|
1,263,071
|
|
Paul J. Hegener,
President, Core Communities
|
|
|
2006
|
|
|
|
403,092
|
|
|
|
6,354
|
|
|
|
|
|
|
|
166,789
|
|
|
|
|
|
|
|
|
|
|
|
16,600
|
|
|
|
592,835
|
|
Elliott Wiener,
Chief Executive Officer, Levitt and Sons(5)
|
|
|
2006
|
|
|
|
600,000
|
|
|
|
8,195
|
|
|
|
|
|
|
|
166,789
|
|
|
|
|
|
|
|
|
|
|
|
22,666
|
|
|
|
797,650
|
|
George P. Scanlon,
Executive Vice President and Chief Financial Officer
|
|
|
2006
|
|
|
|
283,708
|
|
|
|
104,384
|
|
|
|
|
|
|
|
130,781
|
|
|
|
|
|
|
|
|
|
|
|
8,800
|
|
|
|
527,673
|
|
|
|
|
(1) |
|
Represents the discretionary component of cash awards under the
Goals Plan. In addition, the amount reflected in the
Bonus column for Mr. Scanlon includes a
$100,000 payment under Levitts annual incentive and bonus
program which is tied to a subjective evaluation of overall
performance. Both the Goals Plan and Levitts annual
incentive and bonus program are more fully described in the
section above entitled Levitts Compensation
Discussion and Analysis. |
|
(2) |
|
All options are to purchase shares of Levitt Class A Common
Stock. Represents the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended
December 31, 2006, in accordance with FAS 123(R),
without taking into account an estimate of forfeitures related
to service-based vesting, of stock option grants, including
amounts from awards granted prior to 2006. Other than with
respect to forfeitures, of which there were none during 2006,
assumptions used in the calculation of these amounts are
included in footnote 4 to Levitts audited financial
statements for the fiscal year ended December 31, 2006
included in Levitts Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 16, 2007. Additional information regarding these
stock options awarded to Levitts named executive officers
in 2006, including the grant date fair value of such stock
options, is set forth in Levitts Grants of
Plan-Based Awards 2006 below. |
134
|
|
|
(3) |
|
Items included under All Other Compensation for each
of Levitts named executive officers are set forth in the
table below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees paid to
|
|
|
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
Abdo
|
|
|
|
|
|
to Retirement
|
|
|
|
|
|
|
|
|
|
|
|
|
Companies,
|
|
|
Insurance
|
|
|
and
|
|
|
Auto
|
|
|
|
|
Name
|
|
Year
|
|
|
Inc.
|
|
|
Premiums
|
|
|
401(k) Plans
|
|
|
Allowance
|
|
|
Total
|
|
|
Alan B. Levan
|
|
|
2006
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
John E. Abdo
|
|
|
2006
|
|
|
|
291,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
291,244
|
|
Paul J. Hegener
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
8,800
|
|
|
|
7,800
|
|
|
|
16,600
|
|
Elliott Wiener
|
|
|
2006
|
|
|
|
|
|
|
|
7,866
|
|
|
|
8,800
|
|
|
|
6,000
|
|
|
|
22,666
|
|
George Scanlon
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
8,800
|
|
|
|
|
|
|
|
8,800
|
|
|
|
|
|
|
Mr. Abdo is the principal shareholder and chief executive
officer of Abdo Companies, Inc. |
|
|
|
Amounts included under Insurance Premiums include
amounts paid to Mr. Weiner in connection with a life and
accidental death and dismemberment policy plus long term
disability coverage as well as amounts reimbursed to
Mr. Weiner for medical expenses. |
|
(4) |
|
Each of Messrs. Levan and Abdo received non-qualified
options to acquire 50,000 shares of Bluegreen common stock
during 2006 at an exercise price of $12.07. The options vest on
the fifth anniversary of the grant date and have a ten year
term. The grant date fair value of the options computed in
accordance with FAS 123(R) was $336,500. |
|
(5) |
|
Mr. Wiener was a party to an employment agreement dated
July 19, 2001, as amended on August 28, 2006, pursuant
to which Levitt employed Mr. Wiener as chief executive
officer of Levitt and Sons. Effective April 1, 2007,
Mr. Weiner retired as chief executive officer of Levitt and
Sons and began his service as chairman emeritus of Levitt and
Sons. Additional information regarding this agreement,
Mr. Wieners retirement as chief executive officer of
Levitt and Sons and Mr. Weiners service as chairman
emeritus of Levitt and Sons is set forth under Potential
Payments upon Termination or
Change-in-Control
of Levitt below. |
LEVITTS
GRANTS OF PLAN-BASED AWARDS 2006
The following table sets forth certain information concerning
grants of awards to Levitts named executive officers
pursuant to Levitts non-equity incentive plans in the
fiscal year ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise or
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Base Price
|
|
|
of Stock
|
|
|
|
|
|
|
Estimated Possible Payouts Under
|
|
|
Shares of
|
|
|
Securities
|
|
|
of Option
|
|
|
and
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(1)
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Grant Date
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options(2)
|
|
|
($ / Sh)
|
|
|
Awards(3)
|
|
|
Alan B. Levan
|
|
|
7/24/2006
|
|
|
$
|
N/A
|
|
|
$
|
N/A
|
|
|
$
|
N/A
|
|
|
|
0
|
|
|
|
60,000
|
|
|
$
|
13.06
|
|
|
$
|
371,370
|
|
John E. Abdo(4)
|
|
|
3/27/2006
|
|
|
|
|
|
|
|
|
|
|
|
943,008
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
7/24/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
60,000
|
|
|
|
13.06
|
|
|
|
371,370
|
|
Paul J. Hegener(5)
|
|
|
3/27/2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
7/24/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
30,000
|
|
|
|
13.06
|
|
|
|
185,685
|
|
Elliott Wiener(6)
|
|
|
3/27/2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
7/24/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
30,000
|
|
|
|
13.06
|
|
|
|
185,685
|
|
George P. Scanlon
|
|
|
7/24/2006
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
30,000
|
|
|
|
13.06
|
|
|
|
185,685
|
|
|
|
|
(1) |
|
Represents the estimated possible payouts of cash awards under
the formula-based component of Levitts annual incentive
program which is tied to financial performance goals.
Levitts named executive officers did not receive any
payments under the formula-based component of Levitts
annual incentive program for 2006. Levitts annual
incentive program is more fully described in the section above
entitled Levitts Compensation Discussion and
Analysis. |
135
|
|
|
(2) |
|
All options are to purchase shares of Levitt Class A Common
Stock, were granted under Levitts Amended and Restated
2003 Stock Incentive Plan and vest on the fifth anniversary of
the date of grant. |
|
(3) |
|
Represents the grant date fair value computed in accordance with
FAS 123(R). |
|
(4) |
|
Mr. Abdos award under the formula-based component of
Levitts annual incentive program was to be paid based on
Levitts 2006 pre-tax income, not to exceed 150% of his
base salary, subject to reduction in the sole discretion of
Levitts compensation committee. As the conditions for
payment were not met, no payments were made to Mr. Abdo
under Levitts annual incentive program. |
|
(5) |
|
Mr. Hegeners award under the formula-based component
of Levitts annual incentive program was to be paid based
on Core Communities 2006 pre-tax earnings, subject to
reduction in the sole discretion of Levitts compensation
committee. As the conditions for payment were not met, no
payments were made to Mr. Hegener under Levitts
annual incentive program. |
|
(6) |
|
Mr. Wieners award under the formula-based component
of Levitts annual incentive program was to be paid based
on Levitt and Sons 2006 pre-tax earnings, subject to
reduction in the sole discretion of Levitts compensation
committee. As the conditions for payment were not met, no
payments were made to Mr. Wiener under Levitts annual
incentive program. |
LEVITTS
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
2006
The following table sets forth certain information regarding
equity-based awards of Levitt held by Levitts named
executive officers as of December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Option Awards
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Payout Value
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Unearned
|
|
|
of Unearned
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Shares, Units
|
|
|
Shares, Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
or Other
|
|
|
or Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
Options
|
|
|
Options
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable(1)
|
|
|
Options
|
|
|
Price
|
|
|
Date
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Alan B. Levan
|
|
|
|
|
|
|
60,000
|
(2)
|
|
|
N/A
|
|
|
$
|
20.15
|
|
|
|
1/2/2014
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
40,000
|
(3)
|
|
|
|
|
|
|
32.13
|
|
|
|
7/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(4)
|
|
|
|
|
|
|
13.06
|
|
|
|
7/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John E. Abdo
|
|
|
|
|
|
|
90,000
|
(2)
|
|
|
N/A
|
|
|
|
20.15
|
|
|
|
1/2/2014
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
60,000
|
(3)
|
|
|
|
|
|
|
32.13
|
|
|
|
7/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(4)
|
|
|
|
|
|
|
13.06
|
|
|
|
7/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul J. Hegener
|
|
|
|
|
|
|
45,000
|
(2)
|
|
|
N/A
|
|
|
|
20.15
|
|
|
|
1/2/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(3)
|
|
|
|
|
|
|
32.13
|
|
|
|
7/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(4)
|
|
|
|
|
|
|
13.06
|
|
|
|
7/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elliott Wiener
|
|
|
|
|
|
|
45,000
|
(2)
|
|
|
N/A
|
|
|
|
20.15
|
|
|
|
1/2/2014
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
30,000
|
(3)
|
|
|
|
|
|
|
32.13
|
|
|
|
7/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(4)
|
|
|
|
|
|
|
13.06
|
|
|
|
7/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George P. Scanlon
|
|
|
|
|
|
|
25,000
|
(5)
|
|
|
N/A
|
|
|
|
23.40
|
|
|
|
8/23/2014
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
30,000
|
(3)
|
|
|
|
|
|
|
32.13
|
|
|
|
7/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(4)
|
|
|
|
|
|
|
13.06
|
|
|
|
7/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All options are to purchase shares of Levitt Class A Common
Stock. |
|
(2) |
|
Vests on January 2, 2009. |
|
(3) |
|
Vests on July 22, 2010. |
|
(4) |
|
Vests on July 24, 2011. |
|
(5) |
|
Vests on August 23, 2009. |
136
LEVITTS
OPTION EXERCISES 2006
None of Levitts named executive officers exercised options
to purchase shares of Levitts common stock in the fiscal
year ended December 31, 2006. However, in 2006,
Messrs. Hegener and Weiner exercised options to purchase
shares of BankAtlantic Bancorp Class A Common Stock, which
options had net exercise values of $165,281 and $151,958,
respectively. These options were granted to Messrs. Hegener
and Wiener when Levitt was a wholly-owned subsidiary of
BankAtlantic Bancorp and continued to vest after Levitts
spin-off from BankAtlantic Bancorp.
POTENTIAL
PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL
OF LEVITT
Mr. Wiener was a party to an employment agreement dated
July 19, 2001, as amended on August 28, 2006, pursuant
to which Levitt employed Mr. Wiener as chief executive
officer of Levitt and Sons through December 31, 2008.
Mr. Wiener was entitled to an annual salary during the term
of $600,000 and incentive compensation in an amount equal to a
percentage of pretax earnings of Levitt and Sons as determined
by mutual agreement provided that Levitt and Sons achieved a
predetermined after tax return on equity. In addition, the
employment agreement provided that Mr. Wiener would serve
as chairman emeritus of Levitt and Sons after December 31,
2008, or at any time prior to that date at the election of
Mr. Wiener or, in the event of Mr. Wieners
disability, at the election of Levitt and Sons. Effective
April 1, 2007, Mr. Weiner retired as chief executive
officer of Levitt and Sons and began serving as chairman
emeritus of Levitt and Sons. Accordingly, Mr. Wiener is no
longer an executive officer of Levitt, but continues to serve
Levitt in a non-executive position. The term for
Mr. Wieners service as chairman emeritus of Levitt
and Sons will be for five years. Mr. Wiener will continue
to receive his annual base salary of $600,000 during the period
he serves as chairman emeritus of Levitt and Sons and will
continue to be covered under certain benefit plans provided to
other employees so long as Mr. Wiener remains eligible for
such coverage. The annual value of the employee benefits to be
provided to Mr. Wiener under the employment agreement is
estimated to be approximately $35,000. Under certain instances,
payments of base salary and for employee benefits may be delayed
or suspended for a period of six months in order to meet certain
requirements of Section 409A of the Code. If
Mr. Wiener dies during the term of his service as chairman
emeritus, his estate will be entitled to payment of his
compensation for a period of up to five years.
COMPENSATION
OF LEVITTS DIRECTORS
Levitts compensation committee recommends director
compensation to Levitts board based on factors it
considers appropriate and based on the recommendations of
management. Each non-employee director receives $100,000 for
service on Levitts board of directors, payable in cash,
restricted stock or non-qualified stock options, in such
combinations as the directors may elect, provided that no more
than $50,000 may be paid in cash. The restricted stock and stock
options are granted in Levitt Class A Common Stock under
the Levitt Corporation Amended and Restated 2003 Stock Incentive
Plan. Restricted stock vests monthly over a
12-month
service period beginning on July 1 of each year and stock
options are fully vested on the date of grant, have a ten-year
term and have an exercise price equal to the closing market
price of Levitt Class A Common Stock on the date of grant.
The number of stock options and restricted stock granted is
determined by Levitt based on assumptions and formulas typically
used to value these types of securities. No director receives
additional compensation for attendance at board or committee
meetings except as follows. Members of Levitts audit
committee receive an additional $10,000 per year for their
service on that committee. The chairman of the audit committee
receives an additional fee of $15,000 per year for service
as chairman. The chairman of Levitts compensation
committee and the chairman of Levitts nominating and
corporate governance committee each receive an annual cash fee
of $3,500. Other than the chairmen, members of the compensation
committee and the nominating and corporate governance committee
do not receive additional compensation for service on those
committees. Non-management directors who serve on Levitts
investment committee receive an additional fee of
$15,000 per year. Directors who are also officers of Levitt
do not receive additional compensation for their service as
directors or for attendance at board or committee meetings.
137
LEVITTS
DIRECTOR COMPENSATION TABLE 2006
The following table sets forth certain information regarding the
compensation paid to Levitts non-employee directors for
their service during the fiscal year ended December 31,
2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name
|
|
Paid in Cash
|
|
|
Awards(1)(3)
|
|
|
Awards(2)(3)
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
|
James Blosser
|
|
$
|
57,958
|
|
|
$
|
|
|
|
$
|
49,835
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
$
|
107,793
|
|
Darwin Dornbush
|
|
|
50,000
|
|
|
|
|
|
|
|
49,835
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
99,835
|
|
S. Lawrence Kahn, III
|
|
|
53,500
|
|
|
|
29,992
|
|
|
|
29,897
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
113,389
|
|
Alan J. Levy
|
|
|
50,000
|
|
|
|
49,992
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
99,992
|
|
Joel Levy
|
|
|
60,835
|
|
|
|
|
|
|
|
49,835
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
110,670
|
|
William R. Nicholson
|
|
|
75,000
|
|
|
|
|
|
|
|
49,835
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
124,835
|
|
William Scherer
|
|
|
50,000
|
|
|
|
|
|
|
|
49,835
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
99,835
|
|
|
|
|
(1) |
|
All restricted stock awards are in shares of Levitt Class A
Common Stock. The dollar amount represents the amount recognized
for financial statement reporting purposes for the fiscal year
ended December 31, 2006, in accordance with
FAS 123(R), without taking into account an estimate of
forfeitures related to service-based vesting, of restricted
stock grants, including amounts from awards granted prior to
2006. There were no forfeitures during 2006. The grant date fair
value of the restricted stock awards computed in accordance with
FAS 123(R) is $29,992 for Mr. Kahn and $49,992 for
Mr. Alan Levy. |
|
(2) |
|
All options are to purchase shares of Levitt Class A Common
Stock. The dollar amount represents the amount recognized for
financial statement reporting purposes for the fiscal year ended
December 31, 2006, in accordance with FAS 123(R),
without taking into account an estimate of forfeitures related
to service-based vesting, of stock option grants, including
amounts from awards granted prior to 2006. Assumptions used in
the calculation of these amounts are included in footnote 4
to Levitts audited financial statements for the fiscal
year ended December 31, 2006 included in Levitts
Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 16, 2007. There were no forfeitures during 2006. The
grant date fair value of the stock option awards computed in
accordance with FAS 123(R) is $49,835 for each of
Messrs. Blosser, Dornbush, Nicholson, Scherer and Joel Levy
and $29,897 for Mr. Kahn. |
|
(3) |
|
The table below sets forth the aggregate number of shares of
restricted stock and the aggregate number of stock options held
by each non-employee director as of December 31, 2006: |
|
|
|
|
|
|
|
|
|
|
|
Restricted
|
|
|
Stock
|
|
Name
|
|
Stock(1)
|
|
|
Options(2)
|
|
|
James Blosser
|
|
|
|
|
|
|
18,774
|
|
Darwin Dornbush
|
|
|
1,565
|
|
|
|
15,376
|
|
S. Lawrence Kahn, III
|
|
|
3,116
|
|
|
|
13,584
|
|
Alan J. Levy
|
|
|
3,890
|
|
|
|
1,699
|
|
Joel Levy
|
|
|
939
|
|
|
|
17,415
|
|
William Nicholson
|
|
|
738
|
|
|
|
17,066
|
|
William Scherer
|
|
|
1,565
|
|
|
|
15,376
|
|
|
|
|
(1) |
|
All restricted stock awards are in shares of Levitt Class A
Common Stock. |
|
(2) |
|
All options are to purchase shares of Levitt Class A Common
Stock. |
138
REPORT OF
LEVITTS AUDIT COMMITTEE
The following Report of Levitts audit committee does
not constitute soliciting material and should not be deemed
filed or incorporated by reference into any other Levitt filing
under the Securities Act or the Exchange Act, except to the
extent Levitt specifically incorporates this Report by reference
therein.
Levitts audit committee held nine meetings during 2006.
These meetings were designed, among other things, to facilitate
and encourage communication among Levitts audit committee,
management, internal auditors and independent auditors for 2006,
PwC, and to monitor compliance matters. The committee discussed
with the companys internal and independent auditors the
overall scope and plans for their respective audits and met with
the internal and independent auditors, with and without
management present, to discuss the results of their examinations
and their evaluations of the companys internal controls.
On April 23, 2007, the audit committee selected PwC as
Levitts independent auditor for 2007.
Levitts audit committee reviewed and discussed the
companys audited consolidated financial statements for the
fiscal year ended December 31, 2006 with the companys
management and internal auditors and PwC.
Management has primary responsibility for the companys
financial statements and the overall reporting process,
including the companys system of internal controls. PwC
audits the annual financial statements prepared by management,
expresses an opinion as to whether those financial statements
present fairly, in all material respects, the financial
position, results of operations and cash flows of the company in
conformity with accounting principles generally accepted in the
United States of America and discusses with the audit committee
their independence and any other matters that 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 PwC.
Levitts audit committee also discussed with PwC 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
companys consolidated financial statements and the matters
required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees).
Levitts audit committee also received from PwC the written
disclosures and the letter required by Independence Standards
Board Standard No. 1 (Independence Discussions with
Audit Committees), and discussed with PwC its independence
from the company. When considering PwCs independence, the
audit committee considered that there were no services to the
company beyond those rendered in connection with PwCs
audit and review of the companys consolidated financial
statements which was compatible with maintaining PwCs
independence. The audit committee also reviewed, among other
things, the amount of fees paid to PwC for audit services.
Based on these reviews and meetings, discussions and reports,
Levitts audit committee recommended to Levitts board
of directors that the companys audited consolidated
financial statements for the fiscal year ended December 31,
2006 be included in the companys Annual Report on
Form 10-K
for the year ended December 31, 2006.
Submitted
by the Members of Levitts Audit Committee:
Joel Levy, Chairman
S. Lawrence Kahn, III
William R. Nicholson
139
FEES TO
LEVITTS INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING
FIRM
FOR FISCAL 2006 AND 2005
The following table presents fees billed by PwC relating to the
audit of Levitts annual consolidated financial statements
for fiscal 2006 and 2005 and fees billed by PwC relating to
audit-related services, tax services and all other services
rendered by PwC for such years.
|
|
|
|
|
|
|
|
|
|
|
Fiscal
|
|
|
Fiscal
|
|
|
|
2006
|
|
|
2005
|
|
|
|
(In thousands)
|
|
|
Audit fees(1)
|
|
$
|
1,060
|
|
|
$
|
1,073
|
|
Audit-related fees
|
|
|
|
|
|
|
|
|
Tax fees
|
|
|
|
|
|
|
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes primarily fees for services related to Levitts
annual financial statement audits, the 2006 and 2005 audit of
effectiveness of internal control over financial reporting and
review of quarterly financial statements filed in Levitts
Quarterly Reports on
Form 10-Q.
In addition, the 2005 amount includes additional billing of
$300,000 which was incurred during 2006 as final settlement of
fees for the 2005 audit. |
All audit related services, tax services and other services were
pre-approved by Levitts audit committee, which concluded
that the provision of such services by PwC was compatible with
the maintenance of that firms 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 certified public
accounting firm and shall not engage the independent certified
public accounting firm to perform any non-audit services
prohibited by law or regulation. Each year, the independent
certified public accounting firms retention to audit
Levitts financial statements, including the associated
fee, is approved by the audit committee. Under its current
practices, Levitts audit committee does not regularly
evaluate potential engagements of the independent certified
public accounting firm and approve or reject such potential
engagements. At each audit committee meeting, the committee
receives updates on the services actually provided by the
independent auditor, and management may present additional
services for pre-approval. The audit committee may delegate to
the chairman of the committee the authority to evaluate and
approve engagements 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.
Levitts audit committee has determined that the provision
of the services other than audit services, as described above,
are compatible with maintaining the principal independent
auditors independence.
140
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF
LEVITT
Principal
Shareholders of Levitt
The following table sets forth, as of April 18, 2007,
certain information as to Levitt Class A Common Stock and
Class B Common Stock beneficially owned by persons owning
in excess of 5% of the outstanding shares of such stock.
Management knows of no person, except as listed below, who
beneficially owned more than 5% of Levitts outstanding
Class A Common Stock or Class B Common Stock as of
April 18, 2007. Except as otherwise indicated, the
information provided in the following table was obtained from
filings with the SEC and with Levitt pursuant to the Exchange
Act. Addresses provided are those listed in the filings as the
address of the person authorized to receive notices and
communications. For purposes of the table below and the table
set forth under Security Ownership of Levitts
Management, in accordance with
Rule 13d-3
under the Exchange Act, a person is deemed to be the beneficial
owner of any shares of 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 18, 2007. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
|
|
|
|
|
Name and Address of
|
|
of Beneficial
|
|
|
|
|
Title of Class
|
|
Beneficial Owner
|
|
Ownership
|
|
|
Percent of Class
|
|
|
Class A Common Stock
|
|
NWQ Investment Management
2049 Century Park East
16th Floor
Los Angeles, CA 90067
|
|
|
4,530,917
|
(1)
|
|
|
24.35
|
%
|
|
|
Advisory Research, Inc.
180 North Stetson Street
Suite 5500
Chicago, IL 60601
|
|
|
3,506,000
|
(2)
|
|
|
18.88
|
|
|
|
BFC Financial Corporation
2100 West Cypress Creek Road
Fort Lauderdale, Florida 33309
|
|
|
2,074,244
|
(3)
|
|
|
11.15
|
|
|
|
Brandywine Asset Management,
LLC
Three Christina Centre
201 N. Walnut Street
Suite 1200
Wilmington, DE 19801
|
|
|
1,304,839
|
(4)
|
|
|
7.01
|
|
|
|
Capital Research &
Management Co.
333 South Hope Street
55th Floor
Los Angeles, CA 90071
|
|
|
1,000,000
|
(5)
|
|
|
5.34
|
|
|
|
Pennant Capital Management, LLC
40 Main Street
Chatham, NY 07928
|
|
|
947,850
|
(6)
|
|
|
5.09
|
|
|
|
Barclays Global Investors N.A.
45 Fremont Street
San Francisco, CA 94105
|
|
|
938,435
|
(7)
|
|
|
5.04
|
|
Class B Common Stock
|
|
BFC Financial Corporation
2100 West Cypress Creek Road
Fort Lauderdale, Florida 33309
|
|
|
1,219,031
|
(3)
|
|
|
100
|
%
|
|
|
|
(1) |
|
NWQ Investment Management Company, LLC has sole voting power
over 4,107,517 of such shares and sole dispositive power over
all of such shares. |
|
(2) |
|
Advisory Research, Inc. has sole voting and dispositive power
over all shares listed. |
141
|
|
|
(3) |
|
BFC has sole voting and dispositive power over all shares
listed. BFC 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 52.7% of the outstanding
common stock of BFC. Mr. Levan serves as chairman and chief
executive officer of Levitt and chairman, president and chief
executive officer of BFC. Mr. Abdo serves as vice chairman
of Levitt and BFC. |
|
(4) |
|
Brandywine Global Investment Management, LLC has sole voting
power over 1,292,329 of such shares and shared dispositive power
over 1,304,839 of such shares. |
|
(5) |
|
Capital Research & Management Co. has sole voting and
dispositive power over all shares listed. |
|
(6) |
|
Pennant Capital Management, LLC and Alan Fournier have shared
voting and shared dispositive power over all shares listed. |
|
(7) |
|
Barclays Global Investors N.A. has sole voting power over
883,959 of such shares and sole dispositive power over all of
such shares. |
Security
Ownership of Levitts Management
Listed in the table below are the outstanding shares of Levitt
Class A Common Stock and Class B Common Stock
beneficially owned as of April 18, 2007 by Levitts
(i) named executive officers, (ii) directors as of
such date and (iii) directors and executive officers as of
such date as a group. The address of all parties listed below is
2200 West Cypress Creek Road, Fort Lauderdale, Florida
33309.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Percent of
|
|
|
Percent of
|
|
|
|
Common Stock
|
|
|
Common Stock
|
|
|
Class A
|
|
|
Class B
|
|
|
|
Ownership
|
|
|
Ownership
|
|
|
Common Stock
|
|
|
Common Stock
|
|
|
BFC Financial Corporation(1)
|
|
|
2,074,244
|
|
|
|
1,219,031
|
|
|
|
11.15
|
%
|
|
|
100
|
%
|
Alan B. Levan(1)(2)(3)
|
|
|
16,239
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
John E. Abdo(1)(3)(4)
|
|
|
13,460
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
Paul J. (Pete) Hegener
|
|
|
7,256
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
George P. Scanlon
|
|
|
0
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
Elliott M. Wiener
|
|
|
0
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
James J. Blosser(5)
|
|
|
18,774
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
Darwin C. Dornbush(5)
|
|
|
17,066
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
S. Lawrence Kahn, III(5)
|
|
|
17,200
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
Alan Levy(5)
|
|
|
5,589
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
Joel Levy(5)
|
|
|
18,354
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
William R. Nicholson(5)
|
|
|
21,904
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
William R. Scherer(5)
|
|
|
17,586
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
All directors and executive
officers of Levitt as a group (13 persons)(1)(6)
|
|
|
2,227,874
|
|
|
|
1,219,031
|
|
|
|
11.91
|
%
|
|
|
100
|
%
|
|
|
|
* |
|
Less than one percent of class. |
|
(1) |
|
BFC 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 52.7% of the outstanding common stock of
BFC. Mr. Levan serves as chairman and chief executive
officer of Levitt and chairman, president and chief executive
officer of BFC. Mr. Abdo serves as vice chairman of Levitt
and BFC. |
|
(2) |
|
Includes beneficial ownership of 92 shares of Levitt
Class A Common Stock held indirectly. |
|
(3) |
|
Includes beneficial ownership of shares of Levitt Class A
Common Stock held in the BankAtlantic Security Plus Plan as a
result of the spin-off of Levitt Corporation on
December 31, 2003 as follows: Alan B. Levan
2,772 shares; John E. Abdo 9,744 shares. |
|
(4) |
|
Includes beneficial ownership of 5,052 shares of Levitt
Class A Common Stock held indirectly. |
142
|
|
|
(5) |
|
Includes beneficial ownership of the following shares of Levitt
Class A Common Stock, which may be acquired within
60 days pursuant to stock options: Darwin C.
Dornbush 15,376 shares; Alan J.
Levy 1,699 shares; Joel I. Levy
17,415 shares; James J. Blosser
18,774 shares; William R. Nicholson
17,066 shares; William R. Scherer
15,376 shares; and S. Lawrence Kahn, III
13,584 shares. |
|
(6) |
|
Includes beneficial ownership of 99,290 shares of Levitt
Class A Common Stock, which may be acquired by
Levitts directors within 60 days pursuant to stock
options held by them. |
LEVITTS
EQUITY COMPENSATION PLAN INFORMATION
Set forth below is certain information, as of December 31,
2006, concerning Levitts equity compensation plans for
which Levitt has previously obtained shareholder approval and
those equity compensation plans for which Levitt has not
previously obtained shareholder approval:
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities to be Issued
|
|
Weighted Average Exercise
|
|
Number of Securities
|
|
|
Upon Exercise of Outstanding
|
|
Price of Outstanding
|
|
Remaining Available for
|
Plan Category
|
|
Options, Warrants or Rights
|
|
Options, Warrants and Rights
|
|
Future Issuance
|
|
Equity compensation plans approved
by security holders
|
|
|
1,892,181
|
|
|
20.73
|
|
|
1,107,819
|
Equity compensation plans not
approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,892,181
|
|
|
20.73
|
|
|
1,107,819
|
|
|
|
|
|
|
|
|
|
|
143
BFC
ANNUAL MEETING PROPOSAL NO. 1 APPROVAL
OF
THE MERGER AND THE RELATED TRANSACTIONS
For a summary and detailed information regarding this proposal,
see the information about the merger and the transactions
related thereto throughout this joint proxy
statement/prospectus, including the information set forth in
Questions and Answers About the Merger,
Questions and Answers About the BFC Annual Meeting,
Summary, The BFC Annual Meeting,
The Merger and The Merger Agreement.
THE BOARD OF DIRECTORS OF BFC HAS DETERMINED THAT THE MERGER AND
THE RELATED
TRANSACTIONS ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF
BFC AND ITS
SHAREHOLDERS AND RECOMMENDS THAT BFCS SHAREHOLDERS VOTE
FOR THE MERGER AND
THE RELATED TRANSACTIONS.
BFC
ANNUAL MEETING PROPOSAL NO. 2 ELECTION OF
DIRECTORS
For a summary and detailed information regarding this proposal,
see the information about the election of directors to
BFCs board of directors set forth in this joint proxy
statement/prospectus, including the information set forth in
Questions and Answers About the BFC Annual Meeting,
The BFC Annual Meeting and Management of
BFC Board of Directors of BFC.
THE BOARD OF DIRECTORS OF BFC RECOMMENDS THAT BFCS
SHAREHOLDERS VOTE FOR THE
ELECTION OF EACH OF BFCS NOMINEES FOR DIRECTOR.
LEVITT
ANNUAL MEETING PROPOSAL NO. 1 APPROVAL
OF
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE MERGER
For a summary and detailed information regarding this proposal,
see the information about the merger agreement and the
transactions contemplated thereby, including the merger,
throughout this joint proxy statement/prospectus, including the
information set forth in Questions and Answers About the
Merger, Questions and Answers About the Levitt
Annual Meeting, Summary, The Levitt
Annual Meeting, The Merger and The
Merger Agreement.
THE BOARD OF DIRECTORS OF LEVITT HAS DETERMINED THAT THE MERGER
AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED THEREBY ARE ADVISABLE, FAIR TO AND
IN THE BEST
INTERESTS OF LEVITTS SHAREHOLDERS AND RECOMMENDS THAT
LEVITTS SHAREHOLDERS
VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT AND
THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE MERGER.
LEVITT
ANNUAL MEETING PROPOSAL NO. 2 ELECTION OF
DIRECTORS
For a summary and detailed information regarding this proposal,
see the information about the election of directors to
Levitts board of directors set forth in this joint proxy
statement/prospectus, including the information set forth in
Questions and Answers About the Levitt Annual
Meeting, The Levitt Annual Meeting and
Management of Levitt Board of Directors of
Levitt.
THE BOARD OF DIRECTORS OF LEVITT RECOMMENDS THAT LEVITTS
SHAREHOLDERS VOTE
FOR THE ELECTION OF EACH OF LEVITTS NOMINEES
FOR DIRECTOR.
144
LEGAL
MATTERS
The legality of the securities offered by this joint proxy
statement/prospectus will be passed upon for BFC by Stearns
Weaver Miller Weissler Alhadeff & Sitterson, P.A.,
Miami, Florida.
EXPERTS
The consolidated financial statements of BFC Financial
Corporation, except as they relate to Bluegreen Corporation, and
managements assessment of the effectiveness of internal
control over financial reporting (which is included in
Managements Report on Internal Control over Financial
Reporting) incorporated in this joint proxy statement/prospectus
by reference to BFCs Annual Report on
Form 10-K
for the year ended December 31, 2006, have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, an independent registered certified public accounting firm,
given on the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of Levitt Corporation,
except as they relate to Bluegreen Corporation, and
managements assessment of the effectiveness of internal
control over financial reporting (which is included in
Managements Report on Internal Control over Financial
Reporting) incorporated in this joint proxy statement/prospectus
by reference to Levitts Annual Report on
Form 10-K
for the year ended December 31, 2006, have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, an independent registered certified public accounting firm,
given on the authority of said firm as experts in auditing and
accounting.
The audited financial statements, included as an Exhibit to
Levitts Annual Report on
Form 10-K
for the year ended December 31, 2006, and managements
assessment of the effectiveness of internal control over
financial reporting (which assessment is not separately
presented therein) of Bluegreen Corporation have been audited by
Ernst & Young LLP, an independent registered public
accounting firm. Such financial statements and managements
assessment of the effectiveness of internal control over
financial reporting, to the extent they have been incorporated
in Levitts financial statements, have been incorporated by
reference in this joint proxy statement/prospectus in reliance
on the report of such independent registered public accounting
firm given on the authority of said firm as experts in auditing
and accounting.
OTHER
MATTERS
No business, other than as described in this joint proxy
statement/prospectus, will be transacted at the BFC or Levitt
annual meeting, except such other business as may properly be
brought before such meetings or any adjournment or postponement
thereof by the boards of directors of BFC and Levitt,
respectively. As of the date of this joint proxy
statement/prospectus, the boards of directors of BFC and Levitt
know of no matters that will be presented for consideration at
the BFC or Levitt annual meeting, respectively, other than as
described in this joint proxy statement/prospectus. However, if
other matters are properly presented at such meetings or any
adjournment or postponement thereof, the persons named as
proxies with respect to such meetings will vote in accordance
with their best judgment on those matters.
INDEPENDENT
REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP served as both BFCs and
Levitts independent registered certified public accounting
firm for each of the years ended December 31, 2006 and
2005. A representative of PricewaterhouseCoopers LLP is expected
to be present at the BFC and Levitt annual meetings, will have
the opportunity to make a statement if he or she desires to do
so, and will be available to respond to appropriate questions
from shareholders.
HOUSEHOLDING
OF PROXY MATERIAL
The SEC has adopted rules that permit companies and
intermediaries such as brokers to satisfy delivery requirements
for proxy statements with respect to two or more shareholders
sharing the same address by delivering a single proxy statement
addressed to those shareholders. This process, which is commonly
referred to as
145
householding, potentially provides extra convenience
for shareholders and cost savings for companies. Each of BFC and
Levitt as well as some brokers household proxy materials,
delivering a single proxy statement to multiple shareholders
sharing an address unless contrary instructions have been
received from the affected shareholders. Once you have received
notice from your broker or the companies transfer agent,
American Stock Transfer & Trust Company
(AST), that they or the companies will be
householding materials to your address, householding will
continue until you are notified otherwise or until you revoke
your consent. However, BFC or Levitt, as applicable, will
deliver promptly upon written or oral request a separate copy of
this joint proxy statement/prospectus to 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 in the future, or if you are receiving multiple proxy
statements and would like to request delivery of a single proxy
statement in the future, 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 calling
800-937-5449
or by sending a written request to American Stock
Transfer & Trust Company, 59 Maiden Lane
Plaza Level, New York, NY 10038, attention Karen A.
Trachtenberg, Vice President.
ADVANCE
NOTICE PROCEDURES AND FUTURE SHAREHOLDER PROPOSALS
BFC
Advance Notice Procedures. Under BFCs
By-laws, no business may be brought before the BFC 2008 annual
meeting of shareholders 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 of directors of BFC or by a
shareholder entitled to vote who has delivered written notice to
BFCs secretary (containing certain information specified
in BFCs By-laws about the shareholder and the proposed
action) not
before ,
2008 and not
after ,
2008. In addition, any shareholder of BFC who wishes to submit a
nomination to the board of directors of BFC must deliver written
notice of the nomination within the aforementioned time period
and comply with the information requirements in BFCs
By-laws relating to shareholder nominations. These requirements
are separate from and in addition to the SECs requirements
that a shareholder must meet in order to have a shareholder
proposal included in the proxy materials for the BFC 2008 annual
meeting of shareholders.
Shareholder Proposals for BFCs 2008 Annual Meeting of
Shareholders. Shareholders interested in
submitting a proposal for inclusion in the proxy materials for
the BFC 2008 annual meeting of shareholders may do so by
following the procedures prescribed in SEC Rule
l4a-8. To be
eligible for inclusion, shareholder proposals must be received
by BFCs secretary no later
than ,
2008 at BFCs main offices, 2100 West Cypress Creek
Road, Fort Lauderdale, Florida 33309. If such proposal or
proposals are in compliance with applicable rules and
regulations, they will be included in BFCs proxy statement
and form of proxy for that meeting.
Levitt
Advance Notice Procedures. Under Levitts
By-laws, no business may be brought before the Levitt 2008
annual meeting of shareholders 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 of directors of Levitt or by
a shareholder entitled to vote who has delivered written notice
to Levitts secretary (containing certain information
specified in Levitts By-laws about the shareholder and the
proposed action) not
before ,
2008 and not
after ,
2008. In addition, any shareholder of Levitt who wishes to
submit a nomination to the board of directors of Levitt must
deliver written notice of the nomination within the
aforementioned time period and comply with the information
requirements in Levitts By-laws relating to shareholder
nominations. These requirements are separate from and in
addition to the SECs requirements that a shareholder must
meet in order to have a shareholder proposal included in the
proxy materials for Levitts 2008 annual meeting of
shareholders.
Shareholder Proposals for Levitts 2008 Annual Meeting
of Shareholders. Shareholders interested in
submitting a proposal for inclusion in the proxy materials for
Levitts 2008 annual meeting of shareholders may do so by
following the procedures prescribed in SEC Rule
l4a-8. To be
eligible for inclusion, shareholder proposals must be received
by Levitts secretary no later
than ,
2008 at Levitts main offices, 2200 West Cypress Creek
Road, Fort Lauderdale, Florida 33309. If such proposal or
proposals are in compliance with applicable rules and
regulations, they will be included in Levitts proxy
statement and form of proxy for that meeting.
146
WHERE YOU
CAN FIND MORE INFORMATION
BFC and Levitt file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and
copy any reports, statements or other information that BFC and
Levitt file with the SEC at the SECs public reference room
at the following location:
Public Reference Room
100 F Street, N.E.
Room 1024
Washington, D.C. 20549
Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. These SEC
filings are also available to the public from commercial
document retrieval services and at the website maintained by the
SEC at http://www.sec.gov. Reports, proxy statements and other
information concerning BFC and Levitt may also be inspected at
the offices of NYSE Arca, Inc. at 100 South Wacker Drive,
Chicago, Illinois 60606 and the New York Stock Exchange at
20 Broad Street, New York, New York 10005, respectively.
Additional information about the companies may be found at
http://www.bfcfinancial.com and at
http://www.levittcorporation.com.
You can also contact Levitts information agent for answers
to your questions regarding the merger.
Georgeson Shareholder
17 State Street 10th Floor
New York, NY 10004
Shareholders of Levitt Call:
866-413-8827
Shareholders of BFC Call:
866-877-6017
The SEC allows BFC and Levitt to incorporate by
reference information into this joint proxy
statement/prospectus, which means that the companies can
disclose important information to you by referring you to other
documents filed separately with the SEC. The information
incorporated by reference is considered part of this joint proxy
statement/prospectus, except for any information superseded by
information contained directly in this joint proxy
statement/prospectus or in later filed documents incorporated by
reference into this joint proxy statement/prospectus.
This joint proxy statement/prospectus incorporates by reference
the documents set forth below that BFC and Levitt have
previously filed with the SEC. The portions of these documents
that were furnished to, and not filed with, the SEC are not
incorporated herein by reference. These documents contain
important business and financial information about BFC and
Levitt that is not included in or delivered with this joint
proxy statement/prospectus.
|
|
|
BFC Filings
|
|
Period
|
|
Annual Report on
Form 10-K
|
|
Fiscal year ended
December 31, 2006
|
Amendment No. 1 to Annual
Report on
Form 10-K/A
|
|
Fiscal year ended
December 31, 2006
|
Current Reports on
Form 8-K
|
|
Filed on January 31, 2007
(Item 1.01 and Exhibit 2.1 thereto only),
March 29, 2007 and April 4, 2007
|
The description of BFC Class A Common Stock contained in
its Registration Statement on
Form 8-A
filed with the SEC on October 16, 1997 and any amendment or
report filed with the SEC for the purpose of updating the
description
|
|
|
Levitt Filings
|
|
Period
|
|
Annual Report on
Form 10-K
|
|
Fiscal year ended
December 31, 2006
|
Amendment No. 1 to Annual
Report on
Form 10-K/A
|
|
Fiscal year ended
December 31, 2006
|
Current Reports on
Form 8-K
|
|
Filed on January 31, 2007
(Item 1.01 and Exhibits 2.1 thereto only) and
March 27, 2007
|
The description of Levitt Class A Common Stock contained in
its Registration Statement on
Form 8-A
filed with the SEC on December 12, 2003 and any amendment
or report filed with the SEC for the purpose of updating the
description
147
BFC and Levitt also incorporate by reference additional
documents that may be filed with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
between the date of this joint proxy statement/prospectus and,
in the case of BFC, the date of the BFC annual meeting, and, in
the case of Levitt, the date of the Levitt annual meeting. These
include periodic reports, such as Annual Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q
and Current Reports on
Form 8-K,
as well as proxy statements.
BFC has supplied all information contained or incorporated by
reference in this joint proxy statement/prospectus relating to
BFC, and Levitt has supplied all information contained or
incorporated by reference in this joint proxy
statement/prospectus relating to Levitt.
If you are a shareholder, the companies may have previously sent
you some of the documents incorporated by reference, but you can
obtain any of them through the companies, the SEC or the
SECs website at
http://www.sec.gov. Documents incorporated by reference
are available from the companies without charge, excluding all
exhibits, except that if the companies have specifically
incorporated by reference an exhibit in this joint proxy
statement/prospectus, the exhibit will also be provided without
charge. Shareholders may obtain documents incorporated by
reference in this joint proxy statement/prospectus by requesting
them in writing or by telephone from the appropriate company at
the following addresses:
|
|
|
BFC Financial Corporation
|
|
Levitt Corporation
|
2100 West Cypress Creek Road
|
|
2200 West Cypress Creek Road
|
Fort Lauderdale, Florida 33309
|
|
Fort Lauderdale, Florida 33309
|
Attention: Secretary
|
|
Attention: Secretary
|
Telephone Number:
(954) 940-4900
|
|
Telephone Number: (954) 958-1800
|
You should rely only on the information contained or
incorporated by reference in this joint proxy
statement/prospectus. BFC and Levitt have not authorized anyone
to provide you with information that is different from what is
contained or incorporated by reference in this joint proxy
statement/prospectus. You should assume that the information in
this joint proxy statement/prospectus is accurate only as of the
date of this joint proxy statement/prospectus. You should also
assume that the information contained in any document
incorporated by reference herein is accurate only as of the date
of that document. Neither the mailing of this joint proxy
statement/prospectus to shareholders nor the issuance of shares
of BFC Class A Common Stock in connection with the merger
creates any implication to the contrary.
148
Annex A
Execution
Copy
AGREEMENT
AND PLAN OF MERGER
by and among
BFC FINANCIAL CORPORATION,
LEV MERGER SUB, INC.
and
LEVITT CORPORATION
TABLE OF
CONTENTS
|
|
|
|
|
|
|
|
|
ARTICLE I DEFINITIONS
|
|
|
A-I-1
|
|
|
|
|
|
|
ARTICLE II THE
MERGER
|
|
|
A-I-6
|
|
|
2.1
|
|
|
Merger
|
|
|
A-I-6
|
|
|
2.2
|
|
|
Consummation of the Merger;
Effective Time
|
|
|
A-I-6
|
|
|
2.3
|
|
|
Effect of the Merger
|
|
|
A-I-6
|
|
|
2.4
|
|
|
Articles of Incorporation and
Bylaws
|
|
|
A-I-6
|
|
|
2.5
|
|
|
Board of Directors
|
|
|
A-I-6
|
|
|
2.6
|
|
|
Officers
|
|
|
A-I-6
|
|
|
2.7
|
|
|
Additional Actions
|
|
|
A-I-6
|
|
|
|
|
|
|
ARTICLE III CONVERSION
OF SHARES; CONSIDERATION
|
|
|
A-I-7
|
|
|
3.1
|
|
|
Merger Consideration
|
|
|
A-I-7
|
|
|
3.2
|
|
|
Exchange of Certificates
|
|
|
A-I-7
|
|
|
3.3
|
|
|
Stock Transfer Books
|
|
|
A-I-9
|
|
|
3.4
|
|
|
Levitt Options and Restricted Stock
|
|
|
A-I-9
|
|
|
3.5
|
|
|
Appraisal Rights
|
|
|
A-I-10
|
|
|
|
|
|
|
ARTICLE IV REPRESENTATIONS
AND WARRANTIES OF BFC AND MERGER SUB
|
|
|
A-I-10
|
|
|
4.1
|
|
|
Organization; Good Standing; Power
|
|
|
A-I-10
|
|
|
4.2
|
|
|
Capitalization
|
|
|
A-I-10
|
|
|
4.3
|
|
|
Authorization; No Violation
|
|
|
A-I-11
|
|
|
4.4
|
|
|
Subsidiaries
|
|
|
A-I-12
|
|
|
4.5
|
|
|
Exchange Act Reports; Financial
Statements
|
|
|
A-I-12
|
|
|
4.6
|
|
|
Absence of Certain Changes
|
|
|
A-I-12
|
|
|
4.7
|
|
|
Taxes
|
|
|
A-I-12
|
|
|
4.8
|
|
|
BFC Material Contracts
|
|
|
A-I-13
|
|
|
4.9
|
|
|
Investigations; Litigation
|
|
|
A-I-13
|
|
|
4.10
|
|
|
Insurance
|
|
|
A-I-13
|
|
|
4.11
|
|
|
Compliance with Laws
|
|
|
A-I-13
|
|
|
4.12
|
|
|
Labor Matters
|
|
|
A-I-14
|
|
|
4.13
|
|
|
Employee Benefit Plans
|
|
|
A-I-14
|
|
|
4.14
|
|
|
Related Party Transactions
|
|
|
A-I-14
|
|
|
4.15
|
|
|
Brokers and Finders
Fees
|
|
|
A-I-14
|
|
|
4.16
|
|
|
Registration Statement; Joint
Proxy Statement/Prospectus
|
|
|
A-I-14
|
|
|
4.17
|
|
|
Tax Treatment
|
|
|
A-I-14
|
|
|
4.18
|
|
|
Opinion of Financial Advisor
|
|
|
A-I-14
|
|
|
4.19
|
|
|
Sarbanes-Oxley
|
|
|
A-I-15
|
|
|
4.20
|
|
|
Certain Business Practices
|
|
|
A-I-15
|
|
|
4.21
|
|
|
Operations of Merger Sub
|
|
|
A-I-15
|
|
|
4.22
|
|
|
Full Disclosure
|
|
|
A-I-15
|
|
A-I-i
|
|
|
|
|
|
|
|
|
ARTICLE V REPRESENTATIONS
AND WARRANTIES OF LEVITT
|
|
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A-I-15
|
|
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5.1
|
|
|
Organization; Good Standing; Power
|
|
|
A-I-15
|
|
|
5.2
|
|
|
Capitalization
|
|
|
A-I-15
|
|
|
5.3
|
|
|
Authorization; No Violation
|
|
|
A-I-16
|
|
|
5.4
|
|
|
Subsidiaries
|
|
|
A-I-17
|
|
|
5.5
|
|
|
Exchange Act Reports; Financial
Statements
|
|
|
A-I-17
|
|
|
5.6
|
|
|
Absence of Certain Changes
|
|
|
A-I-17
|
|
|
5.7
|
|
|
Taxes
|
|
|
A-I-18
|
|
|
5.8
|
|
|
Investigations, Litigation
|
|
|
A-I-18
|
|
|
5.9
|
|
|
Levitt Material Contracts
|
|
|
A-I-18
|
|
|
5.10
|
|
|
Brokers and Finders
Fees
|
|
|
A-I-18
|
|
|
5.11
|
|
|
Affiliate Letters
|
|
|
A-I-19
|
|
|
5.12
|
|
|
Registration Statement; Joint
Proxy Statement/Prospectus
|
|
|
A-I-19
|
|
|
5.13
|
|
|
State Takeover Laws
|
|
|
A-I-19
|
|
|
5.14
|
|
|
Opinion of Financial Advisor
|
|
|
A-I-19
|
|
|
5.15
|
|
|
Tax Treatment
|
|
|
A-I-19
|
|
|
5.16
|
|
|
Full Disclosure
|
|
|
A-I-19
|
|
|
|
|
|
|
ARTICLE VI CONDUCT
OF BUSINESS PRIOR TO THE EFFECTIVE TIME
|
|
|
A-I-19
|
|
|
6.1
|
|
|
Conduct of Business by Levitt
|
|
|
A-I-19
|
|
|
6.2
|
|
|
Conduct of Business by BFC
|
|
|
A-I-20
|
|
|
6.3
|
|
|
Notice
|
|
|
A-I-20
|
|
|
|
|
|
|
ARTICLE VII ADDITIONAL
COVENANTS AND AGREEMENTS
|
|
|
A-I-21
|
|
|
7.1
|
|
|
Access to Information
|
|
|
A-I-21
|
|
|
7.2
|
|
|
Public Announcements
|
|
|
A-I-21
|
|
|
7.3
|
|
|
Reasonable Efforts
|
|
|
A-I-21
|
|
|
7.4
|
|
|
No Solicitation
|
|
|
A-I-21
|
|
|
7.5
|
|
|
Special Meetings
|
|
|
A-I-22
|
|
|
7.6
|
|
|
Registration Statement; Joint
Proxy Statement/Prospectus
|
|
|
A-I-23
|
|
|
7.7
|
|
|
Employee Benefit Plans
|
|
|
A-I-24
|
|
|
7.8
|
|
|
Indemnification
|
|
|
A-I-24
|
|
|
7.9
|
|
|
Further Assurances
|
|
|
A-I-25
|
|
|
7.10
|
|
|
Tax Treatment
|
|
|
A-I-25
|
|
|
7.11
|
|
|
Comfort Letters
|
|
|
A-I-25
|
|
|
7.12
|
|
|
Shareholder Litigation
|
|
|
A-I-25
|
|
|
7.13
|
|
|
Liquidity Support of the Surviving
Corporation
|
|
|
A-I-25
|
|
|
7.14
|
|
|
Affiliate Letters
|
|
|
A-I-26
|
|
|
7.15
|
|
|
HSR Act
|
|
|
A-I-26
|
|
|
7.16
|
|
|
Directors of BFC
|
|
|
A-I-26
|
|
|
|
|
|
|
ARTICLE VIII CONDITIONS
PRECEDENT TO OBLIGATIONS
|
|
|
A-I-26
|
|
|
8.1
|
|
|
Conditions to Each Partys
Obligation to Effect the Merger
|
|
|
A-I-26
|
|
|
8.2
|
|
|
Conditions to Levitts
Obligation to Effect the Merger
|
|
|
A-I-27
|
|
|
8.3
|
|
|
Conditions to BFCs and
Merger Subs Obligation to Effect the Merger
|
|
|
A-I-27
|
|
A-I-ii
|
|
|
|
|
|
|
|
|
ARTICLE IX TERMINATION,
AMENDMENT AND WAIVER
|
|
|
A-I-28
|
|
|
9.1
|
|
|
Termination of the Agreement
|
|
|
A-I-28
|
|
|
9.2
|
|
|
Effect of Termination
|
|
|
A-I-29
|
|
|
9.3
|
|
|
Amendment and Waiver
|
|
|
A-I-29
|
|
|
|
|
|
|
ARTICLE X MISCELLANEOUS
|
|
|
A-I-29
|
|
|
10.1
|
|
|
Survival of the Representations
and Warranties
|
|
|
A-I-29
|
|
|
10.2
|
|
|
Payment of Expenses
|
|
|
A-I-30
|
|
|
10.3
|
|
|
Binding Effect
|
|
|
A-I-30
|
|
|
10.4
|
|
|
Governing Law
|
|
|
A-I-30
|
|
|
10.5
|
|
|
Counterparts
|
|
|
A-I-30
|
|
|
10.6
|
|
|
Notices
|
|
|
A-I-30
|
|
|
10.7
|
|
|
Entire Agreement; Assignment
|
|
|
A-I-31
|
|
|
10.8
|
|
|
Headings
|
|
|
A-I-31
|
|
|
10.9
|
|
|
Knowledge of the Parties
|
|
|
A-I-31
|
|
|
10.10
|
|
|
Attorneys Fees
|
|
|
A-I-31
|
|
|
10.11
|
|
|
No Third Party Beneficiary
|
|
|
A-I-31
|
|
|
10.12
|
|
|
Injunctive Relief
|
|
|
A-I-31
|
|
|
10.13
|
|
|
Jurisdiction; Venue
|
|
|
A-I-31
|
|
|
10.14
|
|
|
Severability
|
|
|
A-I-31
|
|
|
10.15
|
|
|
Waiver
|
|
|
A-I-32
|
|
|
10.16
|
|
|
Special Committee
|
|
|
A-I-32
|
|
|
10.17
|
|
|
Time of the Essence
|
|
|
A-I-32
|
|
A-I-iii
AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this
Agreement) is entered into as of the
30th day of January, 2007, by and among BFC FINANCIAL
CORPORATION, a Florida corporation (BFC), LEV
MERGER SUB, INC., a Florida corporation and a wholly-owned
subsidiary of BFC (Merger Sub), and LEVITT
CORPORATION, a Florida corporation (Levitt).
W I T N E S
S E T H
WHEREAS, BFC has proposed a business combination with Levitt
pursuant to which Levitt will merge with and into Merger Sub,
with Merger Sub to be the surviving corporation in the merger
(the Merger);
WHEREAS, the Board of Directors of Levitt has designated a
special committee composed of independent members of such Board
of Directors (the Special Committee) to,
among other things, review and evaluate the terms and
conditions, and determine the advisability, of the Merger;
WHEREAS, the Special Committee has negotiated the terms and
conditions of this Agreement on behalf of Levitt and has
(i) determined that the Merger is consistent with and in
furtherance of the long-term business strategy of Levitt and
advisable, fair to, and in the best interests of the Minority
Shareholders (as hereinafter defined) and (ii) recommended
the approval and adoption of this Agreement by the Levitt Board
of Directors;
WHEREAS, the Board of Directors of Levitt has, based upon the
recommendation of the Special Committee, (i) determined
that the Merger is consistent with and in furtherance of the
long-term business strategy of Levitt and advisable, fair to,
and in the best interests of the Minority Shareholders,
(ii) approved and adopted this Agreement and declared its
advisability and approved the Merger and the other transactions
contemplated by this Agreement and (iii) recommended the
approval and adoption of this Agreement by the shareholders of
Levitt in accordance with this Agreement;
WHEREAS, the Board of Directors of BFC designated a committee
composed of independent directors to review and evaluate the
terms and conditions and determine the advisability of a
possible business combination between BFC and Levitt, and such
committee has determined that the Merger is consistent with and
in furtherance of the long term business strategy of BFC and
fair to and in the best interests of BFC and BFCs
shareholders and has recommended the approval and adoption of
this Agreement by the BFC Board of Directors;
WHEREAS, the Board of Directors of BFC has determined that the
Merger is consistent with and in furtherance of the long-term
business strategy of BFC and fair to, and in the best interests
of, BFC and its shareholders and has approved and adopted this
Agreement, the Merger and the other transactions contemplated by
this Agreement;
WHEREAS, it is intended that the Merger qualify as a
reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the
Code); and
WHEREAS, BFC, Merger Sub and Levitt desire to make certain
representations, warranties, covenants and agreements in
connection with the Merger and to also set forth certain
conditions to the Merger;
NOW, THEREFORE, for and in consideration of the premises and the
mutual agreements, representations, warranties and covenants
herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and
for the purpose of prescribing the terms and conditions of the
Merger, the parties, intending to be legally bound, hereby agree
as follows:
ARTICLE I
Definitions
When used in this Agreement, and in addition to the other terms
defined herein, the following terms shall have the meanings
specified:
Acquisition Proposal shall have the meaning set
forth in Section 7.4(a).
A-I-1
Affiliate shall mean with respect to any Person, any
other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common
control with the Person specified. For purposes of this
definition, control of a Person means the power, direct or
indirect, to direct or cause the direction of the management and
policies of such Person whether though the ownership of voting
securities, by contract or otherwise; provided, however, that
for purposes of this Agreement, Levitt shall not be treated as
an Affiliate of BFC, and BFC and BankAtlantic Bancorp, Inc.
shall not be treated as Affiliates of Levitt.
Affiliate Letter shall mean an agreement in the form
attached hereto as Exhibit A.
Agreement means this Agreement and Plan of Merger as
executed on the date hereof and as amended and supplemented in
accordance with its terms, including all Schedules and Exhibits.
Articles of Merger shall mean the articles of merger
with respect to the Merger to be filed with the Secretary of
State of the State of Florida.
BFC shall mean BFC Financial Corporation.
BFC Capital Stock shall have the meaning set forth
in Section 4.2(a).
BFC Class B Common Stock shall mean the
Class B Common Stock, par value $0.01 per share, of
BFC.
BFC Class A Common Stock shall mean the
Class A Common Stock, par value $0.01 per share, of
BFC.
BFC Financial Statements shall mean the audited
Consolidated Statements of Financial Condition, Consolidated
Statements of Operations, Consolidated Statements of
Comprehensive Income, Consolidated Statements of
Shareholders Equity and Consolidated Statements of Cash
Flows of BFC, and the related notes thereto, for each of
BFCs fiscal years ended on December 31, 2003, 2004
and 2005, and the unaudited Consolidated Statements of Financial
Condition, Consolidated Statements of Operations, Consolidated
Statements of Comprehensive Income, Consolidated Statements of
Shareholders Equity and Consolidated Statements of Cash
Flows of BFC, and the related notes thereto, for the nine-month
period ended September 30, 2006, as each of which is
included in the BFC SEC Reports.
BFC Leased Real Property shall mean all real
property leased by BFC (including all leasehold or subleasehold
estates and other rights to use or occupy any land, buildings
(including sales kiosks) and improvements thereon).
BFC Material Contract shall mean any material
contract (as such term is defined in Item 601(b)(10)
of
Regulation S-K
of the SEC) to which BFC or any of its Subsidiaries is a party
or otherwise relating to or affecting any of their respective
assets, properties or operations.
BFC Options shall mean all options or warrants
granted by BFC to purchase shares of BFC Class A Common
Stock or BFC Class B Common Stock which are outstanding and
unexercised immediately prior to the Effective Time.
BFC Option Plans shall mean (i) the BFC
Financial Corporation Stock Option Plan and (ii) the BFC
Financial Corporation 2005 Stock Incentive Plan.
BFC Owned Real Property shall mean all real property
owned by BFC (including all land, interests in buildings,
structures, improvements and fixtures located thereon and all
easements and other rights and interests appurtenant thereto
owned by BFC).
BFC Plans shall mean all employee benefit plans and
all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other benefit
plans, programs or arrangements, and all employment,
termination, severance or other contracts or agreements, whether
legally enforceable or not, to which BFC is a party, with
respect to which BFC has any obligation or which are maintained,
contributed to or sponsored by BFC for the benefit of any
current or former employee, officer or director of BFC.
BFC SEC Reports shall have the meaning set forth in
Section 4.5(a).
A-I-2
BFC Special Meeting shall mean the special meeting
of BFCs shareholders to be held for the purpose of
approving the transactions contemplated hereby.
BFC Stock Certificate(s) shall have the meaning set
forth in Section 3.2(a).
Business Day means any day on which banks are not
required or authorized by Law or executive order to close in the
city of Fort Lauderdale, Florida, USA.
Claim shall have the meaning set forth in
Section 7.8.
Closing shall have the meaning set forth in
Section 2.2.
Closing Date shall have the meaning set forth in
Section 2.2.
Code shall have the meaning set forth in the
Recitals.
Controlled Group shall mean a controlled group of
organizations (within the meaning of Sections 414(b), (c),
(m) or (o) of the Code).
Dissenting Shares shall have the meaning set forth
in Section 3.5.
Effective Time shall have the meaning set forth in
Section 2.2.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
rules and regulations thereunder.
Exchange Act shall mean the Securities Exchange Act
of 1934, as amended, together with the rules and regulations
promulgated thereunder.
Exchange/Paying Agent shall have the meaning set
forth in Section 3.2(a).
Exchange/Payment Fund shall have the meaning set
forth in Section 3.2(a).
Exchange Ratio shall have the meaning set forth in
Section 3.1(c).
FBCA shall mean the Florida Business Corporation Act.
GAAP shall mean United States generally accepted
accounting principles, consistently applied during the periods
presented in accordance with past practices.
Governmental Entity shall mean any federal, state,
local or foreign court, tribunal, arbitral body, administrative
agency or commission or other governmental or regulatory
authority or administrative agency or commission.
HSR Act shall mean the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder.
Indemnified Liabilities shall have the meaning set
forth in Section 7.8.
Indemnified Parties shall have the meaning set forth
in Section 7.8.
Joint Proxy Statement/Prospectus shall have the
meaning set forth in Section 4.16.
Law shall mean any federal, state or local
governmental law, rule, regulation or requirement, including any
rules, regulations and Orders promulgated thereunder and any
Orders, decrees, consents or judgments of any Governmental
Entity and courts having the force of law.
Letter of Transmittal shall have the meaning set
forth in Section 3.2(b).
Levitt shall have the meaning set forth in the
Preamble.
Levitt Class A Common Stock shall mean the
Class A common stock, par value $0.01 per share, of
Levitt.
Levitt Class B Common Stock shall mean the
Class B common stock, par value $0.01 per share, of
Levitt.
A-I-3
Levitt Financial Statements shall mean the audited
Consolidated Statements of Financial Condition, Consolidated
Statements of Income, Consolidated Statements of Comprehensive
Income, Consolidated Statements of Shareholders Equity and
Consolidated Statements of Cash Flows of Levitt, and the related
notes thereto, for each of Levitts fiscal years ended on
December 31, 2003, 2004 and 2005, and the unaudited
Consolidated Statements of Financial Condition, Consolidated
Statements of Operations, Consolidated Statements of
Comprehensive Income, Consolidated Statements of
Shareholders Equity and Consolidated Statements of Cash
Flows of Levitt, and the related notes thereto, for the
nine-month period ended September 30, 2006, as each of
which is included in the Levitt SEC Reports.
Levitt Material Contract shall mean any
material contract (as such term is defined in
Item 601(b)(10) of
Regulation S-K
of the SEC) to which Levitt or any of its Subsidiaries is a
party or otherwise relating to or affecting any of their
respective assets, properties or operations.
Levitt Options shall mean all options or warrants
granted by Levitt to purchase shares of Levitt Class A
Common Stock which are outstanding and unexercised immediately
prior to the Effective Time.
Levitt Option Plan shall mean the Levitt Corporation
2003 Stock Incentive Plan, as amended and restated.
Levitt SEC Reports shall have the meaning set forth
in Section 5.5(a).
Levitt Special Meeting shall mean the special
meeting of Levitts shareholders to be held for the purpose
of voting upon the Merger, this Agreement and the other
transactions contemplated by this Agreement, and for no other
purpose without the prior written consent of BFC.
Levitt Stock Certificate(s) shall have the meaning
set forth in Section 3.2(a).
Lien shall mean any lien, charge, pledge, security
interest, mortgage, claim, encumbrance, option, right of first
refusal and other proscription, restriction, condition, covenant
or similar right whether imposed by law, by contract or
otherwise.
Material Adverse Effect shall mean any effect,
change, event, state of fact, development, circumstance or
condition (including changes in banking, thrift or similar laws,
rules or regulations) which when considered individually or in
the aggregate with all other effects, changes, events, state of
facts, developments, circumstances or conditions has materially
and adversely affected or could reasonably be expected to
materially and adversely affect (i) the results of
operations, financial condition, assets, liabilities, or
business of BFC or Levitt, as the case may be, in each case
including its respective Subsidiaries together with it taken as
a whole, including the ability of the parties to consummate the
Merger
and/or any
of the other transactions contemplated hereby; provided,
however, that a Material Adverse Effect shall
not be deemed to include (x) any changes resulting from
general economic or political conditions, (y) circumstances
that affect the industries in which Levitt or BFC, as the case
may be, operate or (z) force majeure events, acts of
terrorism or acts of war; and provided, further, that,
notwithstanding the foregoing, the changes or events described
in clauses (x) through (z) above shall be
regarded in determining whether a Material Adverse Effect has
occurred if the effects of such changes or events
disproportionately impact or uniquely relate to BFC or Levitt,
as applicable.
Merger Consideration shall have the meaning set
forth in Section 3.2(c).
Merger Sub shall have the meaning set forth in the
Preamble.
Merger shall have the meaning set forth in the
Recitals.
Minority Shareholders shall mean the holders of
Levitt Class A Common Stock, other than BFC and the
directors of Levitt who are not independent within
the meaning of the rules and regulations of the NYSE.
NYSE shall mean the New York Stock Exchange.
NYSE Arca shall mean the NYSE Arca Stock Exchange.
Order shall mean any judgment, ruling, order, writ,
injunction, decree, consent decree, statute, rule or regulation.
A-I-4
OSHA shall mean the Occupational Safety and Health
Act of 1970, as amended from time to time, and the rules and
regulations issued thereunder.
PBGC shall mean the Pension Benefit Guaranty
Corporation.
Permits shall mean all permits, licenses, variances,
registrations, certificates of authority, Orders and approvals
of Governmental Entities.
Permitted Liens shall mean (i) statutory Liens
imposed by Law for Taxes that are not yet due and payable, or
are being contested in good faith by proper proceedings and
which have been adequately reserved for in accordance with GAAP
on the Levitt Financial Statements or BFC Financial Statements,
as applicable, (ii) Liens which are purchase money Liens
arising in the ordinary course of business for amounts which are
not in default; (iii) carriers, warehousemens,
mechanics, landlords, materialmens, repairmens
or other substantially similar Liens arising under Law for
amounts not yet due and payable; (iv) easements,
rights-of-way
and other similar instruments whether or not recorded in the
public land records or filed in other public records and which
do not, individually or in the aggregate, interfere with the use
or marketability of the relevant asset; (v) zoning,
subdivision and other applicable Laws; and (vi) amendments,
extensions, renewals or replacements of any Lien referred to in
clauses (i) through (v) above, to the extent that the
scope, duration and effect of the Lien so amended, extended,
renewed or replaced remains the same in all material respects.
Person shall mean a natural person, corporation,
limited liability company, association, joint stock company,
trust, partnership, governmental entity, agency or branch or
department thereof, or any other legal entity.
Plan shall mean, with respect to any Person, any
employee benefit plan (within the meaning of Section 3(3)
of ERISA), stock purchase plan, stock option plan, fringe
benefit plan, bonus plan and any other deferred compensation
agreement or plan or funding arrangement sponsored, maintained
or to which contributions are made by: (i) such Person or
any of its Subsidiaries or (ii) any other organization
which is a member of a Controlled Group of which such Person or
any of its Subsidiaries is a member, or (iii) with respect
to which such Person or any of its Subsidiaries or any member of
the Controlled Group of which such Person or any of its
Subsidiaries has any liability or potential liability.
Registration Statement shall have the meaning set
forth in Section 4.16.
SEC means the United States Securities and Exchange
Commission.
Securities Act shall mean the Securities Act of
1933, as amended, together with the rules and regulations
promulgated thereunder.
Special Committee shall have the meaning set forth
in the Recitals.
Subsidiary or Subsidiaries of any Person
shall mean any corporation, limited liability company,
partnership, joint venture or other legal entity of which such
Person, directly or indirectly (either alone or through or
together with any other Subsidiary of such Person) owns more
than fifty percent (50%) of the stock or other equity interests,
the holders of which are generally entitled to vote for the
election of the board of directors, other governing body or
manager of such corporation or other legal entity; provided,
however, that for purposes of this Agreement, Levitt shall not
be treated as a Subsidiary of BFC.
Superior Proposal shall have the meaning set forth
in Section 7.4(b).
Surviving Corporation shall have the meaning set
forth in Section 2.1.
Tax or Taxes shall mean any and all
taxes, fees, levies, duties, tariffs, imposts, and other charges
of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect
thereto) imposed by any government or taxing authority,
including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross
receipts, property, sales, use, capital stock, payroll,
employment, social security, workers compensation,
unemployment compensation, or net worth, taxes or other charges
in the nature of excise, withholding, ad valorem, stamp,
transfer, value added, or gains taxes; license, registration and
documentation fees; and customs duties, tariffs, and
similar charges.
Third Party shall have the meaning set forth in
Section 7.4(b).
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ARTICLE II
The Merger
2.1 Merger. At the Effective Time,
Levitt shall be merged with and into Merger Sub, and Merger Sub
will be the surviving corporation of the Merger (the
Surviving Corporation), in accordance with
the terms, conditions and provisions of this Agreement and the
Articles of Merger.
2.2 Consummation of the Merger; Effective
Time. The consummation of the transactions
contemplated by this Agreement (the Closing)
shall take place at the offices of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A., 150 West
Flagler Street, Miami, Florida 33130, at such time as shall be
fixed by mutual agreement of BFC and Levitt as promptly as
practicable after the satisfaction or waiver of all of the
conditions set forth in this Agreement (the date of Closing is
hereinafter sometimes referred to as the Closing
Date). On or prior to the day before the Closing Date,
Levitt and Merger Sub will each execute the Articles of Merger
and deliver it to Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A. for filing with the
Secretary of State of the State of Florida. Subject to the
satisfaction or waiver of all conditions precedent to the
consummation of the transactions contemplated by this Agreement,
the parties shall cause the Merger to become effective on the
date of the Closing by (i) causing the filing, in
accordance with all applicable regulations, of the Articles of
Merger with the Secretary of State of the State of Florida and
(ii) causing all other documents which must be recorded or
filed as a result of the Merger to be recorded or filed. The
Articles of Merger shall provide that the Merger shall be
effective as of 5:00 p.m. on the date of Closing (the date
and time of such effectiveness being referred to herein as the
Effective Time). The Closing shall be deemed
to occur simultaneously with the Effective Time.
2.3 Effect of the Merger. At the
Effective Time, the effect of the Merger shall be as provided in
the applicable provisions of the Articles of Merger and the
FBCA. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time all of the property,
rights, privileges, powers and franchises of Levitt and Merger
Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Levitt and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
2.4 Articles of Incorporation and
Bylaws. The Articles of Incorporation of Merger
Sub as in effect immediately prior to the Merger shall be the
Articles of Incorporation of the Surviving Corporation. The
Bylaws of Merger Sub as in effect immediately prior to the
Merger shall be the Bylaws of the Surviving Corporation until
thereafter altered, amended or repealed in accordance with
applicable law.
2.5 Board of Directors. As of the
Effective Time, the Board of Directors of the Surviving
Corporation will consist of the directors of Merger Sub
immediately prior to the Effective Time.
2.6 Officers. As of the Effective
Time, the officers of Levitt immediately prior to the Effective
Time shall constitute the officers of the Surviving Corporation
until such time as their respective successors have been elected
and qualified.
2.7 Additional Actions. If, at any
time after the Effective Time, BFC or the Surviving Corporation
shall consider or be advised that consistent with the terms of
this Agreement any further assignments or assurances in law or
any other acts are necessary or desirable (a) to vest,
perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to and possession of any property or right of
either Levitt or Merger Sub acquired or to be acquired by reason
of, or as a result of, the Merger, or (b) otherwise to
carry out the purposes of this Agreement, then, subject to the
terms and conditions of this Agreement, each of Levitt and
Merger Sub and their officers and directors shall be deemed to
have granted to the Surviving Corporation an irrevocable power
of attorney to execute and deliver all such deeds, assignments
and assurances in law and to do all acts necessary or proper to
vest, perfect or confirm title to and possession of such
property or rights in the Surviving Corporation and otherwise to
carry out the purposes of this Agreement; and the officers and
directors of the Surviving Corporation are fully authorized in
the name of either Levitt or Merger Sub to take any and all such
action.
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ARTICLE III
Conversion
of Shares; Consideration
3.1 Merger Consideration. At the
Effective Time, by virtue of the Merger and without any action
on the part of BFC, Merger Sub, Levitt or the holders of any of
the following securities:
(a) Each issued and outstanding share of common stock, par
value $0.01 per share, of Merger Sub outstanding
immediately prior to the Effective Time shall remain outstanding
and unchanged following the Effective Time as a share of common
stock of the Surviving Corporation.
(b) Each share of Levitt Class A Common Stock and
Levitt Class B Common Stock owned by BFC, Merger Sub or
Levitt (in each case other than in a fiduciary capacity or as a
result of debts previously contracted), immediately prior to the
Effective Time shall be canceled and extinguished without any
conversion thereof and no stock of BFC, cash or other
consideration shall be delivered in exchange therefor; it being
understood that BFC is the sole holder of shares of Levitt
Class B Common Stock and all of such shares shall be
canceled pursuant to this Section 3.1(b).
(c) Subject to the other provisions of this
Section 3.1, each share of Levitt Class A
Common Stock that is issued and outstanding immediately prior to
the Effective Time (excluding any shares of Levitt Class A
Common Stock canceled pursuant to Section 3.1(b) and
excluding Dissenting Shares) shall by virtue of the Merger and
without any action on the part of the holder thereof become and
be converted into the right to receive 2.27 shares of BFC
Class A Common Stock (such ratio of shares of BFC
Class A Common Stock to shares of Levitt Class A
Common Stock being referred to as the Exchange
Ratio).
(d) At the Effective Time, holders of Levitt Class A
Common Stock and Levitt Class B Common Stock shall cease to
be, and shall have no rights as, shareholders, and Levitt Stock
Certificates shall thereafter represent only the right to
receive the consideration provided under this
Article III.
(e) If between the date of this Agreement and the Effective
Time the outstanding shares of BFC Class A Common Stock or
Levitt Class A Common Stock are changed into a different
number of shares by reason of a reorganization,
reclassification, recapitalization, division, combination or
exchange of shares, or any dividend or other distribution
payable in stock or other securities is declared with regard to
the BFC Class A Common Stock or Levitt Class A Common
Stock with a record date between the date of this Agreement and
the Effective Time, the Merger Consideration will be adjusted to
provide the holders of Levitt Class A Common Stock the same
economic effect as that contemplated by this Agreement if the
reorganization, reclassification, recapitalization, division,
combination, exchange, dividend or other distribution had not
taken place.
3.2 Exchange of Certificates.
(a) At or prior to the Effective Time, BFC shall deposit,
or shall cause to be deposited, with American Stock Transfer and
Trust Company, or such other bank or trust company designated by
BFC and who is reasonably satisfactory to Levitt (the
Exchange/Paying Agent) for the benefit of the
holders of certificates representing the shares of Levitt
Class A Common Stock (Levitt Stock
Certificates) for exchange in accordance with this
Article III through the Exchange/Paying Agent,
(1) certificates representing the shares of BFC
Class A Common Stock (BFC Stock
Certificates) issuable pursuant to
Section 3.1(c) above and (2) an estimated
amount of cash to be paid in lieu of fractional shares (such
cash and such BFC Stock Certificates, together with any
dividends or distributions with respect thereto (without any
interest thereon), being hereinafter referred to as the
Exchange/Payment Fund) to be paid pursuant to
this Article III in exchange for outstanding Levitt
Stock Certificates. The Exchange/Payment Fund shall not be used
for any other purpose. The Exchange/Paying Agent shall invest
any cash included in the Exchange/Payment Fund, as directed by
BFC. Any interest and other income resulting from such
investments shall be paid to BFC. Any losses resulting from such
investments shall be the sole responsibility of BFC and shall
not in any way limit BFCs obligations to holders of Levitt
Stock Certificates.
(b) Promptly, but in any event no later than three
(3) Business Days after the Effective Time, BFC will
instruct the Exchange/Paying Agent to mail to each holder of
record of Levitt Class A Common Stock who has not
previously surrendered his, her or its Levitt Stock Certificates
(other than holders of any shares of Levitt Class A Common
Stock cancelled pursuant to Section 3.1(b) or
holders of Dissenting Shares): (1) a letter of transmittal
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reasonably acceptable to Levitt (which shall specify that
delivery shall be effected, and risk of loss and title to such
holders Levitt Stock Certificates shall pass, only upon
proper delivery of the Levitt Stock Certificates to the
Exchange/Paying Agent and shall be in such form and have such
other provisions as to which BFC and Levitt may agree) and
(2) instructions reasonably acceptable to Levitt for use in
effecting the surrender of the Levitt Stock Certificates in
exchange for BFC Stock Certificates and cash in lieu of
fractional shares in accordance with this
Article III (collectively, the Letter of
Transmittal).
(c) From and after the Effective Time and upon the
surrender of a Levitt Stock Certificate for cancellation (or
affidavits and indemnification regarding the loss or destruction
of such certificates reasonably acceptable to BFC and the
Exchange/Paying Agent) to the Exchange/Paying Agent together
with the Letter of Transmittal, duly executed, and such other
customary documents as may be required pursuant thereto, the
holder of such Levitt Stock Certificate shall be entitled to
receive in exchange therefor, and the Exchange/Paying Agent
shall deliver in accordance with the Letter of Transmittal:
(1) BFC Stock Certificates representing that number of
whole shares of BFC Class A Common Stock which such holder
has the right to receive in respect of the shares of Levitt
Class A Common Stock formerly evidenced by such Levitt
Stock Certificate in accordance with Section 3.1 and
(2) cash in lieu of fractional shares of BFC Class A
Common Stock to which such holder is entitled pursuant to
Section 3.2(d) (the shares of BFC Class A
Common Stock and cash described in clauses (1) and
(2) being collectively referred to as the Merger
Consideration), and the Levitt Stock Certificate so
surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Levitt Class A Common
Stock which is not registered in the transfer records of Levitt,
a certificate evidencing the proper number of shares of BFC
Class A Common Stock
and/or cash
may be issued
and/or paid
in accordance with this Article III to a transferee
if the Levitt Stock Certificate evidencing such shares is
presented to the Exchange/Paying Agent, accompanied by all
documents reasonably required to evidence and effect such
transfer and by evidence reasonably acceptable to BFC and the
Exchange/Paying Agent that any applicable stock transfer taxes
have been paid. Until surrendered as contemplated by this
Section 3.2, each Levitt Stock Certificate shall be
deemed at any time after the Effective Time to evidence only the
right to receive upon such surrender (i) the Merger
Consideration and (ii) any dividends or other distributions
declared or paid on shares of BFC Class A Common Stock
after the Effective Time.
(d) No certificates or scrip evidencing fractional shares
of BFC Class A Common Stock shall be issued upon the
surrender for exchange of Levitt Stock Certificates, and such
fractional share interests will not entitle the owner thereof to
vote or to any rights as a shareholder of BFC. In lieu of any
such fractional shares, each holder of shares of Levitt
Class A Common Stock, upon surrender of a Levitt Stock
Certificate for exchange pursuant to this
Section 3.2, shall be paid an amount in cash
(without interest), rounded up to the nearest cent, determined
by multiplying (1) the average closing price of the BFC
Class A Common Stock as quoted on the NYSE Arca for the
twenty (20) consecutive trading days ending on and
including the trading day two (2) days prior to the day of
the Effective Time by (2) the fractional interest to which
such holder would otherwise be entitled (after taking into
account all shares of Levitt Class A Common Stock then held
of record by such holder). Any payment received by a holder of
shares of Levitt Class A Common Stock with respect to
fractional share interests is merely intended to provide a
mechanical rounding off of, and is not separately bargained for,
consideration. Notwithstanding the foregoing, if more than one
Levitt Stock Certificate shall be surrendered for the account of
the same holder, the number of shares of BFC Class A Common
Stock to be issued to such holder in exchange for the Levitt
Stock Certificates which have been surrendered shall be computed
on the basis of the aggregate number of shares represented by
all of the Levitt Stock Certificates surrendered for the account
of such holder.
(e) All shares of BFC Class A Common Stock issued and
cash paid upon the surrender for exchange of Levitt Stock
Certificates in accordance with the terms of this
Article III shall be deemed to have been issued and
paid, respectively, in full satisfaction of all rights
pertaining to the shares of Levitt Class A Common Stock
theretofore represented by such Levitt Stock Certificates.
(f) Any portion of the Exchange/Payment Fund which remains
undistributed to the holders of the Levitt Stock Certificates
upon the date that is nine (9) months after the Effective
Time shall be delivered by the Exchange/Paying Agent to BFC and
any holders of Levitt Stock Certificates who have not
theretofore complied with this Article III shall
thereafter look only to BFC for payment of their claim for the
Merger Consideration.
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(g) None of BFC, Levitt, Merger Sub or the Exchange/Paying
Agent shall be liable to any Person in respect of any shares of
BFC Class A Common Stock or cash from the Exchange/Payment
Fund in each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any
Levitt Stock Certificate shall not have been surrendered prior
to the date that is seven (7) years after the Effective
Time (or immediately prior to such earlier date on which any
Merger Consideration would otherwise escheat to, or become the
property of, any Governmental Entity), any such Merger
Consideration shall, to the extent permitted by applicable Law,
become the property of BFC, free and clear of all claims or
interest of any person previously entitled thereto.
(h) BFC and Merger Sub shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of shares of Levitt Class A
Common Stock such amounts as BFC or Merger Sub is required to
deduct and withhold with respect to the making of such payment
under the Code or any provision of Tax Law. To the extent that
amounts are so withheld by BFC or Merger Sub, such withheld
amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Levitt
Class A Common Stock in respect of which such deduction and
withholding was made by BFC or Merger Sub.
(i) If any Levitt Stock Certificate shall have been lost,
stolen or destroyed, upon the making of a customary affidavit of
that fact by the Person claiming such Levitt Stock Certificate
to be lost, stolen or destroyed and, if requested by BFC, the
posting by such Person of a bond in such reasonable amount as
BFC may direct as indemnity against any claim that may be made
with respect to such Levitt Stock Certificate, the
Exchange/Paying Agent will issue in exchange for such lost,
stolen or destroyed Levitt Stock Certificate the Merger
Consideration, pursuant to this Article III.
3.3 Stock Transfer Books. After the
Effective Time, there shall be no further registration of
transfers on the stock transfer books of Levitt or the Surviving
Corporation of the shares of Levitt Class A Common Stock or
Levitt Class B Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective
Time, Levitt Stock Certificates are presented to the Surviving
Corporation or the Exchange/Paying Agent for any reason, they
shall be canceled and, subject to the provisions of this
Article III, exchanged or paid for as provided in
this Article III, except as otherwise required by
Law.
3.4 Levitt Options and Restricted Stock.
(a) At the Effective Time, the Levitt Option Plan shall be
assumed by BFC and each Levitt Option that is outstanding and
unexercised immediately prior to the Effective Time shall be
assumed by BFC and converted into an option to purchase shares
of BFC Class A Common Stock in such number and at such
exercise price as provided below and otherwise having the same
terms and conditions as in effect immediately prior to the
Effective Time (except to the extent that such terms, conditions
and restrictions may be altered in accordance with their terms
or the terms of the applicable Levitt Option Plan as a result of
the Merger contemplated hereby and except that all references to
Levitt in each such Levitt Option shall be deemed to refer to
BFC). All outstanding restricted stock awards issued under the
Levitt Option Plan shall be converted into the right to receive
restricted stock awards in the form of shares of BFC
Class A Common Stock, to be adjusted as provided in
Section 3.4(b).
(b) The number of shares of BFC Class A Common Stock
to be subject to the new option or award of restricted stock
shall be equal to the product of (i) the number of shares
of Levitt Class A Common Stock subject to the original
Levitt Option or restricted stock award immediately prior to the
Effective Time and (ii) the Exchange Ratio.
(c) The exercise price per share of the BFC Class A
Common Stock underlying the new option shall be equal to
(i) the exercise price per share of Levitt Class A
Common Stock in effect under the original Levitt Option
immediately prior to the Effective Time divided by (ii) the
Exchange Ratio.
(d) In effecting such assumption and conversion, the
aggregate number of shares of BFC Class A Common Stock to
be subject to each assumed Levitt Option or restricted stock
award will be rounded up, if necessary, to the next whole share
and the aggregate exercise price shall be rounded down, if
necessary, to the next whole cent.
(e) The adjustments provided herein with respect to any
options that are incentive stock options (as
defined in Section 422 of the Code) shall be effected in a
manner consistent with the requirements of Section 424(a)
of the Code.
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(f) As soon as practicable after the Effective Time, but in
no event later than thirty (30) days after the Effective
Time, BFC shall file a Registration Statement on
Form S-8
(or any successor or other appropriate form) with respect to the
shares of BFC Class A Common Stock underlying the assumed
Levitt Options and restricted stock awards, and BFC will use its
reasonable efforts to maintain the effectiveness of such
registration statement (and the current status of the prospectus
or prospectuses contained therein) for so long as any such
assumed Levitt Options or restricted stock awards remain
outstanding under the Levitt Option Plan to be assumed by BFC.
3.5 Appraisal
Rights. Notwithstanding anything in this
Agreement to the contrary and unless otherwise provided by
applicable law, each share of Levitt Class A Common Stock
which is issued and outstanding immediately prior to the
Effective Time and which is owned by a shareholder who, pursuant
to Section 607.1301, et seq., of the FBCA duly and
validly exercises and perfects his, her or its appraisal rights
with respect to his, her or its shares (the Dissenting
Shares), shall not be converted into the right to
receive, or be exchangeable for, the Merger Consideration, but,
instead, the holder thereof shall be entitled to payment in cash
from the Surviving Corporation of the appraised value of such
Dissenting Shares in accordance with the provisions of
Section 607.1301, et. seq., of the FBCA. If any such
holder shall have failed to duly and validly exercise or perfect
or shall have effectively withdrawn or lost such appraisal
rights, each share of Levitt Class A Common Stock of such
holder shall not be deemed a Dissenting Share and shall
automatically be converted into and shall thereafter be
exchangeable only for the right to receive the Merger
Consideration as provided in this Agreement.
ARTICLE IV
Representations
and Warranties of BFC and Merger Sub
BFC and Merger Sub jointly and severally represent and warrant
to Levitt as follows:
4.1 Organization; Good Standing;
Power. BFC is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Florida. Merger Sub is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Florida. Each of BFC and Merger Sub has all necessary
corporate power and authority to execute and deliver this
Agreement and, except as contemplated in this Agreement, to
consummate the Merger and the other transactions contemplated
hereby, to own its properties and assets and to carry on its
business as now conducted. BFC has heretofore made available to
Levitt a complete and correct copy of its Articles of
Incorporation, as amended and restated, and its Bylaws, each as
amended to the date hereof. Each of BFC and Merger Sub is duly
licensed or qualified to conduct business and is in good
standing in each jurisdiction in which the nature of its
businesses requires such qualification or license, except where
the failure to be duly qualified could not reasonably be
expected to have a Material Adverse Effect on BFC.
4.2 Capitalization.
(a) BFCs authorized capital stock consists solely of
70,000,000 shares of BFC Class A Common Stock,
20,000,000 shares of BFC Class B Common Stock and
10,000,000 shares of preferred stock, par value
$0.01 per share (collectively, the BFC Capital
Stock). As of the date hereof, 28,755,882 shares
of BFC Class A Common Stock, 7,090,652 shares of BFC
Class B Common Stock, no shares of preferred stock
designated as Series A Junior Participating Preferred Stock
and 15,000 shares of preferred stock designated as 5%
Cumulative Convertible Preferred Stock are issued and
outstanding. As of the date hereof, 2,947,448 shares of BFC
Class A Common Stock and 1,139,087 shares of BFC
Class B Common Stock are reserved for issuance upon
exercise of outstanding BFC Options, 1,250,000 shares of
BFC Class A Common Stock are reserved for issuance upon
conversion of the 5% Cumulative Convertible Preferred Stock,
7,090,652 shares of BFC Class A Common Stock are
reserved for issuance upon conversion of shares of BFC
Class B Common Stock, and no shares of BFC Capital Stock
are held in treasury. Merger Subs authorized capital stock
consists solely of 1,000 shares of common stock, par value
$0.01 per share, of which 100 shares are outstanding
and owned by BFC.
(b) All of the issued and outstanding shares of BFC Capital
Stock are duly and validly authorized and issued, fully paid and
nonassessable. None of the outstanding shares of BFC Capital
Stock have been issued in violation of any statutory preemptive
rights. Shares of BFC Class A Common Stock and BFC
Class B Common Stock represent the only securities of BFC
with the right to vote on the Merger and the other transactions
contemplated hereby or for the election of directors of BFC.
Except for (i) BFC Options outstanding on the date hereof
to acquire not more than
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468,000 shares of BFC Class A Common Stock and
1,139,087 shares of BFC Class B Common Stock and
(ii) the 5% Cumulative Convertible Preferred Stock, there
are no outstanding or existing BFC Options or other agreements,
commitments or obligations relating to the issuance of
additional shares of any class of capital stock or other equity
securities of BFC.
(c) All outstanding BFC Options were granted under the BFC
Option Plans. None of the BFC Options was issued in violation of
applicable Law or the terms of the applicable BFC Option Plan.
BFC is not a party to or bound by any contract, agreement or
arrangement to sell or otherwise dispose of or redeem, purchase
or otherwise acquire any of its capital stock. There are no
agreements or understandings with respect to the voting of any
shares of BFC Capital Stock or which restrict the transfer of
such shares to which BFC is a party, nor, except as set forth on
Schedule 4.2(c), does BFC have knowledge of any such
agreements or understandings to which BFC is not a party. Since
September 30, 2006, BFC has not (i) issued any shares
of BFC Capital Stock (or securities exercisable for or
convertible into BFC Capital Stock) other than upon the valid
exercise of BFC Options previously granted under the BFC Option
Plans or the valid conversion of shares of BFC Class B
Common Stock to BFC Class A Common Stock or
(ii) granted any options under the BFC Option Plans. True
and complete copies of the BFC Option Plans have been made
available to Levitt and there is no agreement to amend, modify
or supplement the BFC Option Plans from the form made available
to Levitt.
(d) The shares of BFC Class A Common Stock to be
issued pursuant to the Merger (including shares of BFC
Class A Common Stock underlying the assumed Levitt Options,
assuming the exercise and payment in full of any exercise price
in accordance with the terms of such Levitt Options), will, when
issued (i) be duly authorized, validly issued, fully paid
and non-assessable and not subject to preemptive rights created
by the FBCA, BFCs Articles of Incorporation or Bylaws, or
any agreement to which BFC is a party or is bound; (ii) be
registered under the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (the
Securities Act) and the Exchange Act and registered
or exempt from registration under applicable state, local and
other applicable securities laws; and (iii) be listed on
the NYSE Arca, subject only to official notice of listing.
4.3 Authorization; No
Violation. Except to the extent described herein,
the execution and delivery of this Agreement by BFC and Merger
Sub and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate
action on the part of BFC and Merger Sub, and no other corporate
action on the part of BFC or Merger Sub is necessary (other than
the filing of the Articles of Merger pursuant to the FBCA and
the approval by BFCs shareholders of the transactions
contemplated hereby), and, subject to the terms and conditions
of this Agreement and assuming due and valid authorization,
execution and delivery hereof by the other parties hereto, this
Agreement constitutes the legal, valid and binding obligation of
BFC and Merger Sub, enforceable against each of them in
accordance with its terms, except as limited by
(x) bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance laws and other similar laws affecting
creditors rights generally, and (y) general
principles of equity, regardless of whether asserted in a
proceeding in equity or at law. Neither the execution, delivery
and performance of this Agreement by BFC or Merger Sub, nor the
consummation of the transactions contemplated hereby, nor the
compliance by BFC and Merger Sub with any of the provisions of
this Agreement, will: (a) violate, conflict with, or result
in a breach of any of the provisions of, or constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of
termination or acceleration, or the creation of any Lien upon
any of the properties or assets of BFC or any Subsidiary of BFC
under any of the terms, conditions or provisions of (i) the
Articles of Incorporation or Bylaws (or analogous organizational
documents) of BFC or any of its Subsidiaries or (ii) any
BFC Material Contract, (b) violate any Law or any Order
applicable to BFC or any of its Subsidiaries or any of their
respective properties or assets or (c) require any filing,
declaration or registration by BFC, any Subsidiary of BFC or
Merger Sub with, or permission, determination, waiver,
authorization, consent or approval of, any Governmental Entity
(except for (i) compliance with any applicable requirements
of the Securities Act or the Exchange Act (including the filing
of (A) the Registration Statement and the Joint Proxy
Statement/Prospectus and (B) such reports under
Section 13(a) or 13(d) of the Exchange Act with the SEC as
may be required in connection with this Agreement and the
transactions contemplated hereby), (ii) any filings as may
be required under the FBCA in connection with the Merger,
including, without limitation, the Articles of Merger,
(iii) filings and applications required by NYSE Arca,
(iv) any filings as may be required by the HSR Act and
(v) such filings and approvals as may be required by any
applicable state securities, blue sky or takeover Laws, except
in the case of
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clauses (a)(ii), (b) or (c), where such violation,
conflict, breach, default, termination, acceleration, lien,
security interest, charge, encumbrance or failure to make such
filings or applications could not reasonably be expected to have
a Material Adverse Effect on BFC.
4.4 Subsidiaries. Set forth on
Schedule 4.4 hereto is a list of each Subsidiary of
BFC (other than Subsidiaries of BankAtlantic Bancorp, Inc.),
including its name and jurisdiction of organization. Except as
set forth on Schedule 4.4, BFC is the beneficial
owner directly or indirectly of 100% of the outstanding equity
interests in each of its Subsidiaries (other than Subsidiaries
of BankAtlantic Bancorp, Inc.), and all of the shares of capital
stock or other equity interests of BFCs Subsidiaries
(other than Subsidiaries of BankAtlantic Bancorp, Inc.) are
beneficially owned, directly or indirectly, by BFC free and
clear of any Liens. Each Subsidiary of BFC (i) is duly
organized, validly existing and in good standing under the laws
of its jurisdiction of organization, (ii) is duly licensed
or qualified to conduct business and in good standing in each
jurisdiction in which the nature of its business reasonably
requires such qualification or license and (iii) has all
necessary power to own its properties and assets and to carry on
its business as presently conducted, except, in each case, where
the failure or lack thereof could not reasonably be expected to
have a Material Adverse Effect on BFC.
4.5 Exchange Act Reports; Financial Statements.
(a) Since January 1, 2004, BFC has filed all reports
and other documents required to be filed by it with the SEC
under the Exchange Act, including but not limited to proxy
statements and reports on
Form 10-K,
Form 10-Q
and
Form 8-K
(as such documents have been amended since the time of their
filing, collectively, the BFC SEC Reports).
As of the respective dates they were filed with the SEC, or if
amended prior to the date hereof, as of the date of the last
such amendment, the BFC SEC Reports, including all documents
incorporated by reference into such reports, complied in all
material respects with the rules and regulations of the SEC and
did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As
of the date hereof, there are no amendments or modifications to
agreements, documents or other instruments which previously had
been filed by BFC with the SEC pursuant to the Securities Act or
the Exchange Act or any other agreements, documents or other
instruments, which have not yet been filed with the SEC but
which are or will be required to be filed by BFC.
(b) The BFC Financial Statements as of the dates thereof
and for the periods covered thereby, present fairly, in all
material respects, the financial position, results of
operations, and cash flows of BFC and its Subsidiaries on a
consolidated basis (subject, in the case of unaudited financial
statements, to normal recurring year-end audit adjustments which
did not and are not expected to have a Material Adverse Effect
on BFC). Any supporting schedules included in the BFC SEC
Reports present fairly, in all material respects, the
information required to be stated therein. Such BFC Financial
Statements and supporting schedules were prepared: (i) in
accordance with the requirements of
Regulation S-X
promulgated by the SEC; and (ii) except as otherwise noted
in the BFC SEC Reports, in conformity with GAAP applied on a
consistent basis. Other than as disclosed in the BFC Financial
Statements, neither BFC nor any of its Subsidiaries has any
liabilities, commitments or obligations of any nature
whatsoever, whether accrued, contingent or otherwise that would
be required to be reflected on, or reserved against in, a
balance sheet or in notes thereto, prepared in accordance with
GAAP, other than liabilities, commitments or obligations
incurred since September 30, 2006 in the ordinary course of
business to Persons other than Affiliates of BFC that could not
reasonably be expected to have a Material Adverse Effect on BFC.
4.6 Absence of Certain
Changes. Except as disclosed in the BFC SEC
Reports, since September 30, 2006, (i) BFC and each of
its Subsidiaries have conducted their business in the ordinary
and usual course, consistent with past practices, and
(ii) there has not been any event, occurrence, development
or set of circumstances or facts which (A) has had or could
reasonably be expected to have a Material Adverse Effect on BFC
or any of its Subsidiaries, (B) could reasonably be
expected to render any of the representations and warranties of
BFC incorrect or untrue as of the Closing Date or (C) would
result in a violation of the covenants set forth in
Section 6.2 of this Agreement had such events,
occurrences, developments or set of circumstances or facts
occurred after the date hereof.
4.7 Taxes. Except for such matters
as could not reasonably be expected to have a Material Adverse
Effect on BFC, (a) BFC and each of its Subsidiaries have
timely filed or shall timely file all returns and reports
required to be filed by them with any Taxing authority with
respect to Taxes for any period ending on or before the
Effective
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Time, taking into account any extension of time to file granted
to or obtained on behalf of BFC and its Subsidiaries,
(b) all Taxes shown to be payable on such returns or
reports that are due prior to the Effective Time have been paid
or shall be paid, (c) no deficiency for any amount of Tax
has been asserted or assessed by a Taxing authority against BFC
or any of its Subsidiaries, (d) BFC and each of its
Subsidiaries have provided adequate reserves in their financial
statements for any Taxes that have not been paid, whether or not
shown as being due on any returns or reports and (e) no
audit or other administrative proceedings are presently being
conducted or have been threatened in writing against BFC or any
of its Subsidiaries by a Taxing authority.
4.8 BFC Material Contracts. Each
BFC Material Contract has been filed as an exhibit to a BFC SEC
Report. Except as could not reasonably be expected to have a
Material Adverse Effect on BFC: (i) each BFC Material
Contract is valid, binding and enforceable against the parties
thereto in accordance with its terms, and is in full force and
effect on the date hereof; and (ii) BFC and each of its
Subsidiaries have performed in all material respects all
obligations required to be performed by them to date under, and
they are not in material default in respect of, any BFC Material
Contract, and no event has occurred which, with due notice or
lapse of time or both, would constitute such a material default.
No consent of or notice to third parties is required pursuant to
the terms of any BFC Material Contract or other material
agreement to which BFC or any of its Subsidiaries is a party as
a consequence of this Agreement or the transactions contemplated
herein, except for such consents or notices which if not
obtained or given could not reasonably be expected to have a
Material Adverse Effect on BFC or materially impair the ability
of BFC to consummate the Merger. To the knowledge of BFC, no
other party to any BFC Material Contract is in material default
in respect thereof, and no event has occurred which, with due
notice or lapse of time or both, would constitute such a
material default. BFC has made available to Levitt true, correct
and complete copies of all the written BFC Material Contracts
and a brief written summary or description of each oral BFC
Material Contract, and no BFC Material Contract has been
modified in any material respect since the date it was made
available.
4.9 Investigations;
Litigation. Except as set forth in the BFC SEC
Reports, there is no investigation by any Governmental Entity or
any action, suit, proceeding or claim pending or, to the
knowledge of BFC, threatened, against BFC or any of its
Subsidiaries (including, without limitation, any investigation,
action, or proceeding with respect to Taxes), or the assets or
business of BFC or any of its Subsidiaries which if determined
adversely to BFC or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect on BFC. Neither BFC
nor any of its Subsidiaries nor any director, officer, employee
or agent of BFC or any of its Subsidiaries (in their respective
capacities as such), is a party to any, and there are no pending
or, to the knowledge of BFC, threatened, material legal,
administrative, arbitral or other proceedings, claims, suits,
actions or governmental investigations of any nature against BFC
or any of its Subsidiaries, or any director, officer, employee
or agent of BFC or any of its Subsidiaries (in their respective
capacities as such), or involving any property or assets of BFC
or any of its Subsidiaries, and to the knowledge of BFC, there
is no outstanding Order of any Governmental Entity entered
specifically against or materially affecting BFC or any of its
Subsidiaries, or any of their respective assets, businesses or
operations.
4.10 Insurance. BFC and its
Subsidiaries have in effect insurance coverage which, in respect
to amounts, types and risks insured, is customary for the
businesses in which BFC and its Subsidiaries are engaged. All of
the insurance policies, binders, bonds and other similar forms
of insurance owned, held or maintained by BFC and each of its
Subsidiaries are in full force and effect, and all premiums with
respect thereto covering all periods up to and including the
date hereof have been paid (other than retrospective premiums
which may be payable with respect to workers compensation
insurance policies). Neither BFC nor any of its Subsidiaries is
in material default under any such policy, and no notice of
cancellation, termination or nonrenewal has been received with
respect to any of the foregoing, and all claims thereunder have
been filed in due and timely fashion. The insurance policies to
which BFC or any of its Subsidiaries is a party are sufficient
for compliance with all requirements of Law and, to the extent
applicable, of all BFC Material Contracts and provide adequate
insurance coverage for the assets and operations of BFC and its
Subsidiaries.
4.11 Compliance with Laws. BFC and
each of its Subsidiaries have all Permits and has made all
required filings, applications or registrations with applicable
Governmental Entities necessary to permit them to carry on their
business as presently conducted except where the failure to have
such Permits or make such filings, applications or registrations
would not have a Material Adverse Effect on BFC. All such
Permits are in full force
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and effect, and, to the knowledge of BFC, no suspension or
cancellation of any of them is pending or has been threatened;
and all such filings, applications and registrations are
current. Neither BFC nor any of its Subsidiaries is in material
default under any such Permits or, to the knowledge of BFC,
under any Order or under any license, regulation or demand of
any Governmental Entity. BFC and each of its Subsidiaries have
conducted their business in compliance in all material respects
with all applicable Laws.
4.12 Labor Matters. Neither BFC nor
any of its Subsidiaries is a party to, nor does BFC or any of
its Subsidiaries have in effect, any organized labor contract or
collective bargaining agreement.
4.13 Employee Benefit Plans.
(a) Schedule 4.13 lists all of the BFC Plans.
Each BFC Plan is now and always has been operated in all
material respects in accordance with its terms and the
requirements of all applicable Laws. BFC has performed all
obligations required to be performed by it under, is not in any
material respect in default under or in violation of, and has no
knowledge of any default or violation by any party to, any BFC
Plan. Except as otherwise described in
Schedule 4.13, no action, suit, proceeding or claim
is pending or, to the knowledge of BFC, threatened, against BFC
with respect to any BFC Plan (other than claims for benefits in
the ordinary course).
(b) All contributions, premiums or payments required to be
made with respect to any Plan have been made. All such
contributions have been fully deducted for income tax purposes
and no such deduction has been challenged or disallowed by any
Governmental Entity.
(c) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby
will (either alone or in conjunction with any other event)
result in, cause the accelerated vesting or delivery of, or
increase the amount or value of, any severance, termination or
other payment to any director, officer, employee or consultant
of BFC or any of its Subsidiaries.
4.14 Related Party
Transactions. Except for arrangements disclosed
in the BFC SEC Reports, no holder of more than 5% of the BFC
Class A Common Stock or BFC Class B Common Stock, or
any officer or director of BFC or any Subsidiary of BFC, or, to
the knowledge of BFC, any Affiliate of any of the foregoing
(other than BFC and its Subsidiaries) (i) is indebted to
BFC for money borrowed from BFC; (ii) to the knowledge of
BFC, has any direct or indirect material interest in any Person
which is a customer or supplier of BFC or any of its
Subsidiaries; or (iii) is party to any other material
transaction or business relationship with BFC or any of its
Subsidiaries that would be required to be disclosed in the BFC
SEC Reports pursuant to Item 404 of
Regulation S-K
of the SEC.
4.15 Brokers and Finders
Fees. Other than Sandler ONeill &
Partners, L.P., BFC has not employed any financial advisor,
broker or finder and has not incurred and will not incur any
brokers, finders, investment banking or similar
fees, commissions or expenses to any other party in connection
with the transactions contemplated by this Agreement. BFC has
provided to Levitt complete and correct copies of all agreements
between BFC and Sandler ONeill & Partners, L.P.
pursuant to which such firm would be entitled to any payment
related to the Merger.
4.16 Registration Statement; Joint Proxy
Statement/Prospectus. None of the information
included or incorporated by reference in BFCs registration
statement on
Form S-4,
which shall include the joint proxy statement relating to the
Levitt Special Meeting and the BFC Special Meeting (together
with any amendments thereof or supplements thereto, the
Joint Proxy Statement/Prospectus), pursuant
to which the issuance of the shares of BFC Class A Common
Stock to be issued to Levitts shareholders in the Merger
will be registered under the Securities Act (the
Registration Statement), other than
information relating to Levitt, will, at the time the
Registration Statement is filed with the SEC, at the time it
becomes effective under the Securities Act and at the time of
the BFC Special Meeting or the Levitt Special Meeting, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.17 Tax Treatment. BFC has no
knowledge of any reason why the Merger will, and has not taken
or agreed to take and has no plans to take any action that could
cause the Merger to, fail to qualify as a
reorganization under Section 368(a) of
the Code.
4.18 Opinion of Financial
Advisor. Sandler ONeill &
Partners, L.P. has delivered to the Board of Directors of BFC
its written opinion to the effect that, as of the date hereof,
the Merger Consideration to be exchanged is fair
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to BFC from a financial point of view and its consent to the
inclusion of such opinion in the Joint Proxy
Statement/Prospectus.
4.19 Sarbanes-Oxley. There is and
has been no failure on the part of BFC or any of its directors
or officers, in their capacities as such, to comply in all
material respects with any applicable provision of the
Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley
Act) and the rules and regulations promulgated in
connection therewith, except, in the case of BFCs
directors and officers, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect on BFC.
4.20 Certain Business
Practices. Neither BFC, nor, to BFCs
knowledge, any of its Subsidiaries, nor, in connection with the
operation of the business of BFC or any of its Subsidiaries, any
directors or officers, agents or employees of BFC or, to
BFCs knowledge, any of its Subsidiaries, has
(i) directly or indirectly given or agreed to give any
funds for unlawful contributions, payments, gifts, entertainment
or other unlawful expenses related to political activity,
(ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or
(iii) made any payment in the nature of criminal bribery.
4.21 Operations of Merger
Sub. Merger Sub is a direct, wholly owned
subsidiary of BFC, was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement, has engaged
in no other business activities and has conducted its operations
only as contemplated by this Agreement. Except for obligations
and liabilities incurred in connection with its organization and
the transactions contemplated by this Agreement, Merger Sub has
no obligations or liabilities.
4.22 Full Disclosure. No
representation or warranty of BFC contained in this Agreement,
and none of the statements or information concerning BFC and its
Subsidiaries contained in this Agreement or the exhibits and the
schedules hereto, contains or will contain any untrue statement
of a material fact nor will such representations, warranties,
covenants or statements taken as a whole omit a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
ARTICLE V
Representations
and Warranties of Levitt
Levitt represents and warrants to BFC and Merger Sub as follows:
5.1 Organization; Good Standing;
Power. Levitt is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Florida. Levitt has all necessary corporate power and
authority to execute and deliver this Agreement and, except as
contemplated in this Agreement, to consummate the Merger and the
other transactions contemplated hereby, to own its properties
and assets and to carry on its business as now conducted. Levitt
is duly licensed or qualified to conduct business and in good
standing in each jurisdiction in which the nature of its
businesses requires such qualification or license, except where
the failure to be so licensed or qualified could not reasonably
be expected to have a Material Adverse Effect on Levitt.
5.2 Capitalization.
(a) Levitts authorized capital stock consists solely
of 50,000,000 shares of Levitt Class A Common Stock,
10,000,000 shares of Levitt Class B Common Stock and
5,000,000 shares of preferred stock, par value
$0.01 per share (collectively, the Levitt Capital
Stock). As of the date hereof, 18,609,024 shares
of Levitt Class A Common Stock, 1,219,031 shares of
Levitt Class B Common Stock and no shares of preferred
stock are issued and outstanding, 2,111,982 shares of
Levitt Class A Common Stock are reserved for issuance upon
exercise of outstanding Levitt Options, and no shares of Levitt
Capital Stock are held in treasury.
(b) All of the issued and outstanding shares of Levitt
Capital Stock are duly and validly authorized and issued, fully
paid and nonassessable. None of the outstanding shares of Levitt
Capital Stock have been issued in violation of any statutory
preemptive rights. The Levitt Class A Common Stock and
Levitt Class B Common Stock are the only securities of
Levitt with the right to vote on the transactions contemplated
by this Agreement or for the election of directors of Levitt.
Except for Levitt Options outstanding on the date hereof to
acquire not more than
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1,893,539 shares of Levitt Class A Common Stock, there
are no outstanding or existing Levitt Options or other
agreements, commitments or obligations relating to the issuance
of additional shares of any class of capital stock or other
equity securities of Levitt.
(c) All outstanding Levitt Options were granted under the
Levitt Option Plan. None of the Levitt Options was issued in
violation of applicable Law or the terms of the plan under which
it was granted. Levitt is not a party to or bound by any
contract, agreement or arrangement to sell or otherwise dispose
of or redeem, purchase or otherwise acquire any of its capital
stock. Other than as set forth in Levitts Amended and
Restated Articles of Incorporation, there are no agreements or
understandings with respect to the voting of any shares of
Levitt Capital Stock or which restrict the transfer of such
shares to which Levitt is a party, nor does Levitt have
knowledge of any such agreements or understandings to which
Levitt is not a party. Except as set forth on
Schedule 5.2, since September 30, 2006, Levitt
has not (i) issued any shares of Levitt Capital Stock (or
securities exercisable for or convertible into Levitt Capital
Stock) other than upon the valid exercise of options previously
granted under the Levitt Option Plan or (ii) granted any
options under the Levitt Option Plan. The terms of the Levitt
Option Plan permit the assumption or substitution of options to
purchase BFC Class A Common Stock as provided in this
Agreement, without the consent or approval of the holders of
such securities, the shareholders of Levitt, or any other Person
(other than Levitts Board of Directors or a committee
thereof), and without mandatory acceleration of the vesting or
expiration of any of the Levitt Options.
Schedule 5.2 hereto includes a true and complete
list as of the date hereof of all holders of outstanding options
under the Levitt Option Plan, including the name of such
holders, the number of shares of Levitt Class A Common
Stock subject to each such option, the exercise or vesting
schedule, the exercise price per share and the expiration date
of each such option. There are no awards outstanding as of the
date hereof under the Levitt Option Plan other than those
identified in Schedule 5.2. A true and complete copy
of the Levitt Option Plan and all agreements and instruments
relating to or issued under the Levitt Option Plan have been
made available to BFC and no such plan, agreement or instrument
has been amended, modified or supplemented, and there is no
agreement to amend, modify or supplement any such plan,
agreement or instrument in any case from the form made available
to BFC.
(d) No bonds, debentures, notes or other indebtedness of
Levitt having the right to vote on any matters on which
shareholders may vote are issued or outstanding.
5.3 Authorization; No
Violation. The execution and delivery of this
Agreement by Levitt and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Levitt, and no other
corporate action on the part of Levitt is necessary (other than
the approval of this Agreement and the Merger by the holders of
Levitt Capital Stock and the filing of the Articles of Merger
pursuant to the FBCA), and, subject to the terms and conditions
of this Agreement and assuming due and valid authorization,
execution and delivery hereof by the other parties hereto, this
Agreement constitutes the legal, valid and binding obligation of
Levitt, enforceable against it in accordance with its terms,
except as limited by (x) bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance laws and other
similar laws affecting creditors rights generally, and
(y) general principles of equity, regardless of whether
asserted in a proceeding in equity or at law. Except as set
forth on Schedule 5.3, neither the execution,
delivery and performance of this Agreement by Levitt, nor the
consummation of the transactions contemplated hereby, nor the
compliance by Levitt with any of the provisions of this
Agreement, will: (a) violate, conflict with, or result in a
breach of any of the provisions of, or constitute a default (or
an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of
termination or acceleration, or the creation of any Lien upon
any of the properties or assets of Levitt or any Subsidiary of
Levitt under any of the terms, conditions or provisions of
(i) the Articles of Incorporation or Bylaws (or analogous
organizational documents) of Levitt or any of its Subsidiaries
or (ii) any Levitt Material Contract; (b) violate any
Law or any Order applicable to Levitt or any of its Subsidiaries
or any of their respective properties or assets or
(c) require any filing, declaration or registration by
Levitt with, or permission, determination, waiver,
authorization, consent or approval of, any Governmental Entity
(except for (i) compliance with any applicable requirements
of the Securities Act or the Exchange Act (including the filing
of (A) the Registration Statement and the Joint Proxy
Statement/Prospectus and (B) such reports under
Section 13(a) or 13(d) of the Exchange Act with the SEC as
may be required in connection with this Agreement and the
transactions contemplated hereby); (ii) any filings as may
be required under the FBCA in connection with the Merger,
including, without limitation, the
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Articles of Merger, (iii) filings and applications required
by the NYSE, (iv) any filings as may be required by the HSR
Act and (v) such filings and approvals as may be required
by any applicable state securities, blue sky or takeover Laws,
except in the case of clauses (a)(ii), (b) or (c),
where such violation, conflict, breach, default, termination,
acceleration, lien, security interest, charge, encumbrance or
failure to make such filings or applications could not
reasonably be expected to have a Material Adverse Effect on
Levitt.
5.4 Subsidiaries. Set forth on
Schedule 5.4 hereto is a list of each Subsidiary of
Levitt, including its name and jurisdiction of organization.
Except as set forth on Schedule 5.4 hereto, Levitt
does not own more than 20% of the capital stock or similar
interests in or control any entities (including, without
limitation, corporations, limited liability companies,
partnerships, joint ventures and inactive corporations). Except
as set forth on Schedule 5.4, Levitt is the
beneficial owner directly or indirectly of 100% of the
outstanding equity interests in each of its Subsidiaries, and
all of the shares of capital stock or other equity interests of
Levitts Subsidiaries are beneficially owned, directly or
indirectly, by Levitt free and clear of any Liens. Each
Subsidiary of Levitt (i) is duly organized, validly
existing and in good standing under the laws of its jurisdiction
of organization, (ii) is duly licensed or qualified to
conduct business and in good standing in each jurisdiction in
which the nature of its business reasonably requires such
qualification or license and (iii) has all necessary power
to own its properties and assets and to carry on its business as
presently conducted, except, in each case, where the failure or
lack thereof could not reasonably be expected to have a Material
Adverse Effect on Levitt.
5.5 Exchange Act Reports; Financial Statements.
(a) Since January 1, 2004, Levitt has filed all
reports and other documents required to be filed by it with the
SEC under the Exchange Act, including but not limited to proxy
statements and reports on
Form 10-K,
Form 10-Q
and
Form 8-K
(as such documents have been amended since the time of their
filing, collectively, the Levitt SEC
Reports). As of the respective dates they were filed
with the SEC, or if amended prior to the date hereof, as of the
date of the last such amendment, the Levitt SEC Reports,
including all documents incorporated by reference into such
reports, complied in all material respects with the rules and
regulations of the SEC and did not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. As of the date hereof, there are no
amendments or modifications to agreements, documents or other
instruments which previously had been filed by Levitt with the
SEC pursuant to the Securities Act or the Exchange Act or any
other agreements, documents or other instruments, which have not
yet been filed with the SEC but which are or will be required to
be filed by Levitt.
(b) The Levitt Financial Statements as of the dates thereof
and for the periods covered thereby, present fairly, in all
material respects, the financial position, results of
operations, and cash flows of Levitt and its Subsidiaries on a
consolidated basis (subject, in the case of unaudited financial
statements, to normal recurring year-end audit adjustments which
did not and are not expected to have a Material Adverse Effect
on Levitt). Any supporting schedules included in the Levitt SEC
Reports present fairly, in all material respects, the
information required to be stated therein. Such Levitt Financial
Statements and supporting schedules were prepared: (i) in
accordance with the requirements of
Regulation S-X
promulgated by the SEC; and (ii) except as otherwise noted
in the Levitt SEC Reports, in conformity with GAAP applied on a
consistent basis in accordance with past practice. Other than as
disclosed in the Levitt Financial Statements, neither Levitt nor
any of its Subsidiaries has any liabilities, commitments or
obligations of any nature whatsoever, whether accrued,
contingent or otherwise that would be required to be reflected
on, or reserved against in, a balance sheet or in notes thereto,
prepared in accordance with GAAP, other than liabilities,
commitments or obligations incurred since September 30,
2006 in the ordinary course of business to Persons other than
Affiliates of Levitt or that could not reasonably be expected to
have a Material Adverse Effect on Levitt.
5.6 Absence of Certain
Changes. Except as set forth in
Schedule 5.6 or as disclosed in the Levitt SEC
Reports, since September 30, 2006, (i) Levitt and its
Subsidiaries have conducted their respective businesses in the
ordinary and usual course, consistent with past practices, and
(ii) there has not been any event, occurrence, development
or set of circumstances or facts which (A) has had or could
reasonably be expected to have a Material Adverse Effect on
Levitt, or (B) could reasonably be expected to render any
of the representations and warranties of Levitt contained in
this Agreement incorrect or untrue as of the Closing Date or
(C) would result in a violation of the
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covenants set forth in Section 6.1 of this Agreement
had such events, occurrences, developments or set of
circumstances or facts occurred after the date hereof.
5.7 Taxes. Except as set forth on
Schedule 5.7 and except for such matters as could
not reasonably be expected to have a Material Adverse Effect on
Levitt, (a) Levitt and each of its Subsidiaries have timely
filed or shall timely file all returns and reports required to
be filed by them with any taxing authority with respect to Taxes
for any period ending on or before the Effective Time, taking
into account any extension of time to file granted to or
obtained on behalf of Levitt and its Subsidiaries, (b) all
Taxes shown to be payable on such returns or reports that are
due prior to the Effective Time have been paid or shall be paid,
(c) no deficiency for any amount of Tax has been asserted
or assessed by a Taxing authority against Levitt or any of its
Subsidiaries, (d) Levitt and each of its Subsidiaries have
provided adequate reserves in their financial statements for any
Taxes that have not been paid, whether or not shown as being due
on any returns or reports and (e) no audit or other
administrative proceedings are presently being conducted or have
been threatened in writing against Levitt or any of its
Subsidiaries by a Taxing authority.
5.8 Investigations,
Litigation. Except as set forth on
Schedule 5.8 or in the Levitt SEC Reports, there is
no investigation by any Governmental Entity or any action, suit,
proceeding or claim pending or, to the knowledge of Levitt,
threatened, against Levitt or any of its Subsidiaries
(including, without limitation, any investigation, action, or
proceeding with respect to Taxes), or the assets or business of
Levitt or any of its Subsidiaries which, if determined adversely
to Levitt or such Subsidiary, could reasonably be expected to
have a Material Adverse Effect on Levitt. Except as disclosed on
Schedule 5.8: (i) neither Levitt nor any of its
Subsidiaries nor any director, manager, officer, employee or
agent of Levitt or any of its Subsidiaries (in their respective
capacities as such), is a party to any, and there are no pending
or, to the knowledge of Levitt, threatened, material legal,
administrative, arbitral or other proceedings, claims, suits,
actions or governmental investigations of any nature against
Levitt or any of its Subsidiaries, or any director, officer,
employee or agent of Levitt or any of its Subsidiaries (in their
respective capacities as such), or involving any property or
assets of Levitt or any of its Subsidiaries and (ii) to the
knowledge of Levitt, there is no outstanding Order of any
Governmental Entity entered specifically against or materially
affecting Levitt or any of its Subsidiaries, or any of their
respective assets, businesses or operations.
5.9 Levitt Material Contracts. Each
Levitt Material Contract has been filed as an exhibit to a
Levitt SEC Report. Except as could not reasonably be expected to
have a Material Adverse Effect on Levitt, (i) each Levitt
Material Contract is valid, binding and enforceable against the
parties thereto in accordance with its terms, and is in full
force and effect on the date hereof; and (ii) Levitt and
each of its Subsidiaries have performed in all material respects
all obligations required to be performed by such entity to date
under, and are not in material default in respect of, any Levitt
Material Contract, and no event has occurred which, with due
notice or lapse of time or both, would constitute such a
material default. Except as set forth on
Schedule 5.9 which shall be delivered no later than
fifteen (15) Business Days after the date hereof, no
consent of or notice to third parties is required pursuant to
the terms of any Levitt Material Contract or other material
agreement to which Levitt or any of its Subsidiaries is a party
as a consequence of this Agreement or the transactions
contemplated herein, except for any such consents or notices
which if not obtained or given could not reasonably be expected
to have a Material Adverse Effect on Levitt or materially impair
the ability of Levitt to consummate the Merger. To the knowledge
of Levitt, no other party to any Levitt Material Contract is in
material default in respect thereof, and no event has occurred
which, with due notice or lapse of time or both, would
constitute such a material default. Levitt has made available to
BFC true, correct and complete copies of all the written Levitt
Material Contracts and a brief written summary or description of
each oral Levitt Material Contract, and no Levitt Material
Contract has been modified in any material respect since the
date it was made available.
5.10 Brokers and Finders
Fees. Other than Houlihan Lokey
Howard & Zukin, neither Levitt nor any of its
Subsidiaries has employed any financial advisor, broker or
finder and has not incurred and none will incur any
brokers, finders, investment banking or similar
fees, commissions or expenses to any other party in connection
with the transactions contemplated by this Agreement. Levitt has
provided to BFC complete and correct copies of all agreements
between Levitt and Houlihan Lokey Howard & Zukin
pursuant to which such firm would be entitled to any payment
related to the Merger.
A-I-18
5.11 Affiliate
Letters. Schedule 5.11 sets forth
each shareholder of Levitt (other than BFC or its Affiliates)
that is or could be deemed to be, as of the date hereof, an
Affiliate of Levitt.
5.12 Registration Statement; Joint Proxy
Statement/Prospectus. None of the information
included or incorporated by reference in Registration Statement
or the Joint Proxy Statement/Prospectus, other than information
relating to BFC, will, at the time the Registration Statement is
filed with the SEC, at the time it becomes effective under the
Securities Act or at the time of the BFC Special Meeting or the
Levitt Special Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
5.13 State Takeover Laws. Levitt
has taken all action necessary on its part to exempt the Merger,
this Agreement and the transactions contemplated hereby, and the
Merger, this Agreement, and (except for the taking of any
actions that may be necessary on the part of BFC in order for
such matters to be so exempt) the transactions contemplated
hereby are exempt from any applicable state anti-takeover
statutes, including, without limitation, Sections 607.0901
and 607.0902 of the FBCA.
5.14 Opinion of Financial
Advisor. Houlihan Lokey Howard & Zukin
has delivered to the Board of Directors of Levitt its written
opinion to the effect that, as of the date hereof, the Merger
Consideration is fair to the Minority Shareholders from a
financial point of view and its consent to the inclusion of such
opinion in the Joint Proxy Statement/Prospectus.
5.15 Tax Treatment. Levitt has no
knowledge of any reason why the Merger will, and has not taken
or agreed to take and has no plans to take any action that could
cause the Merger to, fail to qualify as a
reorganization under Section 368(a) of
the Code.
5.16 Full Disclosure. No
representation or warranty of Levitt contained in this
Agreement, and none of the statements or information concerning
Levitt and its Subsidiaries contained in this Agreement or the
exhibits and the schedules hereto, contains or will contain any
untrue statement of a material fact nor will such
representations, warranties, covenants or statements taken as a
whole omit a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE VI
Conduct of
Business Prior to the Effective Time
6.1 Conduct of Business by
Levitt. Except as expressly contemplated by any
other provision of this Agreement, Levitt agrees that from the
date of this Agreement until the earlier of the termination of
this Agreement and the Effective Time, Levitt shall not (and
shall cause each of its Subsidiaries to not), directly or
indirectly, take or propose to take any of the following actions
without the prior written consent of BFC:
(a) conduct the businesses of Levitt and its Subsidiaries
in a manner, or take any action with respect to the businesses
of Levitt and its Subsidiaries, that is not in the ordinary
course of business and consistent with past practice or that
would cause Levitt or any of its Subsidiaries to be in default
under any Levitt Material Contract (as in effect on the date
hereof, irrespective of any subsequent waiver or amendment);
(b) change or amend the Articles of Incorporation or Bylaws
of Levitt;
(c) issue, sell, or grant any shares of capital stock
(except Levitt Class A Common Stock to be issued upon
exercise of Levitt Options outstanding on the date of the
Agreement), or, except in the ordinary course of business
consistent with past practices, any options, warrants, or rights
to purchase or subscribe to, or enter into any arrangement or
contract with respect to the issuance or sale of, any of the
capital stock of Levitt or any of its Subsidiaries or rights or
obligations convertible into or exchangeable for any such shares
of capital stock;
(d) divide, combine or reclassify any of its capital stock
or otherwise make any changes in the capital structure of Levitt;
(e) declare, pay, or set aside for payment any dividend or
other distribution in respect of the capital stock or other
equity securities of Levitt or any Subsidiary of Levitt, except
as consistent with past practice;
A-I-19
(f) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Levitt or any of its
Subsidiaries;
(g) engage in any action that could reasonably be expected
to cause the Merger to fail to qualify as a
reorganization under Section 368(a) of the Code;
(h) take any action that would cause Levitts
representations and warranties set forth in this Agreement to be
untrue in any material respect;
(i) take any action that would reasonably be likely to
materially delay the Merger; or
(j) agree to take or make any commitment to take any of the
foregoing actions.
6.2 Conduct of Business by
BFC. Except as expressly contemplated by any
other provision of this Agreement, BFC agrees that from the date
of this Agreement until the earlier of the termination of this
Agreement and the Effective Time, BFC shall not, directly or
indirectly, take or propose to take any of the following actions
without the prior written consent of Levitt:
(a) conduct the businesses of BFC and its Subsidiaries in a
manner, or take any action with respect to the businesses of BFC
and its Subsidiaries, that is not in the ordinary course of
business and consistent with past practice or that would cause
BFC or any of its Subsidiaries to be in default under any BFC
Material Contract (as in effect on the date hereof, irrespective
of any subsequent waiver or amendment);
(b) change or amend the Articles of Incorporation or Bylaws
of BFC, except for an amendment to BFCs Articles of
Incorporation increasing the authorized shares of BFC
Class A Common Stock and an amendment to BFCs Bylaws
increasing the size of BFCs Board of Directors;
(c) divide, combine or reclassify any of its capital stock
or otherwise make any changes in the capital structure of BFC;
(d) declare, pay, or set aside for payment any dividend or
other distribution in respect of the capital stock or other
equity securities of BFC or any Subsidiary of BFC, except as
consistent with past practice;
(e) cause BFCs directors and officers liability
insurance policy, and any excess liability policy related
thereto, to be canceled, terminated or otherwise not be renewed
or replaced with at least an equivalent amount of coverage and
on other terms no less favorable to BFC and its officers and
directors;
(f) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of BFC or any of its
Subsidiaries;
(g) engage in any action that could reasonably be expected
to cause the Merger to fail to qualify as a
reorganization under Section 368(a) of the Code;
(h) take any action that would cause BFCs
representations and warranties set forth in this Agreement to be
untrue in any material respect;
(i) take any action that would reasonably be likely to
materially delay the Merger; or
(j) agree to take or make any commitment to take any of the
foregoing actions.
6.3 Notice. Each party will
promptly notify the other party of (i) any event of which
it obtains knowledge which has or is reasonably likely to have a
Material Adverse Effect on such party or any of its
Subsidiaries, (ii) any event or circumstance that
constitutes or could reasonably be expected to constitute a
breach of any of the representations, warranties, or covenants
of such party contained herein or (iii) any event or
circumstance which could materially and adversely affect the
partys ability to satisfy the conditions to the Merger.
Each party will promptly notify the other party in the event it
determines that it is unable to fulfill any of the conditions to
performance by the other party hereunder.
A-I-20
ARTICLE VII
Additional
Covenants and Agreements
7.1 Access to Information. From the
date hereof through the Effective Time, each party shall permit
the other party and its authorized representatives reasonable
access during regular business hours to the properties of such
party (and, in the case of each of BFC or Levitt, its
Subsidiaries). Each party shall (and, in the case of each of BFC
or Levitt shall cause its Subsidiaries to) make their respective
directors, management and other employees and agents and
authorized representatives (including counsel and independent
public accountants) available to confer with the other party,
and its authorized representatives at reasonable times and upon
reasonable request, and each party shall disclose and make
available to the other party and shall cause its agents and
authorized representatives to disclose and make available to the
other party, all books, papers and records relating to the
assets, properties, operations, obligations and liabilities of
such party (and, in the case of each of BFC or Levitt, its
Subsidiaries). Each party may make or cause to be made such
investigation of the records, business and properties of the
other party (and, in the case of each of BFC and Levitt, its
Subsidiaries) as such party deems necessary or advisable to
familiarize itself and its advisors with such business,
properties, and other matters, provided that any such
investigation shall be reasonably related to the transactions
contemplated hereby and shall not unduly interfere with the
normal operations of the other party (or, in the case of each of
BFC or Levitt, its Subsidiaries). Each party agrees to maintain
the confidentiality of all information exchanged pursuant to
this Section 7.1, except as otherwise required by
Law.
7.2 Public Announcements. Any
public announcement made by or on behalf of either BFC or Levitt
prior to the termination of this Agreement concerning this
Agreement, the transactions described herein or any other aspect
of the dealings heretofore had or hereafter to be had between
Levitt and BFC and their respective Affiliates must first be
approved by the other party (any such approval not to be
unreasonably withheld or delayed), subject to either
partys obligations under applicable Law or NYSE or NYSE
Arca requirements or rules (but such party shall use its
reasonable best efforts to consult with the other party as to
all such public announcements).
7.3 Reasonable Efforts. Subject to
the terms and conditions of this Agreement, (a) the parties
shall use their respective reasonable efforts in good faith to
take or cause to be taken as promptly as practicable all
reasonable actions that are within their control to cause to be
fulfilled those conditions precedent to their obligations to
consummate the Merger and (b) the parties shall use
reasonable efforts to obtain all consents and approvals required
in connection with the consummation of the transactions
contemplated by this Agreement.
7.4 No Solicitation.
(a) From and after the date of this Agreement until the
Effective Time, without the prior written consent of BFC, and
subject to Section 7.4(b) hereof, Levitt will not,
and will not permit its directors, officers, employees,
investment bankers, attorneys, accountants or other
representatives, agents or Affiliates to, directly or
indirectly, (i) solicit, initiate, or knowingly encourage
any Acquisition Proposals or any inquiries or proposals that
could reasonably be expected to lead to any Acquisition
Proposals, (ii) engage in negotiations or discussions
concerning, or provide any non-public information to any Person
in connection with, any Acquisition Proposal or under
circumstances that could reasonably be expected to result in an
Acquisition Proposal or (iii) agree to, approve, recommend
or otherwise endorse or support any Acquisition Proposal. As
used herein, the term Acquisition Proposal
shall mean any proposal relating to a possible (1) merger,
consolidation, share exchange, business combination or similar
transaction involving Levitt or any of its Subsidiaries,
(2) sale, lease, exchange, transfer or other disposition
(other than sales of inventory in the ordinary course of
business consistent with past practices), directly or
indirectly, by merger, consolidation, share exchange or
otherwise (whether in one or more transactions), of all or
substantially all of the assets of Levitt and its Subsidiaries
on a consolidated basis, (3) liquidation, dissolution,
recapitalization or other similar type of transaction, or
(4) transaction which is similar in form, substance or
purpose to any of the foregoing transactions; provided, however,
that the term Acquisition Proposal shall not
include the Merger and the transactions contemplated hereby or
any proposal or modification thereof submitted by BFC or any of
its Affiliates (other than Levitt or any of its Subsidiaries,
directors, officers, employees or agents). Levitt will, and will
direct all its directors, officers, employees, investment
bankers, attorneys, accountants and other representatives,
agents and Affiliates to, immediately cease any and all existing
activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
A-I-21
(b) Notwithstanding the provisions of
Section 7.4(a) above, if a Person or group other
than BFC or any of its Affiliates (other than Levitt or any of
its Subsidiaries, directors, managers, officers, employees or
agents) (a Third Party) after the date of
this Agreement submits to Levitt or its Board of Directors, or
the Special Committee, not resulting from a breach of
Section 7.4(a) above, an unsolicited, bona fide,
written Acquisition Proposal, and the Special Committee or
Levitts Board of Directors reasonably determines in good
faith, (i) after consultation with their financial, legal
and other advisors that such Acquisition Proposal will result
in, or upon further discussion with or due diligence by such
Third Party could reasonably be expected to constitute or result
in, a Superior Proposal and (ii) after consultation with
outside legal counsel, that the failure to take the action set
forth in (A) and (B) below may be inconsistent with
its fiduciary duties under applicable Law, then, in such case
Levitt may (A) furnish information about its business to
the Third Party under protection of an appropriate
confidentiality agreement containing customary limitations on
the use and disclosure of all non-public written or oral
information furnished to such Third Party, provided that Levitt
contemporaneously furnishes to BFC all such non-public
information furnished to the Third Party and (B) negotiate
and participate in discussions and negotiations with such Third
Party. In the event that, after the date of this Agreement and
prior to the Effective Time, Levitt receives a Superior Proposal
not in violation of Section 7.4(a) and the Special
Committee or the Board of Directors of Levitt determines, in
good faith and after consultation with its financial advisors
and legal counsel, that the failure to do so would be
inconsistent with the Board of Directors fiduciary duties
under applicable Law, the Board of Directors may do any or all
of the following: (x) withhold, withdraw, modify or change
the Board of Directors approval or recommendation of this
Agreement or the Merger or (y) approve or recommend to the
shareholders of Levitt the Superior Proposal. The Board of
Directors shall not take the action described in
clauses (x) or (y) above without providing BFC
with at least two (2) Business Days prior written notice
stating that the Board of Directors intends to take such actions
and setting forth the information specified in
Section 7.4(c) hereof with respect to any Superior
Proposal which the Board of Directors intends to accept or
recommend. For purposes of this Agreement, Superior
Proposal means any unsolicited, bona fide, written
Acquisition Proposal for consideration consisting of cash (not
subject to a financing contingency)
and/or
securities, and otherwise on terms which the Special Committee
or Levitts Board of Directors determines, after
consultation with their legal, financial and other advisors, are
more favorable to the Minority Shareholders from a financial
point of view than the Merger or other revised proposal
submitted by BFC prior such determination, taking into account
the ability of the Third Party to consummate the Superior
Proposal on substantially the terms proposed. Nothing contained
herein shall prohibit Levitt from taking, and disclosing to its
shareholders, a position required by
Rule 14d-9,
Rule 14e-2(a)
or Item 1012(a) of
Regulation M-A
promulgated under the Exchange Act.
(c) Levitt will notify BFC immediately, and in any event
within twenty-four (24) hours, if (i) an Acquisition
Proposal is made or is modified in any respect (including any
written material provided by the offeror, the principal terms
and conditions of any such Acquisition Proposal or modification
thereto and the identity of the offeror), in which case Levitt
will provide a copy of the Acquisition Proposal concurrently
with such notice or (ii) Levitt furnishes non-public
information to, or enters into discussions or negotiations with
respect to an Acquisition Proposal with, any Third Party.
(d) In addition to the obligations of Levitt set forth in
paragraph (a), (b) and (c) of this
Section 7.4, Levitt, as promptly as practicable,
will advise BFC orally and in writing of any request for
information that could reasonably be expected to lead to an
Acquisition Proposal, and the material terms and conditions of
such request or inquiry. Levitt will keep BFC informed in all
respects of the status of any such request or inquiry. In
addition to the foregoing, Levitt will provide BFC with prior
telephonic (promptly confirmed in writing) or written notice of
any meeting of Levitts Board of Directors (or any
committee thereof) at which Levitts Board of Directors (or
any committee thereof) is expected or could reasonably be
expected to consider an Acquisition Proposal, together with a
copy of the documentation relating to such Acquisition Proposal
to the extent such documentation is then available (and
otherwise provide such documentation as soon as available).
7.5 Special Meetings.
(a) Levitt shall call the Levitt Special Meeting to be held
as promptly as reasonably practicable after the effectiveness of
the Registration Statement for the purpose of voting upon the
Merger, this Agreement and the other transactions contemplated
by this Agreement and for no other purpose without the prior
written consent of BFC. Except as provided in
Section 7.4(b) with respect to the right of the
Special Committee or Levitts Board of
A-I-22
Directors to withhold, withdraw, modify or change its
recommendation to Levitts shareholders, Levitt shall use
its reasonable efforts to secure the vote of its shareholders
required under the FBCA and this Agreement pursuant to the Joint
Proxy Statement/Prospectus.
(b) BFC shall call the BFC Special Meeting to be held as
promptly as reasonably practicable after the effectiveness of
the Registration Statement for the purpose of voting on the
transactions contemplated hereby. BFC shall use its reasonable
efforts to secure the required vote or consent of its
shareholders pursuant to the Joint Proxy Statement/Prospectus,
and shall take all other action necessary or advisable to obtain
the vote or consent of shareholders required by the FBCA to
obtain such approval pursuant to the Joint Proxy
Statement/Prospectus.
(c) BFC shall vote all of its shares of Levitt Class A
Common Stock and Levitt Class B Common Stock at the Levitt
Special Meeting in favor of the Merger and the other
transactions contemplated hereby.
(d) At the Levitt Special Meeting, the inspector of
elections designated by the Levitt Board of Directors shall make
a special determination as to whether the condition set forth in
Section 8.1(a) regarding the required vote of
Minority Shareholders has been satisfied.
7.6 Registration Statement; Joint Proxy
Statement/Prospectus.
(a) As promptly as practicable after the date of this
Agreement, Levitt shall supply BFC with the information
pertaining to Levitt required by the Securities Act or the
Exchange Act, as the case may be, for inclusion or incorporation
by reference in the Registration Statement and the Joint Proxy
Statement/Prospectus to be filed by BFC, which information shall
not at each time the Registration Statement is filed with the
SEC, at the time it becomes effective under the Securities Act,
at the time the Joint Proxy Statement/Prospectus is mailed to
Levitts shareholders or at the time of the Levitt Special
Meeting or the BFC Special Meeting, contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading. No representation is or shall be made by
Levitt with respect to the accuracy of statements made in the
Joint Proxy Statement/Prospectus or the Registration Statement
based on information supplied by BFC or Merger Sub for inclusion
or incorporation by reference in such documents. If before the
Effective Time, any event or circumstance relating to Levitt or
any of its Subsidiaries, or their respective officers, managers
or directors, is discovered by Levitt that should be set forth
in an amendment or a supplement to the Registration Statement or
Joint Proxy Statement/Prospectus, Levitt shall promptly inform
BFC and shall provide to BFC appropriate amendments or
supplements to the Registration Statement or Joint Proxy
Statement/Prospectus, and the representations and warranties of
Levitt set forth in this Section 7.6(a) as to the
accuracy of such information shall apply to all such amended or
supplemented information.
(b) As promptly as practicable after the date of this
Agreement, BFC shall provide Levitt with the information
pertaining to BFC and Merger Sub required by the Securities Act
or the Exchange Act, as the case may be, for inclusion or
incorporation by reference in the Registration Statement or the
Joint Proxy Statement/Prospectus to be filed by BFC, which
information shall not at the time the Registration Statement is
filed with the SEC, at the time it becomes effective under the
Securities Act, at the time the Joint Proxy Statement/Prospectus
is mailed to Levitts shareholders, at the time the Joint
Proxy Statement/Prospectus is mailed to BFCs shareholders
or at the time of the Levitt Special Meeting or the BFC Special
Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. No
representation is or shall be made by BFC with respect to
statements made in the Registration Statement or Joint Proxy
Statement/Prospectus based on information supplied by Levitt for
inclusion or incorporation by reference in such documents. If
before the Effective Time, any event or circumstance relating to
BFC or any of its Subsidiaries, or their respective officers,
managers or directors, should be discovered by BFC that should
be set forth in an amendment or a supplement to the Registration
Statement or Joint Proxy Statement/Prospectus, BFC shall
promptly inform Levitt and shall make appropriate amendments or
supplements to the Registration Statement or Joint Proxy
Statement/Prospectus, and the representations and warranties of
BFC set forth in this Section 7.6(b) as to the
accuracy of such information shall apply to all such amended or
supplemented information.
(c) As promptly as practicable after the date of this
Agreement, BFC shall prepare and file with the SEC, with
Levitts assistance, the Registration Statement, which
shall include the Joint Proxy Statement/Prospectus of Levitt
A-I-23
and BFC relating to the Levitt Special Meeting and BFC Special
Meeting. BFC shall use all commercially reasonable efforts to
cause the Registration Statement to become effective as promptly
as practicable after filing and shall use commercially
reasonable efforts to maintain the effectiveness of such
Registration Statement until all of the shares of BFC
Class A Common Stock have been issued and distributed in
the Merger as described in the Joint Proxy Statement/Prospectus.
BFC shall take any action required under applicable federal or
state securities Laws in connection with the issuance of shares
of BFC Class A Common Stock pursuant to the Merger. BFC
shall, promptly after the execution of the Agreement, prepare
and submit to the NYSE Arca a listing application covering all
shares of BFC Class A Common Stock to be issued to the
Levitt shareholders in the Merger and pursuant to the Levitt
Options and restricted stock awards to be assumed by BFC, and
shall use its reasonable best efforts to obtain, prior to the
Effective Time, approval for the listing of all of such shares,
subject to official notice of issuance, as promptly as
practicable after the date hereof, and in any event prior to the
Closing. The Surviving Corporation shall use its reasonable best
efforts to cause the Levitt Class A Common Stock to be
delisted from the NYSE and deregistered under the Exchange Act
as soon as practicable following the Effective Time. Levitt
shall furnish all information concerning Levitt as BFC may
reasonably request in connection with such actions and the
preparation of the Registration Statement, including information
in response to comments received from the SEC. As promptly as
practicable after the Registration Statement becomes effective,
Levitt shall mail the Joint Proxy Statement/Prospectus to its
shareholders and BFC shall mail the Joint Proxy
Statement/Prospectus to its shareholders. Notwithstanding
anything to the contrary contained herein, neither the Joint
Proxy Statement/Prospectus nor the Registration Statement nor
any amendment or supplement thereto shall be filed or mailed
without the consent of both BFC and Levitt, which consent shall
not be unreasonably withheld.
7.7 Employee Benefit Plans. As
appropriate, Levitts Board of Directors shall adopt a
resolution to discontinue the sale or contribution (for any
applicable period that has not yet commenced) of Levitt Common
Stock pursuant to any Levitt Plan subject to Section 401(a)
of the Code, or otherwise shall cause such discontinuance.
7.8 Indemnification.
(a) After the Effective Time, the Surviving Corporation
shall indemnify, defend and hold harmless each Person who is
now, or who has been at any time before the date hereof or who
becomes before the Effective Time, an officer or director of
Levitt (the Indemnified Parties) against all
losses, claims, damages, costs, expenses (including
attorneys fees), liabilities or judgments or amounts that
are paid in settlement (which settlement shall require the prior
written consent of BFC, which consent shall not be unreasonably
withheld) of or in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, or
administrative (each a Claim), in which an
Indemnified Party is, or is threatened to be made, a party based
in whole or in part on or arising in whole or in part out of the
fact that such person is or was a director or officer of Levitt
if such Claim pertains to any matter or fact arising, existing
or occurring before the Effective Time (including, without
limitation, the Merger) regardless of whether such Claim is
asserted or claimed before, at or after the Effective Time (the
Indemnified Liabilities), to the same extent
provided for under the FBCA in effect as of the date hereof and
under the Articles of Incorporation or Bylaws of Levitt as in
effect on the date hereof. The Surviving Corporation shall pay
expenses in advance of the final disposition of any such action
or proceeding to each Indemnified Party to the same extent
provided for under the FBCA in effect on the date hereof and
under the Articles of Incorporation or Bylaws of Levitt upon
receipt of any undertaking required by applicable Law. Any
Indemnified Party wishing to claim indemnification under this
Section 7.8(a), upon learning of any Claim, shall
immediately notify BFC (but the failure so to notify BFC shall
not relieve it from any liability which it may have under this
Section 7.8(a) except to the extent such failure
prejudices BFC) and shall deliver to BFC any undertaking
required by applicable Law. The Surviving Corporation shall
ensure, to the extent permitted under applicable Law, that all
limitations of liability existing in favor of the Indemnified
Parties as provided in the Articles of Incorporation or Bylaws
of Levitt as in effect on the date hereof, or allowed under
applicable Law as in effect on the date hereof with respect to
Indemnified Liabilities, shall survive the consummation of the
transactions contemplated by this Agreement.
(b) For a period of six (6) years from and after the
Effective Time, the Surviving Corporation shall cause to be
maintained in effect the current policies of directors and
officers liability insurance maintained by Levitt
(provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage and amount containing
terms and conditions which are substantially no less
advantageous, or in lieu thereof obtain single limit
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tail coverage providing at least the same coverage and amount
containing terms and conditions which are substantially no less
advantageous for such period (which shall be purchased by Levitt
immediately prior to Closing upon the request of BFC)) with
respect to claims arising from facts or events which occurred
before the Effective Time.
(c) The obligations of the Surviving Corporation provided
under paragraphs (a) and (b) of this
Section 7.8 are intended to be enforceable against
the Surviving Corporation directly by the Indemnified Parties
and shall be binding on all successors and permitted assigns of
the Surviving Corporation.
7.9 Further Assurances. Subject to
the terms and conditions herein provided, each of the parties
hereto agrees to use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable on the part of such party, to
consummate and make effective the transactions contemplated by
this Agreement at the earliest practicable date, including
obtaining all required consents, approvals, waivers, exemptions,
amendments and authorizations, giving all notices, and making or
effecting all filings, registrations, applications, designations
and declarations, including, but not limited to, those described
in the schedules to this Agreement, and each party shall
cooperate fully with the other (including by providing any
necessary information) with respect to the foregoing. In case at
any time any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers
and/or
directors of BFC or Levitt will take all such necessary action.
7.10 Tax Treatment.
(a) The parties shall use reasonable best efforts to cause
the Merger to qualify as a reorganization under
Section 368(a) of the Code and shall use reasonable best
efforts not to, and not to permit or cause any Affiliate or any
of BFCs Subsidiaries to, take any action or cause any
action to be taken which would cause the Merger to fail to so
qualify as a reorganization under Section 368(a) of the
Code.
(b) Unless otherwise required by applicable Law, BFC,
Levitt and Merger Sub shall report the Merger as a
reorganization within the meaning of Section 368(a) of the
Code.
(c) The parties hereto shall cooperate and use their
reasonable efforts in order for BFC to obtain the opinion of
Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A. described in Section 8.1(h) hereof. In
connection therewith, Levitt, BFC and Merger Sub shall deliver
to Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A. representation letters as may be reasonably
requested by such law firm, dated and executed as of the date of
such opinion.
7.11 Comfort Letters. Levitt and
BFC will each use their commercially reasonable efforts to cause
to be delivered to each other reasonable and customary letters
from their respective independent accountants, the first letter
dated a date within two (2) Business Days before the
effective date of the Registration Statement and the second
letter dated a date within two (2) Business Days before the
date of the BFC Special Meeting and the Levitt Special Meeting,
as applicable, in form and substance reasonably satisfactory to
the recipient and customary in scope and substance for comfort
letters delivered by independent accountants in connection with
registration statements similar to the Registration Statement.
7.12 Shareholder Litigation. The
parties shall cooperate and consult with one another, to the
fullest extent possible, in connection with any shareholder
litigation against any of them or any of their respective
directors or officers with respect to the transactions
contemplated by this Agreement. In furtherance of and without in
any way limiting the foregoing, each of the parties shall use
its respective commercially reasonable efforts to prevail in
such litigation (or, with the consent of the other parties,
settle such litigation) so as to permit the consummation of the
transactions contemplated by this Agreement in the manner
contemplated by this Agreement. Notwithstanding the foregoing,
no party shall compromise or settle any litigation commenced
against it or its directors or officers relating to this
Agreement or the transactions contemplated hereby (including the
Merger) without the other parties prior written consent,
which shall not be unreasonably withheld or delayed.
7.13 Liquidity Support of the Surviving
Corporation. BFC shall use its commercially
reasonable efforts to support the liquidity needs of the
Surviving Corporation and its Subsidiaries after the Effective
Time, consistent with the reasonable business judgment and
fiduciary duties of the Board of Directors of BFC.
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7.14 Affiliate Letters. Not later
than the fifteenth (15th) day prior to the mailing of the Joint
Proxy Statement/Prospectus, Levitt shall deliver to BFC a
schedule of each Levitt shareholder that is or is reasonably
likely to be, as of such date, deemed to be an Affiliate of
Levitt and who was not previously disclosed pursuant to
Section 5.11 or for whom Levitt has not delivered an
Affiliate Letter pursuant to Section 5.11. Levitt
shall use commercially reasonable efforts to cause each
Affiliate disclosed pursuant to Section 5.11 and
each other shareholder referred to above to execute and deliver
an Affiliate Letter to BFC on or before the date of mailing of
the Joint Proxy Statement/Prospectus.
7.15 HSR Act. If required, BFC and
Levitt will (a) take all commercially reasonable actions
necessary to file as soon as practicable notifications under the
HSR Act with respect to the Merger, if required, (b) comply
at the earliest practicable date with any request for additional
information received from the Federal Trade Commission or
Antitrust Division of the Department of Justice pursuant to the
HSR Act, and (c) request early termination of all
applicable waiting periods.
7.16 Directors of BFC. BFC shall
use its best efforts to cause the directors of Levitt who are
not already directors of BFC as of the date of this Agreement to
be elected to the Board of Directors of BFC.
ARTICLE VIII
Conditions
Precedent to Obligations
8.1 Conditions to Each Partys Obligation to
Effect the Merger. The respective obligations of
each party to consummate and effect the Merger and the other
transactions contemplated hereby shall be subject to the
satisfaction prior to or at the Closing of the following
conditions, each of which may only be waived in writing in whole
or in part by mutual agreement of all of the parties, to the
extent permitted by Law:
(a) This Agreement, the Merger and the transactions
contemplated by this Agreement shall have received the requisite
approval and authorization of the shareholders of Levitt in
accordance with applicable Law and the Articles of Incorporation
and Bylaws of Levitt, and the transactions contemplated by this
Agreement shall have received the requisite approval and
authorization of the shareholders of BFC in accordance with
applicable Law, the rules and regulations of the NYSE Arca and
the Articles of Incorporation and Bylaws of BFC. In addition to
the approval of the shareholders of Levitt required by
applicable Law and Levitts Articles of Incorporation and
Bylaws, it shall be a further condition that the approval and
adoption of this Agreement, the Merger and the transactions
contemplated hereby shall receive the affirmative vote of at
least a majority of the shares of Levitt Class A Common
Stock voted (but not including any vote that is not counted as
either affirmative or negative) in person or by proxy at the
Levitt Special Meeting by the Minority Shareholders.
(b) No litigation, arbitration or other proceeding shall be
pending by or before any court, arbitration panel or
Governmental Entity which seeks to enjoin or prohibit the
consummation of the transactions contemplated by this Agreement
(other than a proceeding instituted by Levitt or any of its
Subsidiaries, directors, officers, employees or agents).
(c) No Law shall have been enacted or promulgated by any
Governmental Entity which prohibits the consummation of the
Merger; and there shall be no Order of a Governmental Entity
precluding consummation of the Merger.
(d) The SEC shall have declared the Registration Statement
effective. No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose, and no similar
proceeding in respect of the Joint Proxy Statement/Prospectus,
shall have been initiated or threatened in writing by the SEC;
and all requests for additional information on the part of the
SEC shall have been complied with to the reasonable satisfaction
of the parties hereto.
(e) All consents, approvals, Orders or authorizations of,
or registrations, declarations or filings with, any Governmental
Entity required by or with respect to Levitt, BFC or any of
their respective Subsidiaries in connection with the execution
and delivery of this Agreement or the consummation of the Merger
and other transactions contemplated hereby shall have been
obtained or made, including, without limitation, the expiration
or termination of any notice and waiting period under the HSR
Act, if applicable, other than consents, approvals, Orders,
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authorizations, registrations, declarations or filings which if
not made or obtained could not reasonably be expected to result
in a Material Adverse Effect on BFC or the Surviving Corporation
after consummation of the Merger. All of such consents and
approvals shall have been obtained without the imposition of any
conditions which, in the opinion of Levitt and BFC, could
reasonably be expected to materially adversely affect the
operation of BFC or the Surviving Corporation after consummation
of the Merger.
(f) All written consents, approvals, interim approvals,
assignments, waivers, Orders, authorizations or other
certificates necessary to provide for the continuation in full
force and effect of the Levitt Material Contracts and all other
material agreements set forth on Schedule 5.9 and
all of the existing Permits of Levitt and for Levitt to
consummate the Merger and other transactions contemplated hereby
shall have been received, except where the failure to receive
such consents, approvals, interim approvals, assignments,
waivers, Orders, authorizations or certificates could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Levitt or could not adversely
affect the ability of the Surviving Corporation to continue to
conduct the business of Levitt as it has been historically
conducted by Levitt.
(g) BFC and Levitt shall each have received the written
opinion of Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A., in form and substance reasonably acceptable to
each of them, dated as of the Closing to the effect that, on the
basis of the facts, representations and assumptions set forth or
referred to in such opinion, for U.S. Federal income tax
purposes, the Merger will constitute a
reorganization within the meaning of
Section 368(a) of the Code. In rendering such opinion,
counsel to BFC shall be entitled to rely upon customary
assumptions and representations reasonably satisfactory to such
counsel, including representations set forth in certificates of
officers of BFC, Merger Sub and Levitt, in form and substance
reasonably satisfactory to BFC, Merger Sub and Levitt,
respectively.
8.2 Conditions to Levitts Obligation to
Effect the Merger. The obligations of Levitt to
consummate and effect the Merger and the other transactions
contemplated hereby are further subject to the fulfillment of
the following conditions, any of which may be waived only in
writing in whole or part by Levitt:
(a) The representations and warranties of BFC and Merger
Sub set forth in this Agreement that are qualified by
materiality or Material Adverse Effect shall
have been true and correct as of the date of this Agreement and
shall be true and correct as of the Effective Time as if made on
and as of the Effective Time, and the representations and
warranties of BFC and Merger Sub contained in this Agreement
that are not so qualified shall have been true and correct in
all material respects as of the date of this Agreement and shall
be true and correct in all material respects as of the Effective
Time as if made on and as of the Effective Time except, in each
case, for those representations and warranties which address
matters only as of a particular date (which shall remain true
and correct or true and correct in all material respects, as
applicable, as of such date).
(b) Each of BFC and Merger Sub shall have performed in all
material respects all obligations and complied in all material
respects with all covenants required by this Agreement to be
performed or complied with by it at or prior to the Effective
Time.
(c) BFC shall have obtained approval for listing on the
NYSE Arca of the shares of BFC Class A Common Stock to be
issued in the Merger, subject only to official notice of
issuance.
(d) The opinion of Houlihan Lokey Howard & Zukin
referred to in Section 5.14 hereof shall not have
been withdrawn, revoked or materially modified.
(e) Each of BFC and Merger Sub shall have delivered to
Levitt a certificate, dated the Effective Time and signed by
their respective Chief Executive Officers and Chief Financial
Officers, certifying the satisfaction of the conditions set
forth in Sections 8.2(a) and (b) in all
respects.
8.3 Conditions to BFCs and Merger Subs
Obligation to Effect the Merger. The obligations
of BFC and Merger Sub to consummate and effect the Merger and
the other transactions contemplated hereby are further subject
to the fulfillment of the following conditions, any of which may
be waived only in writing in whole or part by BFC or Merger Sub:
(a) The representations and warranties of Levitt set forth
in this Agreement that are qualified by materiality or
Material Adverse Effect shall have been true
and correct as of the date of this Agreement and shall be true
and
A-I-27
correct as of the Effective Time as if made on and as of the
Effective Time, and the representations and warranties of Levitt
contained in this Agreement that are not so qualified shall have
been true and correct in all material respects as of the date of
this Agreement and shall be true and correct in all material
respects as of the Effective Time as if made on and as of the
Effective Time except for those representations and warranties
which address matters only as of a particular date (which shall
remain true and correct as of such date).
(b) Levitt shall have performed all obligations and
complied with all covenants required by this Agreement to be
performed or complied with by it at or prior to the Effective
Time; provided, however, that this condition shall
not apply to any agreement or covenant of Levitt if the failure
by Levitt to so perform or comply is attributable to BFC.
(c) Levitt shall have delivered to BFC a certificate, dated
the Closing Date and signed by its President and Chief Financial
Officer, certifying the satisfaction of the conditions set forth
in Sections 8.3(a) and (b).
(d) The opinion of Sandler ONeill &
Partners, L.P. referred to in Section 4.18 hereof
shall not have been withdrawn, revoked or materially modified.
(e) Holders of not more than 10% of the outstanding shares
of Levitt Class A Common Stock shall have duly and validly
exercised, or remain entitled to exercise, appraisal rights in
connection with the Merger in accordance with the FBCA.
ARTICLE IX
Termination,
Amendment and Waiver
9.1 Termination of the
Agreement. This Agreement may be terminated and
the Merger and transactions contemplated by this Agreement may
be abandoned at any time prior to the Effective Time (whether
before or after the approval of this Agreement by Levitts
shareholders), as follows:
(a) by mutual written consent of Levitt and BFC.
(b) by either of Levitt or BFC:
(i) (A) if Levitts shareholders do not approve
the Merger by the requisite vote at the Levitt Special Meeting
(including any adjournment or postponement thereof) or
(B) if BFCs shareholders do not approve the
transactions contemplated hereby by the requisite vote at the
BFC Special Meeting (including any adjournment or postponement
thereof);
(ii) if any Governmental Entity shall have issued an Order,
decree or ruling or taken any other action (which Order, decree,
ruling or other action the parties hereto shall use their
reasonable efforts to lift), which permanently restrains,
enjoins or otherwise prohibits consummation of the Merger and
such Order, decree, ruling or other action shall have become
final and non appealable;
(iii) if there shall be any Law enacted, promulgated or
issued and deemed applicable to the Merger by any Governmental
Entity which would make consummation of the Merger illegal;
(iv) if the Merger shall not have been consummated by
July 31, 2007; provided, however, that if BFC is proceeding
in good faith to consummate the Merger, this date may be
extended, as specified by BFC in writing to Levitt by
July 15, 2007, to a date not later than October 1,
2007; provided, further, that the right to terminate this
Agreement under this Section 9.1(b)(iv) shall not be
available to any party whose failure, or whose Affiliates
failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Effective Time
to occur on or before such date; or
(v) if (A) the Special Committee
and/or
Levitts Board of Directors shall have finally determined
to approve or recommend a Superior Proposal to Levitts
shareholders after complying with Section 7.4 or
(B) the Special Committee
and/or
Levitts Board of Directors withholds or withdraws its
recommendation of this Agreement or the Merger or modifies or
changes such recommendation in a manner adverse to BFC.
A-I-28
(c) by Levitt if:
(i) BFC or Merger Sub shall have breached in any material
respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which
breach (A) cannot be or has not been cured, in all material
respects, within 15 days after the giving of written notice
to BFC or Merger Sub, as applicable, and (B) would result
in the failure to satisfy a condition set forth in
Section 8.2;
(ii) the average closing price of the BFC Class A
Common Stock as quoted on the NYSE Arca and the average closing
price of the BankAtlantic Bancorp, Inc. Class A Common
Stock as quoted on the NYSE, in each case for the ten
(10) consecutive trading days ending on and including the
trading day two (2) days prior to the day of the Effective
Time, are both less than 70% of the closing prices for such
stocks on the date of this Agreement; provided however, that
after receiving written notice from Levitt of termination
pursuant to this Section 9.1(c)(ii), BFC shall have
the right, but not the obligation, to avoid such termination,
and to extend the date of the Effective Time for up to two
(2) Business Days, by promptly providing written notice to
Levitt of its election to adjust the Exchange Ratio so as to
increase the value of the consideration delivered to holders of
Levitt Class A Common Stock to equal the value such
shareholders would have received if the value of the BFC
Class A Common Stock at the Effective Time was equal to 70%
of the closing price of the BFC Class A Common Stock on the
NYSE Arca on the date hereof; and such notice to Levitt shall
include the Exchange Ratio, as adjusted; or
(iii) if Houlihan Lokey Howard & Zukin has
withdrawn, revoked, annulled or materially modified its fairness
opinion.
(d) by BFC if:
(i) Levitt shall have breached in any material respect any
representation, warranty, covenant or other agreement contained
in this Agreement, which breach (i) cannot be or has not
been cured, in all material respects, within 15 days after
the giving of written notice to Levitt and (ii) would
result in the failure to satisfy a condition set forth in
Section 8.3;
(ii) if Sandler ONeill & Partners, L.P. has
withdrawn, revoked, annulled or materially modified its fairness
opinion; or
(iii) a tender offer or exchange offer for ten percent
(10%) or more of the outstanding shares of Levitt Common Stock
shall have been commenced or a registration statement or
statement on Schedule TO with respect thereto shall have
been filed (other than by BFC or an Affiliate thereof (other
than Levitt or any of its Subsidiaries, directors, officers,
employees or agents)) and the Board of Directors of Levitt
shall, notwithstanding its obligations hereunder, have
(A) recommended that the Levitt shareholders tender their
shares in such tender or exchange offer or (B) publicly
announced its intention to take no position with respect to such
tender offer.
9.2 Effect of Termination. If this
Agreement is terminated pursuant to this Article IX,
written notice thereof shall promptly be given by the party
electing such termination to the other party and, subject to the
expiration of the cure periods provided in
Sections 9.1(c) and 9.1(d)(i) above, if any,
this Agreement shall terminate without further actions by the
parties and no party shall have any further obligations under
this Agreement except that nothing in this
Section 9.2 shall relieve a breaching party for
liability for its willful or intentional breach of this
Agreement.
9.3 Amendment and Waiver. This
Agreement may be amended or modified in whole or in part at any
time only by a writing signed by the parties hereto. Any term,
condition or provision of this Agreement may be waived in
writing at any time by the party which is entitled to the
benefits thereof.
ARTICLE X
Miscellaneous
10.1 Survival of the Representations and
Warranties. No investigation by the parties
hereto made heretofore or hereafter shall affect the
representations and warranties of the parties which are
contained herein and each
A-I-29
such representation and warranty shall survive such
investigation. The representations and warranties of the parties
hereto contained in this Agreement and in any certificate
delivered pursuant hereto or in any exhibit or schedule to this
Agreement shall not survive the Effective Time.
10.2 Payment of Expenses.
(a) Except as set forth in this Section 10.2,
all fees and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not the Merger is
consummated.
(b) BFC and Levitt each agree to pay one-half
(1/2)
of any printing, mailing and filing expenses of the Registration
Statement, the Joint Proxy Statement/Prospectus and any
applicable pre-merger notification and report forms under the
HSR Act.
10.3 Binding Effect. Neither this
Agreement nor any rights, duties or obligations hereunder shall
be assignable by Levitt, in whole or in part, and any attempted
assignment in violation of this prohibition shall be null and
void. Subject to the foregoing, all of the terms and provisions
hereof shall be binding upon, and inure to the benefit of, the
successors and permitted assigns of the parties hereto.
10.4 Governing Law. This Agreement
will be governed and enforced in all respects, including
validity, interpretation and effect, by the Laws of the State of
Florida without giving effect to its principles of conflicts of
laws.
10.5 Counterparts. This Agreement
may be executed in several counterparts and one or more separate
documents, all of which together shall constitute one and the
same instrument with the same force and effect as though all of
the parties had executed the same document. Delivery of an
executed counterpart signature page to this Agreement by
facsimile or other electronic transmission shall be effective as
delivery of an original executed counterpart signature page.
10.6 Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
to have been duly received (i) on the date given if
delivered personally or by facsimile (ii) one day after
being sent by nationally recognized overnight delivery service
or (iii) five days after having been mailed by registered
or certified mail (postage prepaid, return receipt requested),
to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If either to BFC or Merger Sub, addressed to:
BFC Financial Corporation
2100 West Cypress Creek Boulevard
Fort Lauderdale, Florida 33309
Attn: Alan B. Levan, Chief Executive Officer
Facsimile:
(954) 940-5050
With copies addressed to:
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
150 West Flagler Street, Suite 2200
Miami, Florida 33130
Attn: Alison W. Miller, Esq.
Facsimile:
(305) 789-3395
If to Levitt, addressed to:
Levitt Corporation
2200 West Cypress Creek Boulevard
Fort Lauderdale, Florida 33309
Attn: George Scanlon, Chief Financial Officer
Facsimile:
(954) 958-1966
A-I-30
and to
Joel Levy, Chairman of the Special Committee
Adler Group
1400 Northwest 107th Avenue
Miami, Florida
33172-2704
Facsimile:
(305) 418-1001
With a copy addressed to (which shall not constitute notice):
Blank Rome LLP
Counsel to the Levitt Corporation Special Committee
One Logan Square
Philadelphia, Pennsylvania
19103-6998
Attn: Barry H. Genkin, Esq.
Facsimile:
(215) 832-5514
10.7 Entire Agreement;
Assignment. All exhibits and schedules referred
to in this Agreement are integral parts hereof, and this
Agreement, together with such exhibits and schedules,
constitutes the entire agreement among the parties hereto with
respect to the matters contained herein and therein, and
supersedes all prior agreements and understandings between the
parties with respect thereto. This Agreement shall not be
assigned or delegated (whether pursuant to a merger, by
operation of Law or otherwise).
10.8 Headings. The section headings
contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of
this Agreement.
10.9 Knowledge of the
Parties. Where any representation or warranty
contained in this Agreement is expressly qualified by reference
to the knowledge of any of the parties hereto, each of the
parties hereto acknowledges and confirms that it has made
reasonable inquiry as to the matters that are the subject of
such representations and warranties. Where reference is made to
a partys knowledge or any similar phrase, such reference
shall be deemed to include the respective executive officers and
directors of such party and each of its Subsidiaries, all of
whom shall be deemed to have conducted the inquiry required in
this Section 10.9.
10.10 Attorneys Fees. In any
action or proceeding brought to enforce any provision of this
Agreement, or where any provision hereof is validly asserted as
a defense, the successful party shall be entitled to recover
reasonable attorneys fees and expenses through all appeals
in addition to any other remedy.
10.11 No Third Party
Beneficiary. Except as permitted in
Section 7.8 hereof, nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer
upon or give any Person other than the parties hereto and their
respective heirs, personal representatives, legal
representatives, successors and permitted assigns, any rights or
remedies under or by reason of this Agreement.
10.12 Injunctive Relief. It is
possible that remedies at law may be inadequate and, therefore,
the parties hereto shall be entitled to equitable relief
including, without limitation, injunctive relief, specific
performance or other equitable remedies in addition to all other
remedies provided hereunder or available to the parties hereto
at law or in equity.
10.13 Jurisdiction; Venue. Any
suit, action or proceeding against any party with respect to
this Agreement or any judgment entered by any court in respect
of this Agreement shall be brought in a federal or state court
in Broward County, Florida, and the parties hereto accept the
exclusive jurisdiction of those courts for the purpose of any
such suit, action or proceeding. In addition, the parties
irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or
relating to this Agreement, or any judgment entered by any court
in respect hereof brought in Broward County, Florida.
10.14 Severability. If any term or
provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal
substance of the Merger and the other transactions
A-I-31
contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner
in order that such transactions be consummated as originally
contemplated to the fullest extent possible.
10.15 Waiver. Any waiver by any
party hereto of any of its rights or remedies under this
Agreement or of any breach or violation of or default under this
Agreement must be in writing and signed by the party to be
charged thereunder and shall not constitute a waiver of any of
its other rights or remedies or of any other or future breach,
violation or default hereunder.
10.16 Special Committee. Except as
may be required by applicable Law, prior to the Effective Time,
any consent, waiver or other determination to be made, or action
to be taken, by Levitt under this Agreement shall be made or
taken only upon the approval of the Special Committee.
10.17 Time of the Essence. Time is
of the essence in the performance of all agreements, obligations
and covenants by the parties under this Agreement.
[SIGNATURE
PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
BFC FINANCIAL CORPORATION,
a Florida corporation
Alan B. Levan,
Chief Executive Officer and
Chairman of the Board
LEV MERGER SUB, INC.,
a Florida corporation
Alan B. Levan,
President
LEVITT CORPORATION,
a Florida corporation
Seth M. Wise,
President
A-I-33
EXHIBIT A
AFFILIATE LETTER
,
2007
BFC Financial Corporation
2100 West Cypress Creek Road
Fort Lauderdale, Florida 33309
Ladies and Gentlemen:
The undersigned has been advised that, as of the date of this
letter, the undersigned may be deemed to be an
affiliate of Levitt Corporation, a Florida
corporation (Levitt), as the term
affiliate is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the
rules and regulations (the Rules and
Regulations) of the Securities and Exchange Commission
(the SEC) under the Securities Act of 1933,
as amended (the 1933 Act). Pursuant to
the terms of the Agreement and Plan of Merger dated as of
January 30, 2007 (the Merger Agreement)
among Levitt, BFC Financial Corporation, a Florida corporation
(BFC), and LEV Merger Sub, Inc., a Florida
corporation and wholly-owned subsidiary of BFC (Merger
Sub), each share of Class A Common Stock,
$0.01 par value, of Levitt issued and outstanding
immediately prior to the Effective Time set forth in the Merger
Agreement (the Levitt Class A Common
Stock), shall be automatically converted at the
Effective Time into the right to receive the number of shares of
Class A Common Stock, 0.01 par value, of BFC (the
BFC Class A Common Stock) set forth in
the Merger Agreement (together with cash in lieu of fractional
shares), and Levitt will be merged with and into Merger Sub with
Merger Sub to be the surviving corporation in the merger (the
Merger). Terms capitalized but not otherwise
defined herein shall have the meaning ascribed to them in the
Merger Agreement.
As a result of the Merger, the undersigned will receive shares
of BFC Class A Common Stock in exchange for shares owned by
the undersigned of Levitt Class A Common Stock.
The undersigned represents, warrants and covenants to BFC that,
as of the first date the undersigned receives any BFC
Class A Common Stock as a result of the Merger:
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A.
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The undersigned shall not make any sale, transfer or other
disposition of the BFC Class A Common Stock in violation of
the 1933 Act or the Rules and Regulations.
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B.
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The undersigned has carefully read this letter and the Merger
Agreement and discussed, to the extent the undersigned felt
necessary, with the undersigneds counsel or counsel for
Levitt, the requirements of such documents and other applicable
limitations upon the undersigneds ability to sell,
transfer or otherwise dispose of BFC Class A Common Stock.
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C.
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The undersigned has been advised that the issuance of BFC
Class A Common Stock to the undersigned pursuant to the
Merger will be registered with the SEC under the 1933 Act
on a Registration Statement on
Form S-4.
The undersigned has also been advised that, because, at the time
the Merger is submitted for a vote of the shareholders of
Levitt, the undersigned may be deemed an affiliate of Levitt,
the undersigned may not sell, transfer or otherwise dispose of
BFC Class A Common Stock issued to the undersigned in the
Merger unless such sale, transfer or other disposition
(i) has been registered under the 1933 Act,
(ii) is made in conformity with Rule 145 promulgated
by the SEC under the 1933 Act, or (iii) in the opinion
of counsel, which opinion and counsel shall be reasonably
satisfactory to BFC, is otherwise exempt from registration under
the 1933 Act.
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D.
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The undersigned understands that BFC is under no obligation to
register the sale, transfer or other disposition of the BFC
Class A Common Stock by the undersigned or on the
undersigneds behalf under the 1933 Act or to take any
other action necessary in order to enable the undersigned to
make such sale, transfer or other disposition in compliance with
an exemption from such registration; provided,
however, that BFC shall use reasonable efforts to file
timely with the SEC all filings required to be filed by it under
the Securities Exchange Act of 1934, as amended.
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A-II-1
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E.
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The undersigned also understands that there will be placed on
the certificates for the BFC Class A Common Stock issued to
the undersigned, or on any substitutions therefor, a legend
stating in substance:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ISSUED IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER
THE SECURITIES ACT OF 1933 APPLIES. THE SECURITIES REPRESENTED
BY THIS CERTIFICATE MAY BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF ONLY IN ACCORDANCE WITH THE TERMS OF A LETTER
AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF AND BFC FINANCIAL
CORPORATION, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF BFC FINANCIAL CORPORATION.
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F.
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The undersigned also understands that, unless the transfer by
the undersigned of the undersigneds BFC Class A
Common Stock has been registered under the 1933 Act, or is
a sale made in conformity with the provisions of Rule 145,
BFC reserves the right to put the following legend on the
certificates issued to the undersigneds transferee:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE
ACQUIRED FROM A PERSON WHO RECEIVED SUCH SECURITIES IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES. THE SECURITIES HAVE NOT BEEN
ACQUIRED BY THE HOLDER WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF
THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933.
It is understood and agreed that the legends set forth in
paragraphs E and F above shall be promptly removed by
delivery of substitute certificates without such legend if
(i) the securities represented thereby have been registered
for sale by the undersigned under the 1933 Act, or
(ii) BFC has received either an opinion of counsel, which
opinion and counsel shall be reasonably satisfactory to BFC, or
a no-action letter obtained by the undersigned from
the SEC staff to the effect that the restrictions imposed by
Rule 145 under the 1933 Act no longer apply to the
undersigned.
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G.
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The undersigned further understands and agrees that the
representations, warranties, covenants and agreements of the
undersigned set forth herein are for the benefit of BFC and the
Surviving Corporation (as defined in the Merger Agreement) and
will be relied upon by such corporations and their respective
counsel.
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H.
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The undersigned understands and agrees that the restrictions of
this letter agreement shall apply to all shares of BFC
Class A Common Stock that are acquired by the undersigned
in the Merger.
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A-II-2
Execution of this letter shall not be considered an admission on
the part of the undersigned that the undersigned is an
affiliate of Levitt as described in the first
paragraph of this letter, nor as a waiver of any rights that the
undersigned may have to object to any claim that the undersigned
is such an affiliate on or after the date of this letter.
Very truly yours,
Accepted this day
of ,
2007:
BFC FINANCIAL CORPORATION
By: _
_
Name: _
_
Title: _
_
A-II-3
Annex B
January 30, 2007
Special Committee of the Board of Directors
BFC Financial Corp.
2100 West Cypress Creek Road
Fort Lauderdale, FL 33309
Ladies and Gentlemen:
BFC Financial Corp.(BFC), Lev Merger Sub, Inc., a
wholly-owned subsidiary of BFC (Merger Sub) and
Levitt Corporation (Levitt), have entered into
Agreement and Plan of Merger, dated as of January 30, 2007
(collectively, the Agreement), pursuant to which
Levitt will be merged with and into Merger Sub, with Merger Sub
as the surviving entity (the Merger). Under the
terms of the Agreement, on the Effective Date, each share of
Levitt common stock issued and outstanding immediately prior to
the Merger, other than those shares owned by BFC, Merger Sub or
Levitt and certain other shares specified in the Agreement, will
be converted into the right to receive 2.27 shares of BFC
Class A common stock (the Exchange Ratio).
Capitalized terms used herein without definition shall have the
meanings assigned to them in the Agreement. The other terms and
conditions of the Merger are more fully set forth in the
Agreement. You have requested our opinion as to the fairness,
from a financial point of view, of the Exchange Ratio to BFC.
Sandler ONeill & Partners, L.P., as part of its
investment banking business, is regularly engaged in the
valuation of financial institutions and their securities in
connection with mergers and acquisitions and other corporate
transactions. In connection with this opinion, we have reviewed,
among other things: (i) the Agreement; (ii) certain
publicly available financial statements and other historical
financial information of BFC that we deemed relevant;
(iii) certain publicly available financial statements and
other historical financial information of Levitt that we deemed
relevant; (iv) earnings per share estimates for BFC for the
years ending December 31, 2007 and December 31, 2008
as provided by and reviewed with senior management of BFC;
(v) internal financial projections for Levitt for the years
ending December 31, 2006 and December 31, 2007 as
provided by and discussed with the senior management of Levitt
and an estimated earnings per share growth rate for the years
thereafter as provided by senior management of Levitt;
(vi) an estimated market value of the land holdings of
Levitt based on historical market prices and discussions with
senior management of Levitt; (vii) the pro forma financial
impact of the Merger on BFC, based on assumptions relating to
transaction expenses, purchase accounting adjustments and cost
savings determined by senior management of BFC; (viii) the
publicly reported historical price and trading activity for
BFCs and Levitts common stock, including a
comparison of certain financial and stock market information for
BFC and Levitt with similar publicly available information for
certain other companies the securities of which are publicly
traded; (ix) the current market environment generally; and
(x) such other information, financial studies, analyses and
investigations and financial, economic and market criteria as we
considered relevant. We also discussed with certain members of
the senior management of BFC the business, financial condition,
results of operations and prospects of BFC and held similar
discussions with senior management of Levitt concerning the
business, financial condition, results of operations and
prospects of Levitt.
In performing our review, we have relied upon the accuracy and
completeness of all of the financial and other information that
was available to us from public sources, that was provided to us
by BFC and Levitt or their respective representatives or that
was otherwise reviewed by us and we have assumed such accuracy
and completeness for purposes of rendering this opinion. We have
further relied on the assurances of the senior management of
each of BFC and Levitt that they are not aware of any facts or
circumstances that would make any of such information inaccurate
or misleading. We have not been asked to undertake, and have not
undertaken, an independent verification of any of such
information and we do not assume any responsibility or liability
for the accuracy or completeness thereof. We did not make an
independent evaluation or appraisal of the specific assets, the
collateral securing assets or the liabilities (contingent or
otherwise) of BFC and Levitt or any of their subsidiaries, or
the collectibility of any such assets, nor have we been
furnished with any such evaluations or appraisals.
B-1
With respect to the earnings per shares estimates for BFC used
by Sandler ONeill in its analyses, senior management of
BFC confirmed to us that those estimates reflected the best
currently available estimates of the future financial
performances of BFC. With respect to the internal financial
projections for Levitt used, with BFCs consent, by Sandler
ONeill in its analyses, senior management of Levitt
confirmed to us that those estimates reflected the best
currently available estimates of the future financial
performance of Levitt. We assumed that the financial
performances reflected in those estimates and projections used
by us in our analyses would be achieved. We express no opinion
as to such financial estimates, projections or the assumptions
on which they are based. We have also assumed that there has
been no material change in the assets, financial condition,
results of operations, business or prospects of BFC and Levitt
since the date of the most recent financial statements made
available to us. We have assumed in all respects material to our
analysis that BFC and Levitt will remain as going concerns for
all periods relevant to our analyses, that all of the
representations and warranties contained in the Agreement and
all related agreements are true and correct, that each party to
the agreements will perform all of the covenants required to be
performed by such party under the agreements and that the
conditions precedent in the agreements are not waived. Finally,
with your consent, we have relied upon the advice BFC received
from its legal, accounting and tax advisors as to all legal,
accounting and tax matters relating to the Merger and the other
transactions contemplated by the Agreement.
Our opinion is necessarily based on financial, economic, market
and other conditions as in effect on, and the information made
available to us as of, the date hereof. Events occurring after
the date hereof could materially affect this opinion. We have
not undertaken to update, revise, reaffirm or withdraw this
opinion or otherwise comment upon events occurring after the
date hereof. We are expressing no opinion herein as the prices
at which the common stock of BFC and Levitt may trade at any
time.
We have acted as BFCs financial advisor in connection with
the Merger and will receive a fee for our services, a
substantial portion of which is contingent upon consummation of
the Merger. We will also receive a fee for rendering this
opinion. BFC has also agreed to indemnify us against certain
liabilities arising out of our engagement.
In the ordinary course of our business as a broker-dealer, we
may purchase securities from and sell securities to BFC and
Levitt and their affiliates. We may also actively trade the
equity
and/or debt
securities of BFC and Levitt for our own account and for the
accounts of our customers and, accordingly, may at any time hold
a long or short position in such securities.
Our opinion is directed to the Board of Directors of BFC in
connection with its consideration of the Merger and is directed
only to the fairness, from a financial point of view, of the
Exchange Ratio to BFC and does not address the underlying
business decision of BFC to engage in the Merger, the relative
merits of the Merger as compared to any other alternative
business strategies that might exist for BFC or the effect of
any other transaction in which BFC might engage. Our opinion is
not to be quoted or referred to, in whole or in part, in a
registration statement, prospectus, proxy statement or in any
other document, nor shall this opinion be used for any other
purposes, without our prior written consent.
Based upon and subject to the foregoing, it is our opinion, as
of the date hereof, that the Exchange Ratio is fair to BFC from
a financial point of view.
Very truly yours,
/s/ Sandler
ONeill & Partners, L.P.
B-2
Annex C
January 30, 2007
The Special Committee of Levitt Corporation and
the Board of Directors of Levitt Corporation
2200 West Cypress Creek Boulevard
Ft. Lauderdale, FL 33309
Dear Members of the Special Committee and Board of Directors:
We understand that BFC Financial Corp. (the
Acquiror) and Levitt Corporation (the
Company) propose to enter into the Merger Agreement
(defined below) pursuant to which, among other things, the
Company will be merged with an into Lev Merger Sub, Inc., (the
Merger Sub) a wholly-owned subsidiary of the
Acquiror, with the Merger Sub surviving such merger and
remaining a wholly-owned subsidiary of the Acquiror (the
Transaction) and that, in connection with the
Transaction, each outstanding share of Class A common
stock, par value $0.01 per share, of the Company
(Company Class A Common Stock) other than such
shares held by Excluded Persons (and holder who duly and validly
exercise and perfect their appraisal rights with respect to such
shares) will be converted into the right to receive
2.27 shares of Class A common stock, par value
$0.01 per share, of the Acquiror (the
Consideration). Excluded Persons shall
be defined as the Acquiror, Merger Sub and the Company.
You have requested that Houlihan Lokey Howard & Zukin
Financial Advisors, Inc. (Houlihan Lokey) provide an
opinion (the Opinion) to the Special Committee (the
Committee) and Board of Directors of the Company as
to whether, as of the date hereof, the Consideration per share
of Company Class A Common Stock to be received by the
Minority Shareholders in the Transaction is fair to such holders
from a financial point of view. Minority
Shareholders shall mean the holders of Levitt Class A
Common Stock, other than the Acquiror and the directors of the
Company who are not independent within the meaning
of the rules and regulations of the NYSE.
In connection with this Opinion, we have made such reviews,
analyses and inquiries as we have deemed necessary and
appropriate under the circumstances. Among other things, we have:
1. reviewed reports to shareholders on
Form 10-K
for the fiscal year ended December 31, 2003,
December 31, 2004, and December 31, 2005 and
Form 10-Q
for the quarters ended September 30, 2005, and
September 30, 2006 for each of the Company, the Acquiror,
BankAtlantic Bancorp Inc. (BankAtlantic), Bluegreen
Corporation (Bluegreen), and Benihana Inc., defined
herein as the Entities;
2. reviewed preliminary company-prepared interim financial
statements for the period ended December 31, 2006, for the
Company, BankAtlantic, and Bluegreen, which the respective
managements have identified as being the most current financial
statements available;
3. held discussions with certain members of the management
of the Company, the Acquiror, BankAtlantic and Bluegreen
regarding the operations, financial condition, future prospects
and projected operations and performance of each company,
respectively, held discussions with the management of the
Company and the Acquiror regarding the Transaction, and held
discussions with representatives of the Committees counsel
regarding the Company, the Acquiror, the Transaction, and
related matters;
4. reviewed financial forecasts and projections prepared by
the management of the Company for the fiscal years ended
December 31, 2007 through December 31, 2009;
C-1
5. reviewed financial forecasts and projections prepared by
the management of Bluegreen for the fiscal year ended
December 31, 2007;
6. reviewed certain other publicly available financial data
for certain companies that we deemed relevant for companies in
industries related to each of the Entities;
7. reviewed publicly available transaction prices and
premiums paid in other change of control transactions including
those in industries related to the Company;
8. reviewed the historical market prices and trading volume
for the Entities publicly traded securities and those of
certain publicly traded companies which we deemed relevant;
9. reviewed the Companys management presentation
dated November 13, 2006;
10. reviewed the following documents in connection with the
Transaction:
a) a term sheet prepared by Holdco for the proposed
transaction draft dated, December 4, 2006;
b) draft dated January 27, 2007 of the Agreement and
Plan of Merger by and between BFC Financial Corporation, Lev
Merger Sub, Inc. and the Company (the Merger
Agreement);
11. reviewed the Companys Flash Report and SST Report
as of December 31, 2006;
12. reviewed certain information prepared by management or
third parties, regarding the Companys land holdings;
13. reviewed BankAtlantics management presentation
dated December 12, 2006; and
14. conducted such other studies, analyses and inquiries as
we have deemed appropriate.
We have relied upon and assumed, without independent
verification, the accuracy and completeness of all data,
material and other information furnished, or otherwise made
available, to us, discussed with or reviewed by us, or publicly
available, and do not assume any responsibility for
independently verifying such data, material and other
information. In addition, managements of the Company and the
Acquiror have advised us, and we have assumed, that the
financial forecasts and projections have been reasonably
prepared in good faith on bases reflecting the best currently
available estimates and judgments of such managements as to the
future financial results and condition of the Company, the
Acquiror and their respective subsidiaries and we express no
opinion with respect to such forecasts and projections or the
assumptions on which they are based. We have relied upon and
assumed, without independent verification, that there has been
no material change in the assets, liabilities, financial
condition, results of operations, business or prospects of the
Company or the Acquiror since the date of the most recent
financial statements provided to us, and that there are no
information or facts that would make any of the information
reviewed by us incomplete or misleading. We have not considered
any aspect or implication of any transaction to which the
Company or the Acquiror is a party (other than the Transaction).
We have relied upon and assumed, without independent
verification, that (a) the representations and warranties
of all parties to the agreements identified in item 10
above and all other related documents and instruments that are
referred to therein are true and correct, (b) each party to
all such agreements will fully and timely perform all of the
covenants and agreements required to be performed by such party,
(c) all conditions to the consummation of the Transaction
will be satisfied without waiver thereof, and (d) the
Transaction will be consummated in a timely manner in accordance
with the terms described in the agreements provided to us,
without any amendments or modifications thereto or any
adjustment to the aggregate consideration (through offset,
reduction, indemnity claims, post-closing purchase price
adjustments or otherwise). We also have relied upon and assumed,
without independent verification, that (i) the Transaction
will be consummated in a manner that complies in all respects
with all applicable federal and state statutes, rules and
regulations, and (ii) all governmental, regulatory, and
other consents and approvals necessary for the consummation of
the Transaction will be obtained and that no delay, limitations,
restrictions or conditions will be imposed or amendments,
modifications or waivers made that would result in the
disposition of any material portion of the assets of the Company
or the Acquiror, or otherwise have an adverse effect on the
Company or the Acquiror or any expected benefits of the
Transaction. In addition, we have relied upon and assumed,
without independent verification, that the final forms of the
draft documents identified above will not
C-2
differ in any material respect from such draft documents. You
also have informed us, and we have relied upon and assumed,
without independent verification, that the Transaction will
qualify as a tax-free reorganization for federal income tax
purposes.
Furthermore, in connection with this Opinion, we have not been
requested to make, and have not made, any physical inspection or
independent appraisal or evaluation of any of the assets,
properties or liabilities (fixed, contingent or otherwise) of
the Company , the Acquiror or any other party. We have reviewed
certain information prepared by the Companys management or
third parties regarding certain landholdings of the Company and
we have assumed, without independent verification, the accuracy
of such information. We are not appraisers and do not express
any opinion with respect to such subject matter. We express no
opinion regarding the liquidation value of any entity.
Furthermore, we have undertaken no independent analysis of any
potential or actual litigation, regulatory action, possible
unasserted claims or other contingent liabilities, to which the
Company or the Acquiror is or may be a party or is or may be
subject, or of any governmental investigation of any possible
unasserted claims or other contingent liabilities to which the
Company or the Acquiror is or may be a party or is or may be
subject and, at your direction and with your consent, our
opinion makes no assumption concerning, and therefore does not
consider, the possible assertion of claims, outcomes or damages
arising out of any such matters.
We have not been requested to, and did not, (a) initiate
any discussions with, or solicit any indications of interest
from, third parties with respect to the Transaction or any
alternatives to the Transaction, or (b) advise the
Committee, the Board of Directors or any other party with
respect to alternatives to the Transaction. This Opinion is
necessarily based on financial, economic, market and other
conditions as in effect on, and the information made available
to us as of, the date hereof. Except as set forth in our
engagement letter, we have not undertaken, and are under no
obligation, to update, revise, reaffirm or withdraw this
Opinion, or otherwise comment on or consider events occurring
after the date hereof. We have not considered, nor are we
expressing any opinion herein with respect to, the prices at
which the common stock of the Company or the Acquiror has traded
or may trade at any time. We have assumed that the Class A
common stock of the Acquiror to be issued in the Transaction to
the shareholders of the Company will be listed on the New York
Stock Exchange Arca. Subsequent events that could materially
affect the conclusions set forth in this Opinion include,
without limitation, changes in industry performance or market
conditions; changes to the business, financial condition and
results of operations of the Company the Acquiror and their
respective subsidiaries; changes in the terms of the
Transaction; and the failure to consummate the Transaction
within a reasonable period of time.
This Opinion is furnished for the use and benefit of the
Committee and the Board of Directors in connection with their
consideration of the Transaction and is not intended to be used,
and may not be used, for any other purpose, without our express,
prior written consent. This Opinion is not intended to be, and
does not constitute, a recommendation to any security holder or
any other person as to how such person should act or vote with
respect to the Transaction. This Opinion may not be disclosed,
reproduced, disseminated, quoted, summarized or referred to at
any time, in any manner or for any purpose, nor shall any
references to Houlihan Lokey or any of its affiliates be made by
any recipient of this Opinion, without the prior written consent
of Houlihan Lokey, except for purposes of the joint proxy
statement/prospectus required in connection with the approval of
the Transaction by stockholders of the Company and the Acquirer
pursuant to a written consent to be provided by Houlihan Lokey.
In the ordinary course of business and in compliance with
applicable laws, certain of our affiliates, as well as
investment funds in which they may have financial interests, may
acquire, hold or sell, long or short positions, or trade or
otherwise effect transactions, in debt, equity, and other
securities and financial instruments (including bank loans and
other obligations) of, or investments in, the Company, the
Acquiror, any other party that may be involved in the
Transaction and their respective affiliates.
Houlihan Lokey and its affiliates have in the past provided, are
currently providing and in the future may provide, investment
banking and other financial services to the Company, for
which we have received, and would expect to receive,
compensation.
Houlihan Lokey Howard & Zukin Capital, Inc.
(HLHZ), an affiliate of Houlihan Lokey, has also
acted as financial advisor to the Committee with respect to the
Transaction and will receive a fee for such services, a
substantial portion of which is contingent upon the successful
completion of the Transaction. In addition, we will receive a
fee for rendering this Opinion, which is not contingent upon the
successful completion of the Transaction.
C-3
The Company has agreed to indemnify Houlihan Lokey and its
affiliates for certain liabilities that may arise in connection
with our engagement.
We have not been requested to opine as to, and this Opinion does
not address: (i) the underlying business decision of the
Committee, the Company, security holders or any other party to
proceed with or effect the Transaction, (ii) the terms of
any arrangements, understandings, agreements or documents
related to, or the form or any other portion or aspect of, the
Transaction or otherwise, except as expressly addressed in this
Opinion, (iii) other than those set forth in this Opinion,
the fairness of any portion or aspect of the Transaction to the
holders of any class of securities, creditors or other
constituencies of the Company, or any other party, (iv) the
relative merits of the Transaction as compared to any
alternative business strategies that might exist for the Company
or any other party or the effect of any other transaction in
which the Company or any other party might engage, (v) the
tax or legal consequences of the Transaction to either the
Company, the Acquiror, their respective security holders, or any
other party, (vi) the fairness of any portion or aspect of
the Transaction to any one class or group of the Companys
or any other partys security holders vis-à-vis any
other class or group of the Companys or such other
partys security holders (including without limitation the
allocation of any consideration amongst such classes or groups
of security holders), or (vii) the solvency,
creditworthiness or fair value of the Company, the Acquiror or
any other participant in the Transaction under any applicable
laws relating to bankruptcy, insolvency, fraudulent conveyance
or similar matters. Furthermore, no opinion, counsel or
interpretation is intended in matters that require legal,
regulatory, accounting, insurance, tax or other similar
professional advice. It is assumed that such opinions, counsel
or interpretations have been or will be obtained from the
appropriate professional sources. Furthermore, we have relied,
with your consent, on the assessment by the Committee, the
Company and the Acquiror and their respective advisers, as to
all legal, regulatory, accounting, insurance and tax matters
with respect to the Company, the Acquiror and the Transaction.
Based upon and subject to the foregoing, and in reliance
thereon, it is our opinion that, as of the date hereof, the
Consideration per share of Company Class A Common Stock to
be received by the Minority Shareholders in the Transaction is
fair to such holders from a financial point of view.
HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS, INC.
C-4
Annex D
FORM OF
ARTICLES OF AMENDMENT
TO THE
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. The second paragraph of Article IV is hereby
deleted in its entirety and replaced with the following:
Special Class A Common Stock: The Corporation is
authorized to issue 130,000,000 shares of Special
Class A Common Stock at a par value of $.01 per share.
The Special Class A Common Stock may be issued from 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 of Directors, 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:
2. Article V, Section 6, Paragraph 1
is hereby deleted in its entirety and replaced with the
following:
1. Designation and Amount. The shares of such
series shall be designated Class A Common Stock
(the Class A Common Stock) and the number of
shares constituting such series shall be 130,000,000.
D-1
Annex E
FORM OF
AMENDED AND RESTATED BY-LAWS
OF
BFC FINANCIAL CORPORATION
ARTICLE I
Meetings of Shareholders
Section 1. Annual
Meeting. The annual meeting of the shareholders
of this Corporation shall be held at the time and place
designated by the Board of Directors of the Corporation. The
annual meeting of the shareholders for any year shall be held no
later than thirteen months after the last preceding annual
meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the
Corporation.
Section 2. Special
Meetings. Special meetings of the shareholders
shall be held when directed by the President or the Board of
Directors or when requested in writing by the holders of not
less than ten percent of all the shares entitled to vote at the
meeting. A special meeting requested by shareholders shall be
called for a date not less than ten nor more than sixty days
after the request is made, unless (in the case of the sixty day
maximum) the shareholders requesting the meeting designate a
later date and unless (in the case of the ten day minimum) the
number of shareholders constituting a quorum shall waive the ten
day minimum notice period. The call for the meeting shall be
issued by the Secretary, unless the President, Board of
Directors or shareholders requesting the meeting shall designate
another person to do so.
Section 3. Notice. Written
notice stating the place, day and hour of the meeting and, in
the case of a special meeting, the purpose or purposes for which
the meeting is called shall be delivered not less than ten nor
more than sixty days before the meeting, unless the number of
shareholders constituting a quorum shall waive the ten day
minimum notice period. The notice shall be delivered personally
or by first class mail by or at the direction of the President,
the Secretary or the officer or persons calling the meeting to
each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder
at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid.
Section 4. Place. Meetings
of shareholders may be held within or without the State of
Florida.
Section 5. Closing
of Transfer Books and Fixing Record Date. The
Board of Directors may fix in advance a date as the record date
for the determination of shareholders for any purpose. Such date
in any case to be not more than sixty days and, in case of a
meeting of shareholders, not less than ten days prior to the
date on which the particular action requiring such determination
of share-holders is to be taken.
Section 6. Voting
Record. The Secretary shall make, at least ten
days before each meeting of shareholders, a complete list of
shareholders entitled to vote at such meeting or any adjournment
thereof, with the address of and the number and class and
series, if any, of shares held by each. The list shall be kept
on file at the principal place of business of the Corporation
for a period of ten days prior to such meeting. Any shareholder
shall be entitled to inspect the list during usual business
hours and said list shall be available at the time and place of
the meeting and shall be subject to inspection by any
shareholder at any time during the meeting. This Section 6
shall not be applicable, however, if, as of the record date
established pursuant to Section 5 of Article I hereof,
the Corporation has less than six shareholders.
Section 7. Shareholder
Quorum and Voting.
a. A majority of the shares entitled to vote represented in
person or by proxy shall constitute a quorum at a meeting of
shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the
shares of such class or series shall constitute a quorum for the
transaction of such item of business by that class or series. If
a quorum is present, the affirmative vote of a majority of the
shares (or,
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when applicable, a class or series of stock) represented at the
meeting and entitled to vote on the subject matter shall be the
act of the shareholders unless otherwise provided by the Florida
General Corporation Act, as amended from time to time.
b. After a quorum has been established at a
shareholders meeting, the subsequent withdrawal of
shareholders so as to reduce the number of shareholders entitled
to vote at the meeting below the number required for a quorum
shall not affect the validity of any action taken at the meeting
or any adjournment thereof.
Section 8. Voting
of Shares.
a. Each outstanding share of Common
and/or
Preferred stock shall have only such voting rights as are
specified by the Board of Directors in connection with the
designation of each series of Common Shares
and/or
Preferred Shares which is authorized and issued pursuant to
Article III of the Articles of Incorporation. If the voting
rights so designated with respect to each series provide for
more or less than one vote for any such share in the series,
every reference herein to a majority or other proportion of
shares shall refer to such a majority or other proportion of
votes entitled to be cast.
b. Treasury shares, shares of stock of this Corporation
owned by another corporation the majority of voting stock of
which is owned or controlled by this Corporation, and shares of
stock of this Corporation held by it in a fiduciary capacity
shall not be voted, directly or indirectly, at any meeting and
shall not be counted in determining the total number of
outstanding shares at any given time.
c. A shareholder may vote either in person or by proxy
executed in writing by the shareholder or his duly authorized
attorney-in-fact.
d. At each election for directors, every shareholder
entitled to vote at such election shall have the right to vote
in person or by proxy the number of shares owned by him for as
many persons as there are directors to be elected at that time
and for whose election he has a right to vote or, if cumulative
voting is authorized by the Board of Directors in connection
with the designation of any series of Common Shares
and/or
Preferred Shares which is authorized and issued pursuant to
Article III of the Articles of Incorporation, to accumulate
his votes by giving one candidate as many votes as the number of
directors to be elected at that time multiplied by the number of
his votes shall produce or by distributing such votes on the
same principle among any number of such candidates.
e. Shares standing in the name of another corporation,
domestic or foreign, may be voted by the officer, agent or proxy
designated by the By-laws of the corporate shareholder or, in
the absence of any applicable by-law, by such person as the
board of directors of the corporate shareholder may designate.
Proof of such designation may be made by presentation of a
certified copy of the By-laws or other instrument of the
corporate shareholder. In the absence of any such designation or
in case of conflicting designation by the corporate shareholder,
the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be
presumed to possess, in that order, authority to vote such
shares.
Section 9. Proxies.
a. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting
or a shareholders duly authorized
attorney-in-fact
may authorize another person or persons to act for him by proxy.
b. Every proxy must be signed by the shareholder or his
attorney-in-fact.
No proxy shall be valid after the expiration of eleven months
from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the
shareholder executing it, except as otherwise required by
applicable law.
Section 10. Action
by Shareholders Without a Meeting.
a. Any action required by law, these By-Laws or the
Articles of Incorporation of this Corporation to be taken at any
annual or special meeting of shareholders of the Corporation or
any action which may be taken at any annual or special meeting
of such shareholders may be taken without a meeting, without
prior notice and without a vote if a consent in writing, setting
forth the action so taken, shall be signed by the holders of
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outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were
present and voted. If any class or series of shares is entitled
to vote thereon as a class or series, such written consent shall
be required of the holders of a majority of the shares of each
class or series of shares entitled to vote as a class or series
thereon and of the total shares entitled to vote thereon.
b. Within ten days after obtaining such authorization by
written consent, notice shall be given to those shareholders who
have not consented in writing. The notice shall fairly summarize
the material features of the authorized action and, if the
action be a merger, consolidation or sale or exchange of assets
for which dissenters rights are provided under this applicable
law, the notice shall contain a clear statement of the right of
shareholders dissenting therefrom to be paid the fair value of
their shares upon compliance with further provisions of
applicable law regarding the rights of dissenting shareholders.
ARTICLE II
Directors
Section 1. Function. All
corporate powers shall be exercised by or under the authority of
and the business and affairs of a corporation shall be managed
under the direction of the Board of Directors.
Section 2. Qualification. Directors
need not be residents of this State or shareholders of this
Corporation.
Section 3. Compensation. The
Board of Directors shall have authority to fix the compensation
of the directors.
Section 4. Duties
of Directors.
a. A director shall perform his duties as a director,
including his duties as a member of any committee of the Board
upon which he may serve, in good faith, in a manner he
reasonably believes to be in the best interests of the
Corporation and with such care as an ordinarily prudent person
in a like position would use under similar circumstances.
b. In performing his duties, a director shall be entitled
to rely on information, opinions, reports or statements,
including financial statements and other financial data, in each
case prepared by and presented by:
(i) one or more officers or employees of the Corporation
whom the director reasonably believes to be reliable and
competent in the matters presented;
(ii) counsel, public accountants or other persons as to
matters which the director reasonably believes to be within such
persons professional or expert competence; or
(iii) a committee of the Board upon which he does not
serve, duly designated in accordance with a provision of the
Articles of Incorporation or the By-Laws, as to matters within
its designated authority, which committee the director
reasonably believes to merit confidence.
c. A director shall not be considered to be acting in good
faith if he has knowledge concerning the matter in question that
would cause such reliance described above to be unwarranted.
d. A person who performs his duties in compliance with this
section shall have no liability by reason of being or having
been a director of the Corporation.
e. The Board of Directors shall elect a Chairman to preside
at all meetings of the Board and at all shareholder meetings and
to fix the dates of meetings of the Board. In the absence of the
President and upon the request of a majority of the Board of
Directors, the Chairman may assume the authority of the
President, as stated in these By-Laws, and transact any business
in which the President would otherwise be permitted to engage.
Section 5. Presumption
of Assent. A director of the Corporation who is
present at a meeting of its Board of Directors at which action
on any corporate matter is taken shall be presumed to have
assented to the action taken
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unless he votes against such action or abstains from voting in
respect thereto because of an asserted conflict of interest.
Section 6. Number. This
Corporation shall have not less than three (3) nor more
than seventeen (17) directors as determined by the Board of
Directors. The number of directors may be increased or decreased
from time to time by amendment to these By-Laws, but no decrease
shall have the effect of shortening the terms of any incumbent
director.
Section 7. Election
and Term. The directors shall hold office for a
term of three years from the date of their election, provided
that of the initial members of the board, which shall initially
consist of eight members, three shall hold office for a term of
three years, three for a term of two years and two for a term of
one year. After such initial election, one-third
(1/3)
of the members of the board shall be elected annually for a
three year term.
Section 8. Vacancies. Any
vacancy occurring in the Board of Directors, including any
vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority
of the remaining directors though less than a quorum of the
Board of Directors. A director elected to fill a vacancy caused
by the resignation or removal of a director shall hold office
for the same term as that to which such directors
predecessor was elected. In the case of a director elected to
fill a vacancy created by reason of an increase in the number of
directors, the director shall serve for the term designated by
the Board of Directors but in no event shall such term exceed
three (3) years.
Section 9. Removal
of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of
Directors may be removed, with or without cause, by a vote of
the holders of a majority of the shares then entitled to vote at
an election of directors.
Section 10. Quorum
and Voting. A majority of the number of directors
fixed by these By-Laws shall constitute a quorum for the
transaction of business. The act of the majority of the
directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 11. Director
Conflicts of Interest.
a. No contract or other transaction between this
Corporation and one or more of its directors or any other
corporation, firm, association or entity in which one or more of
the directors are directors or officers or are financially
interested, shall be either void or voidable because of such
relationship or interest or because such director or directors
are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such
contract or transaction or because his or their votes are
counted for such purpose, if:
(i) The fact of such relationship or interest is disclosed
or known to the Board of Directors or committee which
authorizes, approves or ratifies the contract or transaction by
a vote or consent sufficient for the purpose without counting
the votes or consents of such interested directors; or
(ii) The fact of such relationship or interest is disclosed
or known to the shareholders entitled to vote and they
authorize, approve or ratify such contract or transaction by
vote or written consent; or
(iii) The contract or transaction is fair and reasonable as
to the Corporation at the time it is authorized by the board, a
committee or the shareholders.
b. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board
of Directors or a committee thereof which authorizes, approves
or ratifies such contract or transaction.
Section 12. Executive
and Other Committees.
a. The Board of Directors, by resolution adopted by a
majority of the full Board of Directors, may designate from
among its members an executive committee and one or more other
committees each of which,
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to the extent provided in such resolution, shall have and may
exercise all the authority of the Board of Directors, except
that no committee shall have the authority to:
(i) approve or recommend to shareholders actions or
proposals required by law to be approved by shareholders;
(ii) designate candidates for the office of director, for
purposes of proxy solicitation or otherwise;
(iii) fill vacancies in the Board of Directors or any
committee thereof;
(iv) amend the By-Laws;
(v) authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the Board
of Directors; or
(vi) authorize or approve the issuance or sale of or any
contract to issue or sell shares or designate the terms of a
series of a class of shares, except that the Board of Directors,
having acted regarding general authorization for the issuance or
sale of shares, the designation thereof may, pursuant to a
general formula or method specified by the Board of Directors,
by resolution or by adoption of a stock option or other plan,
authorize a committee to fix the terms of any contract for the
sale of the shares and to fix the terms upon which such shares
may be issued or sold, including without limitation the price,
the rate or manner of payment of dividends, provisions for
redemption, sinking fund, conversion, voting or preferential
rights and provisions for other features of a class of shares or
a series of a class of shares, with full power in such committee
to adopt any final resolution setting forth all the terms
thereof and to authorize the statement of the terms of a series
for filing with the Department of State.
b. The Board of Directors, by resolution adopted in
accordance with this section, may designate one or more
directors as alternate members of any such committee, who may
act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Chairman
of the Board. The Board of Directors shall elect
a Chairman to preside at all meetings of the Board and at all
shareholder meetings and to fix the dates of meetings of the
Board. In the absence of the President and upon the request of a
majority of the Board of Directors, the Chairman may assume the
authority of the President, as stated in these By-Laws, and
transact any business in which the President would otherwise be
permitted to engage.
Section 14. Place
of Meetings. Regular and special meetings of the
Board of Directors and Executive and other committees, created
pursuant to Section 12 of Article II hereof, may be
held within or without the State of Florida.
Section 15. Time,
Notice and Call of Meetings.
a. Written notice of the time and place of regular and
special meetings of the Board of Directors shall be given to
each director by either personal delivery, telegram, telephone
or cablegram at least two days before the meeting or by notice
mailed to the director at least five days before the meeting.
b. Notice of a meeting of the Board of Directors need not
be given to any director who signs a waiver of notice either
before or after the meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting and
waiver of any and all objections to the place of the meeting,
the time of the meeting or the manner in which it has been
called or convened, except when a director states, at the
beginning of the meeting, any objection to the transaction of
business because the meeting is not lawfully called or convened.
c. Neither the business to be transacted at nor the purpose
of any regular or special meeting of the Board of Directors need
be specified in the notice or waiver of notice of such meeting.
d. A majority of the directors present, whether or not a
quorum exists, may adjourn any meeting of the Board of Directors
to another time and place. Notice of any such adjourned meeting
shall be given to the directors who were not present at the time
of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment,
to the other directors.
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e. Meetings of the Board of Directors may be called by the
Chairman of the Board, by the President of the Corporation or by
any two directors.
f. Members of the Board of Directors may participate in a
meeting of such Board by means of a conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in
person at a meeting.
Section 16. Action
Without a Meeting. Any action required to be
taken at a meeting of the directors of the Corporation or any
action which may be taken at a meeting of the directors or a
committee thereof, may be taken without a meeting if a consent
in writing, setting forth the action so to be taken, signed by
all the directors or all the members of the committee, as the
case may be, is filed in the minutes of the proceedings of the
Board or of the committee. Such consent shall have the same
effect as a unanimous vote.
Section 17. Resignation
of Directors. Any director may resign from the
Board of Directors upon written notice being given to the
President and Chairman of the Board. The resignation is
effective upon receipt of the written notice by the President or
the Chairman, except that resignations received after notice has
been given of a Board of Directors meeting shall not be
effective until subsequent to that meeting or sooner if approved
by the then remaining Board members.
Section 18. Expenses
and Salaries of Directors. By resolution of the
Board of Directors, the directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as directors. No such
payment shall preclude any director from serving the Corporation
in any other capacity and receiving compensation therefor.
ARTICLE III
Officers
Section 1. Officers. The
officers of this Corporation shall consist of a President, Vice
President, a Secretary and a Treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and
assistant officers and agents as may be deemed necessary may be
elected or appointed by the Board of Directors from time to
time. Any two or more offices may be held by the same person.
The failure to elect any of the aforesaid officers shall not
effect the existence of this Corporation.
Section 2. Duties. The
officers of this Corporation shall have the following duties:
a. The President shall be the chief executive officer of
the Corporation, shall have general and active management of the
business and affairs of the Corporation subject to the
directions of the Board of Directors and shall preside at all
meetings of the stockholders and Board of Directors.
b. The Vice President shall have duties and powers incident
to the specific area of employment and shall have such other
powers and duties as may be prescribed by the President or Board
of Directors. In the event of incapacity of the President, the
Vice President may be designated by the Board of Directors to
perform such duties of the President as the Board shall
prescribe.
c. The Secretary shall have custody of and maintain all of
the corporate records, except the financial records, shall
record the minutes of all meetings of the stockholders and Board
of Directors, shall send all notices of meetings out and shall
perform such other duties as may be prescribed by the Board of
Directors or the President.
d. The Treasurer shall have custody of all corporate funds
and financial records, shall keep full and accurate accounts of
receipts and disbursements and render accounts thereof at the
annual meetings of stockholders and whenever else required by
the Board of Directors or the President and shall perform such
other duties as may be prescribed by the Board of Directors or
the President.
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Section 3. Delegation
of Duties. In the case of the absence of an
officer of the Corporation or for any other reason that the
Board may deem sufficient, the Board may delegate for the time
being the powers and duties of such officers to any other
officer or officers or to any director or directors or to any
other individual or individuals.
Section 4. Removal
of Officers.
a. Any officer or agent elected or appointed by the Board
of Directors may be removed by the Board whenever in its
judgment the best interests of the Corporation will be served
thereby.
b. Any officer or agent elected by the shareholders may be
removed only by vote of the shareholders, unless the
shareholders shall have authorized the directors to remove such
officer or agent.
c. Any vacancy, however occurring, in any office may be
filled by the Board of Directors. d. Removal, as provided in
this section, shall be without prejudice to the contract rights,
if any, of the person so removed. Election or appointment of an
officer or agent shall not, in and of itself, create contract
rights.
Section 5. Salary
of Officers. The salaries of the officers shall
be fixed from time to time by the Board of Directors or the
executive committee. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a
director of the Corporation.
ARTICLE IV
Stock Certificates
Section 1. Issuance. Every
holder of shares in this Corporation shall be entitled to have a
certificate representing all shares to which he is entitled. No
certificate shall be issued for any share until such share is
fully paid.
Section 2. Form.
a. Certificates representing shares in this Corporation
shall be signed by the President or Vice President and Secretary
or an Assistant Secretary and may be sealed with the seal of
this Corporation or a facsimile thereof. The signatures of the
President or Vice President and Secretary or Assistant Secretary
may be facsimiles if the certificate is manually signed on
behalf of a transfer agent or a registrar, other than the
Corporation itself or an employee of the Corporation. In case
any officer who signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by
the Corporation with the same effect as if he were such officer
at the date of its issuance.
b. Every certificate representing shares issued by this
Corporation shall set forth or fairly summarize upon the face or
back of the certificate or shall state that the Corporation will
furnish to any shareholder, upon request and without charge, a
full statement of the designations, preferences, limitations and
relative rights of the shares of each class or series authorized
to be issued and the variations in the relative rights and
preferences between the shares of each series so far as the same
have been fixed and determined and the authority of the Board of
Directors to fix and determine the relative rights and
preferences of subsequent series.
c. Every certificate representing shares which are
restricted as to the sale, disposition or other transfer of such
shares shall state that such shares are restricted as to
transfer and shall set forth or fairly summarize upon the
certificate or shall state that the Corporation will furnish to
any shareholder, upon request and without charge, a full
statement of such restrictions.
d. Each certificate representing shares shall state upon
the face thereof: the name of the Corporation; that the
Corporation is organized under the laws of this State; the name
of the person or persons to whom issued; the number and class of
shares and the designation of the series, if any, which such
certificate represents; and the par value of each share
represented by such certificate or a statement that the shares
are without par value.
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Section 3. Lost,
Stolen or Destroyed Certificates. The Corporation
shall issue a new stock certificate in the place of any
certificate previously issued if the holder of record of the
certificate
a. Makes proof in affidavit form that it has been lost,
destroyed or wrongfully taken;
b. Requests the issue of a new certificate before the
Corporation has notice that the certificate has been acquired by
a purchaser for value in good faith and without notice of any
adverse claim;
c. Gives bond in such form as the Corporation may direct to
indemnify the Corporation, the transfer agent and registrar
against any claim that may be made on account of the alleged
loss, destruction or theft of a certificate; and
d. Satisfies any other reasonable requirements imposed by
the Corporation.
ARTICLE V
Books and Records
Section 1. Books
and Records.
a. The Corporation shall keep correct and complete books
and records of account and shall keep minutes of the proceedings
of its shareholders, Board of Directors and committees of
directors.
b. This Corporation shall keep at its registered office or
principal place of business or at the office of its transfer
agent or registrar a record of its shareholders, giving the
names and addresses of all shareholders and the number, class
and series, if any, of the shares held by each.
c. Any books, records and minutes may be in written form or
in any other form capable of being converted into written form
within a reasonable time.
Section 2. Shareholders
Inspection Rights. Any person who shall have been
a holder of record of shares or of voting certificates there for
at least six months immediately preceding his demand or shall be
the holder of record of or the holder of record of voting trust
certificates for at least five percent of the outstanding shares
of any class or series of the Corporation, upon written demand
stating the purpose thereof, shall have the right to examine, in
person or by agent or attorney, at any reasonable time or times,
for any proper purpose, its relevant books and records of
accounts, minutes and records of shareholders and to make
extracts therefrom.
Section 3. Financial
Information.
a. Unless modified by a resolution of the stockholders not
later than four months after the close of each fiscal year, this
Corporation shall prepare a balance sheet showing in reasonable
detail the financial condition of the Corporation as of the
close of its fiscal year and a profit and loss statement showing
the results of the operations of the Corporation during its
fiscal year.
b. Upon the written request of any shareholder or holder of
voting trust certificates for shares of the Corporation, the
Corporation shall mail to such shareholder or holder of voting
trust certificates a copy of the most recent such balance sheet
and profit and loss statement.
c. The balance sheet and profit and loss statements shall
be filed in the registered office of the Corporation in this
State, shall be kept for at least five years and shall be
subject to inspection during business hours by any shareholder
or holder of voting trust certificates, in person or by agent.
ARTICLE VI
Dividends
The Board of Directors of this Corporation may, from time to
time, declare and the Corporation may pay dividends on its
shares in cash, property or its own shares, except when the
Corporation is insolvent or when the
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payment thereof would render the Corporation insolvent or when
the declaration or payment thereof would be contrary to any
restrictions contained in the Articles of Incorporation, subject
to the following provisions:
a. Dividends in cash or property may be declared and paid,
except as otherwise provided in this section, only out of the
unreserved and unrestricted earned surplus of the Corporation or
out of capital surplus, howsoever arising, but each dividend
paid out of capital surplus shall be identified as a
distribution of capital surplus and the amount per share paid
from such surplus shall be disclosed to the shareholders
receiving the same concurrently with the distribution.
b. Dividends may be declared and paid in the
Corporations own treasury shares.
c. Dividends may be declared and paid in the
Corporations own authorized but unissued shares out of any
unreserved and unrestricted surplus of the Corporation upon the
following conditions:
(i) If a dividend is payable in shares having a par value,
such shares shall be issued at not less than the par value
thereof and there shall be transferred to stated capital at the
time such dividend is paid an amount of surplus equal to the
aggregate par value of the shares to be issued as a dividend.
(ii) If a dividend is payable in shares without par value,
such shares shall be issued at such stated value as shall be
fixed by the Board of Directors by resolution adopted at the
time such dividend is declared and there shall be transferred to
stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect
of such shares and the amount per share so transferred to stated
capital shall be disclosed to the shareholders receiving such
dividend concurrently with the payment thereof.
d. No dividend payable in shares of any class shall be paid
to the holders of shares of any other class unless the Articles
of Incorporation so provide or such payment is authorized by the
affirmative vote or the written consent of the holders of at
least a majority of the outstanding shares of the class in which
the payment is to be made.
e. A
split-up or
division of the issued shares of any class into a greater number
of shares of the same class without increasing the stated
capital of the Corporation shall not be construed to be a share
dividend within the meaning of this section.
f. Dividends shall be payable only with respect to such
series of Common shares
and/or
Preferred Shares and subject to such restrictions as the Board
of Directors shall so designate pursuant to Article VI of
the Articles of Incorporation.
ARTICLE VII
Amendment
The By-laws may be amended by a majority vote of either the
Board of Directors or the shareholders eligible to vote;
provided, however, that the Board of Directors may not amend or
repeal any by-law adopted by shareholders if the shareholders
specifically provide that such by-law is not subject to
amendment or repeal by the board of directors.
ARTICLE VIII
Indemnification
This Corporation shall indemnify any and all of its directors,
officers, employees or agents or former directors, officers,
employees or agents or any person or persons who may have served
at its request as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise in which it owns shares of capital stock or of which
it is a creditor to the full extent permitted by law. Said
indemnification shall include but not be limited to the
expenses, including the cost of any judgments, fines,
settlements and counsel fees, actually paid or incurred in
connection with any action, suit or proceeding, whether civil,
criminal, administrative or investigative, and any appeals
thereof, to which any such person or his legal representative
may be made a party or may be
E-9
threatened to be made a party by reason of his being or having
been a director, officer, employee or agent as herein provided.
The foregoing right of indemnification shall not be exclusive of
any other rights to which any director, officer, employee or
agent may be entitled as a matter of law.
E-10
Annex F
FORM OF
AMENDED AND RESTATED
BFC FINANCIAL CORPORATION
2005 STOCK INCENTIVE PLAN
1. PURPOSES. The purposes of this
BFC Financial Corporation 2005 Stock Incentive Plan (the
Plan) are to attract and retain the best available
personnel for positions of substantial responsibility, to
provide additional incentive to the Employees of the Company or
its Subsidiaries (as defined in Section 2 below) as well as
other individuals who perform services for the Company and its
Subsidiaries, and to promote the success and profitability of
the Companys business. Options granted hereunder may be
either incentive stock options, as defined in
Section 422 of the Internal Revenue Code of 1986, as
amended, or non-qualified stock options, at the
discretion of the Committee (as defined in Section 2 below)
and as reflected in the terms of the Stock Option Agreement (as
defined in Section 2 below).
2. DEFINITIONS. As used herein, the
following definitions shall apply:
(a) Award Notice shall mean, with respect to a
particular Restricted Stock Award, a written instrument signed
by the Company and the recipient of the Restricted Stock Award
evidencing the Restricted Stock Award and establishing the terms
and conditions thereof.
(b) Award Recipient shall mean the recipient of
a Restricted Stock Award.
(c) Beneficiary shall mean the Person
designated by an Award Recipient to receive any Shares subject
to a Restricted Stock Award made to such Award Recipient that
become distributable following the Award Recipients death.
(d) Board of Directors shall mean the Board of
Directors of the Company.
(e) Class A Common Stock shall mean the
Class A common stock, par value $0.01 per share, of
the Company.
(f) Code shall mean the Internal Revenue Code
of 1986, as amended.
(g) Committee shall mean the Committee
appointed by the Board of Directors in accordance with
paragraph (a) of Section 4 of the Plan.
(h) Company shall mean BFC Financial
Corporation, a Florida corporation, and its successors and
assigns.
(i) Continuous Status as an Employee shall mean
the absence of any interruption or termination of service as an
Employee. Continuous Status as an Employee shall not be
considered interrupted in the case of sick leave, military
leave, or any other leave of absence approved by the Board of
Directors of the Company or the Committee. Continuous Status as
an Employee shall not be deemed terminated or interrupted by a
termination of employment followed immediately by service as a
non-Employee director of the Company or one or more of its
Subsidiaries until a subsequent termination of all service as
either a non-Employee director or an Employee.
(j) Covered Employee shall mean, for any
taxable year of the Company, a person who is, or who the
Committee determines is reasonably likely to be, a covered
employee (within the meaning of section 162(m) of the
Code).
(k) Disability shall mean permanent and total
disability as defined in Section 22(e)(3) of the Code.
(l) Employee shall mean any person, including
officers and directors, employed by the Company or any Parent or
Subsidiary of the Company. The payment of a directors fee
by the Company shall not be sufficient to constitute
employment by the Company.
(m) Exchange Act shall mean the Securities
Exchange Act of 1934, as amended.
F-1
(n) Fair Market Value shall be determined by
the Committee in its discretion; provided, however, that where
there is a public market for the Class A Common Stock, the
fair market value per Share shall be (i) if the
Class A Common Stock is listed or admitted for trading on
any United States national securities exchange, or if actual
transactions are otherwise reported on a consolidated
transaction reporting system, the closing price of such stock on
such exchange or reporting system, as the case may be, on the
relevant date, as reported in any newspaper of general
circulation, or (ii) if the Class A Common Stock is
quoted on the National Association of Securities Dealers
Automated Quotations (NASDAQ) System, or any similar
system of automated dissemination of quotations of securities
prices in common use, the mean between the closing bid and asked
quotations for such stock on the relevant date, as reported by a
generally recognized reporting service.
(o) Incentive Stock Option shall mean a stock
option intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code.
(p) Nonqualified Stock Option shall mean a
stock option not intended to qualify as an Incentive Stock
Option or a stock option that at the time of grant, or
subsequent thereto, fails to satisfy the requirements of
Section 422 of the Code.
(q) Option shall mean a stock option granted
pursuant to the Plan.
(r) Optioned Stock shall mean the Class A
Common Stock subject to an Option.
(s) Optionee shall mean the recipient of an
Option.
(t) Parent shall mean a parent
corporation, whether now or hereafter existing, as defined
in Section 424(e) of the Code.
(u) Performance-Based Restricted Stock Award
shall mean a Restricted Stock Award to which Section 8.3 is
applicable.
(v) Performance Goal shall mean, with respect
to any Performance-Based Restricted Stock Award, the performance
goal(s) established pursuant to Section 8.3(a), the
attainment of which is a condition of vesting of the
Performance-Based Restricted Stock Award.
(w) Performance Measurement Period shall mean,
with respect to any Performance Goal, the period of time over
which attainment of the Performance Goal is measured.
(x) Person shall mean an individual, a
corporation, a partnership, a limited liability company, an
association, a joint-stock company, a trust, an estate, an
unincorporated organization and any other business organization
or institution.
(y) Restricted Stock Award shall mean an award
of Shares pursuant to Section 8.
(z) Rule 16b-3
shall mean
Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Exchange Act or any successor rule.
(aa) Service shall mean, unless the Committee
provides otherwise in an Award Notice: (a) service in any
capacity as a common-law employee, director, advisor or
consultant to the Company or a Parent or Subsidiary;
(b) service in any capacity as a common-law employee,
director, advisor or consultant (including periods of
contractual availability to perform services under a retainer
arrangement) to an entity that was formerly a Parent or
Subsidiary, to the extent that such service is an uninterrupted
continuation of services being provided immediately prior to the
date on which such entity ceased to be a Parent or Subsidiary;
and (c) performance of the terms of any contractual
non-compete agreement for the benefit of the Company or a Parent
or Subsidiary.
(bb) Share shall mean a share of the
Class A Common Stock, as adjusted in accordance with
Section 9 of the Plan.
(cc) Stock Option Agreement shall mean the
written option agreements described in Section 14 of the
Plan.
F-2
(dd) Subsidiary shall mean a subsidiary
corporation, whether now or hereafter existing, as defined
in Section 424(f) of the Code.
(ee) Transferee shall mean a
transferee of the Optionee as defined in
Section 7.4 of the Plan.
3. STOCK. Subject to the provisions
of Section 9 of the Plan, the maximum aggregate number of
Shares which may be issued for Restricted Stock Awards and upon
the exercise of Options under the Plan is 8,000,000 Shares.
The maximum aggregate number of Shares which may be covered by
Options granted to individuals who are Covered Employees shall
be 1,500,000 Shares during any calendar year. The maximum
aggregate number of Shares which may be issued as Restricted
Stock Awards to individuals who are Covered Employees shall be
300,000 Shares during any calendar year. If an Option or
Restricted Stock Award should expire or become un-exercisable
for any reason without having been exercised or vested in full,
the unpurchased Shares which were subject thereto shall, unless
the Plan shall have been terminated, become available for
further grant under the Plan.
Subject to the provisions of Section 9 of the Plan, no
person shall be granted Options under the Plan in any calendar
year covering an aggregate of more than 100,000 Shares. If
an Option should expire, become unexercisable for any reason
without having been exercised in full, or be cancelled for any
reason during the calendar year in which it was granted, the
number of Shares covered by such Option shall nevertheless be
treated as Options granted for purposes of the limitation in the
preceding sentence.
4. ADMINISTRATION.
(a) Procedure. The Plan shall be
administered by a Committee appointed by the Board of Directors,
which initially shall be the Compensation Committee of the
Company. The Committee shall consist of not less than two
(2) members of the Board of Directors. Once appointed, the
Committee shall continue to serve until otherwise directed by
the Board of Directors. From time to time the Board of
Directors, at its discretion, may increase the size of the
Committee and appoint additional members thereof, remove members
(with or without cause), and appoint new members in substitution
therefor, and fill vacancies however caused; provided, however,
that at no time shall a Committee of less than two
(2) members of the Board of Directors administer the Plan.
If the Committee does not exist, or for any other reason
determined by the Board of Directors, the Board may take any
action and exercise any power, privilege or discretion under the
Plan that would otherwise be the responsibility of the Committee.
(b) Powers of the Committee. Subject to
the provisions of the Plan, the Committee shall have the
authority, in its discretion: (i) to grant Incentive Stock
Options, in accordance with Section 422 of the Code, to
grant Nonqualified Stock Options or to grant Restricted Stock
Awards; (ii) to determine, upon review of relevant
information, the Fair Market Value of the Class A Common
Stock; (iii) to determine the exercise price per share of
Options to be granted or consideration for Restricted Stock
Awards; (iv) to determine the persons to whom, and the time
or times at which, Options and Restricted Stock Awards shall be
granted and the number of Shares to be represented by each
Option or Restricted Stock Award; (v) to determine the
vesting schedule of the Options and Restricted Stock Awards to
be granted; (vi) to interpret the Plan; (vii) to
prescribe, amend and rescind rules and regulations relating to
the Plan; (viii) to determine the terms and provisions of
each Option or Restricted Stock Award granted (which need not be
identical) and, with the consent of the holder thereof if
required, modify or amend each Option or Restricted Stock Award;
(ix) to accelerate or defer (with the consent of the holder
thereof) the exercise or vesting date of any Option or the
vesting date of any Restricted Stock Award; (x) to
authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option or
Restricted Stock Award previously granted by the Committee;
(xi) to grant an Option in replacement of Options
previously granted under this Plan; and (xii) to make all
other determinations deemed necessary or advisable for the
administration of the Plan.
(c) Effect of the Committees
Decision. All decisions, determinations and
interpretations of the Committee shall be final and binding on
all Optionees, Award Recipients or Transferees, if applicable.
5. ELIGIBILITY. Incentive Stock
Options may be granted only to Employees. Nonqualified Stock
Options and Restricted Stock Awards may be granted to Employees
as well as directors, independent contractors and agents who are
natural persons (but only if such Options or Restricted Stock
Awards are granted as compensation for personal services
rendered by the independent contractor or agent to the Company
or a Subsidiary that are not
F-3
services in connection with the offer or sale of securities in a
capital-raising transaction or services that directly or
indirectly promote or maintain a market for the Companys
securities), as determined by the Committee. Any person who has
been granted an Option or Restricted Stock Award may, if he is
otherwise eligible, be granted an additional Option or Options
or Restricted Stock Award.
Except as otherwise provided under the Code, to the extent that
the aggregate Fair Market Value of Shares for which Incentive
Stock Options (under all stock option plans of the Company and
of any Parent or Subsidiary) are exercisable for the first time
by an Employee during any calendar year exceeds $100,000, such
excess Options shall be treated as Nonqualified Stock Options.
For purposes of this limitation, (a) the Fair Market Value
of Shares is determined as of the time the Option is granted and
(b) the limitation is applied by taking into account
Options in the order in which they were granted.
The Plan shall not constitute a contract of employment nor shall
the Plan confer upon any Optionee or Award Recipient any right
with respect to continuation of employment or continuation of
providing services to the Company, nor shall it interfere in any
way with his right or the Companys or any Parent or
Subsidiarys right to terminate his employment or his
provision of services at any time.
6. TERM OF PLAN. The Plan shall
become effective upon its adoption by the Board of Directors;
provided, however, if the Plan is not approved by shareholders
of the Company in accordance with Section 15 of the Plan
within twelve (12) months after the date of adoption by the
Board of Directors, the Plan and any Options or Restricted Stock
Awards granted thereunder shall terminate and become null and
void. The Plan shall continue in effect ten (10) years from
the effective date of the Plan, unless sooner terminated under
Section 11 of the Plan.
7. STOCK OPTIONS.
7.1 Term of Option. The term of
each Option shall be ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Stock
Option Agreement. However, in the case of an Incentive Stock
Option granted to an Employee who, immediately before the
Incentive Stock Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the
date of grant thereof or such shorter time as may be provided in
such Optionees Stock Option Agreement.
7.2 Exercise Price and Consideration.
(a) Price. The per Share exercise price
for the Shares to be issued pursuant to exercise of an Option
shall be such price as determined by the Committee, but shall be
subject to the following:
(i) In the case of an Incentive Stock Option which is
(A) granted to an Employee who, immediately before the
grant of such Incentive Stock Option, owns stock representing
more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than one hundred and ten
percent (110%) of the Fair Market Value per Share on the date of
grant.
(B) granted to an Employee not within (A), the per share
exercise price shall be no less than one hundred percent (100%)
of the Fair Market Value per Share on the date of grant.
(C) In the case of a Nonqualified Stock Option, the per
Share exercise price shall be no less than one hundred percent
(100%) of the Fair Market Value per Share on the date of grant.
(b) Certain Corporate Transactions. In
the event the Company substitutes an Option for a stock option
issued by another corporation in connection with a corporate
transaction, such as a merger, consolidation, acquisition of
property or stock, separation (including a spin-off or other
distribution of stock or property), reorganization (whether or
not such reorganization comes within the definition of such term
in Section 368 of the Code) or partial or complete
liquidation involving the Company and such other corporation,
the exercise price of such substituted Option shall be as
determined by the Committee in its discretion (subject to the
provisions of Section 424(a) of the Code in the case of a
stock option that was intended to qualify as an incentive
stock option) to preserve, on a per Share basis
immediately after such corporate transaction, the same ratio of
Fair Market Value
F-4
per Option Share to exercise price per Share which existed
immediately prior to such corporate transaction under the option
issued by such other corporation.
(c) Payment. The consideration to be paid
for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the
Committee and may consist entirely of cash, check, promissory
note, or other shares of the Companys capital stock having
a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option
shall be exercised, or any combination of such methods of
payment, or such other consideration and method of payment for
the issuance of Shares to the extent permitted under the law of
the Companys jurisdiction of incorporation. The Committee
may also establish coordinated procedures with one or more
brokerage firms for the cashless exercise of
Options, whereby Shares issued upon exercise of an Option are
delivered against payment by the brokerage firm on the
Optionees behalf. When payment of the exercise price for
the Shares to be issued upon exercise of an Option consists of
shares of the Companys capital stock, such shares will not
be accepted as payment unless the Optionee or Transferee, if
applicable, has held such shares for the requisite period
necessary to avoid a charge to the Companys earnings for
financial reporting purposes.
7.3 Exercise Of Option.
(a) Procedure for Exercise; Rights as a
Shareholder. Any Option granted hereunder shall
be exercisable at such times and under such conditions as
determined by the Committee, including performance criteria with
respect to the Company or its Subsidiaries
and/or the
Optionee, and as shall be permissible under the terms of the
Plan. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company. Full
payment may, as authorized by the Committee, consist of any
consideration and method of payment allowable under
Section 7.2(c) of the Plan. Until the issuance of the stock
certificate evidencing such Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), which in no event
will be delayed more than thirty (30) days from the date of
the exercise of the Option, no right to vote or receive
dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of
the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the stock
certificate is issued, except as provided in the Plan. Exercise
of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
(b) Termination of Status as an
Employee. Subject to this Section 7.3(b), if
any Employee ceases to be in Continuous Status as an Employee,
he or any Transferee may, but only within thirty (30) days
or such other period of time not exceeding three (3) months
as is determined by the Committee (or, provided that the
applicable Option is not to be treated as an Incentive Stock
Option, such longer period of time as may be determined by the
Committee) after the date he ceases to be an Employee, exercise
his Option to the extent that he or any Transferee was entitled
to exercise it as of the date of such termination. To the extent
that he or any Transferee was not entitled to exercise the
Option at the date of such termination, or if he or any
Transferee does not exercise such Option (which he or any
Transferee was entitled to exercise) within the time specified
herein, the Option shall terminate. If any Employee ceases to
serve as an Employee as a result of a termination for cause (as
determined by the Committee), any Option held by such Employee
or any Transferee shall terminate immediately and automatically
on the date of his termination as an Employee unless otherwise
determined by the Committee. Notwithstanding the foregoing, if
an Employee ceases to be in Continuous Status as an Employee
solely due to a reorganization, merger, consolidation, spin-off,
combination, re-assignment to another member of the affiliated
group of which the Company is a member or other similar
corporate transaction or event, the Committee may, in its
discretion, suspend the operation of this Section 7.3(b);
provided that the Employee shall execute an agreement, in form
and substance satisfactory to the Committee, waiving such
Employees right to have such Employees Options
treated as Incentive Stock Options from and after a date
determined by the Committee which shall be no later than three
months from the date on which such Employee ceases to be in
Continuous Status as an Employee, and such Employees
Options shall thereafter be treated as Nonqualified Options for
all purposes.
F-5
(c) Disability of
Optionee. Notwithstanding the provisions of
Section 7.3(b) above, in the event an Employee is unable to
continue his employment as a result of his Disability, he or any
Transferee may, but only within three (3) months or such
other period of time not exceeding twelve (12) months as is
determined by the Committee (or, provided that the applicable
Option is not to be treated as an Incentive Stock Option, such
longer period of time as may be determined by the Committee)
from the date of termination of employment, exercise his Option
to the extent he or any Transferee was entitled to exercise it
at the date of such Disability. To the extent that he or any
Transferee was not entitled to exercise the Option at the date
of Disability, or if he or any Transferee does not exercise such
Option (which he or any Transferee was entitled to exercise)
within the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of
the death of an Optionee:
(i) during the term of the Option and who is at the time of
his death an Employee and who shall have been in Continuous
Status as an Employee since the date of grant of the Option, the
Option may be exercised at any time within twelve
(12) months (or, provided that the applicable Option is not
to be treated as an Incentive Stock Option, such longer period
of time as may be determined by the Committee) following the
date of death, by the Optionees estate, by a person who
acquired the right to exercise the Option by bequest or
inheritance, or by any Transferee, as the case may be, but only
to the extent of the right to exercise that would have accrued
had the Optionee continued living one (1) month after the
date of death; or
(ii) within thirty (30) days or such other period of
time not exceeding three (3) months as is determined by the
Committee (or, provided that the applicable Option is not to be
treated as an Incentive Stock Option, such longer period of time
as may be determined by the Committee) after the termination of
Continuous Status as an Employee, the Option may be exercised,
at any time within three (3) months following the date of
death, by the Optionees estate, by a person who acquired
the right to exercise the Option by bequest or inheritance, or
by any Transferee, as the case may be, but only to the extent of
the right to exercise that had accrued at the date of
termination.
7.4 Transferability Of
Options. During an Optionees lifetime, an
Option may be exercisable only by the Optionee and an Option
granted under the Plan and the rights and privileges conferred
thereby shall not be subject to execution, attachment or similar
process and may not be sold, pledged, assigned, hypothecated,
transferred or otherwise disposed of in any manner (whether by
operation of law or otherwise) other than by will or by the laws
of descent and distribution. Notwithstanding the foregoing, to
the extent permitted by applicable law and
Rule 16b-3,
the Committee may determine that an Option may be transferred by
an Optionee to any of the following: (1) a family member of
the Optionee; (2) a trust established primarily for the
benefit of the Optionee
and/or a
family member of said Optionee in which the Optionee
and/or one
or more of his family members collectively have a more than 50%
beneficial interest; (3) a foundation in which such persons
collectively control the management of assets; (4) any
other legal entity in which such persons collectively own more
than 50% of the voting interests; or (5) any charitable
organization exempt from income tax under Section 501(c)(3)
of the Code (collectively, a Transferee); provided,
however, in no event shall an Incentive Stock Option be
transferable if such transferability would violate the
applicable requirements under Section 422 of the Code. Any
other attempt to sell, pledge, assign, hypothecate, transfer or
otherwise dispose of any Option under the Plan or of any right
or privilege conferred thereby, contrary to the provisions of
the Plan, or the sale or levy or any attachment or similar
process upon the rights and privileges conferred hereby, shall
be null and void.
8. RESTRICTED STOCK AWARDS.
8.1 In General.
(a) Each Restricted Stock Award shall be evidenced by an
Award Notice issued by the Committee to the Award Recipient
containing such terms and conditions not inconsistent with the
Plan as the Committee may, in its discretion, prescribe,
including, without limitation, any of the following terms or
conditions:
(i) the number of Shares covered by the Restricted Stock
Award;
F-6
(ii) the amount (if any) which the Award Recipient shall be
required to pay to the Company in consideration for the issuance
of such Shares (which shall in no event be less than the minimum
amount required for such Shares to be validly issued, fully paid
and nonassessable under applicable law);
(iii) whether the Restricted Stock Award is a
Performance-Based Award and, if it is, the applicable
Performance Goal or Performance Goals;
(iv) the date of grant of the Restricted Stock
Award; and
(v) the vesting date for the Restricted Stock Award.
(b) All Restricted Stock Awards shall be in the form of
issued and outstanding Shares that shall be either:
(i) registered in the name of the Committee for the benefit
of the Award Recipient and held by the Committee pending the
vesting or forfeiture of the Restricted Stock Award;
(ii) registered in the name of Award Recipient and held by
the Committee, together with a stock power executed by the Award
Recipient in favor of the Committee, pending the vesting or
forfeiture of the Restricted Stock Award; or
(iii) registered in the name of and delivered to the Award
Recipient.
In any event, the certificates evidencing the Shares shall at
all times prior to the applicable vesting date bear the
following legend:
The Class A Common Stock evidenced hereby is subject to the
terms of a Restricted Stock Award agreement between BFC
Financial Corporation and [Name of Award Recipient] dated [Date]
made pursuant to the terms of the BFC Financial Corporation 2005
Stock Incentive Plan, copies of which are on file at the
executive offices of BFC Financial Corporation, and may not be
sold, encumbered, hypothecated or otherwise transferred except
in accordance with the terms of such Plan and Agreement.
and/or such other restrictive legend as the Committee, in its
discretion, may specify.
(c) Except as otherwise provided by the Committee, a
Restricted Stock Award shall not be transferable by the Award
Recipient other than by will or by the laws of descent and
distribution, and the Shares granted pursuant to such Restricted
Stock Award shall be distributable, during the lifetime of the
Award Recipient, only to the Award Recipient.
8.2 Vesting Date.
(a) The vesting date for each Restricted Stock Award shall
be determined by the Committee and specified in the Award Notice
and, if no date is specified in the Award Notice, shall be the
first anniversary of the date on which the Restricted Stock
Award is granted. Unless otherwise determined by the Committee
and specified in the Award Notice:
(i) if the Service of an Award Recipient is terminated
prior to the vesting date of a Restricted Stock Award for any
reason other than death or Disability, any unvested Shares shall
be forfeited without consideration (other than a refund to the
Award Recipient of an amount equal to the lesser of (A) the
cash amount, if any, actually paid by the Award Recipient to the
Company for the Shares being forfeited and (B) the Fair
Market Value of such Shares on the date of forfeiture); and
(ii) if the Service of an Award Recipient is terminated
prior to the vesting date of a Restricted Stock Award on account
of death or Disability, any unvested Shares with a vesting date
that is during the period of six (6) months beginning on
the date of termination of Service shall become vested on the
date of termination of Service and any remaining unvested Shares
forfeited without consideration (other than a refund to the
Award Recipient of an amount equal to the lesser of (A) the
cash amount, if any, actually paid by the Award Recipient to the
Company for the Shares being forfeited and (B) the Fair
Market Value of such Shares on the date of forfeiture).
F-7
8.3 Performance-Based Restricted Stock Awards.
(a) At the time it grants a Performance-Based Restricted
Stock Award, the Committee shall establish one or more
Performance Goals the attainment of which shall be a condition
of the Award Recipients right to retain the related
Shares. The Performance Goals shall be selected from among the
following:
(i) earnings per share;
(ii) net income;
(iii) EBITDA;
(iii) return on equity;
(iv) return on assets;
(v) core earnings;
(vi) stock price;
(vii) strategic business objectives, consisting of one or
more objectives based on meeting specified cost targets,
business expansion goals, goals relating to acquisitions or
divestitures, revenue targets or business development goals;
(viii) except in the case of a Covered Employee, any other
performance criteria established by the Committee;
(ix) any combination of (i) through (viii) above.
Performance Goals may be established on the basis of reported
earnings or cash earnings, and consolidated results or
individual business units and may, in the discretion of the
Committee, include or exclude extraordinary items
and/or the
results of discontinued operations. Each Performance Goal may be
expressed on an absolute
and/or
relative basis, may be based on or otherwise employ comparisons
based on internal targets, the past performance of the Company
(or individual business units)
and/or the
past or current performance of other companies.
(b) At the time it grants a Performance-Based Restricted
Stock Award, the Committee shall establish a Performance
Measurement Period for each Performance Goal. The Performance
Measurement Period shall be the period over which the
Performance Goal is measured and its attainment is determined.
If the Committee establishes a Performance Goal but fails to
specify a Performance Measurement Period, the Performance
Measurement Period shall be:
(i) if the Performance-Based Restricted Stock Award is
granted during the first three months of the Companys
fiscal year, the fiscal year of the Company in which the
Performance-Based Restricted Stock Award is granted; and
(ii) in all other cases, the period of four
(4) consecutive fiscal quarters of the Company that begins
with the fiscal quarter in which the Performance-Based
Restricted Stock Award is granted.
(c) Within a reasonable period of time as shall be
determined by the Committee following the end of each
Performance Measurement Period, the Committee shall determine,
on the basis of such evidence as it deems appropriate, whether
the Performance Goals for such Performance Measurement Period
have been attained and, if they have been obtained, shall
certify such fact in writing.
(d) If the Performance Goals for a Performance-Based
Restricted Stock Award have been determined by the Committee to
have been attained and certified, the Committee shall either:
(i) if the relevant vesting date has occurred, cause the
ownership of the Shares subject to such Restricted Stock Award,
together with all dividends and other distributions with respect
thereto that have been accumulated, to be transferred on the
stock transfer records of the Company, free of any restrictive
legend other than as may be required by applicable law, to the
Award Recipient;
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(ii) in all other cases, continue the Shares in their
current status pending the occurrence of the relevant vesting
date or forfeiture of the Shares.
If any one or more of the relevant Performance Goals have been
determined by the Committee to not have been attained, all of
the Shares subject to such Restricted Stock Award shall be
forfeited without consideration (other than a refund to the
Award Recipient of an amount equal to the lesser of (A) the
cash amount, if any, actually paid by the Award Recipient to the
Company for the Shares being forfeited and (B) the Fair
Market Value of such Shares on the date of forfeiture).
(e) If the Performance Goals for any Performance
Measurement Period shall have been affected by special factors
(including material changes in accounting policies or practices,
material acquisitions or dispositions of property, or other
unusual items) that in the Committees judgment should or
should not be taken into account, in whole or in part, in the
equitable administration of the Plan, the Committee may, for any
purpose of the Plan, adjust such Performance Goals and make
payments accordingly under the Plan; provided, however, that any
adjustments made in accordance with or for the purposes of this
section 8.3(e) shall be disregarded for purposes of
calculating the Performance Goals for a Performance-Based
Restricted Stock Award to a Covered Employee if and to the
extent that such adjustments would have the effect of increasing
the amount of a Restricted Stock Award to such Covered Employee.
8.4 Dividend Rights. Unless the
Committee determines otherwise with respect to any Restricted
Stock Award and specifies such determination in the relevant
Award Notice, any dividends or distributions declared and paid
with respect to Shares subject to the Restricted Stock Award,
whether or not in cash, shall be held and accumulated for
distribution at the same time and subject to the same terms and
conditions as the underlying Shares.
8.5 Voting Rights. Unless the
Committee determines otherwise with respect to any Restricted
Stock Award and specifies such determination in the relevant
Award Notice, voting rights appurtenant to the Shares subject to
the Restricted Stock Award, shall be exercised by the Committee
in its discretion.
8.6 Tender Offers. Each Award
Recipient shall have the right to respond, or to direct the
response, with respect to the issued Shares related to its
Restricted Stock Award, to any tender offer, exchange offer or
other offer made to the holders of Shares. Such a direction for
any such Shares shall be given by completing and filing, with
the inspector of elections, the trustee or such other person who
shall be independent of the Company as the Committee shall
designate in the direction, a written direction in the form and
manner prescribed by the Committee. If no such direction is
given, then the Shares shall not be tendered.
8.7 Designation of Beneficiary. An
Award Recipient may designate a Beneficiary to receive any
unvested Shares that become available for distribution on the
date of his death. Such designation (and any change or
revocation of such designation) shall be made in writing in the
form and manner prescribed by the Committee. In the event that
the Beneficiary designated by an Award Recipient dies prior to
the Award Recipient, or in the event that no Beneficiary has
been designated, any vested Shares that become available for
distribution on the Award Recipients death shall be paid
to the executor or administrator of the Award Recipients
estate, or if no such executor or administrator is appointed
within such time as the Committee, in its sole discretion, shall
deem reasonable, to such one or more of the spouse and
descendants and blood relatives of such deceased person as the
Committee may select.
8.8 Taxes. The Company or the
Committee shall have the right to require any person entitled to
receive Shares pursuant to a Restricted Stock Award to pay the
amount of any tax which is required to be withheld with respect
to such Shares, or, in lieu thereof, to retain, or to sell
without notice, a sufficient number of Shares to cover the
amount required to be withheld.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR
MERGER.
Subject to any required action by the shareholders of the
Company, in the event any recapitalization, forward or reverse
split, reorganization, merger, consolidation, spin-off,
combination, repurchase, or exchange of Class A Common
Stock or other securities, stock dividend or other special and
nonrecurring dividend or distribution (whether in the form of
cash, securities or other property), liquidation, dissolution,
or other similar corporate transaction or event, affects the
Class A Common Stock such that an adjustment is appropriate
in the Committees
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discretion in order to prevent dilution or enlargement of the
rights of Optionees and Award Recipients under the Plan, then
the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of shares of
Class A Common Stock or other securities deemed to be
available thereafter for grants of Options and Restricted Stock
Awards under the Plan in the aggregate to all eligible
individuals and individually to any one eligible individual,
(ii) the number and kind of shares of Class A Common
Stock or other securities that may be delivered or deliverable
in respect of outstanding Options or Restricted Stock Awards,
and (iii) the exercise price of Options. In addition, the
Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Options and
Restricted Stock Awards (including, without limitation,
cancellation of Options or Restricted Stock Awards in exchange
for the
in-the-money
value, if any, of the vested portion thereof, or substitution of
Options or Restricted Stock Awards using stock of a successor or
other entity) in recognition of unusual or nonrecurring events
(including, without limitation, events described in the
preceding sentence) affecting the Company or any Subsidiary or
the financial statements of the Company or any Subsidiary, or in
response to changes in applicable laws, regulations, or account
principles; provided, however, that any such adjustment to an
Option or Performance-Based Restricted Stock Award granted to a
Covered Employee with respect to the Company or its Parent or
Subsidiaries shall conform to the requirements of
section 162(m) of the Code and the regulations thereunder
then in effect. In addition, each such adjustment with respect
to an Incentive Stock Option shall comply with the rules of
Section 424(a) of the Code (or any successor provision),
and in no event shall any adjustment be made which would render
any Incentive Stock Option granted hereunder other than an
incentive stock option as defined in
Section 422 of the Code. The Committees determination
shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock
of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of
Class A Common Stock subject to an Option or Restricted
Stock Award.
In the event of the proposed dissolution or liquidation of the
Company, or in the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, the Committee or
the Board of Directors may determine, in its discretion, that
(i) if any such transaction is effected in a manner that
holders of Class A Common Stock will be entitled to receive
stock or other securities in exchange for such shares, then, as
a condition of such transaction, lawful and adequate provision
shall be made whereby the provisions of the Plan and the Options
granted hereunder shall thereafter be applicable, as nearly
equivalent as may be practicable, in relation to any shares of
stock or securities thereafter deliverable upon the exercise of
any Option or (ii) the Option will terminate immediately
prior to the consummation of such proposed transaction. The
Committee or the Board of Directors may, in the exercise of its
sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Committee or the Board of
Directors and give each Optionee or Transferee, if applicable,
the right to exercise his Option as to all or any part of the
Optioned Stock, including Shares as to which the Option would
not otherwise be exercisable; provided, however, that the
Committee may, at any time prior to the consummation of such
merger, consolidation or other business reorganization, direct
that all, but not less than all, outstanding Options be
cancelled as of the effective date of such merger, consolidation
or other business reorganization in exchange for a cash payment
per optioned Share equal to the excess (if any) of the value
exchanged for an outstanding Share in such merger, consolidation
or other business reorganization over the exercise price of the
Option being cancelled.
In the event of any merger, consolidation, or other business
reorganization in which the Company is not the surviving entity,
any Restricted Stock Award with respect to which Shares had been
awarded to an Award Recipient shall be adjusted by allocating to
the Award Recipient the amount of money, stock, securities or
other property to be received by the other shareholders of
record, and such money, stock, securities or other property
shall be subject to the same terms and conditions of the
Restricted Stock Award that applied to the Shares for which it
has been exchanged.
Without limiting the generality of the foregoing, the existence
of outstanding Options or Restricted Stock Awards granted under
the Plan shall not affect in any manner the right or power of
the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes
in the Companys capital structure or its business;
(ii) any merger or consolidation of the Company;
(iii) any issuance by the Company of debt securities or
preferred or preference stock that would rank above the Shares
subject to outstanding Options or Restricted Stock Awards;
(iv) the dissolution or liquidation of the Company;
(v) any sale, transfer or assignment
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of all or any part of the assets or business of the Company; or
(vi) any other corporate act or proceeding, whether of a
similar character or otherwise.
10. TIME FOR GRANTING OPTIONS AND RESTRICTED STOCK
AWARDS. The date of grant of an Option or
Restricted Stock Award shall, for all purposes, be the date on
which the Committee makes the determination granting such Option
or Restricted Stock Award or such later date as the Committee
may specify. Notice of the determination shall be given to each
Optionee or Award Recipient within a reasonable time after the
date of such grant.
11. AMENDMENT AND TERMINATION OF THE PLAN.
11.1 Committee Action; Shareholders
Approval. Subject to applicable laws and
regulations, the Committee or the Board of Directors may amend
or terminate the Plan from time to time in such respects as the
Committee or the Board of Directors may deem advisable, without
the approval of the Companys shareholders.
11.2 Effect of Amendment or
Termination. No amendment or termination or
modification of the Plan shall in any manner affect any Option
or Restricted Stock Award theretofore granted without the
consent of the Optionee or Award Recipient, except that the
Committee or the Board of Directors may amend or modify the Plan
in a manner that does affect Options or Restricted Stock Awards
theretofore granted upon a finding by the Committee or the Board
of Directors that such amendment or modification is in the best
interest of Shareholders, Optionees or Award Recipients.
12. CONDITIONS UPON ISSUANCE OF
SHARES. Shares shall not be issued pursuant to
the exercise of an Option or delivered with respect to a
Restricted Stock Award unless the exercise of such Option and
the issuance and delivery of such Shares pursuant thereto or the
grant of a Restricted Stock Award and the delivery of Shares
with respect thereto shall comply with all relevant provisions
of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, grant of a
Restricted Stock Award or delivery of Shares with respect to a
Restricted Stock Award, the Company may require the Person
exercising such Option or acquiring such Shares or Restricted
Stock Award to represent and warrant at the time of any such
exercise, grant or acquisition that the Shares are being
purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel
for the Company, such a representation is required by any of the
aforementioned relevant provisions of law. The Company shall not
be required to deliver any Shares under the Plan prior to
(i) the admission of such Shares to listing on any stock
exchange on which Shares may then be listed, or (ii) the
completion of such registration or other qualification under any
state or federal law, rule or regulation as the Committee shall
determine to be necessary or advisable.
13. RESERVATION OF SHARES. The
Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan. Inability of the
Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Companys
counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.
14. STOCK OPTION AGREEMENT; AWARD
NOTICE. Options shall be evidenced by written
option agreements and Restricted Stock Awards shall be evidenced
by Award Notices, each in such form as the Board of Directors or
the Committee shall approve.
15. SHAREHOLDER
APPROVAL. Continuance of the Plan shall be
subject to approval by the shareholders of the Company entitled
to vote thereon within twelve months after the date the Plan is
adopted. If such shareholder approval is obtained at a duly held
shareholders meeting, it may be obtained by the
affirmative vote of the holders of outstanding shares of the
Companys common stock representing a majority of the votes
entitled to be cast thereon. No Performance-Based Restricted
Stock Awards shall be granted after the fifth (5th) anniversary
of the date the Plan is adopted unless, prior to such date, the
listing of permissible Performance Goals set forth in
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Section 8.3 shall have been re-approved by the shareholders
of the Company in the manner required by Section 162(m) of
the Code and the regulations thereunder.
16. OTHER PROVISIONS. The Stock
Option Agreements or Award Notices authorized under the Plan may
contain such other provisions, including, without limitation,
restrictions upon the exercise of the Option or vesting of the
Restricted Stock Award, as the Board of Directors or the
Committee shall deem advisable. Any Incentive Stock Option
Agreement shall contain such limitations and restrictions upon
the exercise of the Incentive Stock Option as shall be necessary
in order that such Option will be an incentive stock option as
defined in Section 422 of the Code.
17. INDEMNIFICATION OF COMMITTEE
MEMBERS. In addition to such other rights of
indemnification they may have as directors, the members of the
Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys fees actually and
necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
thereon, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection
with the Plan or any Option or Restricted Stock Award granted
thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such
Committee member is liable for gross negligence or misconduct in
the performance of his duties; provided that within sixty
(60) days after institution of any such action, suit or
proceeding a Committee member shall in writing offer the Company
the opportunity, at its own expense, to handle and defend the
same.
18. NO OBLIGATION TO EXERCISE
OPTION. The granting of an Option shall impose no
obligation upon the Optionee to exercise such Option.
19. WITHHOLDINGS; TAX MATTERS.
19.1 The Company shall have the right to deduct from
all amounts paid by the Company in cash with respect to an
Option under the Plan any taxes required by law to be withheld
with respect to such Option. Where any Person is entitled to
receive Shares pursuant to the exercise of an Option, the
Company shall have the right to require such Person to pay to
the Company the amount of any tax which the Company is required
to withhold with respect to such Shares, or, in lieu thereof, to
retain, or to sell without notice, a sufficient number of Shares
to cover the minimum amount required to be withheld. To the
extent determined by the Committee and specified in the Option
Agreement, an Option holder shall have the right to direct the
Company to satisfy the minimum required federal, state and local
tax withholding by reducing the number of Shares subject to the
Option (without issuance of such Shares to the Option holder) by
a number equal to the quotient of (a) the total minimum
amount of required tax withholding divided by (b) the
excess of the Fair Market Value of a Share on the Option
exercise date over the Option exercise price per Share.
19.2 If and to the extent permitted by the Committee
and specified in an Award Notice for a Restricted Stock Award
other than a Performance-Based Restricted Stock Award, an Award
Recipient may be permitted or required to make an election under
section 83(b) of the Code to include the compensation
related thereto in income for federal income tax purposes at the
time of issuance of the Shares to such Award Recipient instead
of at a subsequent vesting date. In such event, the Shares
issued prior to their vesting date shall be issued in
certificated form only, and the certificates therefor shall bear
the following legend:
The Class A Common Stock evidenced hereby is subject to the
terms of a Restricted Stock Award agreement between BFC
Financial Corporation and [Name of Recipient] dated [Date] made
pursuant to the terms of the BFC Financial Corporation 2005
Stock Incentive Plan, copies of which are on file at the
executive offices of BFC Financial Corporation, and may not be
sold, encumbered, hypothecated or otherwise transferred except
in accordance with the terms of such Plan and Agreement.
or such other restrictive legend as the Committee, in its
discretion, may specify. In the event of the Award
Recipients termination of Service prior to the relevant
vesting date or forfeiture of the Shares for any other reason,
the Award Recipient shall be required to return all forfeited
Shares to the Company without consideration therefor (other than
a refund to the Award Recipient of an amount equal to the lesser
of (A) the cash amount, if any, actually
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paid by the Award Recipient to the Company for the Shares being
forfeited and (B) the Fair Market Value of such Shares on
the date of forfeiture).
20. OTHER COMPENSATION PLANS. The
adoption of the Plan shall not affect any other stock option or
incentive or other compensation plans in effect for the Company
or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation
for employees and directors of the Company or any Subsidiary.
21. SINGULAR, PLURAL;
GENDER. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun
shall include the feminine gender.
22. HEADINGS, ETC. NO PART OF
PLAN. Headings of Articles and Sections hereof
are inserted for convenience and reference; they constitute no
part of the Plan.
23. SEVERABILITY. If any provision
of the Plan is held to be invalid or unenforceable by a court of
competent jurisdiction, then such invalidity or unenforceability
shall not affect the validity and enforceability of the other
provisions of the Plan and the provision held to be invalid or
unenforceable shall be enforced as nearly as possible according
to its original terms and intent to eliminate such invalidity or
unenforceability.
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Annex G
SECTIONS 607.1301
TO 607.1333 OF THE FLORIDA BUSINESS CORPORATION ACT
607.1301.
Appraisal rights; definitions
The following definitions apply to
ss. 607.1302 607.1333:
(1) Affiliate means a person that directly or
indirectly through one or more intermediaries controls, is
controlled by, or is under common control with another person or
is a senior executive thereof. For purposes of
s. 607.1302(2)(d), a person is deemed to be an
affiliate of its senior executives.
(2) Beneficial shareholder means a person who
is the beneficial owner of shares held in a voting trust or by a
nominee on the beneficial owners behalf.
(3) Corporation means the issuer of the shares
held by a shareholder demanding appraisal and, for matters
covered in ss. 607.1322 607.1333,
includes the surviving entity in a merger.
(4) Fair value means the value of the
corporations shares determined:
(a) Immediately before the effectuation of the corporate
action to which the shareholder objects.
(b) Using customary and current valuation concepts and
techniques generally employed for similar businesses in the
context of the transaction requiring appraisal, excluding any
appreciation or depreciation in anticipation of the corporate
action unless exclusion would be inequitable to the corporation
and its remaining shareholders.
(c) For a corporation with 10 or fewer shareholders,
without discounting for lack of marketability or minority status.
(5) Interest means interest from the effective
date of the corporate action until the date of payment, at the
rate of interest on judgments in this state on the effective
date of the corporate action.
(6) Preferred shares means a class or series of
shares the holders of which have preference over any other class
or series with respect to distributions.
(7) Record shareholder means the person in
whose name shares are registered in the records of the
corporation or the beneficial owner of shares to the extent of
the rights granted by a nominee certificate on file with the
corporation.
(8) Senior executive means the chief executive
officer, chief operating officer, chief financial officer, or
anyone in charge of a principal business unit or function.
(9) Shareholder means both a record shareholder
and a beneficial shareholder.
607.1302.
Right of shareholders to appraisal
(1) A shareholder of a domestic corporation is entitled to
appraisal rights, and to obtain payment of the fair value of
that shareholders shares, in the event of any of the
following corporate actions:
(a) Consummation of a conversion of such corporation
pursuant to s. 607.1112 if shareholder approval is
required for the conversion and the shareholder is entitled to
vote on the conversion under ss. 607.1103 and
607.1112(6), or the consummation of a merger to which
such corporation is a party if shareholder approval is required
for the merger under s. 607.1103 and the shareholder
is entitled to vote on the merger or if such corporation is a
subsidiary and the merger is governed by s. 607.1104;
(b) Consummation of a share exchange to which the
corporation is a party as the corporation whose shares will be
acquired if the shareholder is entitled to vote on the exchange,
except that appraisal rights shall not be available to any
shareholder of the corporation with respect to any class or
series of shares of the corporation that is not exchanged;
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(c) Consummation of a disposition of assets pursuant to
s. 607.1202 if the shareholder is entitled to vote
on the disposition, 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;
(d) An amendment of the articles of incorporation with
respect to the class or series of shares which reduces the
number of shares of a class or series owned by the shareholder
to a fraction of a share if the corporation has the obligation
or right to repurchase the fractional share so created;
(e) Any other amendment to the articles of incorporation,
merger, share exchange, or disposition of assets to the extent
provided by the articles of incorporation, bylaws, or a
resolution of the board of directors, except that no bylaw or
board resolution providing for appraisal rights may be amended
or otherwise altered except by shareholder approval; or
(f) With regard to a class of shares prescribed in the
articles of incorporation prior to October 1, 2003,
including any shares within that class subsequently authorized
by amendment, 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;
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
shareholders 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
shareholders 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 shareholders preferred shares which had
theretofore been cumulative;
6. Reducing the stated dividend preference of any of the
shareholders preferred shares; or
7. Reducing any stated preferential amount payable on any
of the shareholders preferred shares upon voluntary or
involuntary liquidation.
(2) Notwithstanding subsection (1), the availability
of appraisal rights under paragraphs (1)(a), (b), (c), and
(d) shall be limited in accordance with the following
provisions:
(a) Appraisal rights shall not be available for the holders
of shares of any class or series of shares which is:
1. Listed on the New York Stock Exchange or the American
Stock Exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc.; or
2. Not so listed or designated, but has at least
2,000 shareholders and the outstanding shares of such class
or series have a market value of at least $10 million,
exclusive of the value of such shares held by its subsidiaries,
senior executives, directors, and beneficial shareholders owning
more than 10 percent of such shares.
(b) The applicability of paragraph (a) shall be
determined as of:
1. The record date fixed to determine the shareholders
entitled to receive notice of, and to vote at, the meeting of
shareholders to act upon the corporate action requiring
appraisal rights; or
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2. If there will be no meeting of shareholders, the close
of business on the day on which the board of directors adopts
the resolution recommending such corporate action.
(c) Paragraph (a) shall not be applicable and
appraisal rights shall be available pursuant to
subsection (1) for the holders of any class or series
of shares who are required by the terms of the corporate action
requiring appraisal rights to accept for such shares anything
other than cash or shares of any class or any series of shares
of any corporation, or any other proprietary interest of any
other entity, that satisfies the standards set forth in
paragraph (a) at the time the corporate action becomes
effective.
(d) Paragraph (a) shall not be applicable and
appraisal rights shall be available pursuant to
subsection (1) for the holders of any class or series
of shares if:
1. Any of the shares or assets of the corporation are being
acquired or converted, whether by merger, share exchange, or
otherwise, pursuant to the corporate action by a person, or by
an affiliate of a person, who:
a. Is, or at any time in the
1-year
period immediately preceding approval by the board of directors
of the corporate action requiring appraisal rights was, the
beneficial owner of 20 percent or more of the voting power
of the corporation, excluding any shares acquired pursuant to an
offer for all shares having voting power if such offer was made
within 1 year prior to the corporate action requiring
appraisal rights for consideration of the same kind and of a
value equal to or less than that paid in connection with the
corporate action; or
b. Directly or indirectly has, or at any time in the
1-year
period immediately preceding approval by the board of directors
of the corporation of the corporate action requiring appraisal
rights had, the power, contractually or otherwise, to cause the
appointment or election of 25 percent or more of the
directors to the board of directors of the corporation; or
2. Any of the shares or assets of the corporation are being
acquired or converted, whether by merger, share exchange, or
otherwise, pursuant to such corporate action by a person, or by
an affiliate of a person, who is, or at any time in the
1-year
period immediately preceding approval by the board of directors
of the corporate action requiring appraisal rights was, a senior
executive or director of the corporation or a senior executive
of any affiliate thereof, and that senior executive or director
will receive, as a result of the corporate action, a financial
benefit not generally available to other shareholders as such,
other than:
a. Employment, consulting, retirement, or similar benefits
established separately and not as part of or in contemplation of
the corporate action;
b. Employment, consulting, retirement, or similar benefits
established in contemplation of, or as part of, the corporate
action that are not more favorable than those existing before
the corporate action or, if more favorable, that have been
approved on behalf of the corporation in the same manner as is
provided in s. 607.0832; or
c. In the case of a director of the corporation who will,
in the corporate action, become a director of the acquiring
entity in the corporate action or one of its affiliates, rights
and benefits as a director that are provided on the same basis
as those afforded by the acquiring entity generally to other
directors of such entity or such affiliate.
(e) For the purposes of paragraph (d) only, the
term beneficial owner means any person who, directly
or indirectly, through any contract, arrangement, or
understanding, other than a revocable proxy, has or shares the
power to vote, or to direct the voting of, shares, provided that
a member of a national securities exchange shall not be deemed
to be a beneficial owner of securities held directly or
indirectly by it on behalf of another person solely because such
member is the recordholder of such securities if the member is
precluded by the rules of such exchange from voting without
instruction on contested matters or matters that may affect
substantially the rights or privileges of the holders of the
securities to be voted. When two or more persons agree to act
together for the purpose of voting their shares of the
corporation, each member of the group formed thereby shall be
deemed to have acquired beneficial ownership, as of the date of
such agreement, of all voting shares of the corporation
beneficially owned by any member of the group.
G-3
(3) Notwithstanding any other provision of this section,
the articles of incorporation as originally filed or any
amendment thereto may limit or eliminate appraisal rights for
any class or series of preferred shares, but any such limitation
or elimination contained in an amendment to the articles of
incorporation that limits or eliminates appraisal rights for any
of such shares that are outstanding immediately prior to the
effective date of such amendment or that the corporation is or
may be required to issue or sell thereafter pursuant to any
conversion, exchange, or other right existing immediately before
the effective date of such amendment shall not apply to any
corporate action that becomes effective within 1 year of
that date if such action would otherwise afford appraisal rights.
(4) A shareholder entitled to appraisal rights under this
chapter may not challenge a completed corporate action for which
appraisal rights are available unless such corporate action:
(a) Was not effectuated in accordance with the applicable
provisions of this section or the corporations articles of
incorporation, bylaws, or board of directors resolution
authorizing the corporate action; or
(b) Was procured as a result of fraud or material
misrepresentation.
607.1303.
Assertion of rights by nominees and beneficial owners
(1) A record shareholder may assert appraisal rights as to
fewer than all the shares registered in the record
shareholders name but owned by a beneficial shareholder
only if the record shareholder objects with respect to all
shares of the class or series owned by the beneficial
shareholder and notifies the corporation in writing of the name
and address of each beneficial shareholder on whose behalf
appraisal rights are being asserted. The rights of a record
shareholder who asserts appraisal rights for only part of the
shares held of record in the record shareholders name
under this subsection shall be determined as if the shares as to
which the record shareholder objects and the record
shareholders other shares were registered in the names of
different record shareholders.
(2) A beneficial shareholder may assert appraisal rights as
to shares of any class or series held on behalf of the
shareholder only if such shareholder:
(a) Submits to the corporation the record
shareholders written consent to the assertion of such
rights no later than the date referred to in
s. 607.1322(2)(b)2.
(b) Does so with respect to all shares of the class or
series that are beneficially owned by the beneficial shareholder.
607.1320.
Notice of appraisal rights
(1) If proposed corporate action described in
s. 607.1302(1) is to be submitted to a vote at a
shareholders meeting, the meeting notice must state that
the corporation has concluded that shareholders are, are not, or
may be entitled to assert appraisal rights under this chapter.
If the corporation concludes that appraisal rights are or may be
available, a copy of ss. 607.1301
607.1333 must accompany the meeting notice sent to those
record shareholders entitled to exercise appraisal rights.
(2) In a merger pursuant to s. 607.1104, the
parent corporation must notify in writing all record
shareholders of the subsidiary who are entitled to assert
appraisal rights that the corporate action became effective.
Such notice must be sent within 10 days after the corporate
action became effective and include the materials described in
s. 607.1322.
(3) If the proposed corporate action described in
s. 607.1302(1) is to be approved other than by a
shareholders meeting, the notice referred to in
subsection (1) must be sent to all shareholders at the
time that consents are first solicited pursuant to
s. 607.0704, whether or not consents are solicited
from all shareholders, and include the materials described in
s. 607.1322.
G-4
607.1321.
Notice of intent to demand payment
(1) If proposed corporate action requiring appraisal rights
under s. 607.1302 is submitted to a vote at a
shareholders meeting, or is submitted to a shareholder
pursuant to a consent vote under s. 607.0704, a
shareholder who wishes to assert appraisal rights with respect
to any class or series of shares:
(a) Must deliver to the corporation before the vote is
taken, or within 20 days after receiving the notice
pursuant to s. 607.1320(3) if action is to be taken
without a shareholder meeting, written notice of the
shareholders intent to demand payment if the proposed
action is effectuated.
(b) Must not vote, or cause or permit to be voted, any
shares of such class or series in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of
subsection (1) is not entitled to payment under this
chapter.
607.1322.
Appraisal notice and form
(1) If proposed corporate action requiring appraisal rights
under s. 607.1302(1) becomes effective, the
corporation must deliver a written appraisal notice and form
required by paragraph (2)(a) to all shareholders who
satisfied the requirements of s. 607.1321. In the
case of a merger under s. 607.1104, the parent must
deliver a written appraisal notice and form to all record
shareholders who may be entitled to assert appraisal rights.
(2) The appraisal notice must be sent no earlier than the
date the corporate action became effective and no later than
10 days after such date and must:
(a) Supply a form that specifies the date that the
corporate action became effective and that provides for the
shareholder to state:
1. The shareholders name and address.
2. The number, classes, and series of shares as to which
the shareholder asserts appraisal rights.
3. That the shareholder did not vote for the transaction.
4. Whether the shareholder accepts the corporations
offer as stated in subparagraph (b)4.
5. If the offer is not accepted, the shareholders
estimated fair value of the shares and a demand for payment of
the shareholders estimated value plus interest.
(b) State:
1. Where the form must be sent and where certificates for
certificated shares must be deposited and the date by which
those certificates must be deposited, which date may not be
earlier than the date for receiving the required form under
subparagraph 2.
2. A date by which the corporation must receive the form,
which date may not be fewer than 40 nor more than 60 days
after the date the subsection (1) appraisal notice and
form are sent, and state that the shareholder shall have waived
the right to demand appraisal with respect to the shares unless
the form is received by the corporation by such specified date.
3. The corporations estimate of the fair value of the
shares.
4. An offer to each shareholder who is entitled to
appraisal rights to pay the corporations estimate of fair
value set forth in subparagraph 3.
5. That, if requested in writing, the corporation will
provide to the shareholder so requesting, within 10 days
after the date specified in subparagraph 2., the number of
shareholders who return the forms by the specified date and the
total number of shares owned by them.
6. The date by which the notice to withdraw under
s. 607.1323 must be received, which date must be
within 20 days after the date specified in
subparagraph 2.
G-5
(c) Be accompanied by:
1. Financial statements of the corporation that issued the
shares to be appraised, consisting of a balance sheet as of the
end of the fiscal year ending not more than 15 months prior
to the date of the corporations appraisal notice, an
income statement for that year, a cash flow statement for that
year, and the latest available interim financial statements, if
any.
2. A copy of ss. 607.1301
607.1333.
607.1323.
Perfection of rights; right to withdraw
(1) A shareholder who wishes to exercise appraisal rights
must execute and return the form received pursuant to
s. 607.1322(1) and, in the case of certificated
shares, deposit the shareholders certificates in
accordance with the terms of the notice by the date referred to
in the notice pursuant to s. 607.1322(2)(b)2. Once a
shareholder deposits that shareholders certificates or, in
the case of uncertificated shares, returns the executed forms,
that shareholder loses all rights as a shareholder, unless the
shareholder withdraws pursuant to subsection (2).
(2) A shareholder who has complied with
subsection (1) may nevertheless decline to exercise
appraisal rights and withdraw from the appraisal process by so
notifying the corporation in writing by the date set forth in
the appraisal notice pursuant to s. 607.1322(2)(b)6.
A shareholder who fails to so withdraw from the appraisal
process may not thereafter withdraw without the
corporations written consent.
(3) A shareholder who does not execute and return the form
and, in the case of certificated shares, deposit that
shareholders share certificates if required, each by the
date set forth in the notice described in subsection (2),
shall not be entitled to payment under this chapter.
607.1324.
Shareholders acceptance of corporations
offer
(1) If the shareholder states on the form provided in
s. 607.1322(1) that the shareholder accepts the
offer of the corporation to pay the corporations estimated
fair value for the shares, the corporation shall make such
payment to the shareholder within 90 days after the
corporations receipt of the form from the shareholder.
(2) Upon payment of the agreed value, the shareholder shall
cease to have any interest in the shares.
607.1326.
Procedure if shareholder is dissatisfied with offer
(1) A shareholder who is dissatisfied with the
corporations offer as set forth pursuant to
s. 607.1322(2)(b)4 must notify the corporation on
the form provided pursuant to s. 607.1322(1) of that
shareholders estimate of the fair value of the shares and
demand payment of that estimate plus interest.
(2) A shareholder who fails to notify the corporation in
writing of that shareholders demand to be paid the
shareholders stated estimate of the fair value plus
interest under subsection (1) within the timeframe set
forth in s. 607.1322(2)(b)2 waives the right to
demand payment under this section and shall be entitled only to
the payment offered by the corporation pursuant to
s. 607.1322(2)(b)4.
607.1330.
Court action
(1) If a shareholder makes demand for payment under
s. 607.1326 which remains unsettled, the corporation
shall commence a proceeding within 60 days after receiving
the payment demand and petition the court to determine the fair
value of the shares and accrued interest. If the corporation
does not commence the proceeding within the
60-day
period, any shareholder who has made a demand pursuant to
s. 607.1326 may commence the proceeding in the name
of the corporation.
(2) The proceeding shall be commenced in the appropriate
court of the county in which the corporations principal
office, or, if none, its registered office, in this state is
located. If the corporation is a foreign corporation without a
registered office in this state, the proceeding shall be
commenced in the county in this state in which the
G-6
principal office or registered office of the domestic
corporation merged with the foreign corporation was located at
the time of the transaction.
(3) All shareholders, whether or not residents of this
state, whose demands remain unsettled shall be made parties to
the proceeding as in an action against their shares. The
corporation shall serve a copy of the initial pleading in such
proceeding upon each shareholder party 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 shareholder party by
registered or certified mail or by publication as provided by
law.
(4) The jurisdiction of the court in which the proceeding
is commenced under subsection (2) is plenary and
exclusive. If it so elects, the court may appoint one or more
persons as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers shall
have the powers described in the order appointing them or in any
amendment to the order. The shareholders demanding appraisal
rights are entitled to the same discovery rights as parties in
other civil proceedings. There shall be no right to a jury trial.
(5) Each shareholder made a party to the proceeding is
entitled to judgment for the amount of the fair value of such
shareholders shares, plus interest, as found by the court.
(6) The corporation shall pay each such shareholder the
amount found to be due within 10 days after final
determination of the proceedings. Upon payment of the judgment,
the shareholder shall cease to have any interest in the shares.
607.1331.
Court costs and counsel fees
(1) The court in an appraisal proceeding shall determine
all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court.
The court shall assess the costs against the corporation, except
that the court may assess costs against all or some of the
shareholders demanding appraisal, in amounts the court finds
equitable, to the extent the court finds such shareholders acted
arbitrarily, vexatiously, or not in good faith with respect to
the rights provided by this chapter.
(2) The court in an appraisal proceeding may also assess
the fees and expenses of counsel and experts for the respective
parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all
shareholders demanding appraisal if the court finds the
corporation did not substantially comply with
ss. 607.1320 and 607.1322; or
(b) Against either the corporation or a shareholder
demanding appraisal, in favor of any other party, if the court
finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this chapter.
(3) If the court in an appraisal proceeding finds that the
services of counsel for any shareholder were of substantial
benefit to other shareholders similarly situated, and that the
fees for those services should not be assessed against the
corporation, the court may award to such counsel reasonable fees
to be paid out of the amounts awarded the shareholders who were
benefited.
(4) To the extent the corporation fails to make a required
payment pursuant to s. 607.1324, the shareholder may
sue directly for the amount owed and, to the extent successful,
shall be entitled to recover from the corporation all costs and
expenses of the suit, including counsel fees.
607.1332.
Disposition of acquired shares
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 chapter, 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
or share exchange, they may be held and disposed of as the plan
of merger or share exchange otherwise provides. The shares of
the surviving corporation into which the shares of such
shareholders demanding appraisal rights would have been
converted had they assented to the merger shall have the status
of authorized but unissued shares of the surviving corporation.
G-7
607.1333.
Limitation on corporate payment
(1) No payment shall be made to a shareholder seeking
appraisal rights if, at the time of payment, the corporation is
unable to meet the distribution standards of
s. 607.06401. In such event, the shareholder shall,
at the shareholders option:
(a) Withdraw his or her notice of intent to assert
appraisal rights, which shall in such event be deemed withdrawn
with the consent of the corporation; or
(b) Retain his or her status as a claimant against the
corporation and, if it is liquidated, be subordinated to the
rights of creditors of the corporation, but have rights superior
to the shareholders not asserting appraisal rights, and if it is
not liquidated, retain his or her right to be paid for the
shares, which right the corporation shall be obliged to satisfy
when the restrictions of this section do not apply.
(2) The shareholder shall exercise the option under
paragraph (1)(a) or paragraph (b) by written
notice filed with the corporation within 30 days after the
corporation has given written notice that the payment for shares
cannot be made because of the restrictions of this section. If
the shareholder fails to exercise the option, the shareholder
shall be deemed to have withdrawn his or her notice of intent to
assert appraisal rights.
G-8
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 20.
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Indemnification
of Directors and Officers
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Section 607.0850 of the Florida Business Corporation Act
and the Articles of Incorporation and By-laws of the registrant
provide for indemnification of each of the registrants
directors and officers against claims, liabilities, amounts paid
in settlement and expenses if such director or officer is or was
a party to any proceeding by reason of the fact that such person
is or was a director or officer of the registrant or is or was
serving as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise at the
request of the registrant, which may include liabilities under
the Securities Act. In addition, the registrant carries
insurance permitted by the laws of the State of Florida on
behalf of directors, officers, employees or agents which covers
alleged or actual error or omission, misstatement, misleading
misstatement, neglect or breach of fiduciary duty while acting
solely as a director or officer of the registrant, which acts
may also include liabilities under the Securities Act.
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Item 21.
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Exhibits
and Financial Statement Schedules
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The following exhibits are filed herewith unless otherwise
indicated:
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Exhibit
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Number
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Exhibit Description
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2
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.1
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Agreement and Plan of Merger,
dated as of January 30, 2007, by and among BFC Financial
Corporation, LEV Merger Sub, Inc. and Levitt Corporation
(included as Annex A to the joint proxy
statement/prospectus that forms a part of this registration
statement).
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3
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.1.1
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Amended and Restated Articles of
Incorporation of BFC Financial Corporation, as amended
(incorporated by reference to Exhibit 3.1 to BFC Financial
Corporations Registration Statement on
Form 8-A
filed with the SEC on October 16, 1997).
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3
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.1.2
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Amendment to the Amended and
Restated Articles of Incorporation of BFC Financial Corporation,
as amended (incorporated by reference to Exhibit 4 of BFC
Financial Corporations Current Report on
Form 8-K
filed with the SEC on June 18, 2002 and Appendix A of BFC
Financial Corporations Schedule 14C filed with the SEC on
January 18, 2005).
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3
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.1.3
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Form of Amendment to the Amended
and Restated Articles of Incorporation of BFC Financial
Corporation, as amended, to become effective as of the effective
time of the merger (included as Annex D to the joint proxy
statement/prospectus that forms a part of this registration
statement).
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3
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.2.1
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By-laws of BFC Financial
Corporation (incorporated by reference to Exhibit 3.2 of
BFC Financial Corporations Registration Statement on
Form 8-A
filed with the SEC on October 16, 1997).
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3
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.2.2
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Form of Amended and Restated
By-laws of BFC Financial Corporation to become effective as of
the effective time of the merger (included as Annex E to
the joint proxy statement/prospectus that forms a part of this
registration statement).
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5
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.1*
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Form of Opinion of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A. regarding
the legality of the securities being issued.
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8
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.1*
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Form of Opinion of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A. relating to
tax matters.
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12
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.1
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Statement Regarding Computation of
Ratio of Earnings to Fixed Charges.
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23
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.1
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Consent of PricewaterhouseCoopers
LLP relating to BFC Financial Corporations consolidated
financial statements.
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23
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.2
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Consent of PricewaterhouseCoopers
LLP relating to Levitt Corporations consolidated financial
statements.
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23
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.3
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Consent of Ernst & Young
LLP relating to Bluegreen Corporations consolidated
financial statements.
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23
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.4*
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Form of Consent of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A. (included
in Exhibit 5.1).
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24
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.1
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Power of Attorney (included on
signature page).
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99
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.1*
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Form of BFC Financial Corporation
Proxy Card.
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99
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.2*
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Form of Levitt Corporation Proxy
Card.
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* |
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To be filed by amendment. |
II-1
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) to remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) (1) The undersigned registrant hereby undertakes
as follows: that prior to any public reoffering of the
securities registered hereunder through use of a prospectus
which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the
applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(2) The registrant undertakes that every prospectus
(i) that is filed pursuant to
paragraph (1) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of
the Securities Act of 1933, and is used in connection with an
offering of securities subject to Rule 415, will be filed
as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(d) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions hereof, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or
II-2
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(e) The undersigned registrant hereby undertakes to respond
to requests for information that is incorporated by reference
into the prospectus pursuant to Items 4, 10(b), 11 or 13 of
this form, within one business day of receipt of such request,
and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained
in documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
(f) The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information
concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in
the registration statement when it became effective.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 9th day of
May, 2007.
BFC FINANCIAL CORPORATION
Alan B. Levan,
Chairman of the Board of Directors,
Chief Executive Officer and President
POWER OF
ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Alan B. Levan and George
P. Scanlon, and each of them acting alone, as his true and
lawful
attorneys-in-fact
and agents with full power of substitution and re-substitution
for him and in his name, place and stead, in any and all
capacities, to sign any and all documents relating to this
registration statement, including any and all amendments and
supplements thereto, and to file the same with all exhibits
thereto and other documents in connection therewith with the
Securities and Exchange Commission granting unto said
attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully as to all intents and purposes as
he might or could do in person, hereby ratifying and confirming
all that said
attorneys-in-fact
and agents or their substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed by the
following persons in the capacities and on the dates indicated
below.
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Signature
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Title
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Date
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/s/ Alan
B. Levan
Alan
B. Levan
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Chairman of the Board, Chief
Executive Officer and President
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May 9, 2007
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/s/ John
E. Abdo
John
E. Abdo
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Vice-Chairman of the Board
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May 9, 2007
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/s/ George
P. Scanlon
George
P. Scanlon
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Executive Vice President and Chief
Financial Officer
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May 9, 2007
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/s/ Maria
R. Scheker
Maria
R. Scheker
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Chief Accounting Officer
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May 9, 2007
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/s/ Oscar
Holzmann
Oscar
Holzmann
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Director
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May 9, 2007
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/s/ Neil
Sterling
Neil
Sterling
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Director
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May 9, 2007
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/s/ Earl
Pertnoy
Earl
Pertnoy
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Director
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May 9, 2007
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/s/ D.
Keith Cobb
D.
Keith Cobb
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Director
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May 9, 2007
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II-4
EXHIBIT INDEX
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Exhibit
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Number
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Exhibit Description
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2
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.1
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Agreement and Plan of Merger,
dated as of January 30, 2007, by and among BFC Financial
Corporation, LEV Merger Sub, Inc. and Levitt Corporation
(included as Annex A to the joint proxy
statement/prospectus that forms a part of this registration
statement).
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3
|
.1.1
|
|
Amended and Restated Articles of
Incorporation of BFC Financial Corporation, as amended
(incorporated by reference to Exhibit 3.1 to BFC Financial
Corporations Registration Statement on
Form 8-A
filed with the SEC on October 16, 1997).
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|
3
|
.1.2
|
|
Amendment to the Amended and
Restated Articles of Incorporation of BFC Financial Corporation,
as amended (incorporated by reference to Exhibit 4 of BFC
Financial Corporations Current Report on
Form 8-K
filed with the SEC on June 18, 2002 and Appendix A of BFC
Financial Corporations Schedule 14C filed with the SEC on
January 18, 2005).
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|
3
|
.1.3
|
|
Form of Amendment to the Amended
and Restated Articles of Incorporation of BFC Financial
Corporation, as amended, to become effective as of the effective
time of the merger (included as Annex D to the joint proxy
statement/prospectus that forms a part of this registration
statement).
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|
3
|
.2.1
|
|
By-laws of BFC Financial
Corporation (incorporated by reference to Exhibit 3.2 of
BFC Financial Corporations Registration Statement on
Form 8-A
filed with the SEC on October 16, 1997).
|
|
3
|
.2.2
|
|
Form of Amended and Restated
By-laws of BFC Financial Corporation to become effective as of
the effective time of the merger (included as Annex E to
the joint proxy statement/prospectus that forms a part of this
registration statement).
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|
5
|
.1*
|
|
Opinion of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. regarding the
legality of the securities being issued.
|
|
8
|
.1*
|
|
Opinion of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. relating to tax
matters.
|
|
12
|
.1
|
|
Statement Regarding Computation of
Ratio of Earnings to Fixed Charges.
|
|
23
|
.1
|
|
Consent of PricewaterhouseCoopers
LLP relating to BFC Financial Corporations consolidated
financial statements.
|
|
23
|
.2
|
|
Consent of PricewaterhouseCoopers
LLP relating to Levitt Corporations consolidated financial
statements.
|
|
23
|
.3
|
|
Consent of Ernst & Young
LLP relating to Bluegreen Corporations consolidated
financial statements.
|
|
23
|
.3*
|
|
Consent of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. (included in
Exhibit 5.1).
|
|
24
|
.1
|
|
Power of Attorney (included on
signature page).
|
|
99
|
.1*
|
|
Form of BFC Financial Corporation
Proxy Card.
|
|
99
|
.2*
|
|
Form of Levitt Corporation Proxy
Card.
|
|
|
|
* |
|
To be filed by amendment. |