As filed with the Securities and Exchange Commission on April 10, 1998
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BANKUNITED FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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FLORIDA 6035 65-0377773
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
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255 Alhambra Circle
Coral Gables, Florida 33134
(305) 569-2000
(Address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)
Alfred R. Camner
Chairman of the Board
BankUnited Financial Corporation
255 Alhambra Circle
Coral Gables, Florida 33134
(305) 569-2000
(Name, address, including ZIP Code, and telephone
number, including area code, of agent for
service)
Copies to:
Marsha D. Bilzin, Esq. David S. Kenin, Esq.
Stuzin and Camner, Greenberg, Traurig, Hoffman,
Professional Association Lipoff, Rosen & Quentel, P.A.
550 Biltmore Way, Suite 700 1221 Brickell Avenue
Coral Gables, Florida 33134 Miami, Florida 33131
(305) 442-4994 (305) 579-0500
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of the Registration Statement
and all other conditions precedent to the merger of Central Bank ("Central")
into the Registrant's subsidiary, BankUnited, FSB, have been satisfied or waived
as described in the enclosed Prospectus-Proxy Statement.
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. [ ]
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 [ ].
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 [ ].
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT OFFERING PRICE FEE
- -----------------------------------------------------------------------------------------------------------------
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Class A Common Stock, $.01 par value . . . 1,867,500 $ (2) $ (3) $3,386
shares
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(1) This Registration Statement covers the maximum number of the Registrant's
securities that could be issued in the transaction described herein.
(2) Not applicable.
(3) Computed pursuant to Rule 457(f)(2), based upon the book value ($24.83) of
the securities to be cancelled in the merger (450,000 shares of common
stock, par value $6.00 per share, of Central) as of March 31, 1998, the
latest practicable date prior to the filing of this Registration
Statement.
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.
================================================================================
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CENTRAL BANK
7970 N.W. 36th Street
Miami, Florida 33166
April 17, 1998
Dear Shareholder:
You are cordially invited to attend the Special Meeting of Shareholders
(the "Special Meeting") of Central Bank ("Central") which will be held on
Thursday, May 21, 1998 at 11:00 A.M., local time, at the Union Planters Bank
Building, 1221 Brickell Avenue, Miami, Florida 33131, 22nd Floor. At the Special
Meeting, shareholders will be asked to approve the Agreement and Plan of Merger,
dated as of December 30, 1997 (the "Merger Agreement"), between BankUnited
Financial Corporation ("BankUnited") and Central, providing for the merger of
Central with and into BankUnited, FSB, a federal savings bank and a wholly-owned
subsidiary of BankUnited (the "Merger"). Pursuant to the Merger, each share of
common stock of Central will be converted into the right to receive 3.37 shares
of the Class A Common Stock of BankUnited, subject to adjustment as set forth in
the Merger Agreement.
THE BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER IS IN THE BEST
INTERESTS OF CENTRAL AND ITS SHAREHOLDERS. ACCORDINGLY, THE BOARD OF DIRECTORS
HAS UNANIMOUSLY APPROVED THE MERGER AS BEING IN THE BEST INTERESTS OF CENTRAL
AND ITS SHAREHOLDERS AND RECOMMENDS THAT YOU VOTE AT THE SPECIAL MEETING IN
FAVOR OF THE MERGER AGREEMENT.
Only holders of Central Common Stock of record at the close of business
on April 10, 1998 are entitled to notice of and to vote at the Special Meeting
or any adjournments or postponements thereof.
A Notice of the Special Meeting and a Proxy Statement-Prospectus
containing detailed information concerning the Merger is attached. Please read
this material carefully.
Your participation in the Special Meeting, in person or by proxy, is
important. It is very important that your shares be represented at the Special
Meeting. Whether or not you plan to attend the Special Meeting, you are urged to
complete, date, sign and return the proxy card in the enclosed postage paid
envelope. Your shares will be voted at the Special Meeting in accordance with
your instructions. You can revoke the proxy at any time prior to voting and the
giving of a proxy will not affect your right to vote in the event you attend the
Special Meeting in person.
Sincerely,
Ernest M. Halpryn
Chairman of the Board
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CENTRAL BANK
7970 N.W. 36th Street
Miami, Florida 33166
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 1998
A Special Meeting of Shareholders (the "Special Meeting") of Central
Bank ("Central") will be held on Thursday, May 21, 1998 at 11:00 A.M., local
time, at the Union Planters Bank Building, 1221 Brickell Avenue, Miami, Florida
33131, 22nd Floor to consider the following proposals:
1. Approval of the Agreement and Plan of Merger, dated as of December
30, 1997 (the "Merger Agreement"), by and among BankUnited Financial Corporation
("BankUnited") and Central, providing for the merger of Central with and into
BankUnited, FSB, a federal savings bank and a wholly owned subsidiary of
BankUnited (the "Merger"); and
2. Such other business as may properly be brought before the Special
Meeting.
The Merger will be completed only if Proposal One is approved by at
least two-thirds of the shares of the Central Common Stock entitled to vote at
the Special Meeting.
The Board of Directors has fixed the close of business on April 10,
1998, as the record date for determining shareholders of Central entitled to
notice of and to vote at the Special Meeting and at any adjournments or
postponements thereof. A list of shareholders entitled to notice of the meeting
shall be available for inspection by any shareholder, during regular business
hours, for a period of ten days prior to the meeting at the principal executive
office of Central and at the Special Meeting.
Pursuant to Section 552.14 of the Regulations of the Office of Thrift
Supervision, each Central shareholder, whether or not entitled to vote at the
Special Meeting, shall have the right to demand payment of the fair or appraised
value of his or her shares, only if such shareholder (i) does not vote in favor
of Proposal One to approve the Merger Agreement and (ii) before voting on the
Merger Agreement, delivers written notice to Central which identifies the
shareholder and states the shareholder's intention to demand appraisal of and
payment for his or her shares. Such demand must be in addition to and separate
from any proxy or vote against the Merger Agreement. Any dissenting shareholder
must, within 60 days after the effective time of the Merger, file a petition
with the Office of Thrift Supervision, with a copy by registered or certified
mail to BankUnited, FSB, demanding a determination of the fair market value of
the dissenting shares of all dissenting shareholders. Failure to file such a
petition within the required period will be deemed acceptance of the terms
offered under the Merger. A dissenting shareholder shall have the right, at any
time within 60 days after the effective date of the Merger, to withdraw his or
her demand for appraisal and to accept the terms offered upon the Merger.
You are cordially invited to attend the Special Meeting. Whether or not
you plan to attend the Special Meeting, you are urged to complete, date, sign
and return at your earliest convenience, in the envelope provided, the enclosed
proxy card which is being solicited on behalf of Central's Board of Directors.
The proxy card shows the form in which your shares of Central common stock are
registered. Your signature must be in the same form. Your shares will be voted
at the Special Meeting in accordance with your instructions. You can revoke the
proxy at any time prior to voting and the giving of a proxy will not affect your
right to vote in the event you attend the Special Meeting in person. We look
forward to seeing you.
By Order of the Board of Directors,
Ernest M. Halpryn
Miami, Florida CHAIRMAN OF THE BOARD
April 17, 1998
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CENTRAL BANK
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 1998
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BANKUNITED FINANCIAL CORPORATION
PROSPECTUS
1,867,500 SHARES OF CLASS A COMMON STOCK
This Proxy Statement-Prospectus is being furnished in connection with
the solicitation of proxies by the Board of Directors (the "Central Board") of
Central Bank, a Florida chartered commercial bank ("Central"), to be used at the
Special Meeting of Shareholders of Central to be held on May 21, 1998 (including
any adjournments or postponements thereof, the "Central Special Meeting"). At
the Central Special Meeting, holders of Central's Common Stock, par value $6.00
per share (the "Central Common Stock"), will consider and vote upon a proposal
to approve an Agreement and Plan of Merger, dated as of December 30, 1997 (the
"Merger Agreement"), by and between Central and BankUnited Financial
Corporation, a Florida corporation ("BankUnited"), providing for the merger of
Central with and into BankUnited, FSB, a federal savings bank and wholly-owned
subsidiary of BankUnited (the "Merger"), with BankUnited, FSB being the
surviving institution. The Merger Agreement is contained in this Proxy
Statement-Prospectus as Appendix A and is incorporated herein by reference.
This Proxy Statement-Prospectus also serves as the prospectus for up to
1,867,500 shares of BankUnited Series I Class A Common Stock (the "BankUnited
Class A Common Stock") which may be issued in connection with the Merger. Upon
consummation of the Merger, each share of Central Common Stock will be converted
into the right to receive shares of BankUnited Class A Common Stock. The rate of
exchange (the "Exchange Ratio") will be 3.37 shares of BankUnited Class A Common
Stock for each share of Central Common Stock, subject to change based upon the
fair market value of the BankUnited Class A Common Stock prior to the effective
time of the Merger (the "Fair Market Value"). The Exchange Ratio will be
decreased if the Fair Market Value exceeds $14.30 per share, or increased if the
Fair Market Value is less than $11.70 per share. The maximum number of shares of
BankUnited Class A Common Stock which could be received per share of Central
Common Stock is 4.15 shares, if the Fair Market Value were less than $9.50 per
share. The Fair Market Value will be determined by using the average closing
price of the BankUnited Class A Common Stock on the Nasdaq Stock Market, Inc.'s
National Market System ("Nasdaq") computed for the 20-day trading period ending
three business days prior to the effective time of the Merger. See "The
Merger--Conversion of Central Capital Stock."
The last reported sale price of BankUnited Class A Common Stock, as
quoted on the Nasdaq, on December 30, 1997 (the last trading day prior to the
public announcement of the Merger) was $15.375. On April 8, 1998 the closing bid
and ask prices of the BankUnited Class A Common Stock, were $14.25 and $15.25,
respectively, and the last reported sale price was $15.00. If the Fair Market
Value were $15.00 at the time of consummation of the Merger, each share of
Central Common Stock would be converted into the right to receive 3.2913 shares
of BankUnited Class A Common Stock, rather than 3.37 shares. See "The
Merger-Conversion of Central Capital Stock."
Each share of BankUnited Class A Common Stock is entitled to one-tenth
vote on all matters upon which shareholders have the right to vote, in contrast
to the one vote per share to which BankUnited's Class B Common Stock is entitled
and the two and one-half votes per share to which BankUnited's Noncumulative
Convertible Preferred Stock, Series B is entitled. At April 8 1998, holders of
BankUnited Class A Common Stock (assuming the exercise of all outstanding
options and warrants for BankUnited stock were entitled to cast 1,773,296 votes
of a total of 4,603,274 votes entitled to vote at any meeting of shareholders of
BankUnited. See "Description of BankUnited Capital Stock--Class A Common Stock."
In addition, the holders of BankUnited Class A Common Stock are entitled to
dividends as declared by BankUnited's Board of Directors (the "BankUnited
Board"), which may be declared solely on BankUnited Class A Common Stock or for
not less than 110% of the amount per share of any dividend declared on
BankUnited's Class B Common Stock. BankUnited has not paid dividends on its
common stock since 1994, and does not currently expect to pay any dividends on
its common stock for the foreseeable future. Information as to dividends paid on
<PAGE>
BankUnited Class A Common Stock and BankUnited's Class B Common Stock is set
forth in "Summary--Stock Prices and Dividends."
BankUnited has filed a Registration Statement (the "Registration
Statement") on Form S-4 under the Securities Act of 1933, as amended (the
"Securities Act"), with the Securities and Exchange Commission (the
"Commission") covering a maximum of 1,867,500 shares of BankUnited Class A
Common Stock which may be issued in connection with the Merger.
THE ABOVE MATTERS ARE DISCUSSED IN DETAIL IN THIS PROXY
STATEMENT-PROSPECTUS. THE PROPOSED MERGER IS A COMPLEX TRANSACTION. SHAREHOLDERS
ARE STRONGLY URGED TO READ AND CONSIDER CAREFULLY THIS PROXY
STATEMENT-PROSPECTUS IN ITS ENTIRETY.
SEE "RISK FACTORS," BEGINNING ON PAGE 19 OF THIS PROXY
STATEMENT-PROSPECTUS, FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY EACH PROSPECTIVE INVESTOR.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR BANK
DEPOSITS, ARE NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANK OR NON-BANK
SUBSIDIARY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER FEDERAL OR STATE GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
This Proxy Statement-Prospectus and the respective forms of proxy are
first being mailed to Central's shareholders on or about April 17, 1998.
The date of this Proxy Statement-Prospectus is __________, 1998.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE HEREIN
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY BANKUNITED OR CENTRAL. THIS DOCUMENT DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF SHARES OF BANKUNITED CLASS A COMMON
STOCK HEREUNDER WILL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF BANKUNITED OR CENTRAL SINCE THE DATE HEREOF
OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF. ALL INFORMATION CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS
WITH RESPECT TO BANKUNITED HAS BEEN SUPPLIED BY BANKUNITED AND ALL INFORMATION
WITH RESPECT TO CENTRAL HAS BEEN SUPPLIED BY CENTRAL.
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TABLE OF CONTENTS
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PAGE
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Available Information..............................................................1
Incorporation of Certain Documents by Reference....................................2
Summary............................................................................3
The Parties...............................................................3
BankUnited Financial Corporation..........................................3
Central Bank..............................................................3
The Central Special Meeting...............................................4
Date, Time, Place and Purpose of Special Meeting..........................4
Record Date; Shares Entitled to Vote; Quorum..............................4
Vote Required to Approve..................................................5
Revocation of Proxies.....................................................5
The Merger................................................................5
Terms of the Merger.......................................................5
Conditions to the Consummation of the Merger..............................7
Effective Time............................................................8
Recommendation of Central's Board of Directors............................8
Board of Directors and Management Following the Merger....................8
Nasdaq Listing............................................................8
Regulatory Approval.......................................................8
Certain Federal Income Tax Consequences...................................9
Accounting Treatment......................................................9
Termination...............................................................9
No Solicitation of Transactions...........................................9
Interests of Certain Persons in the Merger...............................10
Certain Differences in the Rights of Shareholders........................10
Appraisal Rights.........................................................10
Risk Factors.............................................................10
Stock Prices and Dividends...............................................11
Selected Historical and Pro Forma per Share Data.........................13
Recent Developments......................................................14
BankUnited Summary Consolidated Financial Information and Other Data.....15
Central Selected Financial Data..........................................17
Risk Factors......................................................................19
Risk Factors Relating to BankUnited......................................19
Potential Impact of Changes in Interest Rates ...........................19
Risks Associated with BankUnited's Adjustable Rate Mortgage Loans........19
Refinancing Risks........................................................20
Availability of Mortgage Loans...........................................20
Composition of Residential and Commercial Loan Portfolio ................21
Allowance for Loan Losses................................................22
Recent Rapid Growth and Increased Operating Expenses.....................23
Indirect Automobile Lending Portfolio....................................23
Accounting for Acquisitions..............................................23
Disparate Voting Rights; Continuing Insider Control of BankUnited........24
Certain Potential Anti-takeover Provisions...............................24
Competition and Consolidation of the Industry............................24
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i
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Regulatory Oversight.....................................................25
Year 2000................................................................25
Risk Factors Applicable to the Merger....................................25
Potential Adverse Impact of Integration of Operations....................25
Substantial Voting Dilution of Central Shareholders......................26
Risk of No Solicitation Provision........................................26
Retention of Customers...................................................26
The Parties.......................................................................27
BankUnited Financial Corporation..................................................27
Central Bank......................................................................27
General..................................................................27
Central's Lending Activities.............................................28
General..................................................................28
Consumer Loans...........................................................30
Real Estate Mortgage Loans...............................................30
Commercial Business Loans................................................30
Other Lending Activities.................................................31
Lending Procedures.......................................................31
Non-Performing Assets and Allowance for Loan Losses......................31
Central Special Meeting...........................................................34
Date, Time, Place and Purpose of Special Meeting.........................34
Record Date; Shares Entitled to Vote; Quorum.............................35
Vote Required to Approve.................................................35
Revocation of Proxies....................................................35
Proposal One: the Merger.........................................................36
General..................................................................36
Background of the Merger.................................................36
BankUnited's Reasons for the Merger......................................37
Central's Reasons for the Merger.........................................37
Structure of the Merger..................................................38
Conversion of Central Capital Stock......................................39
Exchange of Certificates.................................................40
Effective Time...........................................................41
Representations and Warranties...........................................41
Conduct of Business Pending the Merger and Other Agreements..............41
Conditions to the Consummation of the Merger.............................43
Regulatory Approval Required for the Merger..............................44
Payment of Fees to BankUnited............................................44
No Solicitation of Acquisition Proposals.................................45
Interests of Certain Persons in the Merger...............................45
Dissenters' Rights.......................................................45
Certain Federal Income Tax Consequences..................................46
Accounting Treatment.....................................................47
Termination of the Merger Agreement......................................47
Modification and Waiver of the Merger Agreement..........................48
Board of Directors, Management and Operations Following the Merger.......49
Expenses.................................................................49
Resales of BankUnited Class A Common Stock Received/Issued in the Merger.49
Description of BankUnited Capital Stock...........................................51
Class A Common Stock.....................................................52
Class B Common Stock.....................................................52
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ii
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Preferred Stock..................................................................53
No Other Rights..................................................................54
Transfer Agent...................................................................54
Certain Anti-takeover Provisions.................................................54
Comparison of Shareholders' Rights........................................................55
General..........................................................................55
Common Stock.....................................................................55
Required Shareholder Votes.......................................................56
Rights of Dissenting Shareholders................................................56
Amendment to Articles of Incorporation and Bylaws................................57
Provisions Relating to Directors.................................................57
Certain Anti-takeover Provisions.................................................57
Security Ownership of Certain Central Beneficial Owners and Management....................58
Security Ownership of Certain BankUnited Beneficial Owners and Management.................59
Experts...................................................................................62
Legal Matters.............................................................................62
Solicitation of Proxies...................................................................62
Stockholder Proposals.....................................................................63
Other Business............................................................................63
Agreement and Plan of Merger......................................................Appendix A
Financial Statements of Central and Management's Discussion and Analysis..........Appendix B
Section 552.14 of the Regulations of the Office of Thrift Supervision.............Appendix C
</TABLE>
iii
<PAGE>
AVAILABLE INFORMATION
BankUnited is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission") . Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the regional offices of the Commission located at
7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, the Commission maintains an Internet Web Site that contains
reports, proxy and information statements and other information regarding
issuers, such as BankUnited, which file electronically with the Commission.
Material may also be accessed electronically at the Commission's Web Site at
http://www.sec.gov. Equity securities of BankUnited are also traded on Nasdaq
and reports, proxy statements and other information concerning BankUnited are
available for inspection and copying at the offices of The Nasdaq Stock Market
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
BankUnited has filed with the Commission under the Securities Act, the
Registration Statement, of which this Proxy Statement-Prospectus is a part. This
Proxy Statement-Prospectus does not contain all of the information set forth in
the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. In addition, certain
documents filed by BankUnited with the Commission have been incorporated in this
Proxy Statement-Prospectus by reference. See "Incorporation of Certain Documents
by Reference." For further information with respect to BankUnited, reference is
made to the Registration Statement, including the exhibits thereto and the
documents incorporated herein by reference. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission or incorporated by
reference herein are not necessarily complete, and, in each instance, reference
is made to the copy of such document so filed for a more complete description of
the matter involved. Each such statement is qualified in its entirety by such
reference; provided that such statements, even though summaries, contain all
material information with respect to such documents. The Registration Statement
may be inspected without charge at the principal office of the Commission in
Washington, D.C, and copies of all or part of it may be obtained from the
Commission, as discussed above, and upon payment of any prescribed fees.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH
DOCUMENTS, OTHER THAN EXHIBITS THERETO, ARE AVAILABLE WITHOUT CHARGE TO ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT-PROSPECTUS
IS DELIVERED UPON WRITTEN OR ORAL REQUEST TO BANKUNITED FINANCIAL CORPORATION,
255 ALHAMBRA CIRCLE, CORAL GABLES, FLORIDA 33134, ATTENTION: NANCY ASHTON (305)
569-2000. IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY APRIL 30, 1998.
The following BankUnited documents are incorporated by reference herein
(Commission File No. 5-43936):
(1) BankUnited's Annual Report on Form 10-K/A for the year ended
September 30, 1997 filed with the Commission on February 27, 1998.
(2) BankUnited's Quarterly Report on Form 10-Q/A for the quarter ended
December 31, 1997, filed with the Commission on February 27, 1998.
(3) BankUnited's Current Reports on Form 8-K dated October 10, 1997,
December 30, 1997, January 15, 1998, January 23, 1998 and March 2, 1998 filed
with the Commission on October 29, 1997, January 2, 1998, January 16, 1998,
February 3, 1998 and March 4, 1998, respectively.
(4) The description of the BankUnited Class A Common Stock contained in
BankUnited's Current Report on Form 8-K dated March 5, 1993, filed with the
Commission to register BankUnited's Class A Common Stock under Section 12(g) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Any statement contained in this Proxy Statement-Prospectus or in a
document incorporated or deemed to be incorporated by reference herein will be
deemed to be modified or superseded for purposes of this Proxy
Statement-Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded will not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement-Prospectus. All documents
subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, prior to the termination of the Offering, shall be
deemed to be incorporated by reference into this Proxy Statement-Prospectus.
2
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS NOT INTENDED TO BE A COMPLETE STATEMENT OF ALL
MATERIAL FEATURES OF THE MERGER AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE
DETAILED INFORMATION AND FINANCIAL STATEMENTS AND NOTES THERETO APPEARING
ELSEWHERE IN OR INCORPORATED BY REFERENCE INTO THIS PROXY STATEMENT-PROSPECTUS.
THE PARTIES
BANKUNITED FINANCIAL CORPORATION
BankUnited is a Florida corporation organized for the purpose of
becoming the savings and loan holding company for BankUnited, FSB. This holding
company reorganization, together with BankUnited, FSB's conversion from a
Florida-chartered stock savings bank (which was founded in 1984) to a federally
chartered stock savings bank, became effective on March 5, 1993. At December 31,
1997, BankUnited had $1.4 billion in deposits, $145.6 million in stockholders'
equity, and $3.0 billion in assets. Based on the latest available information,
BankUnited is the second largest publicly held financial institution
headquartered in Florida. Principally through internal growth and also as a
result of the acquisition of Suncoast Savings and Loan Association FSA
("Suncoast") on November 15, 1996, BankUnited total assets increased by $2.2
billion from September 30, 1996 to December 31, 1997.
BankUnited currently has 18 branch offices in Miami-Dade, Broward and
Palm Beach Counties, Florida ("South Florida") (not including two, scheduled to
be closed shortly, that were part of the recent acquisition of Consumers Savings
Bank), and anticipates opening approximately six more branch offices by
September 30, 1998 in its market area, either by acquisition or de novo
branching, and may expand into other parts of Florida. BankUnited's business has
traditionally consisted of attracting deposits from the general public and using
those deposits, together with borrowings and other funds, to purchase nationwide
and to originate in Florida single-family residential mortgage loans, and to a
lesser extent, to purchase and originate commercial real estate, commercial
business and consumer loans. BankUnited also invests in tax certificates and
other permitted investments. BankUnited's revenues are derived principally from
interest earned on loans, mortgage-backed securities and investments.
BankUnited's primary expenses arise from interest paid on savings deposits and
borrowings and non-interest overhead expenses incurred in operations.
On January 23, 1998 BankUnited acquired Consumers Bancorp, Inc. and
merged its wholly owned subsidiary, Consumers Savings Bank ("Consumers"), a
Florida chartered savings and loan with assets of $101.2 million and deposits of
$84.3 million at December 31, 1997, into BankUnited, FSB. On December 30, 1997,
BankUnited signed a definitive agreement to acquire Central Bank, a Florida
chartered commercial bank. These mergers will increase BankUnited's deposit
market share, particularly in Miami-Dade County, while permitting BankUnited to
compete more effectively with larger super-regional financial institutions in
South Florida.
BankUnited, FSB is a member of the Federal Home Loan Bank system and is
subject to comprehensive regulation, examination and supervision by the Office
of Thrift Supervision (the "OTS") and the Federal Deposit Insurance Corporation
(the "FDIC"). Deposits at BankUnited, FSB are insured by the Savings Association
Insurance Fund of the FDIC (the "SAIF") to the maximum extent permitted by law.
BankUnited's executive offices are located at 255 Alhambra Circle,
Coral Gables, Florida 33134, and its telephone number is (305) 569-2000.
CENTRAL BANK
Central, incorporated in Florida in 1984, is a Florida commercial bank
and member of the Federal Reserve System and is subject to regulation by the
Florida Department of Banking and Finance (the "Florida Banking
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<PAGE>
Department"). Central commenced operations on September 17, 1984 and currently
operates four banking offices, all of which are located in Miami-Dade County,
Florida. As of December 31, 1997, Central had assets of $92.4 million, deposits
of $72.8 million and shareholders' equity of $10.9 million.
Central's main business activities are attracting deposits, originating
loans, making investments and servicing its loans. Central offers the full range
of deposit services that are typically available in most banks, including
checking accounts, NOW accounts, savings accounts and other time deposits of
various types ranging from daily money market deposit accounts to longer-term
certificates of deposit. Central believes that the combination of its rates
offered on its accounts and the quality of service it provides enables Central
to be competitive in its market area. All deposit accounts are insured by the
FDIC up to the maximum amount ($100,000 per depositor, subject to aggregation
rules). Central solicits these accounts from individuals, businesses,
associations and organizations.
Central offers short- to medium-term commercial and residential real
estate, commercial, consumer and construction loans. Central's primary focus is
business and consumer lending. Commercial business and real estate loans include
both secured and unsecured loans (including loans partially guaranteed by the
Small Business Administration) for business expansion (including acquisition of
real estate and improvements), working capital (including inventory and
receivables) and purchases of equipment and machinery. Consumer loans include,
among other things, secured and unsecured loans for financing the purchase of
automobiles and for home improvements. At December 31, 1997, approximately 47%
of Central's loan portfolio consisted of consumer installment loans, 35% of
Central's loan portfolio consisted of real estate loans and 18% of Central's
loan portfolio consisted of general commercial purpose loans. Earnings depend
primarily upon the difference between interest received on loans and investments
and interest paid on Central's deposit base and borrowings and on fees for
services rendered to its customers.
Central's other services include safe deposit boxes, travelers checks,
direct deposit of payroll and Social Security checks, automatic draft payments
for various accounts and international financing services. Central is a member
of the Honor network of automated teller machines that may be used by bank
customers in major cities throughout Florida and the United States, as well as
in various cities worldwide.
The address of Central's principal executive offices is 7970 N.W. 36th
Street, Miami, Florida 33166 and its telephone number is (305) 592-6641.
THE CENTRAL SPECIAL MEETING
DATE, TIME, PLACE AND PURPOSE OF SPECIAL MEETING
The Central Special Meeting will be held on Thursday, May 21, 1998 at
11:00 a.m., local time, at the Union Planters Bank Building, 1221 Brickell
Avenue, Miami, Florida 33131, 22nd Floor, for the purpose of considering and
voting upon a proposal to approve the Merger Agreement and the consummation of
the transactions contemplated thereby, including the Merger, and such other
matters as may properly be brought before the Special Meeting. The Central Board
is currently not aware of any other business to come before the Special Meeting.
RECORD DATE; SHARES ENTITLED TO VOTE; QUORUM
The Central Board has fixed the close of business on April 10, 1998 as
the record date for determining the holders of Central Common Stock entitled to
receive notice of and to vote at the Central Special Meeting or any adjournments
or postponements thereof (the "Central Record Date"). At the close of business
on the Central Record Date, 450,000 shares of Central Common Stock were
outstanding, held by 48 shareholders of record. The presence in person or by
proxy of holders of record of shares representing a majority of the total
outstanding shares of the Central Common Stock will constitute a quorum at the
Central Special Meeting.
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<PAGE>
The holders of Central Common Stock are entitled to one vote on all
matters properly brought before the Central Special Meeting for each share of
Central Common Stock held by such persons. Votes may be cast in person at the
Central Special Meeting or by proxy.
As of the Central Record Date, directors and executive officers of
Central and their affiliates had the right to vote 87,950 shares of Central
Common Stock in the aggregate (representing approximately 19.54% of the
outstanding shares of Central Common Stock). The directors and executive
officers of Central who hold such shares have informed Central that they intend
to vote all such shares in favor of the approval of the Merger Agreement.
VOTE REQUIRED TO APPROVE
Under the regulations of the Office of Thrift Supervision ("OTS
Regulations"), it is not necessary for shareholders of BankUnited to approve the
Merger Agreement in order to consummate the Merger, and therefore they will not
be asked to do so. Proxies will not be solicited from shareholders of
BankUnited.
Under OTS Regulations, the affirmative vote of the holders of at least
two-thirds of the shares of the Central Common Stock outstanding at the Central
Record Date is required in order to approve the Merger Agreement. An abstention
by a holder of shares of Central Common Stock will have the same effect as a
vote against the Merger Agreement. Approval of the Merger Agreement by the
requisite vote of the holders of the Central Common Stock is a condition to, and
required for, consummation of the Merger.
REVOCATION OF PROXIES
Any Central shareholder who signs and returns a proxy may revoke it at
any time before it has been voted by (i) delivering to the Secretary of Central
written notice of its revocation, (ii) executing and delivering to the Secretary
of Central a proxy bearing a later date or (iii) attending the Central Special
Meeting and voting in person. Attendance at the Central Special Meeting will not
in and of itself constitute a revocation of any proxy given to Central. Written
notice of revocation should be sent to Central, 7970 N.W. 36th Street, Miami,
Florida 33166, Attention: Secretary. All properly executed proxies, if received
in time for voting and not revoked, will be voted in accordance with the
instructions specified, or, if no instructions are specified, will be voted for
the approval of the adoption of the Merger Agreement.
THE MERGER
TERMS OF THE MERGER
The Merger Agreement was executed on December 30, 1997 and provides
that the affiliation of Central and BankUnited is to be effected by the merger
of Central with and into BankUnited, FSB. Upon consummation of the Merger,
BankUnited and BankUnited, FSB will continue their existing business, Central
will be merged with and into BankUnited, FSB and Central will cease to exist.
The Merger Agreement is attached as Appendix A to this Proxy
Statement-Prospectus and is incorporated herein by reference.
Upon consummation of the Merger, each issued and outstanding share of
Central Common Stock will be converted into the right to receive shares of
BankUnited Class A Common Stock. The Exchange Ratio will be 3.37 shares of
BankUnited Class A Common Stock for each share of Central Common Stock, subject
to change based upon the Fair Market Value of the BankUnited Class A Common
Stock prior to the effective time of the Merger. The Exchange Ratio will be
decreased if the Fair Market Value exceeds $14.30 per share or increased if the
Fair Market Value is less than $11.70 per Share. The maximum number of shares of
BankUnited Class A Common Stock which could be received per share of Central
Common Stock is 4.15 shares, if the Fair Market Value were less than $9.50 per
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<PAGE>
share. The Merger may be terminated by Central if the Fair Market Value is less
than $9.50 per share, or by either BankUnited or Central, if the Fair Market
Value is less than $9.00 per share. See "The Merger--Conversion of Central
Capital Stock." The Fair Market Value of BankUnited Class A Common Stock will be
determined by using the average closing price of one share of the BankUnited
Class A Common Stock on Nasdaq computed for the 20-day trading period ending
three business days prior to the effective time of the Merger (the "FMV").
If the FMV is between $11.70 and $14.30 per share at the time of
consummation of the Merger, each share of Central Common Stock will be converted
into the right to receive 3.37 shares of BankUnited Class A Common Stock.
If the FMV is greater than $14.30 per share, the number of shares of
BankUnited Class A Common Stock into which each share of Central Common Stock
will be converted will be determined under the following formula:
3.37 X (14.30 + ((FMV - 14.30) X .5))
-------------------------------------
FMV
For example, if the FMV of BankUnited Class A Common Stock is $15.00 per share
at the time of consummation of the Merger, each share of Central Common Stock
will be converted into the right to receive 3.2913 shares of BankUnited Class A
Common Stock, rather than 3.37 shares.
If the FMV is less than $11.70 per share, the number of shares of
BankUnited Class A Common Stock into which each share of Central Common Stock
will be converted will be determined under the following formula:
3.37 X 11.70
------------
FMV
For example, if the FMV is $10.00 per share at the time of consummation of the
Merger, each share of Central Common Stock will be converted into the right to
receive 3.9429 shares of BankUnited Class A Common Stock, rather than 3.37
shares.
If the FMV is less than $9.50 per share, each share of Central Common
Stock will be converted into 4.15 shares of BankUnited Class A Common Stock,
which is the maximum number of shares which could be received per share of
Central Common Stock.
The Merger Agreement contains representations and warranties of
BankUnited and Central as to, among other things, (i) the corporate organization
and existence of each party; (ii) the capitalization of each party; (iii) the
corporate organization, existence and capitalization of the subsidiaries of each
party; (iv) the authorization and enforceability of the Merger Agreement and
related transactions and the compliance of the Merger Agreement with (a) the
articles of incorporation or charter and bylaws of each party, (b) applicable
law and (c) certain material agreements; (v) each party's financial statements
and filings with applicable regulatory authorities; (vi) except as disclosed,
the absence of certain obligations or liabilities; (vii) with respect to
Central, the absence of certain liabilities or commitments to loan, fund or
advance money; (viii) the filing and accuracy of Central's tax returns; (ix)
each party's allowance for loan losses; (x) the absence of actions, facts or
circumstances that would prevent the Merger from qualifying as a reorganization
under Section 368 of the Internal Revenue Code of 1986, as amended (the "Code");
(xi) except as disclosed, the good and marketable title of each party to its
properties; (xii) each party's compliance with applicable laws; (xiii) Central's
employee benefit plans and related matters; (xiv) except as disclosed, the
absence of certain commitments and contracts; (xv) the absence of material
defaults under certain contracts; (xvi) except as disclosed, the absence of
material legal proceedings; (xvii) the absence of certain changes in each
party's business since December 31, 1996; (xviii) the timely filing of required
regulatory reports; (xix) material accuracy and completeness of the statements
made by each party in filings with the Commission or the OTS, as applicable;
(xx) insurance of each party and its subsidiaries; (xxi) with respect to
Central, the absence of work stoppages, labor disputes and union organization;
(xxii) with respect to Central, material interests of certain persons; (xxiii)
with respect to Central, except as disclosed, the absence of any obligations by
Central to register its securities; (xxiv) except as disclosed, the absence of
the need for either party to pay brokers' fees; (xxv) action by Central to
exempt the Merger from takeover laws and restrictions; (xxvi) with respect to
Central,
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<PAGE>
except as disclosed, the absence of environmental law violations; and (xxvii)
voting agreements with certain Central shareholders.
Pursuant to the Merger Agreement, Central has agreed that prior to the
Merger it will (i) conduct its business in the usual, regular and ordinary
course consistent with past practice, and (ii) use its best efforts to maintain
and preserve intact its business organization, employees and advantageous
business relationships and retain the services of its officers and key
employees.
BankUnited and Central have also agreed to cooperate and use their best
efforts to prepare all documentation, to effect all filings and to obtain all
permits, consents, approvals and authorizations of all third parties, regulatory
authorities and other governmental authorities to consummate the transactions
contemplated by the Merger Agreement and to cause the Merger to be consummated
as expeditiously as reasonably practicable. BankUnited and Central have each
agreed upon request to furnish to the other party all information concerning
themselves and their subsidiaries, directors, officers and shareholders and such
other matters as may be necessary or advisable in connection with the Merger.
BankUnited and Central have also agreed, subject to the terms and conditions of
the Merger Agreement, to use their best efforts to take, or cause to be taken,
all actions necessary, proper or advisable to comply promptly with all legal
requirements which may be imposed on such party or its subsidiaries to
consummate the Merger.
BankUnited has agreed that all Central employees who are employed by
BankUnited upon consummation of the Merger will be eligible to participate in
the employee benefit plans and other fringe benefits of BankUnited on the same
terms and conditions as those provided from time to time by BankUnited to its
similarly situated officers and employees, giving effect, for eligibility and
vesting of benefits, to years of service with Central as if such service were
with BankUnited. BankUnited and Central have also reached certain agreements
with respect to directors' and officers' indemnification and insurance.
CONDITIONS TO THE CONSUMMATION OF THE MERGER
The Merger Agreement provides, as a condition to the parties'
obligations to consummate the Merger, that the parties shall have received an
opinion from counsel to BankUnited that for federal income tax purposes the
Merger will qualify as a reorganization under the provisions of Section 368 of
the Code. See "The Merger--Certain Federal Income Tax Consequences."
The Merger Agreement also provides that consummation of the Merger is
subject to certain other conditions, including the approval of the Merger
Agreement by the shareholders of Central, the effectiveness of the Registration
Statement on Form S-4; approval of the Merger by applicable regulatory
authorities; the absence of any active litigation seeking to enjoin or prohibit,
or of any order, decree or injunction enjoining or prohibiting, the Merger; the
authorization for trading upon Nasdaq of the additional shares to be issued in
the Merger; holders of no more than ten percent of the Central Common Stock
having exercised dissenters' rights; approval of the Merger and all related
matters by the Central Board and the BankUnited Board; the truth and correctness
of the representations and warranties of Central and BankUnited as of the
effective time of the Merger; the performance by each party of its respective
obligations required under the Merger Agreement prior to the effective time of
the Merger; and the absence of any event, occurrence, or circumstance that would
constitute a Material Adverse Effect (as defined in the Merger Agreement) as to
BankUnited or Central.
In addition, the obligation of BankUnited to effect the Merger is
conditioned upon receipt of an opinion of counsel for Central addressed to
BankUnited in a form reasonably satisfactory to BankUnited as to the validity of
approvals of the Merger by directors and shareholders of Central, and, as of the
effective time of the Merger, upon Central maintaining a Closing Net Worth (as
defined in the Merger Agreement) of not less than $10,000,000.
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<PAGE>
EFFECTIVE TIME
The time of the consummation of the Merger (the "Effective Time") shall
be determined by BankUnited and Central, but will occur on or promptly after the
first business day following the last to occur of (i) the date that is 30 days
after the date of the order of the OTS approving the Merger, (ii) the effective
date of the last order, approval, or exemption of any other federal or state
regulatory agency approving or exempting the Merger if such action is required,
(iii) the expiration of all required waiting periods after the filing of all
notices to all federal or state regulatory agencies required for consummation of
the Merger, and (iv) the date on which the shareholders of Central approve the
Merger Agreement. BankUnited and Central each anticipate that the Merger will be
consummated in the second quarter of 1998. If the Merger is not effected on or
before June 30, 1998, the Merger Agreement may be terminated by either
BankUnited or Central.
RECOMMENDATION OF CENTRAL'S BOARD OF DIRECTORS
The proxies are being solicited by the Central Board. THE CENTRAL BOARD
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT THE HOLDERS OF
CENTRAL COMMON STOCK VOTE FOR THE PROPOSAL TO APPROVE THE MERGER AGREEMENT. The
Central Board considered a number of factors in reaching its decision to
recommend approval of the Merger Agreement. For Central, the impetus to effect a
Merger with BankUnited was, among other things, the present value of the
consideration being received, to maximize the prospects for long-term
shareholder value through the benefits of a larger organization, to expand
geographical presence, to broaden and diversify the loan portfolio, to provide
for potential to increase earnings per share over the long-term, to enhance
liquidity for shareholders and to expand senior management. See "The
Merger-Central's Reasons for the Merger."
BOARD OF DIRECTORS AND MANAGEMENT FOLLOWING THE MERGER
The Board of Directors of BankUnited consists of 11 persons and will
not change as a result of the consummation of the Merger. The executive officers
of BankUnited after the Merger will be comprised of members of BankUnited's
current senior management. It has not yet been determined which members of
Central's management will become officers of BankUnited following the Merger.
NASDAQ LISTING
The Merger Agreement provides for BankUnited to use its best efforts,
prior to the consummation of the Merger, to list on Nasdaq, upon official notice
of issuance, the shares of BankUnited Class A Common Stock to be issued to
holders of Central Common Stock in the Merger. These shares have already been
listed on Nasdaq.
REGULATORY APPROVAL
The Merger is subject to approval by the OTS. BankUnited has filed
prior to the date hereof an application with the OTS with respect to the Merger.
The Merger will not proceed until the requisite regulatory approvals have been
obtained and such approvals are in full force and effect. There can be no
assurance that the Merger will be approved by the OTS. If such approval is
received, there can be no assurance as to the date of such approval or the
absence of any litigation challenging such approval. See "The Merger--Regulatory
Approval Required for the Merger."
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<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger is intended to qualify as a tax-free reorganization under
Section 368(a)(1) of the Code. Kronish, Lieb, Weiner & Hellman LLP, special tax
counsel to BankUnited, will deliver an opinion to BankUnited and Central to the
effect that no gain or loss will be recognized by Central or BankUnited, or
(other than with respect to cash received in lieu of a fractional share of
BankUnited Class A Common Stock) by Central shareholders, as a result of the
Merger. For a more complete description of the federal income tax consequences,
see "The Merger--Certain Federal Income Tax Consequences."
ACCOUNTING TREATMENT
The Merger will be accounted for as a "purchase" transaction. Under the
purchase method of accounting, the assets and liabilities of Central will be
recorded on the consolidated financial statements of BankUnited at their
respective fair market values at the Effective Date. Any excess of the value of
the consideration paid by BankUnited over the fair market value of Central's
identifiable assets acquired, less liabilities assumed, will be recorded as an
intangible asset.
TERMINATION
The Merger Agreement provides that it may be terminated and the Merger
abandoned at any time prior to its consummation under certain circumstances,
including (i) by Central if the Fair Market Value of the BankUnited Class A
Common Stock is less than $9.50 per share, or by either Central or BankUnited if
the Fair Market Value of BankUnited Class A Common Stock is less than $9.00 per
share; (ii) by mutual consent of the BankUnited Board and the Central Board;
(iii) by BankUnited or Central if the OTS has denied approval of the Merger, or
approved the Merger under circumstances which BankUnited determines to be unduly
restrictive, or if the Merger has not occurred by June 30, 1998, unless said
time is extended by written agreement of Central and BankUnited; (iv) by
BankUnited, if it is not in material breach, pursuant to notice, in the event of
a breach or failure by Central that has a Material Adverse Effect; (v) by
Central, if Central is not in material breach of its obligations under the
Merger Agreement, pursuant to notice in the event of a material breach or
failure by BankUnited; (vi) by BankUnited or Central if the shareholders of
Central fail to approve the Merger Agreement at the Central Special Meeting,
(vii) by Central if Central is not in material breach of its obligations under
the Merger Agreement, and prior to the consummation of the Merger, it receives
an Acquisition Proposal (as defined in the Merger Agreement) that the Central
Board determines in its good faith judgment and in the exercise of its fiduciary
duties, based as to legal matters on the reasonable advice of legal counsel and
as to financial matters on the reasonable advice of an investment banking firm
of national reputation, is more favorable to Central shareholders than the
Merger, and that the failure to terminate the Merger Agreement and accept such
alternative Acquisition Proposal would be inconsistent with the proper exercise
of such fiduciary duties; or (viii) by BankUnited if Central's Closing Net Worth
(as defined in the Merger Agreement) is less than $10,000,000. If the Merger
Agreement is terminated under circumstance (vii), or if the Merger Agreement is
terminated under circumstance (iv) and an Acquisition Event (as defined in the
Merger Agreement) occurs within nine months of the termination, then Central
will be obligated to pay BankUnited a $550,000 termination fee, and reasonable
out-of-pocket expenses up to $35,000.
NO SOLICITATION OF TRANSACTIONS
The Merger Agreement restricts the ability of Central to initiate,
encourage or solicit, directly or indirectly, Acquisition Proposals (as defined
in the Merger Agreement) other than the Merger, and to participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, an Acquisition Proposal other than the Merger. However, Central
may (i) furnish or cause to be furnished information subject to a
confidentiality agreement in a form satisfactory to BankUnited, (ii) in response
to an Acquisition Proposal, issue a communication to
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its security holders of the type contemplated by Rule 14d-9(e) under the
Exchange Act, and (iii) participate in discussions and negotiations directly and
through its representatives with persons who have sought the same if, in each
instance the Central Board determines, based as to legal matters on the written
advice of outside legal counsel, that the failure to furnish such information or
to negotiate with such entity or group or to take and disclose such position
would be inconsistent with the proper exercise of the fiduciary duties of the
Central Board.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of the Central Board and Central's management may be
deemed to have certain interests in the Merger which are in addition to their
interests as Central shareholders, generally. These include, among other things,
certain employment and change-of-control agreements. The Central Board was aware
of these interests and considered them, among other matters, in approving the
Merger Agreement and the transactions contemplated thereby. See "The
Merger-Interests of Certain Persons in the Merger."
CERTAIN DIFFERENCES IN THE RIGHTS OF SHAREHOLDERS
The rights of shareholders and other corporate matters related to the
BankUnited Class A Common Stock are controlled by BankUnited's Articles of
Incorporation and Bylaws and by the Florida Business Corporation Act (the
"FBCA"). The rights of shareholders and other corporate matters relating to the
Central Common Stock are controlled by the Central Articles of Incorporation and
Bylaws and by the Florida Banking Code. Upon consummation of the Merger,
shareholders of Central will receive shares of BankUnited Class A Common Stock.
Shareholders of Central who become shareholders of BankUnited will have rights
governed by BankUnited's Articles of Incorporation and Bylaws and by the FBCA.
See "Comparison of Shareholders' Rights."
APPRAISAL RIGHTS
Pursuant to Section 552.14 of the OTS Regulations, each Central
shareholder, whether or not entitled to vote at the Special Meeting, will have
the right to demand payment of the fair or appraised value of his or her shares,
only if such shareholder (i) does not vote in favor of Proposal One to approve
the Merger Agreement and (ii) before voting on the Merger Agreement, delivers
written notice to Central which identifies the shareholder and states the
shareholder's intention to demand appraisal of and payment for his or her
shares. Such demand must be in addition to and separate from any proxy or vote
against the Merger Agreement. Any dissenting shareholder must, within 60 days
after the effective time of the Merger, file a petition with the Office of
Thrift Supervision, with a copy by registered or certified mail to BankUnited,
FSB, demanding a determination of the fair market value of the dissenting shares
of all dissenting shareholders. Failure to file such a petition within the
required period will be deemed acceptance of the terms offered under the Merger.
A dissenting shareholder will have the right, at any time within 60 days after
the effective date of the Merger, to withdraw his or her demand for appraisal
and to accept the terms offered upon the Merger.
RISK FACTORS
THE MERGER INVOLVES CERTAIN RISK FACTORS THAT SHOULD BE CAREFULLY
CONSIDERED BY THE SHAREHOLDERS OF CENTRAL. SEE "RISK FACTORS."
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STOCK PRICES AND DIVIDENDS
The shares of the BankUnited Class A Common Stock are listed for
trading on Nasdaq under the symbol "BKUNA." As of April 8, 1998, there were 571
record holders of BankUnited Class A Common Stock and 17,011,224 shares issued
and outstanding. BankUnited's Class B Common Stock is not currently traded on
any established public market. As of April 8, 1998 there were approximately 21
holders of record of BankUnited Class B Common Stock and 316,499 shares issued
and outstanding. Central Common Stock is not traded or quoted on an exchange or
other stock market and has historically been an illiquid investment. As of April
8, 1998, there were 450,000 shares of Central Common Stock issued and
outstanding, held by 48 shareholders of record. Central has never declared any
dividends.
The table below sets forth, for the periods indicated, the cash
dividends declared by BankUnited and the range of high and low bid prices for
the BankUnited Class A Common Stock quoted on Nasdaq. Stock price data on Nasdaq
reflects inter-dealer prices, without retail mark-up, mark-down or commission
and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK (1) CLASS B COMMON STOCK (1)
------------------------------------------------- --------------------------
PRICE
FISCAL YEAR ENDED ----------------------------- CASH DIVIDENDS CASH DIVIDENDS
SEPTEMBER 30, 1993: HIGH LOW PAID PER SHARE PAID PER SHARE
- ------------------ ------- -------- ---------------- ---------------
<S> <C> <C> <C> <C>
1st Quarter $ 8.913 $7.000 $.022 $.009
2nd Quarter $12.609 $8.478 $.022 $.009
3rd Quarter $11.000 $7.500 $.025 $.010
4th Quarter $ 8.625 $8.000 $.025 $.010
FISCAL YEAR ENDED
SEPTEMBER 30, 1994:
- -------------------
1st Quarter $8.250 $7.500 $.025 $.010
2nd Quarter $7.500 $6.750 $.025 $.010
3rd Quarter $7.500 $6.750 $.025 $.010
4th Quarter $7.250 $6.000 -- --
FISCAL YEAR ENDED
SEPTEMBER 30, 1995:
1st Quarter $7.000 $4.500 -- --
2nd Quarter $6.250 $4.750 -- --
3rd Quarter $7.000 $5.000 -- --
4th Quarter $8.750 $7.130 -- --
FISCAL YEAR ENDED
SEPTEMBER 30, 1996:
1st Quarter $8.75 $6.00 -- --
2nd Quarter $8.50 $6.50 -- --
3rd Quarter $8.50 $7.25 -- --
4th Quarter $8.25 $7.25 -- --
FISCAL YEAR ENDED
SEPTEMBER 30, 1997:
1st Quarter $10.00 $7.875 -- --
2nd Quarter $11.25 $9.25 -- --
3rd Quarter $10.75 $8.50 -- --
4th Quarter $13.3125 $9.625 -- --
FISCAL YEAR ENDING
SEPTEMBER 30, 1998:
1st Quarter $16.00 $12.50 -- --
2nd Quarter $15.375 $12.25 -- --
</TABLE>
(1) Adjusted to reflect a 15% stock dividend paid in April of 1993 on the
BankUnited Class A Common Stock and BankUnited Class B Common Stock.
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The following table sets forth the closing sale price of the BankUnited
Class A Common Stock on December 30, 1997 (the last trading day prior to the
public announcement of the proposed Merger) and ________ _, 1998 (the latest
practicable trading day before the printing of this Proxy Statement-Prospectus).
BANKUNITED CLASS A
COMMON STOCK
------------
December 30, 1997 $15.375
________ __, 1998 $______
Since the number of shares of BankUnited Class A Common Stock which
Central shareholders may receive in the Merger is dependent on the Fair Market
Value of BankUnited Class A Common Stock, Central shareholders are advised to
obtain current market quotations for the BankUnited Class A Common Stock. The
Fair Market Value of BankUnited Class A Common Stock will be determined by using
the average closing price of one share of the BankUnited Class A Common Stock on
Nasdaq computed for the 20-day trading period ending three business days prior
to the effective time of the Merger (the "FMV").
If the FMV is between $11.70 and $14.30 per share at the time of
consummation of the Merger, each share of Central Common Stock will be converted
into the right to receive 3.37 shares of BankUnited Class A Common Stock.
If the FMV is greater than $14.30 per share, the number of shares of
BankUnited Class A Common Stock into which each share of Central Common Stock
will be converted will be determined under the following formula:
3.37 X (14.30 + ((FMV - 14.30) X .5))
-------------------------------------
FMV
For example, if the FMV of BankUnited Class A Common Stock is $15.00 per share
at the time of consummation of the Merger, each share of Central Common Stock
will be converted into the right to receive 3.2913 shares of BankUnited Class A
Common Stock, rather than 3.37 shares.
If the FMV is less than $11.70 per share, the number of shares of
BankUnited Class A Common Stock into which each share of Central Common Stock
will be converted will be determined under the following formula:
3.37 X 11.70
------------
FMV
For example, if the FMV is $10.00 per share at the time of consummation of the
Merger, each share of Central Common Stock will be converted into the right to
receive 3.9429 shares of BankUnited Class A Common Stock, rather than 3.37
shares.
If the FMV is less than $9.50 per share, each share of Central Common
Stock will be converted into 4.15 shares of BankUnited Class A Common Stock,
which is the maximum number of shares which could be received per share of
Central Common Stock.
12
<PAGE>
SELECTED HISTORICAL AND PRO FORMA PER SHARE DATA
The unaudited information set forth in the following tables reflects
certain comparative per common share data related to income per share, cash
dividends declared per share, and book value per share (i) on an historical
basis for BankUnited and Central; (ii) on a pro forma combined basis per share
of the BankUnited Class A Common Stock assuming consummation of the Merger; and
(iii) on an equivalent pro forma combined basis per share of the Central Common
Stock assuming consummation of the Merger.
The information shown below should be read in conjunction with the
consolidated historical financial statements of BankUnited and Central,
including the respective notes thereto, which are included or incorporated by
reference into this Proxy Statement-Prospectus. The pro forma data is presented
for comparative purposes only and is not necessarily indicative of the combined
financial position or results of operations which would have been realized had
the Merger been consummated during the period or as of the dates for which the
pro forma data is presented.
See "Information Incorporated by Reference," and the consolidated
financial statements of Central and the notes thereto contained in Appendix B to
this Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
AT OR FOR THE THREE AT OR FOR THE
MONTHS ENDED YEAR ENDED
DECEMBER 31, ENDED SEPTEMBER 30,
1997 1997
------------------- -------------------
<S> <C> <C>
BANKUNITED CLASS A COMMON STOCK
Basic earnings per share(a):
Historical................................... $ .13 $ .57
Pro forma(b)................................. .13 .55
Diluted earnings per share(a):
Historical................................... .12 .54
Pro forma(b)................................. .12 .52
Cash dividends declared per share:
Historical................................... - -
Pro forma.................................... - -
Book value per share-end of period:
Historical................................... 9.13 7.94
Pro forma(c)................................. 9.66 8.85
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE THREE AT OR FOR THE
MONTHS ENDED TWELVE MONTHS
DECEMBER 31, ENDED SEPTEMBER 30,
1997 1997
-------------------- -------------------
<S> <C> <C>
CENTRAL COMMON STOCK
Basic earnings per share(a):
Historical................................... $ .72 $ 2.49
Equivalent pro forma(d)...................... .43 1.85
Diluted earnings per share(a):
Historical................................... .72 2.49
Equivalent pro forma(d)...................... .41 1.76
Cash dividends declared per share:
Historical................................... - -
Equivalent pro forma(d)...................... - -
Book value per share-end of period:
Historical................................... 24.17 23.41
Equivalent pro forma (d)..................... 32.55 29.84
</TABLE>
- ----------
(a) In calculating pro forma earnings per share, no adjustments to the pro
forma amounts have been made to reflect potential expense reductions or
revenue enhancements which may result from the Merger.
(b) Gives effect to the Merger as if it had occurred at the beginning of
the period.
(c) Gives effect to the Merger as if it had occurred at December 31, 1997
and September 30, 1997, respectively.
(d) The equivalent pro forma computations are calculated by multiplying the
pro forma amounts by the assumed exchange ratio of 3.37 shares.
13
<PAGE>
RECENT DEVELOPMENTS
On March 11, 1998, BankUnited Capital III, a newly formed trust
subsidiary of BankUnited created under the laws of Delaware, issued $102.5
million of 9% Cumulative Trust Preferred Securities and $4.1 million of common
securities. The common securities are wholly owned by BankUnited. In connection
with this transaction, BankUnited Capital III simultaneously purchased $106.6
million of 9% Junior Subordinated Deferrable Interest Debentures issued by
BankUnited with terms similar to the 9% Cumulative Trust Preferred Securities.
These Securities mature March 31, 2028 and pay a preferential cumulative cash
distribution at an annual rate of 9%. BankUnited and BankUnited Capital III have
the right to defer payment of interest for up to five years. BankUnited has
guaranteed all the obligations of the 9% Cumulative Trust Preferred Securities,
subject to certain limitations. The 9% Junior Subordinated Deferrable Interest
Debentures rank pari pasu with $120.64 million of previously issued junior
subordinated deferrable interest debentures. For additional information on
previously issued junior subordinated deferrable interest debentures, see Note
11 of the Notes to Consolidated Financial Statements contained in BankUnited's
Annual Report on Form 10-K/A for the year ended September 30, 1997, incorporated
by reference into this Proxy Statement-Prospectus.
On March 12, 1998, BankUnited, FSB securitized $350 million of
purchased residential mortgages and retained such securities in its portfolio.
The securitization gives BankUnited, FSB the capability of using such securities
as collateral for the purpose of borrowing, on a secured basis, funds which may
be used to make additional loan purchases or repay a portion of FHLB advances.
No gain or loss was recorded on the transaction.
On April 8, 1998, BankUnited completed (i) the sale (the "Public
Offering") of 850,000 shares of BankUnited Class A Common Stock and 30,000
shares of BankUnited Class B Common Stock, (ii) the direct offering by
BankUnited of 104,000 shares of BankUnited Class A Common Stock to certain
BankUnited directors and principal shareholders, and (iii) the direct offering
by BankUnited of 25,000 shares of BankUnited Noncumulative Convertible Preferred
Stock, Series B to the Chairman of the Board and President of BankUnited.
Friedman, Billings, Ramsey & Co., Inc. and PaineWebber Incorporated were the
underwriters for the Public Offering. For information on the beneficial security
ownership of directors, executive officers and 5% shareholders of BankUnited,
see "Security Ownership of Certain BankUnited Beneficial Owners and Management."
14
<PAGE>
BANKUNITED SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA
The information at or for the three months ended December 31, 1997 and
1996 is derived from unaudited financial statements which, in the opinion of
BankUnited's management, reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results for such
periods. The results for the three months ended December 31, 1997 are not
necessarily indicative of the results that may be expected for the entire year.
The following selected financial data for the years ended September 30, 1993
through 1997 has been derived from the audited consolidated financial statements
of BankUnited. The summary consolidated financial information should be read in
conjunction with BankUnited's Consolidated Financial Statements and Notes
thereto contained in BankUnited's Annual Report on Form 10-K/A for the fiscal
year ended September 30, 1997 and BankUnited's Quarterly Report on Form 10-Q/A
for the quarter ended December 31, 1997, which are incorporated by reference
into this Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
AT OR FOR THE THREE
MONTHS ENDED
DECEMBER 31, AT OR FOR THE FISCAL YEARS ENDED SEPTEMBER 30,
--------------------- --------------------------------------------------
1997 1996 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS DATA:
Interest income..................................$ 41,450 $ 19,491 $ 108,774 $ 52,132 $ 39,419 $ 30,421 $25,722
Interest expense................................. 32,083 12,415 75,960 34,622 26,305 16,295 12,210
---------- --------- --------- --------- ---------- --------- --------
Net interest income before provision (credit)
for loan losses................................ 9,367 7,076 32,814 17,510 13,114 14,126 13,512
Provision (credit) for loan losses............... 650 250 1,295 (120) 1,221 1,187 1,052
---------- --------- --------- --------- ---------- --------- --------
Net interest income after provision (credit)
for loan losses................................ 8,717 6,826 31,519 17,630 11,893 12,939 12,460
---------- --------- --------- --------- ---------- --------- --------
Non-interest income:
Service fees..................................... 452 575 2,993 597 423 358 221
Gain on sales of loans and mortgage-backed
securities, net................................ 1,115 (11) 819 5 239 150 1,496
Gain (loss) on sales of other assets, net(1)..... -- -- 1 (6) 9,569 -- --
Other............................................ 77 36 247 53 6 46 2
---------- --------- --------- --------- ---------- --------- --------
Total non-interest income................... 1,644 600 4,060 649 10,237 554 1,719
---------- --------- --------- --------- ---------- --------- --------
Non-interest expense:
Employee compensation and benefits............. 2,480 1,915 8,880 4,275 3,997 3,372 2,721
Occupancy and equipment........................ 886 886 3,568 1,801 1,727 1,258 978
Insurance (2).................................. 255 361 948 3,610 1,027 844 835
Professional fees.............................. 622 222 1,605 929 1,269 833 543
Other.......................................... 2,782 1,421 7,964 3,421 4,129 3,579 2,746
---------- --------- --------- --------- ---------- --------- --------
Total non-interest expense.................. 7,025 4,805 22,947 14,036 12,149 9,886 7,823
---------- --------- --------- --------- ---------- --------- --------
Income before income taxes and preferred
stock dividends................................ 3,336 2,621 12,632 4,243 9,981 3,607 6,356
Provision for income taxes (3)................... 1,361 1,022 5,033 1,657 3,741 1,328 2,318
---------- --------- --------- --------- ---------- --------- --------
Net income before preferred stock dividends...... 1,975 1,599 7,599 2,586 6,240 2,279 4,038
Preferred stock dividends........................ 332 672 2,890 2,145 2,210 2,069 1,513
---------- --------- --------- --------- ---------- --------- --------
Net income after preferred stock dividends.......$ 1,643 $ 927 $ 4,709 $ 441 $ 4,030 $ 210 $ 2,525
========== ========= ========= ========= ========== ========= ========
FINANCIAL CONDITION DATA:
Total assets.....................................$3,028,776 $1,329,044 $2,145,406 $ 824,360 $ 608,415 $ 551,075 $435,378
Loans receivable, net, and mortgage-backed
securities(4).................................. 2,674,718 1,132,882 1,781,652 716,550 506,132 470,154 313,899
Investments, overnight deposits, tax
certificates, repurchase agreements,
certificates of deposits and other
interest-earning assets......................... 176,091 124,950 186,955 87,662 88,768 64,783 100,118
Total liabilities................................ 2,883,145 1,230,889 2,045,761 755,249 562,670 509,807 397,859
Deposits......................................... 1,444,102 878,166 1,195,892 506,106 310,074 347,795 295,108
Borrowings....................................... 1,291,466 289,259 701,484 237,775 241,775 158,175 97,775
Trust Preferred Securities....................... 116,000 50,000 116,000 - - - --
Total stockholders' equity....................... 145,631 98,155 99,645 69,111 45,745 41,268 30,273
Common stockholders' equity...................... 129,719 60,051 75,649 44,807 21,096 16,667 17,162
PER COMMON SHARE DATA:
Basic earnings per common share(5)...............$ .13 $ .14 $ .57 $ .10 $ 1.99 $ .11 $ 1.67
========== ========= ========= ========== ========= ========= ========
Diluted earnings per common share(5).............$ .12 $ .13 $ .54 $ .10 $ 1.26 $ .10 $ 1.00
========== ========= ========= ========== ========= ========= ========
Weighted average number of common shares
outstanding during the period:
Basic(5)....................................... 13,012,118 6,806,379 8,210,890 4,306,042 2,021,601 1,957,210 1,509,264
Diluted(5)..................................... 14,041,609 7,957,657 8,955,572 4,558,521 4,158,564 2,175,210 3,239,618
Equity per common share.......................... $ 9.13 $ 7.59 $ 7.94 $ 7.85 $ 10.20 $ 8.33 $ 8.86
Fully converted tangible equity per common share. $ 8.19 $ 6.56 $ 6.88 $ 7.13 $ 8.15 $ 7.39 $ 7.57
(Continued on next page)
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE THREE
MONTHS ENDED
DECEMBER 31, AT OR FOR THE FISCAL YEARS ENDED SEPTEMBER 30,
--------------------- --------------------------------------------------
1997 1996 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS
PERFORMANCE RATIOS:
Return on average assets (6)(7).................. .33% .62% .51% .36% 1.10% .46% 1.12%
Return on average common equity(6)............... 6.31 9.55 9.34 1.30 22.60 1.21 18.55
Return on average total equity(6)................ 5.87 8.08 8.06 4.30 14.70 5.84 14.07
Interest rate spread(6).......................... 1.39 2.59 2.07 2.10 2.12 2.78 3.59
Net interest margin(6)........................... 1.66 2.86 2.31 2.51 2.39 3.01 3.87
Dividend payout ratio(8)......................... 16.81 42.02 38.03 82.95 35.42 96.79 40.66
Ratio of earnings to combined fixed charges and
preferred stock dividends(9):
Excluding interest on deposits................ 1.18 1.32 1.26 1.05 1.52 1.07 1.87
Including interest on deposits................ 1.09 1.11 1.10 1.02 1.21 1.03 1.27
Total loans, net, and mortgage-backed securities
to total deposits............................... 185.22 129.00 148.98 141.58 163.13 134.40 109.65
Non-interest expenses to average assets.......... 1.17 1.85 1.55 1.97 2.14 2.04 2.18
Efficiency ratio(10)............................. 57.43 59.37 57.56 61.11(11) 85.50(11) 66.06 45.17
ASSET QUALITY RATIOS:
Ratio of non-performing loans to total loans..... .39% .70% .72% .99% 1.02% 1.07% 1.54%
Ratio of non-performing assets to total loans,
real estate owned and tax certificates.......... .45 .86 .79 1.14 1.35 1.41 1.78
Ratio of non-performing assets to total assets... .40 .70 .67 .95 1.10 1.17 1.46
Ratio of charge-offs to total loans(6)........... .002 .03 .03 .08 .13 .39 .07
Ratio of loan loss allowance to total loans...... .16 .28 .21 .34 .32 .20 .38
Ratio of loan loss allowance to non-performing
loans........................................... 40.78 39.60 28.96 33.74 31.54 18.89 24.70
CAPITAL RATIOS:
Ratio of average common equity to average total
assets.......................................... 4.35% 3.74% 3.40% 4.78% 3.14% 3.58% 3.79%
Ratio of average total equity to average total
assets.......................................... 5.62 7.62 6.36 8.44 7.47 8.05 7.99
Tangible capital-to-assets ratio(12)............. 7.11 7.80 8.07 7.01 7.09 6.65 7.56
Core capital-to-assets ratio(12)................. 7.11 7.80 8.07 7.01 7.09 6.65 7.56
Risk-based capital-to-assets ratio(12)........... 12.89 14.63 11.27 14.19 15.79 14.13 15.85
</TABLE>
- ----------
(1) In 1995 BankUnited recorded a $9.3 million gain ($5.8 million after
tax) from the sale of its branches on the west coast of Florida.
(2) In 1996 BankUnited recorded a one-time SAIF special assessment of $2.6
million ($1.6 million after tax).
(3) Amount reflects expense from change in accounting principle of $194,843
for fiscal 1994.
(4) Does not include mortgage loans held for sale.
(5) Earnings per share for all periods presented before December 31, 1997
have been restated in accordance with Financial Accounting Standard
128.
(6) Calculated on an annualized basis.
(7) Return on average assets is calculated before payment of preferred
stock dividends.
(8) The ratio of total dividends declared during the period (including
dividends on BankUnited, FSB's and BankUnited's preferred stock and
BankUnited's Class A and Class B Common Stock) to total earnings for
the period before dividends.
(9) The ratio of earnings to combined fixed charges and preferred stock
dividends excluding interest on deposits is calculated by dividing
income before taxes and extraordinary items by interest on borrowings
plus 33% of rental expense plus preferred stock dividends on a pretax
basis. The ratio of earnings to combined fixed charges and preferred
stock dividends including interest on deposits is calculated by
dividing income before taxes and extraordinary items by interest on
deposits plus interest on borrowings plus 33% of rental expense plus
preferred stock dividends on a pretax basis.
(10) Efficiency ratio is calculated by dividing non-interest expenses less
non-interest income by net interest income.
(11) These efficiency ratios have been adjusted to exclude the impact of the
one-time SAIF special assessment in 1996 and the gain on the sale of
BankUnited's branches in 1995. If these ratios were not adjusted, the
ratios would have been 76.45 in 1996 and 14.58 in 1995.
(12) Regulatory capital ratio of BankUnited, FSB.
16
<PAGE>
CENTRAL SELECTED FINANCIAL DATA
The following selected financial data at or for the years ended
December 31, 1997 and 1996 have been derived from financial statements of
Central audited by Deloitte & Touche LLP, independent auditors. The selected
financial information should be read in conjunction with the Financial
Statements of Central and Notes thereto and Management's Discussion and Analysis
of Financial Condition and Results of Operations contained in Appendix B to this
Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------
1997 1996
---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C>
SELECTED STATEMENTS OF CONDITION DATA:
Total assets................................................ $ 92,389 $ 91,132
Loans, net.................................................. 46,296 45,078
Securities available for sale............................... 24,392 20,262
Investment held to maturity................................. 5,107 6,186
Cash and cash equivalents................................... 14,638 18,106
Deposits.................................................... 72,825 70,137
Borrowed funds.............................................. 8,334 11,070
Shareholders' equity........................................ 10,878 9,616
YEARS ENDED DECEMBER 31,
-----------------------------
1997 1996
(Dollars in thousands)
SELECTED STATEMENTS OF INCOME DATA:
Interest income............................................. $ 6,941 $ 6,340
Interest expense............................................ 2,389 2,003
-------- --------
Net interest income before provision for loan losses........ 4,552 4,337
Provision for loan losses................................... 275 360
-------- --------
Net interest income after provision for loan losses......... 4,277 3,977
-------- --------
Other income:
Service charges on deposit accounts...................... 1,031 1,048
Other service charges and fees........................... 181 154
Gain (loss) on sale of securities available for sale, net 2 (4)
-------- --------
Total other income................................ 1,214 1,198
-------- --------
Other expense:
Salaries and employee benefits........................... 1,771 1,670
Occupancy and equipment expenses......................... 713 699
Data processing.......................................... 177 157
Legal, professional and consulting fees.................. 165 90
Stationery and supplies.................................. 102 111
Other expense............................................ 735 684
-------- --------
Total other expense............................... 3,663 3,411
-------- --------
Income before income taxes.................................. 1,828 1,764
Income tax expense.......................................... 679 627
-------- --------
Net income........................................ $ 1,149 $ 1,137
======== ========
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE TWELVE MONTHS
ENDED DECEMBER 31,
-----------------------------
1997 1996
---- ----
<S> <C> <C>
OTHER DATA:
Equity to assets......................................... 11.77% 10.55%
Net interest spread(1)................................... 3.95 4.30
Net interest margin(2)................................... 5.28 5.52
Return on average assets................................. 1.24 1.19
Return on average equity................................. 11.36 11.02
Non-interest income to average asset ratio............... 1.31 1.42
Non-interest expense to average asset ratio.............. 3.96 4.03
Non-performing loans to total loans...................... .23 .81
Non-performing assets to total assets.................... .36 .53
Average interest-earning assets to average
interest-bearing liabilities......................... 147.80 147.83
Allowance for loan losses to non-performing assets....... 274.85 188.41
Net interest income to non-interest expense.............. 124.28 127.16
Net interest income after provision for loan
losses to non-interest expense....................... 116.77 116.60
</TABLE>
- ----------
(1) Calculated as the yield difference between total interest-earning
assets and total interest-bearing liabilities for the period in
question.
(2) Calcualted by dividing net interest income by average interest-earning
assets for the period in question.
18
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, TOGETHER WITH THE
OTHER INFORMATION CONTAINED AND INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT-PROSPECTUS, THE FOLLOWING FACTORS IN EVALUATING BANKUNITED AND ITS
BUSINESS BEFORE VOTING ON THE PROPOSALS CONTAINED HEREIN AND EXCHANGING SHARES
OF CENTRAL COMMON STOCK FOR THE SHARES OF BANKUNITED CLASS A COMMON STOCK
OFFERED HEREBY. PROSPECTIVE INVESTORS SHOULD NOTE, IN PARTICULAR, THAT THIS
PROXY STATEMENT-PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE "EXCHANGE ACT"), THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES.
WHEN USED IN THIS PROXY STATEMENT-PROSPECTUS, OR IN THE DOCUMENTS INCORPORATED
BY REFERENCE HEREIN, THE WORD "ANTICIPATE," "BELIEVE," "ESTIMATE," "MAY,"
"INTEND" AND "EXPECT" AND SIMILAR EXPRESSIONS IDENTIFY CERTAIN OF SUCH
FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD
DIFFER MATERIALLY FROM THOSE CONTEMPLATED, EXPRESSED OR IMPLIED BY THE
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, AND CENTRAL SHAREHOLDERS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. THE
CONSIDERATIONS LISTED BELOW REPRESENT CERTAIN IMPORTANT FACTORS THAT COULD CAUSE
SUCH RESULTS TO DIFFER. THESE CONSIDERATIONS ARE NOT INTENDED TO REPRESENT A
COMPLETE LIST OF THE GENERAL OR SPECIFIC RISKS THAT MAY AFFECT BANKUNITED. IT
SHOULD BE RECOGNIZED THAT OTHER RISKS, INCLUDING GENERAL ECONOMIC FACTORS AND
EXPANSION STRATEGIES, MAY BE SIGNIFICANT, PRESENTLY OR IN THE FUTURE, AND THE
RISKS SET FORTH BELOW MAY AFFECT BANKUNITED TO A GREATER EXTENT THAN INDICATED.
RISK FACTORS RELATING TO BANKUNITED
POTENTIAL IMPACT OF CHANGES IN INTEREST RATES
BankUnited, FSB's profitability is dependent to a large extent on its
net interest income, which is the difference between its income on
interest-earning assets and its expense on interest-bearing liabilities.
BankUnited, FSB, like most financial institutions, is affected by changes in
general interest rate levels and by other economic factors beyond its control.
Interest rate risk arises from mismatches (i.e., the interest sensitivity gap)
between the dollar amount of repricing or maturing assets and liabilities, and
is measured in terms of the ratio of the interest rate sensitivity gap to total
assets. More assets than liabilities repricing or maturing over a given time
frame is considered asset-sensitive and is reflected as a positive gap, and more
liabilities than assets repricing or maturing over a given time frame is
considered liability-sensitive and is reflected as a negative gap. An
asset-sensitive position (i.e., a positive gap) will generally enhance earnings
in a rising interest rate environment and will reduce earnings in a falling
interest rate environment, while a liability-sensitive position (i.e., a
negative gap) will generally enhance earnings in a falling interest rate
environment and reduce earnings in a rising interest rate environment.
Fluctuations in interest rates are not predictable or controllable. At December
31, 1997, BankUnited, FSB had a one year cumulative positive gap of 9.8%. This
positive one year gap position may, as noted above, have a negative impact on
earnings in a falling interest rate environment. There can be no assurances of
BankUnited's ability to continue to achieve positive net interest income. See
"Business-Factors Affecting Earnings-Asset and Liability Management" and
"Quantitative and Qualitative Disclosure About Market Risk" contained in
BankUnited's Annual Report on Form 10-K/A for the fiscal year ended September
30, 1997, incorporated by reference into this Proxy Statement-Prospectus.
RISKS ASSOCIATED WITH BANKUNITED'S ADJUSTABLE RATE MORTGAGE LOANS
BankUnited has purchased and intends to continue to purchase a
significant amount of residential mortgage loans. During the three months ended
December 31, 1997 and the year ended September 30, 1997, BankUnited purchased
$1.1 billion and $913.7 million, respectively, of one-to-four family residential
loans, of which $1.1 billion and $728.2 million, respectively, were adjustable
rate mortgage loans ("ARMs"). At December 31, 1997 BankUnited's residential loan
portfolio included $2.0 billion of ARMs (77.9% of BankUnited's gross loan
portfolio). The ARMs purchased by BankUnited generally have annual interest rate
adjustment caps that limit rate increases or decreases to 2% per year. Further,
the ARMs purchased by BankUnited provide for initial rates of interest below the
rates which
19
<PAGE>
would prevail were the contractual index and margin used for repricing applied
initially (the "teaser rate period"). Although BankUnited attempts to mitigate
the risk of default on these loans by requiring that borrowers qualify for the
loan based upon the fully indexed rate, these loans are subject nonetheless to
increased risk of delinquency or default as the higher, fully indexed rate of
interest subsequently comes into effect upon repricing. As a result, management
believes that BankUnited's net interest margin could be negatively impacted in a
rapidly rising interest rate environment by increased delinquencies and
defaults.
Also, if market interest rates rise rapidly, the annual and lifetime
interest rate caps on the ARMs may limit the increase in the interest rates on
the ARMs relative to the increase in market interest rates, and yields on ARMs
with teaser rates may be limited to repricing at interest rates below the
contractual index plus the margin. At December 31, 1997, $1.2 billion of
BankUnited's ARM loans (46.2% of BankUnited's gross loan portfolio) were in the
teaser rate period with an average teaser rate of 6.39% and an average fully
indexed rate of 8.28%. Rapid increases in market interest rates may not be fully
reflected in loans which are in the teaser rate period and may, accordingly have
a negative impact on BankUnited's net interest margin.
REFINANCING RISKS
As of December 31, 1997, 93.4% of BankUnited's loans receivable were
single-family residential mortgages that generally contain an option that allows
the borrower to prepay the loan at any time without penalty. A substantial
portion of these loans have been purchased by BankUnited in the secondary market
at a premium.
In the current interest rate environment, when long-term interest rates
are generally low on a historical basis and the spread between short-term rates
and long-term rates is relatively narrow, prepayments of ARMs and higher
fixed-rate mortgages tend to accelerate. In addition, at December 31, 1997, $1.2
billion of BankUnited's ARMs had teaser rates, substantially all of which will
be subject to interest rate adjustments within the next twelve months. Teaser
rate loans also may tend to be prepaid near the end of the teaser period in the
current interest rate environment.
Premiums and net deferred origination costs, which at December 31, 1997
were $33.0 million, are recognized as a reduction to interest income using the
interest method over the contractual life of the loans adjusted for estimated
prepayments, based on BankUnited's historical prepayment experience. (See Note 1
to BankUnited's Consolidated Financial Statements and Notes thereto contained in
BankUnited's Annual Report on Form 10-K/A for the fiscal year ended September
30, 1997, incorporated by reference into this Proxy Statement-Prospectus). As
prepayments accelerate, BankUnited's historical prepayment experience changes,
resulting in a shortening of the estimated life of the loan portfolio, and an
increase in the rate at which premiums and net deferred origination costs are
expensed, resulting in a greater reduction in interest income. Accelerated
prepayments could, therefore, have a material adverse effect on BankUnited's
results of operations. Based on a continuation of the current interest rate
environment, a significant portion of the premium and net deferred origination
costs may be expensed in a relatively short term period.
In addition, BankUnited would likely apply the proceeds of any prepaid
loans to the purchase of ARMs with teaser rates (possibly with lower teaser
rates), thereby increasing the duration of the teaser period for BankUnited's
loan portfolio. Also, no assurance can be given that BankUnited will be able to
reinvest, on satisfactory terms, the proceeds of loan prepayments.
Mortgage servicing rights, which at December 31, 1997 were $5.0
million, are amortized as a reduction to servicing income over the contractual
life of the underlying loans, adjusted for estimated prepayments, based on
BankUnited's historical prepayment experience. As prepayments accelerate,
BankUnited's historical prepayment experience changes, resulting in a shortening
of the estimated life of the servicing rights, and a greater reduction in
servicing income. Accelerated prepayments could, therefore, have a material
adverse effect on BankUnited's results of operations.
AVAILABILITY OF MORTGAGE LOANS
BankUnited's net income will depend significantly on its ability to
acquire mortgage loans on acceptable terms and at favorable spreads over
BankUnited's borrowing costs. If BankUnited is unable to acquire mortgage loans,
its results of operations will be adversely affected.
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<PAGE>
In acquiring mortgage loans, BankUnited will compete with REITs,
investment banking firms, savings and loan associations, banks, mortgage
bankers, insurance companies, mutual funds, other lenders, FNMA, FHLMC, GNMA and
other entities purchasing mortgage loans, some of which have greater financial
resources than BankUnited. Increased competition for the acquisition of eligible
mortgage loans or a diminution in the supply could result in higher prices and,
thus, lower yields on such mortgage loans that could further narrow the yield
spread over borrowing costs. See "-Competition and Consolidation of the
Industry."
The availability of mortgage loans meeting BankUnited's criteria is
dependent upon, among other things, the size and level of activity in the
residential real estate lending market, which depend on various factors,
including the level of interest rates, regional and national economic conditions
and changes in residential real estate values. To the extent BankUnited is
unable to acquire a sufficient volume of mortgage loans meeting its criteria,
BankUnited's results of operations would be adversely affected.
COMPOSITION OF RESIDENTIAL AND COMMERCIAL LOAN PORTFOLIO
GEOGRAPHIC CONCENTRATION. Most of the loans in BankUnited's portfolio
are secured by real estate. At December 31, 1997, 23.07% of BankUnited's gross
loans receivable were secured by properties located in Florida, 11.64% by
properties located in California and the balance throughout the country.
Conditions in the real estate markets in which the collateral for BankUnited's
mortgage loans are located may strongly influence the level of BankUnited's
non-performing loans and its results of operations. Real estate values are
affected by, among other things, changes in general or local economic
conditions, changes in governmental rules or policies, the availability of loans
to potential purchasers, and natural disasters. Declines in real estate markets
could negatively impact the value of the collateral securing BankUnited's loans
and its results of operations. In this regard, as a result of the downturn in
the California real estate market in 1993, BankUnited believes that certain of
its loans secured by real estate in California may have current loan to value
ratios that are higher than those when the loans were originated. In addition,
both Florida and California are states that are subject to natural disasters
such as hurricanes, earthquakes and flooding. In the event a property securing
the loan incurs damage as a result of a natural disaster that is not covered by
homeowner's insurance, BankUnited's results of operations may be negatively
impacted. Damage from windstorm is generally covered by homeowner's insurance,
and insurance against flooding is required on properties securing mortgage loans
in flood hazard areas; but earthquake damage is frequently not insured. See
"Business-Lending Activities--Loan Portfolio" contained in BankUnited's Annual
Report on Form 10-K/A for the fiscal year ended September 30, 1997, incorporated
by reference into this Proxy Statement-Prospectus.
DIVERSIFIED LENDING RISKS. BankUnited's recent operating strategy has
included an increased emphasis on originating and/or purchasing commercial real
estate (including multi-family residential) loans, and originating real estate
construction and commercial business loans. These lending categories are
generally considered to involve a higher degree of credit risk than that for
traditional single-family residential lending, because, among other factors,
such loans involve larger loan balances to a single borrower or groups of
related borrowers. At December 31, 1997, BankUnited had $165.1 million in
commercial real estate loans, $5.6 million in construction loans and $9.0
million in commercial business loans. The payment experience on multi-family
residential and commercial real estate loans typically is dependent on the
successful operation of the project (as opposed to a desire by the borrower to
continue to occupy the residence), and thus such loans may be adversely affected
to a greater extent by adverse conditions in the real estate markets or in the
economy generally. In addition to the foregoing, multi-family residential and
commercial real estate loans which are not fully amortizing over their maturity
and which have a balloon payment due at their stated maturity, as would
generally be the case with BankUnited's multi-family residential and commercial
real estate loans, involve a greater degree of risk than fully amortizing loans.
The ability of a borrower to make a balloon payment typically will depend on its
ability to either refinance the loan or timely sell the underlying property.
If commercial properties are foreclosed upon, BankUnited may encounter
environmental problems with the properties. There is a risk that hazardous
substances or wastes, contaminants, pollutants or other environmentally
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<PAGE>
restricted substances could be discovered on the real estate owned (primarily in
the case of properties securing multi-family residential and commercial real
estate loans). In such event, BankUnited might be required to remove such
substances from the affected properties or to engage in abatement procedures at
its cost and expense. There can be no assurance that the cost of such removal or
abatement would not substantially exceed the value of the affected properties or
the loans secured by such properties; that BankUnited would have adequate
remedies against the prior owners or other responsible parties; or that
BankUnited would be able to resell the affected properties either prior to or
following completion of any such removal or abatement procedures. If such
environmental problems are discovered prior to foreclosure, BankUnited generally
would not foreclose on the related loan; however, the value of such property as
collateral will generally be substantially reduced and BankUnited may suffer a
loss upon collection of the loan as a result.
Risk of loss on a construction loan is dependent largely upon the
concurrence of the initial estimate of the property's value at completion of
construction and the estimated cost (including interest) of construction, as
well as the availability of permanent take-out financing. During the
construction phase, a number of factors could result in delays and cost
overruns. If the estimate of value proves to be inaccurate, BankUnited may be
confronted, at or prior to the maturity of the loan, with a project which, when
completed, has a value which is insufficient to ensure full repayment.
Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to repay the loan from the borrower's employment
and other income and which are secured by real property the value of which tends
to be more easily ascertainable, commercial business loans are of higher risk
and typically are made on the basis of the borrower's ability to make repayment
from the cash flow of the borrower's business. As a result, the availability of
funds for the repayment of commercial business loans may be substantially
dependent on the success of the business itself. Further, the collateral
securing the loans may depreciate over time, may be difficult to appraise, and
may fluctuate in value based on the success of the business.
Accordingly, there can be no assurance that BankUnited's commercial
real estate, multi-family residential, real estate construction, and commercial
business loans will not be adversely affected by these and the other risks
related to such loans. See "Business-Lending Activities--Commercial Real Estate
Lending," "--Real Estate Construction Lending" and "--Commercial Business
Lending" contained in BankUnited's Annual Report on Form 10-K/A for the fiscal
year ended September 30, 1997, incorporated by reference into this Proxy
Statement-Prospectus.
RISKS ASSOCIATED WITH LOANS HELD FOR SALE. BankUnited recently
initiated a program to sell packages of adjustable rate residential loans,
servicing retained, currently originated through its correspondent loan program.
These loans, when originated, will be classified as held for sale and be subject
to a lower of cost or market adjustment, on a quarterly basis, depending on
market conditions. As of December 31, 1997, BankUnited had $92.2 million of
mortgages held for sale. Since BankUnited does not currently intend to hedge its
held for sale loan portfolio, this portfolio will be subject to adjustments,
based on market conditions, which may adversely affect BankUnited's results of
operations.
ALLOWANCE FOR LOAN LOSSES
Industry experience indicates that a portion of BankUnited's loans will
become delinquent and a portion of the loans will require partial or entire
charge-off. Regardless of the underwriting criteria utilized by BankUnited,
losses may be experienced as a result of various factors beyond BankUnited's
control, including, among other things, changes in market conditions affecting
the value of properties and problems affecting the credit of the borrower.
BankUnited's determination of the adequacy of its allowance for loan losses is
based on various considerations, including an analysis of the risk
characteristics of various classifications of loans, previous loan loss
experience, specific loans which would have loan loss potential, delinquency
trends, estimated fair value of the underlying collateral, current economic
conditions, the views of BankUnited's regulators, and geographic and industry
loan concentrations. Further, a significant amount of BankUnited's loan
portfolio was originated, purchased or acquired over the last three years and,
therefore, may be considered to be subject to a greater likelihood of
delinquency. If delinquency levels were to increase, whether
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<PAGE>
as a result of adverse general economic conditions, especially in Florida and
California where BankUnited's exposure is greatest, or otherwise, the allowance
for loan losses as determined by BankUnited may not be adequate. As of December
31, 1997 BankUnited's allowance for loan losses was $4.3 million or 0.16% of
total loans. There can be no assurance that the allowance will be adequate to
cover loan losses or that BankUnited will not experience significant losses in
its loan portfolios which may require significant increases to the provision for
loan losses in the future, thus materially and adversely affecting BankUnited's
results of operations. See "Business-Loan Portfolio Quality" contained in
BankUnited's Annual Report on Form 10-K/A for the fiscal year ended September
30, 1997, incorporated by reference into this Proxy Statement-Prospectus.
RECENT RAPID GROWTH AND INCREASED OPERATING EXPENSES
During the past 18 months, BankUnited has experienced rapid and
significant growth. The growth and expansion of operations through internal
growth, including loan purchases, and mergers and acquisitions has resulted in a
significant increase in assets, loans and deposits, as well as increases in net
interest income, non-interest income and non-interest expenses. Total assets of
BankUnited have increased from $824 million at September 30, 1996 to $3.0
billion at December 31, 1997. BankUnited, FSB's loan portfolio increased from
$646 million at September 30, 1996 to $2.6 billion at December 31, 1997. Much of
this growth is attributable to the purchase of wholesale residential loans and,
to a lesser extent, to the acquisition of Suncoast.
In connection with such expansion and growth, BankUnited has hired 145
additional employees since September 30, 1996. Employee compensation and
benefits increased 107.7% from $4.3 million to $8.9 million over the last fiscal
year and occupancy and equipment costs increased 98.1% from $1.8 million to $3.6
million during the same period. Such increased expenses were primarily
attributable to internal growth, including the opening of new branch offices,
and growth as a result of the acquisitions. Expenses associated with such growth
and with additional future growth may have an adverse impact on earnings.
There can be no assurance that BankUnited will continue to experience
rapid growth, or any growth in the future and, to the extent that it does
experience continued growth, there is no assurance that BankUnited will be able
to adequately and profitably manage such growth.
INDIRECT AUTOMOBILE LENDING PORTFOLIO
As of December 31, 1996 and 1997, indirect lending through automobile
dealers represented 37% and 41% of Central Bank's gross loans, respectively.
These types of indirect loans carry more credit risk and produce higher
charge-off and delinquency rates than other loans. While Central's management
believes it has established an adequate allowance for loan losses, there can be
no assurance that BankUnited, after the Merger, will not have to increase its
level of loan loss allowance or otherwise implement corrective action or that
regulators, in reviewing BankUnited's loan portfolio or operations, will not
request that BankUnited increase its allowance for loan losses or otherwise
implement corrective action, thereby negatively affecting BankUnited's financial
condition and earnings.
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<PAGE>
ACCOUNTING FOR ACQUISITIONS
Acquisitions are accounted for either as a "purchase" or as a "pooling
of interests." The consideration utilized is one of many factors considered in
determining the accounting treatment of an acquisition. If cash represents at
least 10% of the consideration, the acquisition will generally be accounted for
as a "purchase." If BankUnited Class A Common Stock represents 90% or more of
the consideration and all other required conditions relating to the parties and
the transaction are met, the acquisition will be accounted for as a "pooling of
interests." Under the "purchase" method, the assets and liabilities are recorded
by the acquiror at their fair market values and any difference between the
purchase price and the fair value of the tangible and identifiable intangible
assets and liabilities is recorded as goodwill. Goodwill is generally amortized
over a period generally not exceeding 25 years and such amortization of goodwill
will reduce earnings. Under the "pooling of interests" method, the historical
values of the assets, liabilities and shareholders' equity of the combining
companies are consolidated, no goodwill is recorded and accordingly, the
earnings of the resulting entity are not impacted by the amortization of
goodwill. BankUnited intends to actively pursue acquisitions. If an acquisition
is made and accounted for as a "purchase" rather than a "pooling of interests,"
it is likely that such acquisition will result in the creation of goodwill and
accordingly, future results will reflect the amortization of any goodwill
recorded. The acquisition of Central will be accounted for as a purchase.
DISPARATE VOTING RIGHTS; CONTINUING INSIDER CONTROL OF BANKUNITED
The shares of BankUnited Class A Common Stock are entitled to one-tenth
vote per share. BankUnited also has outstanding shares of Class B Common Stock
entitled to one vote per share and Series B Preferred Stock entitled to 2-1/2
votes per share. As of April 8, 1998, directors, executive officers and holders
of 5% or more of BankUnited's equity securities held approximately 40.66% of the
total voting power of all outstanding voting stock of BankUnited.
The voting power of the directors, executive officers and holders of 5%
or more of BankUnited's equity securities and certain provisions of BankUnited's
Articles of Incorporation may discourage any proposed takeover of BankUnited
unless the terms thereof are approved by management. In addition, BankUnited's
Articles of Incorporation permit additional shares of BankUnited Class A Common
Stock to be issued at any time which may have disproportionate voting rights or
preferences as to dividends or other rights, subject to shareholder approval in
certain circumstances. BankUnited, however, does not intend to issue additional
shares of such stock if the issuance would result in termination of trading of
the BankUnited Class A Common Stock on Nasdaq. See "Description of BankUnited
Capital Stock."
CERTAIN POTENTIAL ANTI-TAKEOVER PROVISIONS
Certain provisions of BankUnited's Articles of Incorporation and Bylaws
could delay or frustrate the removal of incumbent directors and could make more
difficult a merger, tender offer or proxy contest involving BankUnited, even if
such events could be perceived as beneficial to the interests of the
shareholders. In addition, certain provisions of state and federal law may also
have the effect of discouraging or prohibiting a future takeover attempt in
which shareholders of BankUnited might otherwise receive a substantial premium
for their shares over then-current market prices. See "Description of BankUnited
Capital Stock--Certain Anti-Takeover Provisions."
COMPETITION AND CONSOLIDATION OF THE INDUSTRY
BankUnited faces substantial competition in purchasing and originating
real estate loans and in attracting deposits. BankUnited's competition in
originating real estate loans is principally from banks, other thrifts, mortgage
banking companies, real estate financing conduits, and small insurance
companies. In purchasing real estate loans BankUnited competes with other
participants in the secondary mortgage market. Many entities competing with
BankUnited enjoy competitive advantages over BankUnited relative to a potential
borrower or seller in terms of a prior
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<PAGE>
business relationship, wide geographic presence or more accessible branch office
locations, the ability to offer additional services or more favorable pricing
alternatives, a lower origination and operating cost structure, and other
relevant items. BankUnited does not have a significant market share of the real
estate lending activities in the areas in which it conducts operations, and
increased competition in those areas from traditional competitors or new sources
could result in a decrease in the origination or purchase of mortgage loans and
could adversely affect BankUnited's results of operations. In its deposit
gathering activities, BankUnited competes with insured depository institutions
such as thrifts, credit unions, and banks, as well as uninsured investment
alternatives, including money market funds. These competitors may offer higher
rates than BankUnited, which could result in BankUnited either attracting fewer
deposits or in requiring BankUnited to increase the rates it pays to attract
deposits. Increased deposit competition could adversely affect BankUnited's
ability to generate the funds necessary for its lending operations and could
adversely affect BankUnited's results of operations. See "Business-Market Area
and Competition" contained in BankUnited's Annual Report on Form 10-K/A for the
fiscal year ended September 30, 1997, incorporated by reference into this Proxy
Statement-Prospectus.
REGULATORY OVERSIGHT
BankUnited, FSB is subject to extensive regulation, supervision and
examination by the OTS as its chartering authority and primary federal
regulator, and by the FDIC, which insures its deposits up to applicable limits.
BankUnited, FSB is a member of the FHLB of Atlanta and is subject to certain
limited regulation by the Federal Reserve Board. As the holding company of
BankUnited, FSB, BankUnited is also subject to regulation and oversight by the
OTS. Such regulation and supervision governs the activities in which an
institution may engage and is intended primarily for the protection of the FDIC
insurance funds and depositors. Regulatory authorities have been granted
extensive discretion in connection with their supervisory and enforcement
activities and regulations have been implemented which have increased capital
requirements, increased insurance premiums and have resulted in increased
administrative, professional and compensation expenses. Any change in the
regulatory structure or the applicable statutes or regulations could have a
material impact on BankUnited and BankUnited, FSB and their operations.
Additional legislation and regulations may be enacted or adopted in the future
which could significantly affect the powers, authority and operations of
BankUnited, FSB and the BankUnited, FSB's competitors which in turn could have a
material adverse effect on BankUnited, FSB and its operations. See "Regulation"
contained in BankUnited's Annual Report on Form 10-K/A for the fiscal year ended
September 30, 1997, incorporated by reference into this Proxy
Statement-Prospectus.
YEAR 2000
Almost all of BankUnited's operations are supported by computerized
data processing systems and are dependent on the capability of software
applications and operating systems to function properly in the year 2000. Data
processing for the Company's major applications is performed by two third party
service bureaus. Both have indicated that their systems will be year 2000
compliant. Consequently, management does not anticipate that the year 2000 issue
will be material to the Company's operations or financial condition.
RISK FACTORS APPLICABLE TO THE MERGER
POTENTIAL ADVERSE IMPACT OF INTEGRATION OF OPERATIONS
BankUnited and Central have entered into the Merger Agreement with the
expectation that the Merger will result in certain benefits, ultimately
including operating cost savings, for the resulting institution. Achieving the
anticipated benefits of the Merger will depend in part upon whether the
operations and organizations of BankUnited and Central can be integrated in an
efficient and effective manner. There can be no assurance that this integration
will occur or that cost savings in operations will be achieved. The resulting
institution may also encounter unanticipated
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<PAGE>
operational or organizational difficulties. The successful combination of the
two banks will require, among other things, consolidation of certain operations,
and elimination of duplicative corporate and administrative expenses. The
integration of certain operations following the Merger will require the
dedication of management resources which may temporarily distract attention from
the day-to-day business of the resulting institution. There can be no assurance
that integration will be accomplished smoothly or successfully. Failure to
accomplish effectively the integration of the two banks' operations could have a
material adverse effect on the resulting institution's results of operations and
financial condition following the Merger.
SUBSTANTIAL VOTING DILUTION OF CENTRAL SHAREHOLDERS
The Merger will result in substantial voting dilution to the
shareholders of Central. After the Merger, based upon the number of shares of
BankUnited stock outstanding as of April 8, 1998, the holders of Central Common
Stock will have their voting interest in Central reduced from 100% of Central to
approximately 3.11% of BankUnited (assuming the exercise of all outstanding
options and warrants to acquire BankUnited stock, and the issuance of 1,481,085
shares of BankUnited Class A Common Stock in the Merger).
RISK OF NO SOLICITATION PROVISION
The Merger Agreement contains a "no solicitation provision" that
restricts the ability of Central to solicit transactions other than the Merger.
See "The Merger-No Solicitation of Acquisition Proposals." The existence of this
no solicitation provision may have the effect of limiting the ability of the
Central Board to consider (i) competing proposals that could result in greater
value being realized by the shareholders or (ii) equity investments in Central.
RETENTION OF CUSTOMERS
BankUnited expects to retain the individual customer base of Central
after the Merger. However, it is possible that a greater number of customers
than anticipated will move their banking relationships to other financial
institutions as a result of the Merger.
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THE PARTIES
BANKUNITED FINANCIAL CORPORATION
BankUnited is a Florida corporation organized for the purpose of
becoming the savings and loan holding company for BankUnited, FSB. This holding
company reorganization, together with BankUnited, FSB's conversion from a
Florida-chartered stock savings bank (which was founded in 1984) to a federally
chartered stock savings bank, became effective on March 5, 1993. At December 31,
1997, BankUnited had $1.4 billion in deposits, $145.6 million in stockholders'
equity, and $3.0 billion in assets. Based on the latest available information,
BankUnited is the second largest publicly held financial institution
headquartered in Florida. Principally through internal growth and also as a
result of the acquisition of Suncoast on November 15, 1996, BankUnited's total
assets increased by $2.2 billion from September 30, 1996 to December 31, 1997.
BankUnited currently has 18 branch offices in South Florida (not
including two, scheduled to be closed shortly, that were part of the recent
acquisition of Consumers Savings Bank), and anticipates opening approximately
six or more branch offices by September 30, 1998, in its market area, either by
acquisition or de novo branching, and may expand into other parts of Florida.
BankUnited's business has traditionally consisted of attracting deposits from
the general public and using those deposits, together with borrowings and other
funds, to purchase nationwide and to originate in Florida single-family
residential mortgage loans, and to a lesser extent, to purchase and originate
commercial real estate, commercial business and consumer loans. BankUnited also
invests in tax certificates and other permitted investments. BankUnited's
revenues are derived principally from interest earned on loans, mortgage-backed
securities and investments. BankUnited's primary expenses arise from interest
paid on savings deposits and borrowings and non-interest overhead expenses
incurred in operations.
On January 23, 1998 BankUnited acquired Consumers Bancorp, Inc. and
merged its wholly owned subsidiary, Consumers, a Florida chartered savings and
loan with assets of $101.2 million and deposits of $84.3 million at December 31,
1997, into BankUnited, FSB. On December 30, 1997, BankUnited signed a definitive
agreement to acquire Central. These mergers will increase BankUnited's deposit
market share, particularly in Miami-Dade County, while permitting BankUnited to
compete more effectively with larger super-regional financial institutions in
South Florida.
BankUnited, FSB is a member of the Federal Home Loan Bank system and is
subject to comprehensive regulation, examination and supervision by the OTS and
the FDIC. Deposits at BankUnited, FSB are insured by the SAIF to the maximum
extent permitted by law.
For further information regarding BankUnited's business, see
BankUnited's Annual Report on Form 10-K/A for the period ended September 30,
1997, which is incorporated by reference into this Proxy Statement-Prospectus.
BankUnited's executive offices are located at 255 Alhambra Circle,
Coral Gables, Florida 33134, and its telephone number is (305) 569-2000.
CENTRAL BANK
GENERAL
Central, incorporated in Florida in 1984, is a Florida commercial bank
and member of the Federal Reserve System and is subject to regulation by the
Florida Banking Department. Central commenced operations on September 17, 1984
and currently operates four banking offices, all of which are located in
Miami-Dade County,
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Florida. As of December 31, 1997, Central had assets of $92.4 million, deposits
of $72.8 million and shareholders' equity of $10.9 million.
Central's main business activities are attracting deposits, originating
loans, making investments and servicing its loans. Central offers the full range
of deposit services that are typically available in most banks, including
checking accounts, NOW accounts, savings accounts and other time deposits of
various types ranging from daily money market deposit accounts to longer-term
certificates of deposit. Central believes that the combination of its rates
offered on its accounts and the quality of service it provides enables Central
to be competitive in its market area. All deposit accounts are insured by the
FDIC up to the maximum amount ($100,000 per depositor, subject to aggregation
rules). Central solicits these accounts from individuals, businesses,
associations and organizations.
Central offers short- to medium-term commercial and residential real
estate, commercial, consumer and construction loans. Central's primary focus is
business and consumer lending. Commercial business and real estate loans include
both secured and unsecured loans (including loans partially guaranteed by the
Small Business Administration) for business expansion (including acquisition of
real estate and improvements), working capital (including inventory and
receivables) and purchases of equipment and machinery. Consumer loans include,
among other things, secured and unsecured loans for financing the purchase of
automobiles and for home improvements. At December 31, 1997, approximately 47%
of Central's loan portfolio consisted of consumer installment loans, 35% of
Central's loan portfolio consisted of real estate loans and 18% of Central's
loan portfolio consisted of general commercial purpose loans. Earnings depend
primarily upon the difference between interest received on loans and investments
and interest paid on Central's deposit base and borrowing and fees for services
rendered to its customers.
Central's other services include safe deposit boxes, travelers checks,
direct deposit of payroll and Social Security checks, automatic draft payments
for various accounts and international financing services. Central is a member
of the Honor network of automated teller machines that may be used by bank
customers in major cities throughout Florida and the United States, as well as
in various cities worldwide.
The address of Central's principal executive offices is 7970 N.W. 36th
Street, Miami, Florida 33166 and its telephone number is (305) 592-6641.
CENTRAL'S LENDING ACTIVITIES
GENERAL
Under applicable regulations, Central originates loans for its own
portfolio. Lending activities include the origination of short and intermediate
term, adjustable-rate and fixed-rate commercial and real estate mortgage loans,
commercial business loans and consumer loans, consisting mostly of indirect
automobile loans. During 1997 and 1996, the level of indirect automobile loans
continued to increase steadily.
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The following tables set forth the composition of Central's loan
portfolio by type of loan at the dates indicated:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------
1997 1996
---- ----
TYPE OF LOAN AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Consumer loans.......................................... $ 21,851 47% $ 19,261 43%
Real estate loans....................................... 16,070 35 15,501 34
Commercial loans........................................ 8,138 18 9,708 22
Other................................................... 233 - 637 1
--------- -- --------- ---
Total loans................................... $ 46,292 100% $ 45,107 100%
========= =========
Add (deduct)
Unearned dealer interest................................ 946 933
Unearned income......................................... (1) (7)
Deferred loan fees...................................... (24) (46)
Allowance for loan losses............................... (918) (910)
--------- ---------
Total......................................... $ 46,296 $ 45,078
========= =========
</TABLE>
The following table sets forth at December 31, 1997, the principal
amounts of Central's loans with contractual maturities, during the periods
indicated.
<TABLE>
<CAPTION>
MATURING
--------
WITHIN AFTER 1 YEAR AFTER
1 YEAR THROUGH 5 YEARS 5 YEARS TOTAL
------ --------------- ------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Consumer loans.......................................... $ 557 $ 19,716 $ 1,578 $ 21,851
Real estate loans....................................... 2,920 9,327 3,823 16,070
Commercial loans........................................ 5,858 982 1,298 8,138
Other................................................... 233 - - 233
--------- -------- ------- --------
Total............................................ $ 9,568 $ 30,025 $ 6,699 $ 46,292
========= ======== ======= ========
Maturing after one year with:
Variable interest rates................................. $ 6,076 $ 1,586 $ 7,662
Fixed interest rates.................................... 23,949 5,113 29,062
-------- ------- --------
Total............................................ $ 30,025 $ 6,699 $ 36,724
======== ======= ========
</TABLE>
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<PAGE>
Central provides commercial real estate mortgage loans, commercial
business loans and consumer loans. Loans secured by real estate generally
include commercial and residential real estate loans, loans to refinance or
purchase existing properties and home equity loans.
CONSUMER LOANS
Consumer loans are extended for a variety of purposes, including the
purchase of automobiles, lines of credit and unsecured personal loans. As
disclosed in the table above, consumer loans, consisting primarily of indirect
automobile loans, represent the largest single component of Central's loan
portfolio, and have steadily increased over the past five years. At December 31,
1997, Central had outstanding approximately $21.4 million of consumer loans
secured by automobiles, which represented approximately 98% of total consumer
loans held by Central at that date.
Consumer loan underwriting standards include an examination of the
applicant's payment history on other debts and evaluation of his or her ability
to meet existing obligations and payment of the proposed loan. Although
creditworthiness of the applicant is of primary importance, the underwriting
process also includes a comparison of the value of the collateral, if any, in
relation to the proposed loan amount. While consumer loans generally involve a
higher element of credit risk than commercial or real estate loans, consumer
loans are typically made at higher interest rates and are helpful in maintaining
a profitable spread between Central's loan yield and its cost of funds.
REAL ESTATE MORTGAGE LOANS
Central's real estate mortgage loan portfolio consists primarily of
commercial loans and, to a lesser extent, residential loans, including home
improvement and home equity lines, which are secured by both existing properties
and new construction. Loans secured by real properties generally have terms
ranging from five to seven years and interest rate adjustment periods ranging
from monthly to five years. Amortization periods for commercial mortgage loans
do not exceed 25 years. Commercial real estate loans originated by Central are
primarily secured by income-producing properties such as office/warehouse
buildings and retail space. Generally, in underwriting commercial real estate
loans, Central requires the personal guarantee of the business principals and a
maximum loan to value ratio of not greater than 75% and a cash flow to debt
service ratio of 1.2 to 1. One hundred percent of Central's mortgage loans are
secured by property located in Florida.
COMMERCIAL BUSINESS LOANS
Commercial business loans represent 17.6% of loans outstanding at
December 31, 1997. Commercial business loans include loans for business
expansion, working capital and purchases of business and machinery. In making
such loans, Central assesses the borrower's creditworthiness and ability to
repay the loan amount, and evaluates the value of any collateral securing the
proposed loan. Generally, Central requires the personal guarantee of the
business principals. Small Business Association ("SBA") loans, which totaled
approximately $455,000 at December 31, 1997, are underwritten in accordance with
the guidelines of the SBA. The loans are made to small businesses and usually
require that collateral be pledged. Typically, the SBA guaranteed 80% to 90% of
the loan balance. The SBA-guaranteed portion of the loan is then salable in
secondary markets.
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<PAGE>
OTHER LENDING ACTIVITIES
In the normal course of activity, certain of Central's individual and
corporate customers incur overdrafts of their depository accounts. These
overdrafts, usually minor in nature, are typically one day in duration and are
resolved through customer deposit or dishonor by Central.
LENDING PROCEDURES
Loan applications submitted to Central may be approved by either the
Central Board Loan Committee, an Officer's Loan Committee, the President or
Chairman, individually, or a Central loan officer if the loan is within
delegated authority limits. With respect to loan approvals, the Board Loan
Committee has authority to approve all loan applications under review within
statutory limits and the Officer's Loan Committee has authority to approve
secured and unsecured loan applications up to a maximum of $750,000 and
$500,000, respectively. Loan officers are authorized to approve loan
applications for unsecured loans up to a maximum of $50,000 and secured loans up
to a maximum of $150,000. The President or Chairman, individually, has authority
to approve applications representing secured and unsecured loans up to a maximum
of $500,000 and $250,000, respectively. There are no aggregations of
authorities.
The review of each loan application includes an analysis of the
applicant's credit history, income level, financial condition and the value of
any collateral to secure the loan (which, with respect to real estate loans, is
appraised by an independent appraiser). In the case of major real estate loans,
the loan underwriting process typically involves an analysis of the economic
feasibility of the proposed project.
With respect to any approved commercial or real estate loan, generally,
Central issues a written commitment to the applicant, setting forth the terms
under which the loan will be extended. A title insurance commitment for the
mortgaged property is obtained from an approved title company prior to the
closing. Fire, casualty, and flood insurance (where applicable) are obtained,
naming Central as a loss payee.
In accordance with Central's policies and applicable law, the
documentation of each real estate loan includes: disclosing the purpose for
which the loan is sought and the identity of the property; a written appraisal
report disclosing the fair market value of the security offered by the
applicant; a signed financial statement of the applicant and a written credit
report prepared by Central or by others at its request; documentation showing
the dates, amounts, purpose, and recipient of every disbursement of loan
proceeds; an opinion of Central's attorney; a title insurance policy, or other
documentary evidence customarily used in the appropriate jurisdiction, affirming
the quality and validity of Central's lien on the relevant real estate.
NON-PERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES
Central's non-performing assets typically consist of automobiles
acquired through repossession and loans which are 90 days or more past due.
Generally, accrued interest on loans which are more than 90 days past due is
excluded from income and any previously accrued and unpaid interest is reversed
through interest income. Non-performing assets as of December 31, 1997 were
approximately $334,000, representing 0.4% of Central's total assets.
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<PAGE>
The following table details Central's non-performing assets for each of
the years in the two-year period ended December 31, 1997:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Loans:
Consumer loans.......................................... $ 54 $ 49
Real estate loans....................................... - 184
Commercial loans........................................ 53 132
----- -----
Total non-performing loans....................... $ 107 $ 365
----- -----
Repossessions........................................... $ 227 $ 118
----- -----
Total non-performing assets...................... $ 334 $ 483
===== =====
</TABLE>
Central's loan portfolio is reviewed monthly by the President/CEO and
reported to the Board of Directors for the purpose of classifying a loan as
special mention, substandard, doubtful, or loss, as appropriate. An asset is
considered "substandard" if it is inadequately protected by the current net
worth and paying capacity of the obligor or the collateral pledged.
"Substandard" assets include those characterized by the distinct possibility
that the insured institution will sustain some loss if the deficiencies are not
corrected. Assets classified as "doubtful" have all of the weaknesses inherent
in those classified as "substandard," with the added characteristic that the
weaknesses present make collection or liquidation in full on the basis of
currently existing facts, conditions and values, highly questionable and
improbable.
General allowances represent loss allowances which have been
established to recognize the inherent risk associated with lending activities.
Unlike specific allowances, general allowances have not been allocated to a
particular problem loan. Loans classified as loss are those considered
uncollectible and of such little value that their continuance as assets is not
warranted. Central will charge off 100% of the assets classified as loss.
Central's determination as to the classification of its assets and the amount of
its valuation allowance is subject to review by the Federal Reserve Board (the
"FRB") and the Florida Banking Department, which can order the establishment of
additional amounts to the general or specific loss allowance.
Although Central uses its best judgment in underwriting each loan,
industry experience indicates that a portion of Central's loans will become
delinquent. Regardless of the underwriting criteria utilized by banks, losses
may be experienced as a result of many factors beyond their control including,
among other things, changes in market conditions affecting the value of security
and unrelated problems affecting the credit of the borrower. Due to the
concentration of loans in South Florida, adverse economic conditions in this
area could result in a decrease in the value of a significant portion of
Central's collateral.
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<PAGE>
In the normal course of business, Central has recognized and will
continue to recognize losses resulting from the inability of certain borrowers
to repay loans and the insufficient realizable value of collateral securing such
loans. Accordingly, management has established an allowance for loan losses,
which totaled approximately $918,000 and $910,000 at December 31, 1997 and 1996,
respectively, allocated according to the following table:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------
1997 1996
---- ----
ALLOWANCE FOR % OF LOANS TO ALLOWANCE FOR % OF LOANS TO
LOAN LOSSES TOTAL LOSS LOAN LOSSES TOTAL LOSS
----------- ---------- ----------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Consumer loans.................................. $ 86 76% $ 62 57%
Real estate loans............................... - 28 26
Commercial loans................................ 27 24% 18 17
Unallocated..................................... 805 802
------ ---- ------ ----
Total.................................... $ 918 100% $ 910 100%
====== ======
</TABLE>
In evaluating the adequacy of the allowance for loan losses, management
has taken into consideration the loan portfolio, past loan experience, current
economic conditions, workout arrangements, the financial strength of the
borrowers and the appraised value of the collateral at the time reserves were
established. Although management believes the allowance for losses is adequate,
its evaluation is dependent upon future events. Management's evaluation of
losses is a continuing process which may necessitate adjustments to the
allowance in future periods.
Management's evaluation of the allowance for loan losses includes
applying relevant risk factors to the entire loan portfolio, including
non-performing loans. Risk factors applied to the performing loan portfolio in
the year ended December 31, 1997 are based on Central's past two year loss
history considering the current portfolio's characteristics, current economic
conditions and other relevant factors. Non-performing loans are carried at fair
value based on the most recent information available. At December 31, 1997, the
following loss factors are applied to the carrying value of each classified
loan: (i) substandard at 15%, (ii) doubtful at 50% and (iii) loss charged-off at
100%.
33
<PAGE>
The following table details the charge-offs, recoveries, net
charge-offs and ending balance of the allowance for loan losses for each of the
years in the two-year period ended December 31, 1997:
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED
-----------------------------
DECEMBER 31
-----------------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Beginning balance................................................ $ 910 $ 712
Charge offs:
Consumer loans.......................................... 282 211
Real estate loans ...................................... - -
Commercial loans........................................ 50 5
Other .................................................. - -
----- -----
Total-Charge-Offs............................... 332 216
----- -----
Recoveries:
Consumer loans.......................................... 57 48
Real estate loans....................................... 3 2
Commercial loans........................................ 3 4
Other .................................................. 2 -
----- -----
Total Recoveries................................. 65 54
----- -----
Net charge-offs.................................................. 267 162
----- -----
Provision for loan losses........................................ 275 360
----- -----
Ending balance................................................... $ 918 $ 910
===== =====
Ratio of net charge-offs during the period to
average total loans outstanding during the period .59% .39%
</TABLE>
CENTRAL SPECIAL MEETING
DATE, TIME, PLACE AND PURPOSE OF SPECIAL MEETING
This Proxy Statement-Prospectus is first being mailed to Central
Shareholders on or about April 17, 1998, and is accompanied by the Notice of
Special Meeting and a form of proxy that is solicited by the Central Board for
use at the Central Special Meeting. The Central Special Meeting will be held on
Thursday, May 21, 1998 at 11:00 a.m., local time, at the Union Planters Bank
Building, 1221 Brickell Avenue, Miami, Florida 33131, 22nd Floor, for the
purpose of considering and voting upon a proposal to approve the Merger
Agreement and the consummation of the transactions contemplated thereby,
including the Merger, and such other matters as may properly be brought before
the Special Meeting. The Central Board is currently not aware of any other
business to come before the Special Meeting.
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<PAGE>
RECORD DATE; SHARES ENTITLED TO VOTE; QUORUM
The Central Board has fixed the close of business on April 10, 1998 as
the Central Record Date for determining the holders of Central Common Stock
entitled to receive notice of and to vote at the Central Special Meeting or any
adjournments or postponements thereof. At the close of business on the Central
Record Date, 450,000 shares of Central Common Stock were outstanding, held by 48
shareholders of record. The presence in person or by proxy of holders of record
of shares representing a majority of the total outstanding shares of the Central
Common Stock will constitute a quorum at the Central Special Meeting.
The holders of Central Common Stock are entitled to one vote on all
matters properly brought before the Central Special Meeting for each share of
Central Common Stock held by such persons. Votes may be cast in person at the
Central Special Meeting or by proxy.
As of the Central Record Date, directors and executive officers of
Central and their affiliates had the right to vote 87,950 shares of Central
Common Stock in the aggregate (representing approximately 19.54% of the
outstanding shares of Central Common Stock as of the Central Record Date). The
directors and executive officers of Central who hold such shares have informed
Central that they intend to vote all such shares in favor of the approval of the
Merger Agreement.
VOTE REQUIRED TO APPROVE
Under OTS Regulations, it is not necessary for shareholders of
BankUnited to approve the Merger Agreement in order to consummate the Merger,
and therefore they will not be asked to do so. Proxies will not be solicited
from shareholders of BankUnited.
Under OTS Regulations, the affirmative vote of the holders of at least
two-thirds of the shares of the Central Common Stock outstanding at the Central
Record Date is required in order to approve the Merger Agreement. An abstention
by a holder of shares of Central Common Stock will have the same effect as a
vote against the Merger Agreement. Approval of the Merger Agreement by the
requisite vote of the holders of the Central Common Stock is a condition to, and
required for, consummation of the Merger.
REVOCATION OF PROXIES
Any Central shareholder who signs and returns a proxy may revoke it at
any time before it has been voted by (i) delivering to the Secretary of Central
written notice of its revocation, (ii) executing and delivering to the Secretary
of Central a proxy bearing a later date or (iii) attending the Central Special
Meeting and voting in person. Attendance at the Central Special Meeting will not
in and of itself constitute a revocation of any proxy given to Central. Written
notice of revocation should be sent to Central, 7970 N.W. 36th Street, Miami,
Florida 33166, Attention: Secretary. All properly executed proxies, if received
in time for voting and not revoked, will be voted in accordance with the
instructions specified, or, if no instructions are specified, will be voted for
the approval of the adoption of the Merger Agreement and of the Plan of Merger.
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<PAGE>
PROPOSAL ONE: THE MERGER
THE FOLLOWING INFORMATION INSOFAR AS IT RELATES TO MATTERS CONTAINED IN
THE MERGER AGREEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER
AGREEMENT, WHICH IS INCORPORATED HEREIN BY REFERENCE AND ATTACHED HERETO AS
APPENDIX A. CENTRAL SHAREHOLDERS ARE URGED TO READ THE MERGER AGREEMENT IN ITS
ENTIRETY.
GENERAL
The affirmative vote of two-thirds of the votes of the Central Common
Stock is necessary to approve the Merger. An abstention by a holder of shares of
Central Common Stock will have the same effect as a vote against the Merger
Agreement. Approval of the Merger Agreement by the requisite vote of the holders
of the Central Common Stock is a condition to, and required for, consummation of
the Merger.
The proxies are being solicited by the Central Board. THE CENTRAL BOARD
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS THAT THE HOLDERS OF
CENTRAL COMMON STOCK VOTE FOR THE PROPOSAL TO APPROVE THE MERGER AGREEMENT. The
Central Board considered a number of factors in reaching its decision to
recommend approval of the Merger Agreement. For Central, the impetus to effect a
Merger with BankUnited was, among other things, the present value of the
consideration being received, to maximize the prospects for long-term
shareholder value through the benefits of a larger organization, to expand
geographical presence, to broaden and diversify the loan portfolio, to provide
for potential to increase earnings per share over the long-term, to enhance
capital and liquidity and to expand senior management. See "The Merger-Central's
Reasons for the Merger."
BACKGROUND OF THE MERGER
Dr. Ernest Halpryn, Central's Chairman of the Board, was invited in
early December 1997 to a meeting with Mr. Alfred Camner, BankUnited's Chairman
of the Board, to discuss the possible acquisition of Central by BankUnited. At
this meeting, Mr. Camner disclosed BankUnited's interest in acquiring Central
and outlined the proposed general terms for such a transaction. During a meeting
on December 15, 1997, the parties agreed that if a transaction would be
consummated, the consideration would be stock instead of cash, as Central was
interested in the potential for increased future value through an exchange of
stock and the tax-free nature of a common stock transaction. Negotiations as to
the pricing of the transaction consistently focused on the exchange ratio.
Exchange ratios ranging from approximately 3 shares to 4 shares of BankUnited
Class A Common Stock for each share of Central Common Stock were negotiated by
the parties, until an exchange ratio of 3.37 shares was agreed upon, subject to
certain adjustment for fluctuations in market price. Other material aspects of
the negotiations related to other aspects of management structure and the
treatment of Central employees.
At a special board meeting on December 18, 1997, the Central Board
discussed and reviewed certain aspects of the proposed business combination with
BankUnited, including the potential legal restrictions placed on shares of
BankUnited Class A Common Stock to be received by Central shareholders upon
consummation of the proposed business combination, as well as more general
matters concerning whether the timing of such a transaction was in the best
interests of the shareholders of Central. The Central Board further reviewed and
discussed, among other things, (i) Central's due diligence review of BankUnited,
(ii) the benefits to Central and its shareholders from a business combination
with BankUnited, (iii) the benefits a merger with Central would afford
BankUnited and (iv) the potential effect of the transaction on Central's
personnel. After a review and discussion of each of the potential alternative
courses of action and the proposed terms of the Merger Agreement, the Central
Board authorized Central senior management to continue negotiations with
representatives of BankUnited. From December 18, 1997 to December 29, 1997 the
final
36
<PAGE>
terms of the Merger Agreement were discussed and negotiated among the senior
management and counsel of Central and BankUnited and various changes were made
and circulated.
The Central Board convened a special meeting on December 29, 1997 to
review each of the definitive terms and conditions contained in the Merger
Agreement and to determine whether such terms were in the best interests of
Central's shareholders. After concluding its review and determining that the
Merger was in the best interests of Central's shareholders, the Central Board
authorized senior management to execute the Merger Agreement. The Merger
Agreement was executed by Central and BankUnited on December 30, 1997, and a
joint public announcement of the proposed merger was made on December 31, 1997.
BANKUNITED'S REASONS FOR THE MERGER
In considering the Merger, the BankUnited Board concluded that the
combination of Central and BankUnited represented a combination of two
institutions with complementary businesses and business strategies and would
result in a merged institution with greater size, flexibility, efficiency,
capital strength, and profitability.
In addition, in reaching its determination to approve the Merger the
BankUnited Board considered the following factors:
(a) The BankUnited Board expected that Central's commercial loan
portfolio would have a positive impact on BankUnited, FSB's interest rate
spread, and the acquisition would increase BankUnited, FSB's commercial lending
activities.
(b) BankUnited and Central currently have very similar businesses. Both
institutions are spread oriented, community banks seeking, in part, to service
niche markets which have become available due to the consolidation of the
banking business in South Florida.
(c) The short and long term goals of BankUnited and Central are
similar. Specifically, the short term goal of becoming a community bank with a
significant franchise in South Florida is similar for both institutions. The
long term strategy of building a valuable franchise in South Florida which will
be recognized by the market place as a valuable asset is also similar.
(d) The redundancies of the institutions are at the administrative
level and officer level; therefore, the BankUnited Board concluded that the
savings to be realized as a result of greater efficiencies would be accomplished
without a noticeable impact to the customer. This would enhance the probability
that a significant portion of Central's core deposits will remain as deposits of
BankUnited, FSB.
The BankUnited Board did not assign any specific or relative weight to
the foregoing factors in the course of its consideration.
CENTRAL'S REASONS FOR THE MERGER
In reaching its conclusion to enter into the Merger Agreement and to
recommend approval of the Merger Agreement by Central's shareholders, the
Central Board considered a number of factors and reasons of which Central
shareholders should be aware in determining whether to vote for approval of the
Merger Agreement and whether the consideration being paid to the shareholders of
Central in connection with the Merger is fair to Central's shareholders from a
financial point of view, including factors and reasons, discussed below, which
Central believes represent the material factors considered by the Board. The
Central Board believes that a merger with BankUnited represents an opportunity
to maximize the prospects for long-term shareholder value through the benefits
of a larger organization,
37
<PAGE>
by expanding geographical presence, broadening the loan portfolio, providing for
potential to increase earnings per share over the long-term, enhancing capital
and share liquidity and expanding senior management.
The Central Board considered the fact that the Merger represents an
opportunity to maximize the prospects for long-term shareholder value by merging
with a larger organization while maintaining the customer service advantages of
a smaller banking organization and of Central, in particular. The Central Board
believes that the Merger will allow BankUnited to benefit from and utilize
Central's service orientation and expertise to enhance the performance of
BankUnited.
The Central Board further considered that BankUnited currently operates
in Miami-Dade, Broward and Palm Beach counties, whereas Central operates only in
Miami-Dade County. In addition, Central's loan portfolio is primarily composed
of indirect automobile loans, commercial real estate, and commercial loans,
while BankUnited's loan portfolio consists mainly of residential and commercial
real estate loans. The resulting institution would therefore cover a larger
geographical area and have a more diverse loan portfolio, than Central.
The Central Board also considered the anticipated financial benefits of
the Merger. The Merger is expected to be accretive to BankUnited's earnings per
share. BankUnited has a significantly greater capital base than Central, which
would be further increased by the Merger. This capital base would permit a loan
limit to one borrower substantially higher than that of Central, which could be
particularly helpful in making commercial real estate loans. BankUnited would
also be able to compete more readily with the regional banks for larger dollar
loans and more creative financing terms.
Furthermore, the Central Board considered that the Merger would provide
liquidity for its shareholders. Central Common Stock is not traded or listed and
there is only a very limited market for Central Common Stock. BankUnited Class A
Common Stock is listed on Nasdaq and several market makers regularly trade the
BankUnited Class A Common Stock. In addition, the Central Board considered the
potential appreciation in BankUnited's capital stock, both as a result of the
Merger and otherwise.
The Central Board also believed that Central would benefit from the
resulting institution's expanded senior management. Also, the Central Board
believed that it was likely that the Merger would be approved by the required
regulatory authorities.
In reaching its determination to approve the Merger, the Central Board
did not assign any relative or specific weights to the foregoing factors, and
individual directors may have given differing weights to different factors and
may have considered factors not identified here or discussed at the Board
meeting. After deliberating with respect to the Merger and the other
transactions contemplated by the Merger Agreement, and considering, among other
things, the matters discussed above, the Central Board unanimously approved the
Merger Agreement and the transactions contemplated thereby as being in the best
interests of Central and its shareholders.
STRUCTURE OF THE MERGER
Subject to the terms and conditions of the Merger Agreement and in
accordance with applicable law, at the Effective Time, Central will merge with
and into BankUnited, FSB. BankUnited, FSB will be the surviving entity in the
Merger and will continue its corporate existence as a wholly-owned subsidiary of
BankUnited. At the Effective Time, the separate corporate existence of Central
will terminate. The charter of BankUnited, FSB as in effect at the Effective
Time, will be the charter of the surviving association, and the bylaws of
BankUnited, FSB, as in effect immediately prior to the Effective Time, will be
the bylaws of the surviving association.
38
<PAGE>
CONVERSION OF CENTRAL CAPITAL STOCK
At the Effective Time, each share of the Central Common Stock issued
and outstanding immediately prior to the Effective Time will be converted into
the right to receive shares of BankUnited Class A Common Stock. The Exchange
Ratio will be 3.37 shares of BankUnited Class A Common Stock for each share of
Central Common Stock, subject to change based upon the Fair Market Value of the
BankUnited Class A Common Stock prior to the effective time of the Merger. The
Exchange Ratio will be decreased if the Fair Market Value exceeds $14.30 per
share, or increased if the Fair Market Value is less than $11.70 per share. The
maximum number of shares of BankUnited Class A Common Stock which could be
received per share of Central Common Stock is 4.15 shares, if the Fair Market
Value were less than $9.50 per share. The Merger may be terminated by Central if
the Fair Market Value is less than $9.50 per share, or by either BankUnited or
Central, if the Fair Market Value is less than $9.00 per share. The Fair Market
Value will be determined by using the average closing price of one share of the
BankUnited Class A Common Stock on Nasdaq, computed for the 20-day trading
period ending three business days prior to the effective time of the Merger (the
"FMV").
If the FMV is between $11.70 and $14.30 per share, for example $12.00
per share, at the time of consummation of the Merger, each share of Central
Common Stock will be converted into the right to receive 3.37 shares of
BankUnited Class A Common Stock.
If the FMV is greater than $14.30 per share, the number of shares of
BankUnited Class A Common Stock into which each share of Central Common Stock
will be converted will be determined under the following formula:
3.37 X (14.30 + ((FMV - 14.30) X .5))
-------------------------------------
FMV
For example, if the FMV of BankUnited Class A Common Stock were $15.00 per share
at the time of consummation of the Merger, each share of Central Common Stock
would be converted into the right to receive 3.2913 shares of BankUnited Class A
Common Stock, rather than 3.37 shares.
If the FMV is less than $11.70 per share, the number of shares of
BankUnited Class A Common Stock into which each share of Central Common Stock
will be converted will be determined under the following formula:
3.37 X 11.70
------------
FMV
For example, If the FMV were $10.00 per share at the time of consummation of the
Merger, each share of Central Common Stock would be converted into the right to
receive 3.9429 shares of BankUnited Class A Common Stock, rather than 3.37
shares.
If the FMV is less than $9.50 per share, each share of Central Common
Stock will be converted into 4.15 shares of BankUnited Class A Common Stock,
which is the maximum number of shares which could be received per share of
Central Common Stock.
Each holder of shares of Central capital stock exchanged pursuant to
the Merger, who would otherwise have been entitled to receive a fraction of a
share of BankUnited Class A Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
BankUnited Class A Common Stock multiplied by the Fair Market Value. No such
holder will be entitled to dividends, voting rights or any other rights as a
shareholder in respect of any fractional share.
Former shareholders of record of Central will be entitled to vote after
the Effective Time at any meeting of BankUnited shareholders the number of whole
shares of BankUnited Class A Common Stock into which their respective
39
<PAGE>
shares of Central capital stock are converted. For information on the voting
rights of the holders of BankUnited Class A Common Stock, see "Description of
BankUnited Capital Stock-Class A Common Stock." Until surrendered for exchange
in accordance with the provisions of the Merger Agreement, each certificate
therefor representing shares of Central capital stock shall from and after the
Effective Time represent for all purposes only the right to receive shares of
BankUnited Class A Common Stock and, in lieu of fractional shares, cash. No
dividend or other distribution payable to the holders of record of BankUnited
Class A Common Stock at or as of any time after the Effective Time, shall be
paid to the holder of any certificate representing shares of Central capital
stock issued and outstanding at the Effective Time until such holder surrenders
such certificate for exchange, promptly after which time all such dividends or
distributions which have been declared and paid following the Effective Time
shall be paid (without interest). See "--Exchange of Certificates."
The holders of the BankUnited Class A Common Stock are entitled to
dividends when, as, and if declared by the BankUnited Board out of funds legally
available therefor. The BankUnited Board may declare dividends solely on the
BankUnited Class A Common Stock or may declare dividends on both the BankUnited
Class A Common Stock and the BankUnited Class B Common Stock provided that the
dividend declared for a share of the BankUnited Class A Common Stock is not less
than 110% (subject to adjustment upon the occurrence of certain events) of the
amount per share of any dividend declared on the BankUnited Class B Common
Stock. See "Description of BankUnited Capital Stock."
EXCHANGE OF CERTIFICATES
Promptly after the Effective Time (but in no event more than three
business days following the Effective Time), BankUnited and Central shall cause
the exchange agent, American Stock Transfer and Trust Company (the "Exchange
Agent"), to mail appropriate transmittal materials (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
theretofore representing shares of Central Common Stock shall pass, only upon
proper delivery of such certificates to the Exchange Agent) to the former
shareholders of Central.
After the Effective Time, each holder of shares of Central Common Stock
issued and outstanding at the Effective Time (other than shares as to which
dissenters' rights have been asserted) shall surrender the certificate or
certificates theretofore representing such shares, together with such
transmittal materials properly executed, to the Exchange Agent and promptly upon
surrender (but in no event more than three business days following receipt by
the Exchange Agent) shall receive in exchange therefor the BankUnited Class A
Common Stock as provided in the Merger Agreement. The certificate or
certificates for Central Common Stock so surrendered shall be duly endorsed as
the Exchange Agent may require. Each holder of shares of Central Common Stock
issued and outstanding at the Effective Time also shall receive, upon surrender
of the certificate or certificates representing such shares, cash in lieu of any
fractional shares of BankUnited Class A Common Stock to which such holder would
otherwise be entitled.
BankUnited shall not be obligated to deliver the consideration to which
any former holder of Central Common Stock is entitled as a result of the Merger
until such holder surrenders his certificate or certificates representing shares
of Central capital stock for exchange or, in the case of a certificate which has
been lost, stolen or destroyed, the Exchange Agent receives an appropriate
affidavit and/or bond, in accordance with the Merger Agreement, to evidence the
holder's ownership interest in Central Common Stock. In addition, certificates
surrendered for exchange by any person constituting an "affiliate" of Central
for purposes of Rule 145(c) (a "Central Affiliate") under the Securities Act
shall not be exchanged for certificates representing whole shares of BankUnited
Class A Common Stock until BankUnited has received a written agreement from such
person that any disposition of such shares shall be made in compliance with
applicable provisions of the Securities Act. Certificates representing
BankUnited Class A Common Stock issued in the Merger to any Central affiliate
will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
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SECURITIES ACT OF 1933, AS AMENDED, APPLIES. NO TRANSFER OF SUCH SHARES
SHALL BE VALID OR EFFECTIVE UNTIL THE CONDITIONS OF SUCH RULE HAVE BEEN
FULFILLED."
Shares of BankUnited capital stock issued and outstanding immediately
prior to the Effective Time will remain issued and outstanding and be unaffected
by the Merger.
EFFECTIVE TIME
The Effective Time of the consummation of the Merger shall occur on or
promptly after the first business day following the last to occur of (i) the
date that is 30 days after the date of the order of the OTS approving the
Merger, (ii) the effective date of the last order, approval, or exemption of any
other federal or state regulatory agency approving or exempting the Merger, if
such action is required, (iii) the expiration of all required waiting periods
after the filing of all notices to all federal or state regulatory agencies
required for consummation of the Merger, and (iv) the date on which the
shareholders of Central approve the Merger Agreement, in each case as
contemplated by the Merger Agreement. The Effective Time may occur at such other
date and time as BankUnited and Central shall agree in writing.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains representations and warranties of
BankUnited and Central as to, among other things, (i) the corporate organization
and existence of each party; (ii) the capitalization of each party; (iii) the
corporate organization, existence and capitalization of the subsidiaries of each
party; (iv) the authorization and enforceability of the Merger Agreement and
related transactions and the compliance of the Merger Agreement with (a) the
articles of incorporation or charter and bylaws of each party, (b) applicable
law and (c) certain material agreements; (v) each party's financial statements
and filings with applicable regulatory authorities; (vi) except as disclosed,
the absence of certain obligations or liabilities; (vii) with respect to
Central, the absence of certain liabilities or commitments to loan, fund or
advance money; (viii) the filing and accuracy of Central's tax returns; (ix)
each party's allowance for loan losses; (x) the absence of actions, facts or
circumstances that would prevent the Merger from qualifying as a reorganization
under Section 368 of the Code; (xi) except as disclosed, the good and marketable
title of each party to its properties; (xii) each party's compliance with
applicable laws; (xiii) Central's employee benefit plans and related matters;
(xiv) except as disclosed, the absence of certain commitments and contracts;
(xv) the absence of material defaults under certain contracts; (xvi) except as
disclosed, the absence of material legal proceedings; (xvii) the absence of
certain changes in each party's business since December 31, 1996; (xviii) the
timely filing of required regulatory reports; (xix) material accuracy and
completeness of the statements made by each party in filings with the Commission
or the OTS, as applicable; (xx) insurance of each party and its subsidiaries;
(xxi) with respect to Central, the absence of work stoppages, labor disputes and
union organization; (xxii) with respect to Central, material interests of
certain persons; (xxiii) with respect to Central, the absence of any obligations
by Central to register its securities; (xxiv) except as disclosed, the absence
of the need for either party to pay brokers' fees; (xxv) action by Central to
exempt the Merger from takeover laws and restrictions; (xxvi) with respect to
Central, except as disclosed, the absence of environmental law violations; and
(xxvii) voting agreements with certain Central shareholders.
CONDUCT OF BUSINESS PENDING THE MERGER AND OTHER AGREEMENTS
Pursuant to the Merger Agreement, prior to the Effective Time, Central
has agreed (i) to conduct its business in the usual, regular and ordinary course
consistent with past practice, and (ii) to use its best efforts to maintain and
preserve intact its business organization, employees and advantageous business
relationships and retain the services of its officers and key employees.
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In addition, except as required by law, or as contemplated by the
Merger Agreement, Central has agreed that without the prior written consent of
BankUnited, Central will not, among other things:
(a) other than in the ordinary course of business consistent
with past practice since September 30, 1994 ("In the Ordinary Course"),
incur any indebtedness for borrowed money, (it being understood and
agreed that incurrence of indebtedness In the Ordinary Course shall
include, without limitation, the creation of deposit liabilities,
purchases of federal funds, sales of certificates of deposit and
entering into repurchase agreements), assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of
any other individual, corporation or other entity, or make any
commitment to loan or loan or advance other than In the Ordinary
Course;
(b) adjust, split, combine or reclassify any capital stock;
make, declare or pay any dividend or make any other distribution on, or
directly or indirectly redeem, purchase or otherwise acquire, any
shares of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock,
or grant any stock appreciation rights or grant any individual,
corporation or other entity any right to acquire any shares of its
capital stock; or issue any additional shares of capital stock, or any
securities or obligations convertible into or exchangeable for any
shares of its capital stock;
(c) sell, transfer, mortgage, encumber or otherwise dispose of
any of its properties or assets to any individual, corporation or other
entity, or cancel, release or assign any indebtedness to any such
person or any claims held by any such person, except in the ordinary
course of business consistent with past practice or pursuant to
contracts or agreements in force at the date of the Merger Agreement;
(d) other than In the Ordinary Course or pursuant to contracts
in force on the date of the Merger Agreement, make any material
investment either by purchase of stock or securities, contributions to
capital, property transfers, or purchase of any property or assets of
any other individual, corporation or other entity;
(e) enter into or terminate any contract or agreement
involving annual payments in excess of $20,000 and which cannot be
terminated without penalty upon 30 days notice, or make any change in,
or extension of, any of its leases or contracts involving annual
payments in excess of $20,000 and which cannot be terminated without
penalty upon 30 days notice;
(f) increase or modify in any manner the compensation or
fringe benefits of any of its current or former employees or pay any
pension or retirement allowance not required by any existing plan or
agreement to any such current or former employees, or become a party
to, amend or commit itself to any pension, retirement, profit-sharing
or welfare benefit plan or agreement or employment agreement with or
for the benefit of any current or former employee other than routine
adjustments in compensation and fringe benefits In the Ordinary Course
or accelerate the vesting of any stock options or other stock-based
compensation;
(g) take any action that would prevent or impede the Merger
from qualifying as a reorganization within the meaning of Section 368
of the Code;
(h) settle any claim, action or proceeding involving the
payment of money damages in excess of $20,000, except In the Ordinary
Course;
(i) amend its articles of incorporation or its bylaws;
(j) fail to maintain any regulatory agreements, material
licenses and permits or to file in a timely fashion all federal, state,
local and foreign tax returns;
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(k) make any capital expenditures of more than $20,000
individually or $50,000 in the aggregate;
(l) fail to maintain each Central benefit plan or timely make
all contributions or accruals required thereunder in accordance with
GAAP applied on a consistent basis;
(m) issue any additional shares of Central capital stock;
(n) agree to, or make any commitment to, take any of the
actions listed above;
(o) purchase any securities other than in accordance with past
practices; or
(p) purchase or originate any loans or issue any letter of
credit (excluding renewals or advances under existing credit facilities
to its customers and its affiliates consistent with past practices)
individually in an amount greater than $500,000.
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Each party's obligations to effect the Merger is subject to the
fulfillment or waiver at or prior to the Effective Time of the following
conditions:
(a) The Merger Agreement and the transactions contemplated
thereby shall have been adopted and approved by the requisite
affirmative votes of the holders of Central Common Stock entitled to
vote thereon and by the Board of Directors of each party;
(b) The Merger Agreement, the Merger, and the other
transactions contemplated hereby shall have been approved by the OTS
and any other regulatory authorities whose approval is required for
consummation of the transactions contemplated hereby, which approvals
are subject to no conditions that in the reasonable judgment of
BankUnited would unduly restrict it or its subsidiaries or affiliates
in their respective spheres of operations and business activities after
the Effective Time;
(c) The Registration Statement shall have been declared
effective and shall not be subject to a stop order or any threatened
stop order;
(d) Neither BankUnited nor Central shall be subject to any
active litigation seeking, or to, any order, decree, or injunction of
any court or agency of competent jurisdiction, directing that the
consummation of the transactions contemplated by the Merger Agreement
be prohibited or enjoined;
(e) The shares of BankUnited Class A Common Stock issuable
pursuant to the Merger shall have been authorized for trading on Nasdaq
upon official notice of issuance;
(f) Holders of no more than ten percent of the outstanding
capital stock of Central shall have exercised dissenters' rights;
(g) The parties shall have received an opinion of counsel to
BankUnited, in reasonably satisfactory form, that, for federal income
tax purposes, the Merger will qualify as a reorganization under Section
368 of the Code;
(h) The representations and warranties of the other party to
the Merger Agreement shall be true and correct in all material respects
as of the date of the Merger Agreement and (except to the extent such
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representations and warranties speak as of as of an earlier date) as of
the closing date as though made on the closing date;
(i) Each party shall have performed in all material respects
all obligations required to be performed by it under the Merger
Agreement at or prior to the closing date; and
(j) No event, occurrence or circumstance shall have occurred
that would constitute a material adverse effect on either party.
The obligations of BankUnited to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Effective Time of the additional
condition that as of the Effective Time Central's Closing Net Worth (as defined
in the Merger Agreement) shall be not less than $10,000,000.
REGULATORY APPROVAL REQUIRED FOR THE MERGER
BankUnited and Central have agreed to use their reasonable best efforts
to obtain the requisite regulatory approvals, which include approval from the
OTS, and have filed an application to obtain such requisite regulatory
approvals. The Merger is subject to the approval of the OTS. Under federal law,
a period of 15 days must expire following approval by the OTS within which
period the United States Department of Justice may file objections to the Merger
under the federal antitrust laws. The Merger cannot proceed in the absence of
the requisite regulatory approvals. There can be no assurance that such
requisite regulatory approvals will be obtained, and, if obtained, there can be
no assurance as to the date of any such approvals or the absence of any
litigation challenging such approvals. There can likewise be no assurance that
the United States Department of Justice will not attempt to challenge the Merger
on antitrust grounds or, if such a challenge is made, as to the result thereof.
BankUnited and Central are not aware of any other material governmental
approvals or actions that are required prior to the consummation of the Merger
other than those described above. It is presently contemplated that, if any such
additional governmental approvals or actions are required, such approvals or
actions will be sought. There can be no assurance, however, that any such
additional approvals or actions will be obtained.
PAYMENT OF FEES TO BANKUNITED
Provided that BankUnited shall not be in material breach of its
obligations under the Merger Agreement, Central has agreed to pay BankUnited a
fee equal to $550,000 (the "Termination Fee") plus reasonable out of pocket
expenses, not in excess of $35,000, incurred by BankUnited or any of its
affiliates in connection with the Merger, in the event the Merger Agreement is
terminated: (i) by Central, if the Central Board of Directors recommends a
proposal other than the acquisition of Central by BankUnited; or (ii) by
BankUnited as a result of a material breach by Central, if within nine months
after such termination Central enters into an agreement to be acquired by
another company for a consideration having an aggregate value of more than
$19,714,499 (based upon multiplication of the pro rata consideration received or
to be paid per share by 450,000).
NO SOLICITATION OF ACQUISITION PROPOSALS
The Merger Agreement restricts the ability of Central to initiate,
encourage or solicit, directly or indirectly, Acquisition Proposals (as defined
in the Merger Agreement), and to participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, an
Acquisition Proposal other than the Merger. However, Central may (i) furnish or
cause to be furnished information subject to a confidentiality agreement in a
form satisfactory to BankUnited, (ii) in response to an Acquisition Proposal,
issue a communication to its security holders
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of the type contemplated by Rule 14d-9(e) under the Exchange Act, and (iii)
participate in discussions and negotiations directly and through its
representatives with persons who have sought the same if, in each instance the
Central Board determines, based as to legal matters on the written advice of
outside legal counsel, that the failure to furnish such information or to
negotiate with such entity or group or to take and disclose such position would
be inconsistent with the proper exercise of the fiduciary duties of the Central
Board.
"Acquisition Proposal" is defined in the Merger Agreement as any
proposal or offer to acquire all or any significant part of the business and
properties or capital stock of Central or its subsidiaries, whether by merger,
purchase of securities or assets, tender offer or otherwise.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of the Central Board and Central's management have
interests in the Merger as shareholders. In addition, members of the Central
Board and Central's management have interests as described below.
AGREEMENTS WITH CENTRAL OFFICERS. Central is party to an employment
agreement with Central's President, Mr. David Malinoff, pursuant to which Mr.
Malinoff is currently paid $137,500 per annum plus certain health benefits and a
lump sum severance payment of $250,000 upon a change in control of Central. Mr.
Malinoff also agreed pursuant to such agreement, if requested, to assist in the
transition period subsequent to a change in control of Central for a period not
to exceed six months. Central is also party to a severance agreement with
Central's Chief Financial Officer, Mr. Robert Ogonowski, which provides for a
lump sum severance payment of six months of his then current salary upon a
change in control of Central. In addition, Mr. Ogonowski is entitled under such
agreement to the full value of his then current salary and standard fringe
benefits for the six month period following a change in control unless he
resigns on his own volition or is terminated for cause subsequent to a change in
control of Central.
INDEMNIFICATION AND DIRECTORS AND OFFICERS INSURANCE FOR CENTRAL
DIRECTORS AND OFFICERS. The Merger Agreement provides that for a period of three
years after the Effective Time, BankUnited shall indemnify the present and
former directors, officers, employees and agents of Central (the "Indemnified
Parties") against all liabilities arising out of actions or omissions arising
out of their employment by Central and occurring at or prior to the Effective
Time to the full extent permitted under Florida law. In addition, BankUnited has
agreed to purchase $1 million of directors and officers liability insurance for
the Indemnified Parties subject to certain limitations, which include a
limitation on aggregate premium expenditures of $15,000 and a $50,000
deductible.
DISSENTERS' RIGHTS
The holders of Central Common Stock who (i) do not vote in favor of the
Merger Agreement either at the Central Special Meeting or by proxy and (ii) give
written notice to Central, before voting on the Merger Agreement, which
identifies the shareholder and states the shareholder's intention to demand
appraisal of and the payment for his or her shares ("Qualified Dissenting
Central Shareholders") will be entitled to dissenters' rights of appraisal under
Section 552.14 of the OTS Regulations (the text of Section 552.14 is set forth
in Appendix C to this Proxy Statement-Prospectus). Consequently, a Central
shareholder's vote in favor of the Merger Agreement at the Central Special
Meeting or by proxy or failure to give written notice to Central before voting
on the Merger Agreement, which identifies the shareholder and states the
shareholder's intention to demand appraisal of and payment for his or her
shares, will constitute a waiver of such shareholder's appraisal rights. A
dissenting shareholder shall have the right, at any time within 60 days after
the effective date of the Merger, to withdraw his or her demand for appraisal
and to accept the terms offered upon the Merger.
Within 10 days after the Effective Time, BankUnited, FSB will (i) give
written notice by mail to the Qualified Dissenting Central Shareholders advising
them of the Effective Time, (ii) make a written offer to each Qualified
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Dissenting Central Shareholder to pay for the dissenting shares at a specified
price deemed by BankUnited, FSB to be the fair value thereof, and (iii) inform
the Qualified Dissenting Central Shareholders that, within 60 days of such date,
the requirements (as described below) regarding petitions to be filed if the
offer is not accepted and submission of stock certificates for notation must be
satisfied. The notice and offer will be accompanied by a balance sheet and
statement of income for Central for the 1997 fiscal year, together with
Central's latest available interim financial statements.
If a Qualified Dissenting Central Shareholder and BankUnited, FSB agree
upon the fair value of the dissenting shares within 60 days of the Effective
Time, payment for such dissenting shares will be made within 90 days of the
Effective Time. If such agreement is not reached within 60 days of the Effective
Time, then a Qualified Dissenting Central Shareholder may file a petition with
the OTS, with a copy by registered or certified mail to BankUnited, FSB,
demanding a determination of the fair market value of the dissenting shares of
all Qualified Dissenting Central Shareholders. Any Qualified Dissenting Central
Shareholder who fails to file such a petition within 60 days of the Effective
Time will be deemed to have accepted the terms offered under the Merger.
Within 60 days of the Effective Time, each Qualified Dissenting Central
Shareholder demanding appraisal and payment must submit to the Transfer Agent
his or her certificates of stock for notation thereon that an appraisal and
payment have been demanded with respect to such stock and that appraisal
proceedings are pending. A Qualified Dissenting Central Shareholder who fails to
submit his or her stock certificates for such notation will no longer be
entitled to appraisal rights and will be deemed to have accepted the terms
offered under the Merger.
The Director of the OTS may appoint one or more independent persons or
appropriate OTS staff to determine the fair market value of the dissenting
shares as of the Effective Time, exclusive of any element of value arising from
the accomplishment or expectation of the Merger. If the Director concurs with
the valuation of the shares after consideration of the appraisal report and
advice of the appropriate staff, the Director will direct BankUnited, FSB to pay
the fair market value of the shares upon surrender of the certificates
representing such shares of stock with interest from the Effective Time.
The costs and expenses of any proceeding relating to dissenters' rights
of appraisal may be apportioned by the Director of the OTS, as deemed equitable,
among all or some of the parties. A Qualified Dissenting Central Shareholder who
has demanded appraisal rights will not thereafter be entitled to vote such
dissenting shares or to payment of dividends or distributions thereon (except
dividends on distributions payable to or a vote to be taken by shareholders of
record at a date prior to, the Effective Time); provided, that if a Qualified
Dissenting Central Shareholder ceases to be entitled to appraisal and payment of
appraisal value and accepts or is deemed to accept the terms offered upon the
Merger, such shareholder shall thereupon be entitled to vote and receive
distributions.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING DISCUSSION OF MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF
THE MERGER UNDER PRESENT LAW DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OF ALL
TAX CONSEQUENCES THAT MAY BE RELEVANT TO ANY PARTICULAR SHAREHOLDERS. CERTAIN
SHAREHOLDERS (INCLUDING, BUT NOT LIMITED TO, INSURANCE COMPANIES, TAX-EXEMPT
ORGANIZATIONS, FINANCIAL INSTITUTIONS, BROKER-DEALERS, EMPLOYEE SHAREHOLDERS,
FOREIGN CORPORATIONS AND PERSONS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED
STATES) MAY BE SUBJECT TO SPECIAL RULES NOT DISCUSSED BELOW. SHAREHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO SPECIFIC TAX CONSEQUENCES TO THEM
OF THE MERGER INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL,
AND OTHER TAX MATTERS.
Central and BankUnited will receive an opinion of Kronish, Lieb, Weiner
& Hellman LLP, special tax counsel to BankUnited, to the effect that for federal
income tax purposes (i) the Merger will be a reorganization under Section
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368(a) of the Code, (ii) neither Central nor BankUnited will recognize any
taxable gain or loss upon consummation of the Merger, and (iii) the Merger will
result in the tax consequences summarized below for Central shareholders who
receive BankUnited Class A Common Stock in exchange for Central Common Stock in
the Merger. Receipt of substantially the same opinion of Kronish, Lieb, Weiner &
Hellman LLP as of the Effective Time is a condition to consummation of the
Merger. The opinion of Kronish, Lieb, Weiner & Hellman LLP is based on, and the
opinion to be given as of the Effective Time will be based on, certain customary
assumptions and representations regarding, among other things, the lack of
previous dealings between Central and BankUnited, the existing and future
ownership of Central and BankUnited, and the future plans for Central's
business.
EXCHANGE OF CENTRAL COMMON STOCK FOR BANKUNITED CLASS A COMMON STOCK.
This summary does not discuss all potentially relevant federal income tax
matters, consequences to any shareholders subject to special tax treatment (for
example, tax-exempt organizations and foreign persons), or consequences to
shareholders who acquired their Central Common Stock through the exercise of
employee stock options or otherwise as compensation. A holder of shares of
Central Common Stock who receives BankUnited Class A Common Stock in exchange
for his shares of Central Common Stock will not recognize any gain or loss on
the exchange. If a shareholder receives BankUnited Class A Common Stock and cash
in lieu of a fractional share of BankUnited Class A Common Stock, the
shareholder will recognize taxable gain or loss solely with respect to such
fractional share as if the fractional share had been received and then redeemed
for the cash. A shareholder whose Central Common Stock is exchanged for
BankUnited Class A Common Stock will have an aggregate tax basis in the shares
of BankUnited Class A Common Stock (including any fractional share interest)
equal to his tax basis in the shares of Central Common Stock exchanged therefor.
The shareholder's holding period for shares of BankUnited Class A Common Stock
(including any fractional share interest) received in the Merger will include
his holding period for the shares of Central Common Stock exchanged therefor if
they are held as a capital asset at the time of the Merger.
ACCOUNTING TREATMENT
The Merger will be accounted for as a "purchase" transaction. Under the
purchase method of accounting, the assets and liabilities of Central will be
recorded on the consolidated financial statements of BankUnited at their
respective fair values at the Effective Date. Any excess of the value of the
consideration paid by BankUnited over the fair value of Central's identifiable
assets acquired, less liabilities assumed, will be recorded as an intangible
asset.
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement provides that the Merger may be terminated at any
time prior to the Effective Time, whether before or after approval by Central's
shareholders:
(a) by Central if the Fair Market Value of the BankUnited
Class A Common Stock is less than $9.50 per share, or by either party
if the Fair Market Value of the BankUnited Class A Common Stock is less
than $9.00 per share; or
(b) by mutual consent of the BankUnited Board and the Central
Board; or
(c) by the BankUnited Board or the Central Board if (i) the
OTS has denied approval of the Merger and such denial has become final
and nonappealable or has approved the Merger subject to conditions that
in the reasonable judgment of BankUnited would restrict it or its
subsidiaries or affiliates in their respective spheres of operations
and business activities after the Effective Time or (ii) the Effective
Time does not occur by June 30, 1998, unless mutually extended by the
parties; or
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(d) by either party (if such party is not in material breach
of any of its obligations under the Merger Agreement) pursuant to
notice in the event of a breach or failure by the other that is
material in the context of the transactions contemplated by the Merger
Agreement of any representation, warranty, covenant or agreement of the
other contained in the Merger Agreement which has not been, or cannot
be, cured within 30 days after written notice or such breach is given,
provided that BankUnited may not terminate the merger Agreement for a
breach of warranties or representations made by Central, unless the
breach (i) arises out of an event occurring after December 22, 1997, or
(ii) arises out of an event or state of facts which occurred or existed
prior to December 30, 1997 and was not discovered during BankUnited's
due diligence investigation of Central, and, in the case of either (i)
or (ii), the breach is material, and has a Material Adverse Effect as
defined in the Merger Agreement; or
(e) by either party if the shareholders of Central fail to
approve the Merger; or
(f) by Central if (i) there shall not have been a material
breach of any covenant or agreement on the part of Central under the
Merger Agreement and (ii) prior to the Effective Time, a corporation,
partnership, person or other entity or group shall have made a bona
fide Acquisition Proposal (as defined in the Merger Agreement) that the
Central Board determines in its good faith judgment and in the exercise
of its fiduciary duties, based as to legal matters on the reasonable
advice of legal counsel and as to financial matters on the reasonable
advice of an investment banking firm of national reputation, is more
favorable to the Central shareholders than the Merger and that the
failure to terminate the Merger Agreement and accept such alternative
Acquisition Proposal would be inconsistent with the proper exercise of
such fiduciary duties, provided that such termination would not be
effective until payment of the Termination Fee (See "-Payment of Fees
to BankUnited"); or
(g) by BankUnited if Central's Closing Net Worth (as defined
in the Merger Agreement) is less than $10,000,000.
MODIFICATION AND WAIVER OF THE MERGER AGREEMENT
To the extent permitted by law, the Merger Agreement may be amended by
a subsequent writing signed by each of BankUnited and Central; provided,
however, that the provisions hereof relating to the manner or basis in which
shares of Central capital stock will be exchanged for BankUnited Class A Common
Stock shall not be amended after the Central Special Meeting without any
requisite approval of the holders of the issued and outstanding shares of
Central capital stock entitled to vote thereon.
Prior to or at the Effective Time, each of BankUnited and Central shall
have the right to waive any default in the performance of any term of the Merger
Agreement by the other, to waive or extend the time for the compliance or
fulfillment by the other of any and all of the other's obligations under the
Merger Agreement and to waive any or all of the conditions precedent to its
obligations under the Merger Agreement, except any condition which, if not
satisfied, would result in the violation of any law or applicable governmental
regulation.
BOARD OF DIRECTORS, MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER
The BankUnited Board consists of 11 persons and will not change as a
result of the consummation of the Merger. The executive officers of BankUnited
after the Merger will be comprised of members of BankUnited's current senior
management. It has not yet been determined which members of Central's
management, if any, will become officers of BankUnited following the Merger.
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EXPENSES
The Merger Agreement provides that BankUnited and Central will each pay
its own expenses in connection with the Merger and the transactions contemplated
thereby, except that BankUnited and Central shall divide equally all printing
expenses and filing fees incurred in connection with the Merger Agreement, the
Registration Statement and the Proxy Statement. Central's share of such printing
expenses and filing fees shall not exceed $35,000.
RESALES OF BANKUNITED CLASS A COMMON STOCK RECEIVED/ISSUED IN THE MERGER
The BankUnited Class A Common Stock issued pursuant to the Merger will
be registered under the Securities Act and will be freely transferable under the
Securities Act, except for shares issued to any Central shareholder who may be
deemed to be an affiliate of BankUnited for purposes of Rule 144 promulgated
under the Securities Act ("Rule 144") or an affiliate of Central for purposes of
Rule 145 promulgated under the Securities Act ("Rule 145") (each an
"Affiliate"). Affiliates will include persons who control, are controlled by, or
are under common control with (i) Central at the time of the Central Special
Meeting or (ii) BankUnited at or after the Effective Time.
Rules 144 and 145 will restrict the sale of the BankUnited Class A
Common Stock received in the Merger by Affiliates and certain of their family
members and related interests. Generally speaking, during the one-year period
following the Effective Time, those persons who are Affiliates of Central at the
time of the Central Special Meeting, provided they are not Affiliates of
BankUnited at or following the Effective Time, may publicly resell any shares of
the BankUnited Class A Common Stock received by them in the Merger, subject to
certain limitations as to, among other things, the amount of the BankUnited
Class A Common Stock sold by them in any three-month period and as to the manner
of sale. The limitations require that (i) there be adequate current public
information available with respect to BankUnited, (ii) the sale of shares of
Class A Common Stock by the Affiliate during the preceding three-month period
not exceed the greater of one percent of the Class A Common Stock outstanding or
the average weekly trading volume of the Class A Common Stock during a four-week
period specified under Rule 144, and (iii) the securities be sold in brokers
transactions or transactions with a market maker as specified under Rule 144.
After the one-year period, such Affiliates may resell their shares without such
restrictions so long as there is adequate current public information with
respect to BankUnited as required by Rule 144. Persons who become Affiliates of
BankUnited prior to or after the Effective Time, may publicly resell the
BankUnited Class A Common Stock received by them in the Merger subject to the
limitations on volume, manner of sale and current public information described
above as well as certain filing requirements specified in Rule 144.
The ability of Affiliates to resell shares of the BankUnited Class A
Common Stock received in the Merger under Rule 144 or Rule 145 as summarized
herein generally will be subject to BankUnited having satisfied its Exchange Act
reporting requirements for specified periods prior to the time of sale.
Affiliates also would be permitted to resell the BankUnited Class A Common Stock
received in the Merger pursuant to an effective registration statement under the
Securities Act or another available exemption from the Securities Act
registration requirements. The Registration Statement which contains this Proxy
Statement-Prospectus does not constitute such an effective registration
statement covering resales of the BankUnited Class A Common Stock received by
persons who may be deemed to be Affiliates of BankUnited or Central in the
Merger.
Central has agreed in the Merger Agreement to use its best efforts to
cause each person who is an Affiliate (for purposes of Rule 145) of Central to
deliver to BankUnited a written agreement intended to ensure compliance with the
Securities Act. Pursuant to the Merger Agreement Certificates surrendered for
exchange by a Central Affiliate will not be exchanged for certificates
representing whole shares of BankUnited Class A Common Stock until BankUnited
has received such written agreement from such Central Affiliates.
49
<PAGE>
DESCRIPTION OF BANKUNITED CAPITAL STOCK
Set forth below is a summary of certain terms and provisions of
BankUnited's capital stock, which is qualified in its entirety by reference to
BankUnited's Articles of Incorporation and to the Statements of Designation
setting forth the resolutions establishing the rights and preferences of
BankUnited's stock. Copies of the Articles of Incorporation and Statements of
Designation have been incorporated by reference into the Registration Statement
of which this Proxy Statement-Prospectus forms a part.
Under the Articles of Incorporation, the authorized but unissued and
unreserved shares of BankUnited's capital stock will be available for issuance
for general corporate purposes, including, but not limited to, possible stock
dividends, future mergers or acquisitions, or private or public offerings.
Except as may otherwise be required, shareholder approval will not be required
for the issuance of those shares.
The following table sets forth all classes of stock outstanding, and
stock options and warrants held, as of April 8, 1998, as well as the amount of
BankUnited Class A Common Stock which would be outstanding upon exercise or
conversion of all outstanding options, warrants and convertible securities:
<TABLE>
<CAPTION>
CLASS A COMMON
SHARES, OPTIONS STOCK UPON
AND WARRANTS CONVERSION OF ALL
OUTSTANDING OUTSTANDING SECURITIES
----------- ----------------------
<S> <C> <C>
Class A Common Stock(1)........................... 17,011,224(1) 17,011,224(1)
Class B Common Stock.............................. 316,499 316,499
Series B Preferred Stock.......................... 229,580 343,428
9% Preferred Stock................................ 697,117 --
Stock Options
Class A Common Stock......................... 640,516 640,516
Class B Common Stock......................... 1,152,029 1,152,029
Series B Preferred Stock..................... 315,000 471,208
Warrants.......................................... 48,200 81,236
------------ -------------
Total........................................ 20,016,140(1)
=============
</TABLE>
- ----------
(1) Upon completion of the Merger, assuming the issuance of an estimated
1,481,085 shares of BankUnited Class A Common Stock in connection
therewith (based on a closing market price of $15.00 per share for the
BankUnited Class A Common Stock on April 8, 1998), the shares of
BankUnited Class A Common Stock outstanding, and the total Class A
Common Stock upon Conversion of all Outstanding Securities would be
18,492,309 and 21,497,225, respectively. The actual number of shares to
be issued in the Merger may change based on the market price of the
Class A Common Stock during the period prior to the effective time of
the acquisition, but shall not be more than 1,867,500 shares. See "The
Merger-Conversion of Central Capital Stock."
50
<PAGE>
CLASS A COMMON STOCK
BankUnited's Articles of Incorporation authorizes the issuance, in
series, of up to 30,000,000 shares of BankUnited Class A Common Stock and
permits BankUnited's Board of Directors to establish the rights and preferences
of each series of Class A Common Stock. The BankUnited Board has allocated
20,000,000 shares to the Series I Class A Common Stock, the only series of Class
A Common Stock outstanding. As of April 8, 1998, 17,011,224 shares of Class A
Common Stock were issued and outstanding and 2,986,713 shares were reserved for
issuance under BankUnited's stock option and stock bonus plans and upon the
conversion of other classes of stock, as described below.
DIVIDENDS. The holders of the BankUnited Class A Common Stock are
entitled to dividends when, as, and if declared by BankUnited's Board of
Directors out of funds legally available therefor, which may be declared solely
on the BankUnited Class A Common Stock or for not less than 110% of the amount
per share of any dividend declared on the BankUnited Class B Common Stock. The
payment of dividends by BankUnited will depend on BankUnited's net income,
financial condition, regulatory requirements and other factors deemed relevant
by the BankUnited Board.
VOTING RIGHTS. Each share of BankUnited Class A Common Stock entitles
the holder thereof to one-tenth vote on all matters upon which shareholders have
the right to vote. The BankUnited Class A Common Stock does not have cumulative
voting rights in the election of directors.
LIQUIDATION. In the event of any liquidation, dissolution or winding up
of BankUnited, the holders of shares of BankUnited Class A Common Stock are
entitled to share equally with the holders of shares of BankUnited Class B
Common Stock, after payment of all debts and liabilities of BankUnited and
subject to the prior rights of holders of shares of BankUnited's Preferred
Stock, in the remaining assets of BankUnited.
NO PREEMPTIVE RIGHTS; REDEMPTION; ASSESSABILITY. Holders of shares of
BankUnited Class A Common Stock are not entitled to preemptive rights with
respect to any shares of any stock of BankUnited that may subsequently be
issued. The BankUnited Class A Common Stock is not subject to call or redemption
and, as to shares of BankUnited Class A Common Stock currently outstanding, are
fully paid and non-assessable. When the shares of BankUnited Class A Common
Stock offered hereby are issued upon payment of the purchase price therefor,
such shares will be fully paid and non-assessable.
CLASS B COMMON STOCK
BankUnited's Articles of Incorporation authorizes the issuance of up to
3,000,000 shares of Class B Common Stock, all of which have the rights and
preferences described below. The BankUnited Class B Common Stock is held by
directors, executive officers and other certain shareholders of BankUnited. As
of April 8, 1998, 316,499 shares of BankUnited Class B Common Stock were issued
and outstanding and 1,926,629 shares were reserved for issuance under
BankUnited's stock option and stock bonus plans and upon the conversion of
Series B Preferred Stock, as described below.
DIVIDENDS. The holders of BankUnited Class B Common Stock are entitled
to dividends when, as, and if declared by BankUnited's Board of Directors out of
funds legally available therefor. The payment of dividends on the BankUnited
Class B Common Stock is subject to the right of the holders of the BankUnited
Class A Common Stock to receive a dividend per share of 110% of the amount per
share of any dividend declared on the BankUnited Class B Common Stock.
VOTING RIGHTS. Each share of BankUnited Class B Common Stock entitles
the holder thereof to one vote on all matters upon which shareholders have the
right to vote. The BankUnited Class B Common Stock does not have cumulative
voting rights in the election of directors.
51
<PAGE>
CONVERTIBILITY. Each share of BankUnited Class B Common Stock is
convertible into one share of BankUnited Class A Common Stock, subject to
adjustment upon the occurrence of certain events.
LIQUIDATION. In the event of any liquidation, dissolution or winding up
of BankUnited, the holders of shares of BankUnited Class B Common Stock are
entitled to share equally with the holders of shares of BankUnited Class A
Common Stock, after payment of all debts and liabilities of BankUnited and
subject to the prior rights of holders of shares of BankUnited's Preferred
Stock, in the remaining assets of BankUnited.
NO PREEMPTIVE RIGHTS; REDEMPTION; ASSESSABILITY. Holders of shares of
BankUnited Class B Common Stock are not entitled to preemptive rights with
respect to any shares of any stock of BankUnited that may be issued. The
BankUnited Class B Common Stock is not subject to call or redemption and is
fully paid and non-assessable.
PREFERRED STOCK
BankUnited's Articles of Incorporation authorize the issuance, in
series, of up to 10,000,000 shares of Preferred Stock and permits BankUnited's
Board of Directors to establish the rights and preference of each of such series
and to increase the number of shares in any of the series. As of April 8, 1998,
229,580 shares of Series B Preferred Stock were issued and outstanding and
315,000 shares of Series B Preferred Stock were reserved for issuance under
BankUnited's stock option and stock bonus plans. In addition, 697,117 shares of
9% Noncumulative Perpetual Preferred Stock (the "9% Preferred Stock"), were
issued and outstanding.
The shares of Series B Preferred Stock are held by directors, executive
officers and other shareholders of BankUnited. The shares of the 9% Preferred
Stock are publicly held.
DIVIDENDS. The total annual dividend requirement for all series of
BankUnited's Preferred Stock outstanding as of April 8, 1998 was $782,000. In
October 1997 the BankUnited Board and the holders of the outstanding shares of
the Series B Preferred Stock agreed to decrease the dividend rate on the Series
B Preferred Stock to $0.6750 per annum.
VOTING RIGHTS. Each share of Series B Preferred Stock is entitled to
two and one-half votes per share on all matters submitted to the vote of
shareholders. The Series B Preferred Stock does not have cumulative voting
rights in the election of directors. The 9% Preferred Stock is non-voting.
The Series B Preferred Stock and the 9% Preferred Stock are each
permitted to elect two directors for their respective classes to the BankUnited
Board, if BankUnited fails to declare and pay dividends for six dividend
periods, whether or not those periods are consecutive. The right to elect
directors would be revoked once BankUnited paid dividends in four consecutive
periods.
CONVERSION RIGHTS. Each share of Series B Preferred Stock is
convertible into 1.4959 shares of BankUnited Class B Common Stock, subject to
adjustment on the occurrence of certain events.
LIQUIDATION. In the event of any liquidation, dissolution or winding up
of BankUnited, voluntary or involuntary, the 9% Preferred Stock shall be
entitled to a distribution of $10.00 per share, out of the assets of BankUnited
available for distribution to shareholders prior to any distribution being made
on any other class of stock of BankUnited. In the event of liquidation,
dissolution, or winding up of BankUnited, after payment of any debts and other
liabilities of BankUnited, after the per share distributions to the 9% Preferred
Stock, and prior to any distribution of assets to the holders of BankUnited
Class A Common Stock or BankUnited Class B Common Stock, the holders of the
Series B Preferred Stock will be entitled to a preference on liquidation of
$7.375 per share, if the liquidation is involuntary. Such holders shall be
entitled to receive the redemption price per share applicable to such stock at
the time of liquidation if the liquidation is involuntary.
52
<PAGE>
REDEMPTION. Pursuant to its original terms, the Series B Preferred
Stock was redeemable at BankUnited's option at $7.5225 per share to January 31,
1996, declining thereafter at $.07375 per share during each year through January
31, 1998, and thereafter at $7.375 per share. In connection with the recent
decrease in the dividend rate, the BankUnited Board agreed that the Series B
Preferred Stock would not be redeemed for a ten year period (until October 1,
2007 or later) unless earlier redemption is approved by the holders of at least
50% of the outstanding shares of Series B Preferred Stock.
The 9% Preferred Stock is redeemable after September 30, 1998 at the
option of BankUnited at a redemption price of $10.00 per share.
RANK. The 9% Preferred Stock ranks senior to all other classes of stock
of BankUnited with respect to dividend rights and rights upon liquidation,
dissolution or winding up of BankUnited. The Series B Preferred Stock ranks
senior to the BankUnited Class A Common Stock and BankUnited Class B Common
Stock, as to dividend rights, rights upon liquidation, dissolution or winding up
of BankUnited, and redemption rights.
NO PREEMPTIVE RIGHTS; ASSESSABILITY. Holders of BankUnited's Preferred
Stock are not entitled to preemptive rights with respect to any shares of any
stock of BankUnited that may be issued. The outstanding Preferred Stock is fully
paid and non-assessable.
NO OTHER RIGHTS
The shares of BankUnited Class A Common Stock shall not have any
preferences, voting powers or relative, participating, option or other special
rights, except as set forth above and in BankUnited's Articles of Incorporation
or as otherwise required by law.
TRANSFER AGENT
BankUnited's transfer agent is American Stock Transfer & Trust Company,
New York, New York.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of BankUnited's Articles of Incorporation and
Bylaws, as well as certain provisions of Florida law, could have the effect of
deterring takeovers. The BankUnited Board believes that the provisions of
BankUnited's Articles of Incorporation and Bylaws described below are prudent
and in the best interests of BankUnited and its shareholders. Although these
provisions may discourage a future takeover attempt in which shareholders might
receive a premium for their shares over the then current market price and may
make removal of incumbent management more difficult, the BankUnited Board
believes that the benefits of these provisions outweigh their possible
disadvantages. Management is not aware of any current effort to effect a change
in control of BankUnited. In addition, BankUnited has opted not to be governed
by the affiliated transactions and control-share acquisitions sections of the
Florida Business Corporation Act.
DIRECTORS. The BankUnited Board is divided into three classes of
directors serving staggered three-year terms. Vacancies on the Board may be
filled for the remainder of the unexpired term by a majority vote of the
directors then in office. The maximum number of members of BankUnited's Board of
Directors is 20.
Shareholders entitled to vote may nominate persons for election as
directors only if written notice is given not later than (i) with respect to an
annual meeting, 60 days in advance of the meeting, and (ii) with respect to a
special meeting, the close of business on the seventh day following the date on
which notice of the meeting is first given.
53
<PAGE>
CUMULATIVE VOTING. Shareholders may not cumulate their votes in the
election of directors.
CAPITAL STRUCTURE. The BankUnited Board may authorize for issuance
various series of Class A Common Stock and Preferred Stock with different voting
rights. The BankUnited Board is authorized to establish the rights and
preferences of such stock and issue such shares, subject to shareholder approval
in certain circumstances.
COMPARISON OF SHAREHOLDERS' RIGHTS
GENERAL
The rights of Central's shareholders are currently governed by
Central's Articles of Incorporation (the "Central Articles"), Central's bylaws
(the "Central Bylaws") and the Florida Banking Code (the "FBC") and where not in
direct conflict with the FBC, the Florida Business Corporation Act (the "FBCA").
The rights of BankUnited's shareholders are governed by the BankUnited Articles
of Incorporation (the "BankUnited Articles"), the Bylaws of BankUnited (the
"BankUnited Bylaws") and the FBCA. After the Effective Date, the rights of
Central shareholders who become shareholders of BankUnited will be governed by
the BankUnited Articles, the BankUnited Bylaws and the FBCA.
The following is a summary of the material differences between the
rights of holders of the Central Common Stock and the rights of holders of the
BankUnited Class A Common Stock. This summary does not purport to be a complete
discussion of, and is qualified in its entirety by reference to the Central's
Articles of Incorporation and Bylaws, the BankUnited Articles of Incorporation
and Bylaws, the FBC and the FBCA.
COMMON STOCK
The BankUnited Articles authorize the issuance of 30,000,000 shares of
BankUnited Class A Common Stock, $.01 par value per share, and 3,000,000 shares
of BankUnited Class B Common Stock, $.01 par value per share. As of April 8,
1998, 17,011,224 shares of BankUnited Class A Common Stock and 316,499 shares of
BankUnited Class B Common Stock were issued and outstanding. See "Description of
Capital Stock-Class A Common Stock," and "-Class B Common Stock." The Central
Articles authorize the issuance of up to 450,000 shares of Central Common Stock,
par value $6.00 per share, of which, as of April 8, 1998, 450,000 shares were
issued and outstanding.
The principal difference between the BankUnited Class A Common Stock
that the holders of the Central Common Stock will receive upon consummation of
the Merger and Central Common Stock is that each share of BankUnited Class A
Common Stock entitles the holder thereof to one-tenth of a vote on each matter
upon which the shareholders have the right to vote. In contrast, holders of the
Central Common Stock are entitled to one vote per share under identical
circumstances.
Dividends may be paid to the holders of each of the Central Common
Stock and the BankUnited Class A Common Stock if declared by the Board of
Directors out of assets of the respective entity which are by law available for
the payment of dividends to holders of common stock. Central has never paid any
dividends on its capital stock. BankUnited has not paid dividends on its common
stock since 1994, and does not currently expect to pay any dividends on its
common stock for the foreseeable future.
Each share of the BankUnited Class B Common Stock has ten times the
voting power of the BankUnited Class A Common Stock and is entitled to a lower
dividend amount than any dividend declared with respect to a share of the
BankUnited Class A Common Stock. Each share of the BankUnited Class B Common
Stock is also convertible into one share of BankUnited Class A Common Stock,
subject to adjustment for certain events. Neither the Central Common Stock nor
the BankUnited Class A Common Stock is convertible. In all other respects, the
BankUnited Class B Common Stock is the same as the BankUnited Class A Common
Stock.
54
<PAGE>
REQUIRED SHAREHOLDER VOTES
Pursuant to the FBC, Florida law does not restrict the right of Central
to merge with a resulting national bank. In such case the action to be taken by
Central, and its rights and liabilities and those of its shareholders would be
the same as prescribed for national banks by applicable federal law. Under
federal law applicable to the Merger, Section 552.14 of the OTS Regulations, the
affirmative vote of the holders of at least two-thirds of the shares of Central
Common Stock outstanding at the Central Record Date is required to approve the
Merger.
Under Florida law and the BankUnited Bylaws, the affirmative vote of a
majority of the holders of BankUnited capital stock entitled to vote would be
required to approve a merger, consolidation, or other business combination to
which BankUnited is a party and which requires the consent of holders of
BankUnited capital stock under Florida law. Furthermore, the Statement of
Designation of the BankUnited Class A Common Stock and the BankUnited Class B
Common Stock provides that in the event of any consolidation of BankUnited with
or merger of BankUnited into another corporation, or in the event of any sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of
BankUnited to another corporation, then, in any such consolidation, merger,
sale, conveyance, exchange or transfer, if the consideration per share to be
received for the shares of the BankUnited Class A Common Stock differs in any
substantial kind or amount from the per share consideration to be received for
the BankUnited Class B Common Stock, then the majority of the holders of the
outstanding BankUnited Class A Common Stock, by a separate vote of the holders
of the BankUnited Class A Common Stock, must approve such consolidation, merger,
sale, conveyance, exchange or transfer.
RIGHTS OF DISSENTING SHAREHOLDERS
Under the FBCA, shareholders of a Florida corporation have the right,
in certain circumstances, to dissent from certain corporate actions, including
the consummation of a plan of merger to which a Florida corporation is a party
and which requires the approval of such corporation's shareholders. However,
this right to dissent does not apply with respect to a plan of merger to holders
of a security that on the record date is either registered on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc. or held of record by not fewer than 2,000 shareholders. Shareholders who
are entitled to dissent are also entitled to obtain payment in the amount of the
fair value of their shares. The holders of BankUnited Class A Common Stock are
not currently entitled to dissenters' rights because the BankUnited Class A
Common Stock is listed on Nasdaq.
Pursuant to Section 658.44 of the FBC and Section 552.14 of the OTS
Regulations, shareholders of a constituent state bank, such as Central, to a
plan of merger are generally entitled to receive payment in cash for the value
of his or her shares if such shareholder votes against the approval of, or
dissents from, a plan of merger and merger agreement and complies with the
procedures set forth in Section 658.44 or Section 552.14, as applicable, for
exercising such rights. See "Dissenters' Rights of Appraisal." Since the FBC
defers to federal law with respect to the merger of a Florida bank into a
federally-chartered entity, the rights of dissenting Central shareholders in the
Merger are governed by Section 552.14 of the OTS Regulations.
55
<PAGE>
AMENDMENT TO ARTICLES OF INCORPORATION AND BYLAWS
Under the FBC, amendments to the Central Articles must receive the
prior written approval of the Florida Banking Department. Pursuant to the FBC,
except in limited circumstances, amendments to the Central Articles must also be
recommended by the Central Board and approved by a majority of votes entitled to
be cast by each voting group entitled to vote on the amendment. Under the FBC,
the Central Board may adopt or amend the Central Bylaws.
The BankUnited Articles may be amended in the manner authorized by law
at the time of amendment. The BankUnited Bylaws may be amended at any time by
either a majority vote of the BankUnited Board or a majority vote of the holders
of BankUnited capital stock. However, the BankUnited Board may not amend or
repeal any bylaw adopted by the holders of BankUnited capital stock if the bylaw
specifically provides that the bylaw is not subject to amendment or repeal by
the directors.
PROVISIONS RELATING TO DIRECTORS
NUMBER OF DIRECTORS. The Central Articles provide that the Central
Board will consist of at least five members. The Central Board currently has ten
directors. The Central Board is not divided into classes.
The BankUnited Articles of Incorporation provide that the number of
directors shall be equal to or greater than one and may be fixed by the bylaws
of BankUnited. The BankUnited Bylaws provide that the number of directors shall
be no less than five and no more than 20, as shall be fixed from time to time by
resolution of the BankUnited Board. The BankUnited Bylaws also provide that the
BankUnited Board shall be divided into three classes of directors of as nearly
equal numbers as is possible, designated Class I, Class II and Class III,
respectively, serving staggered three year terms, with the term of a class
expiring at each annual meeting of shareholders. In addition, if BankUnited
fails to pay dividends for six dividend periods, whether or not consecutive, on
BankUnited's Series B Preferred Stock or 9% Noncumulative Perpetual Preferred
Stock, the number of Directors shall increase by two for each such class of
stock, and the holders of each such class of stock shall have the right of
voting separately as a class to elect directors to fill the additional
directorships. This right shall remain vested until dividends on such class of
stock have been paid for four consecutive dividend periods. The BankUnited board
of directors currently has 11 members.
REMOVAL. The Central Bylaws provide that directors may be removed, with
or without cause, by (i) the majority vote of the shares of Central Common Stock
at any meeting of shareholders called for such purpose or (ii) a vote of
two-thirds of all directors. Neither the BankUnited Articles nor the BankUnited
Bylaws expressly provides for the removal of directors. Under Florida law, the
holders of BankUnited capital stock may remove one or more directors with or
without cause at a meeting of the holders of BankUnited capital stock, provided
that the notice of the meeting states that one of the purposes of the meeting is
to remove the director.
CERTAIN ANTI-TAKEOVER PROVISIONS
The Central Articles and Central Bylaws do not contain any
anti-takeover provisions. Certain provisions of the BankUnited Articles
currently in effect could have the effect of deterring takeovers. The BankUnited
Articles (i) provide for a Board of Directors that is divided into three classes
of directors serving staggered three-year terms; (ii) does not permit
shareholder action by written consent; and (iii) does not provide for cumulative
voting. Management has no present intention to propose in any future proxy
solicitations any other amendments to the BankUnited Articles of Incorporation
that would have an anti-takeover effect.
56
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN CENTRAL BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with regard
to the beneficial ownership of Central Common Stock as of March 31, 1998 by (1)
the "named executives" of Central, (2) each director of Central, (3) all
directors and executive officers of Central as a group, and (4) each person
known by Central to be the beneficial owner of more than 5% of the outstanding
class of Central Common Stock. Except as otherwise indicated, each shareholder
listed below has sole voting and investment power with respect to shares
beneficially owned by such person.
<TABLE>
<CAPTION>
PERCENTAGE OF
PRE-MERGER AMOUNT AND OUTSTANDING CENTRAL
NAME AND ADDRESS OF BENEFICIAL OWNER (1) NATURE OF BENEFICIAL OWNERSHIP COMMON STOCK
- ---------------------------------------- ------------------------------ -------------------
<S> <C> <C>
Ernest M. Halpryn 21,192 4.71%
David E. Malinoff -- --
Ronald Ager 20,000 4.44%
Milton Fox 10,000 2.22%
David S. Kenin 10,000 2.22%
Jerome Moskowitz 6,050 1.34%
Russell Seal 20,625 4.58%
Steven Shiekman -- --
Michael Silver -- --
Belgravia Square Investments, Inc. 22,725 5.05%
Phillip Frost, M.D.(2) 45,450 10.10%
S International Corp. 22,725 5.05%
All directors and executive officers as
a group (14 persons) 87,950 19.54%
</TABLE>
(1) The address of each beneficial owner identified above is c/o Central
Bank, 7970 N.W. 36th Street, Miami, Florida 33166, except for Belgravia
Square Investments, Inc., whose address is c/o Mr. Isaac Gilinski,
10101 Collins Avenue, No. 10-F, Bal Harbour, Florida 33154, Dr. Phillip
Frost, whose address is 4400 Biscayne Boulevard, Miami, Florida 33137
and S International Corp., whose address is c/o Mr. Lazar Gilinski,
10101 Collins Avenue, No. 19-F, Bal Harbour, Florida 33154.
(2) Dr. Phillip Frost is also the owner of more than 5% of the outstanding
Class A Common Stock of BankUnited, and Dr. Frost's wife, Patricia
Frost, is a member of the BankUnited Board.
57
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BANKUNITED BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 8, 1998
concerning (i) each director of BankUnited; (ii) the Chief Executive Officer;
(iii) all directors and executive officers of BankUnited and BankUnited, FSB as
a group; and (iv) each other person known to management of BankUnited to be the
beneficial owner, as such term is defined in Rule 13d-3 under the Exchange Act,
of more than 5% of the outstanding shares of each class of BankUnited's voting
securities, according to filings by such persons with the Securities and
Exchange Commission.
<TABLE>
<CAPTION>
AMOUNT AMOUNT AMOUNT
AND NATURE AND NATURE AND NATURE
OF BENEFICIAL PERCENT OF OF BENEFICIAL PERCENT OF OF BENEFICIAL PERCENT OF
OWNERSHIP SERIES B OWNERSHIP CLASS B OWNERSHIP CLASS A
OF SERIES B PREFERRED OF CLASS B COMMON OF CLASS A COMMON
NAME AND ADDRESS PREFERRED(1) OUTSTANDING COMMON(1) OUTSTANDING(1) COMMON(1) OUTSTANDING(1)
- -------------------------------- ------------ ----------- --------- -------------- --------- --------------
DIRECTORS AND EXECUTIVE OFFICERS:
- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allen M. Bernkrant 23,560 10.26% 37,860 10.68% 92,474 *
(2)(3) (4)
Lawrence H. Blum 23,560 10.26% 65,854 17.24% 226,884 1.32%
(2)(3)(5) (4)(6)
Alfred R. Camner 431,780 79.28% 1,471,425 91.94% 1,652,330 8.93%
(6)(7) (2)(5)(6)(7) (7)(8)
James A. Dougherty -- -- -- -- 108,545 *
(4)(6)
Earline G. Ford 5,000 2.17% 460,693 62.38% 493,762 2.82%
(2)(3)(5)(6) (4)
Bruce Friesner -- -- -- -- 21,083 *
(9)
Patricia L. Frost -- -- -- -- 8,557 *
(10)
Clifford A. Hope -- -- -- -- 29,604 *
(9)
Samuel A. Milne -- -- -- -- 92,037 *
(6)(9)
Marc D. Jacobson 10,000 4.35% 44,040 12.23% 138,054 *
(2)(3)(5) (4)
Marc Lipsitz -- -- 500 -- 43,088 *
(9)
Neil Messinger, M.D. -- -- -- -- 13,742 *
Donald Putnam -- -- -- -- 27,209 *
(9)
Anne W. Solloway -- -- 31,856 9.25% 42,295 *
(3)(5) (8)
All current directors and
executive officers of the
Company and BankUnited
as a group (14 persons) 493,900 90.69% 2,080,374 95.91% 2,947,371 15.14%
(11) (11)
(FOOTNOTES FOLLOWING.)
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AMOUNT AMOUNT
AND NATURE AND NATURE AND NATURE
OF BENEFICIAL PERCENT OF OF BENEFICIAL PERCENT OF OF BENEFICIAL PERCENT OF
OWNERSHIP SERIES B OWNERSHIP CLASS B OWNERSHIP CLASS A
OF SERIES B PREFERRED OF CLASS B COMMON OF CLASS A COMMON
NAME AND ADDRESS PREFERRED(1) OUTSTANDING COMMON(1) OUTSTANDING(1) COMMON(1) OUTSTANDING(1)
---------------- ------------ ----------- --------- -------------- --------- --------------
OTHER 5% OWNERS:
- ----------------
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. -- -- -- -- 1,012,888 5.95%
4400 Biscayne Boulevard (10)
Miami, Florida 33137
Charles B. Stuzin 16,560 7.21% 81,563 21.48% 276,906 1.61%
550 Biltmore Way (5)(12) (13)
Suite 700
Coral Gables, Florida 33134
James M. Stuzin 7,000 3.04% 60,090 18.37% 61,931 *
550 Biltmore Way (14) (15)
Suite 700
Coral Gables, Florida 33134
Harvey Miller 13,560 5.90% 20,354 6.04% 40,520 *
SunTrust Building - 10th Floor (16)
1 Southeast Third Avenue
Miami, Florida 33131
Barry Shulman 13,560 5.90% 20,284 6.02% 95,026 *
3999 N.E. 15th Avenue (16)
Ft. Lauderdale, FL 33334
</TABLE>
- ----------
* Less than 1%.
(1) The nature of the reported beneficial ownership as of April 8, 1998 is
unshared voting and investment power unless otherwise indicated in the
footnotes to this table. Class B Common Stock ownership of the persons
listed includes shares of Class B Common Stock that would be issued
upon the conversion of shares of Series B Preferred Stock owned by such
persons and the exercise of options granted to such persons to acquire
Class B Common Stock. Ownership by the persons listed of Class A Common
Stock, which is the Company's publicly traded class, includes shares of
Class A Common Stock that would be issued upon the conversion of shares
of Series B Preferred Stock, and Class B Common Stock beneficially
owned by them and the exercise of options to acquire Class A Common
Stock and Class B Common Stock granted to them. Each share of Series B
Preferred Stock is convertible into 1.4959 shares of Class B Common
Stock. Each share of Class B Common Stock is convertible into one share
of Class A Common Stock.
(2) Includes 35,243; 35,243; 174,691; 7,479 and 14,959 shares of Class B
Common Stock that would be issued upon the conversion of shares of
Series B Preferred Stock held individually by each of Allen M.
Bernkrant, Lawrence H. Blum, Alfred R. Camner, Earline G. Ford and Marc
D. Jacobson, respectively.
(3) Includes 2,617; 30,111; 414,501; 28,511 and 27,638 shares of Class B
Common Stock that may be acquired individually by each of Allen M.
Bernkrant, Lawrence H. Blum, Earline G. Ford, Marc D. Jacobson and Anne
W. Solloway, respectively, upon the exercise of options granted under
the Company's option plans.
(4) Includes 12,680; 43,930; 7,209; 5,861; 11,715 and 102,627 shares of
Class A Common Stock that may be acquired by each of Allen M.
Bernkrant, Lawrence H. Blum, Earline G. Ford, Patricia L. Frost, Marc
D. Jacobson and James A. Dougherty, respectively, upon the exercise of
options granted under the Company's option plans.
(5) Includes 25,894 shares of Class B Common Stock that may be acquired by
each of the persons indicated through currently exercisable options
granted to the original organizers of BankUnited.
59
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(6) Includes 3,000; 5,424; 5,424 and 2,800 shares of restricted stock held
by Earline Ford, Samuel Milne, James Dougherty and Lawrence Blum,
respectively, which vest over a 3-year period from the date of grant.
Also includes 20,000 shares of restricted Series B Preferred Stock
which were granted to Alfred Camner and which vest over a 3-year period
from the date of grant.
(7) Includes 544,206 shares of Class B Common Stock that may be acquired by
Alfred R. Camner through currently exercisable options under the
Company's option plans, as well as 93,676 shares of Class B Common
Stock which would be received upon the exercise of options donated by
Mr. Camner as a bona fide gift to the Camner Family Foundation, Inc., a
charitable non-profit foundation under Section 501(a) of the Internal
Revenue Code. Also includes, pursuant to a durable power of attorney
given by Mrs. Solloway to Mr. Camner, 4,218 shares of Class B Common
Stock owned by her, 25,894 shares of Class B Common Stock that may be
acquired by her through options described in Note (5) above, and 1,744
shares of Class B Common Stock that may be acquired by her through
currently exercisable options under the Company's option plans. Also
includes 1,914 shares of Class B Common Stock owned by Mr. Camner's
wife, for which he has been granted a proxy. Also includes shares of
Class B Common Stock that may be acquired upon the conversion of
116,780 shares of Series B Preferred Stock, and upon the exercise and
conversion of options to purchase 315,000 shares of Series B Preferred
Stock.
(8) Includes 7,165 and 7,164 shares of Class A Common Stock that may be
acquired by each of Alfred R. Camner and Anne W. Solloway,
respectively, through currently exercisable options under the Company's
option plans. Mr. Camner also has beneficial ownership of Mrs.
Solloway's shares through a durable family power of attorney.
(9) Includes 3,679; 33,700; 4,157; 85,000; 22,000 and 27,500 shares of
Class A Common Stock that may be acquired by each of Bruce Friesner,
Marc Lipsitz, Neil Messinger, Samuel A. Milne, Donald Putnam, and
Clifford Hope, respectively, through currently exercisable options
granted under the Company's options plans.
(10) The number of shares beneficially owned by Patricia Frost does not
include shares beneficially owned by Phillip Frost, Mrs. Frost's
husband, and a beneficial owner of more than 5% of the Class A Common
Stock of the Company. The number of shares beneficially owned by
Phillip Frost does not include shares beneficially owned by Patricia
Frost.
(11) Includes an aggregate of 315,000 shares of Series B Preferred Stock,
1,113,622 shares of Class B Common Stock and 374,387 shares of Class A
Common Stock that may be acquired upon the exercise of options, as
described in this Note and in Notes (3) through (9) above.
(12) Includes 24,772 shares of Class B Common Stock that would be issued
upon the conversion of the shares of Series B Preferred held by Mr.
Stuzin, 6,843 shares of Class B Common Stock held by a family
partnership of which Mr. Stuzin is a general partner, and 38,394 shares
of Class B Common Stock that may be acquired by Mr. Stuzin through
currently exercisable options under the Non-Statutory Plan.
(13) Includes 36,000 shares of Class A Common Stock that may be acquired
upon the exercise of options to purchase Class A Common Stock.
(14) Reflects shares of Series B Preferred Stock held as trustee of a trust
for the benefit of certain family members.
(15) Includes 10,471 shares of Class B Common Stock that would be issued
upon the conversion of 7,000 shares of Series B Preferred Stock, 49,619
shares of Class B Common Stock held as trustee of a family trust, and
6,843 shares of Class B Common Stock held as general partner of a
family partnership.
(16) Includes 20,284 shares of Class B Common Stock that would be issued
upon the conversion of 13,560 shares of Series B Preferred held by each
of Barry Shulman and Harvey Miller.
60
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EXPERTS
The consolidated financial statements of BankUnited and subsidiaries
incorporated in this Proxy Statement-Prospectus by reference to the Annual
Report on Form 10-K/A for the year ended September 30, 1997 have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
certified public accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Central Bank as of December 31, 1997 and
1996 and for the years then ended included in this Proxy Statement-Prospectus
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report appearing herein and are included in reliance upon the report of
such firm given upon their authority as experts in auditing and accounting.
Representatives of Deloitte & Touche LLP are expected to be present at
the Central Special Meeting and will have the opportunity to make a statement if
they desire to do so and to respond to appropriate questions from shareholders.
LEGAL MATTERS
The validity of the shares of the BankUnited Class A Common Stock to be
issued to the holders of Central capital stock pursuant to the Merger will be
passed upon for BankUnited by Stuzin and Camner, Professional Association
("Stuzin and Camner"), Miami, Florida. Alfred R. Camner, Chairman of the Board,
Chief Executive Officer, President and Director of BankUnited, is the senior
managing director and shareholder of Stuzin and Camner, and Marc Lipsitz, a
Director of BankUnited, is the Managing Director of Stuzin and Camner. As of
April 8, 1998, directors and employees of Stuzin and Camner directly and
indirectly owned in the aggregate approximately 380,947 shares of the BankUnited
Class A Common Stock, 882,817 shares of the BankUnited Class B Common Stock and
448,340 shares of the BankUnited Preferred Stock (including shares that may be
acquired by the exercise of options, but not including shares received upon the
conversion of other classes of stock).
Certain legal matters in connection with the Merger will be passed upon
by Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. ("Greenberg
Traurig") as counsel for Central. David S. Kenin, Esq., a shareholder of
Greenberg Traurig, also serves as a member of the Central Board. Mr. Kenin is a
holder of 10,000 shares of the Central Common Stock.
Certain tax consequences of the Merger will be passed upon by Kronish,
Lieb, Weiner & Hellman LLP.
SOLICITATION OF PROXIES
The proxies are being solicited by the Central Board. The cost of
solicitation of proxies from holders of Central capital stock will be borne by
Central. In addition to such solicitation and solicitation by use of the mails,
solicitation may be made in person or by telephone or telegraph by certain
directors, officers and regular employees of Central.
61
<PAGE>
STOCKHOLDER PROPOSALS
Any BankUnited shareholder, including, after consummation of the
Merger, former shareholders of Central, may submit a proposal to be presented at
BankUnited's 1999 Annual Meeting of Stockholders. Proposals must be in writing
and be received by the Secretary of BankUnited at its executive offices, 255
Alhambra Circle, Coral Gables, Florida 33134, no later than September 25, 1998
for inclusion in BankUnited's proxy statement relating to such meeting, subject
to applicable rules and regulations.
OTHER BUSINESS
Central knows of no other matters to be brought before the Central
Special Meeting other than those referred to herein but if any other business
should properly come before the Central Special Meeting, the persons named in
the proxy, or authorized substitutes, intend to vote in accordance with their
best judgment.
62
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
between
BANKUNITED FINANCIAL CORPORATION
AND
CENTRAL BANK
December 30, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I................................................................1
CERTAIN DEFINITIONS......................................................1
1.01 Certain Definitions.............................................1
ARTICLE II...............................................................5
THE MERGER AND RELATED TRANSACTIONS......................................5
2.01 Merger..........................................................5
2.02 Time and Place of Closing.......................................6
2.03 Effective Time..................................................6
2.04 Further Actions.................................................6
ARTICLE III..............................................................7
MANNER OF CONVERTING SHARES..............................................7
3.01 Conversion......................................................7
ARTICLE IV...............................................................8
EXCHANGE OF SHARES.......................................................8
4.01 Exchange Procedures.............................................8
4.02 Voting and Dividends............................................9
ARTICLE V................................................................9
REPRESENTATIONS AND WARRANTIES OF CENTRAL ...............................9
5.01 Organization, Standing, and Authority...........................9
5.02 Central Capital Stock..........................................10
5.03 Subsidiaries...................................................10
5.04 Authorization of Merger and Related Transactions...............11
5.05 Central Financial Statements...................................11
5.06 Absence of Undisclosed Liabilities.............................12
5.07 Commitments....................................................12
5.08 Tax Matters....................................................12
5.09 Allowance for Loan Losses......................................13
5.10 Other Tax and Regulatory Matters...............................13
5.11 Properties.....................................................13
5.12 Compliance with Laws...........................................14
5.13 Employee Benefit Plans.........................................14
5.14 Commitments and Contracts......................................16
5.15 Material Contract Defaults.....................................16
5.16 Legal Proceedings..............................................17
5.17 Absence of Certain Changes or Events...........................17
5.18 Reports........................................................17
5.19 Statements True and Correct....................................17
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Page
5.20 Insurance......................................................18
5.21 Labor..........................................................18
5.22 Material Interests of Certain Persons..........................18
5.23 Registration Obligations.......................................18
5.24 Brokers and Finders............................................18
5.25 Takeover Laws..................................................19
5.26 Environmental Matters..........................................19
5.27 Support of Stockholders........................................19
ARTICLE VI..............................................................19
REPRESENTATIONS AND WARRANTIES OF BANKUNITED............................19
6.01 Organization...................................................19
6.02 BankUnited Capital Stock.......................................20
6.03 Subsidiaries...................................................20
6.04 Authorization of Merger and Related Transactions...............20
6.05 Financial Statements...........................................21
6.06 Securities Reporting Documents.................................21
6.07 Absence of Undisclosed Liabilities.............................22
6.08 Absence of Certain Changes or Events...........................22
6.09 Compliance with Laws...........................................22
6.10 Allowance for Loan Losses......................................23
6.11 Statements True and Correct....................................23
6.12 Capital Stock..................................................23
6.13 Properties.....................................................23
6.14 Tax and Regulatory Matters.....................................24
6.15 Litigation.....................................................24
6.16 Brokers and Finders............................................24
6.17 Material Contract Defaults.....................................24
6.18 Insurance......................................................24
ARTICLE VII.............................................................25
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME.......................25
7.01 Conduct of Business Prior to the Effective Time................25
7.02 Forbearances of Central........................................25
ARTICLE VIII............................................................27
ADDITIONAL AGREEMENTS...................................................27
8.01 Access and Information.........................................27
8.02 Registration Statement; Regulatory Matters.....................28
8.03 Stockholders' Approval.........................................28
8.04 Press Releases.................................................29
8.05 Notice of Defaults.............................................29
8.06 Miscellaneous Agreements and Consents; Affiliates Agreements...29
ii
<PAGE>
Page
8.07 Indemnification of Central ....................................29
8.08 Certain Change of Control Matters..............................30
8.09 Stock Exchange Listing.........................................30
8.10 Employee Benefits..............................................30
8.11 Certain Actions................................................31
8.12 Acquisition Proposals..........................................31
8.13 Termination Fee................................................31
ARTICLE IX..............................................................32
CONDITIONS..............................................................32
9.01 Conditions to Each Party's Obligation to Effect the Merger.....32
9.02 Conditions to Obligations of Central to Effect the Merger......33
9.03 Conditions to Obligations of BankUnited to Effect the Merger...34
ARTICLE X...............................................................35
TERMINATION.............................................................35
10.01 Termination...........................................35
10.02 Intentionally Deleted.................................36
10.03 Effect of Termination.................................36
10.04 Survival of Representations, Warranties and Covenants
Following the Effective Time........................36
ARTICLE XI..............................................................36
GENERAL PROVISIONS......................................................36
11.01 Expenses..............................................36
11.02 Entire Agreement......................................36
11.03 Amendments............................................37
11.04 Waivers...............................................37
11.05 No Assignment.........................................37
11.06 Notices...............................................37
11.07 Specific Performance..................................38
11.08 Governing Law.........................................38
11.09 Counterparts..........................................38
11.10 Captions..............................................38
11.11 Severability..........................................38
LIST OF EXHIBITS
Exhibit A Board of Directors of Surviving Corporation
Exhibit B Offices of Surviving Corporation
Exhibit C Voting Agreement Pursuant to Section 5.27
Exhibit D Rule 145 Affiliate Agreement Pursuant to Section 8.06
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
December ______, 1997, between BANKUNITED FINANCIAL CORPORATION ("BankUnited"),
a Florida corporation and CENTRAL BANK, a Florida chartered commercial bank
("Central").
WITNESSETH:
WHEREAS, pursuant to the terms and subject to the conditions of this
Agreement, BankUnited will acquire Central through the merger of Central with
and into BankUnited's wholly owned subsidiary, BankUnited, FSB or by such other
means as provided for herein (the "Merger"); and
WHEREAS, the respective Boards of Directors of BankUnited and Central
have resolved that the transactions described herein are in the best interests
of the parties and their respective stockholders and have approved the
transactions described herein, and
WHEREAS, BankUnited and Central desire to provide for certain
undertakings, conditions, representations, warranties and covenants in
connection with the transactions contemplated by this Agreement; and
WHEREAS, BankUnited has conducted a due diligence investigation of
Central based, in part, on the Central Disclosure Schedule;
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties and agreements contained herein, the parties hereto
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth below. Capitalized terms not otherwise
defined herein shall have the meanings ascribed in this Article I.
(a) "Acquisition Event" shall have the meaning set forth in
Section 8.13.
(b) "Acquisition Proposal" shall have the meaning set forth in
Section 8.12.
(c) "Acquisition Transaction" shall have the meaning set forth
in Section 8.12.
(d) "Affiliate" shall mean, with respect to any Person, any
Person that, directly or indirectly, controls or is controlled by or is
under common control with such Person.
(e) "Agreement" shall have the meaning set forth in the
introduction to this Agreement.
<PAGE>
(f) "Allowance" shall have the meaning set forth in Section
5.09.
(g) "Approvals" shall mean any and all permits, consents,
authorizations and approvals of any governmental or regulatory
authority or of any other third person necessary to give effect to the
arrangement contemplated by this Agreement or necessary to consummate
the Merger.
(h) "Authorizations" shall have the meaning set forth in
Section 5.01.
(i) "BankUnited Common Stock" shall mean the Series I Class A
Common Stock of BankUnited.
(j) "BankUnited Financial Statements" shall have the meaning
set forth in Section 6.05.
(k) "BankUnited SEC Documents" shall have the meaning set
forth in Section 6.05.
(l) "BankUnited" shall have the meaning set forth in the
introduction to this Agreement.
(m) "Central " shall have the meaning set forth in the
introduction to this Agreement.
(n) "Central Benefit Plans" shall have the meaning set forth
in Section 5.13(a).
(o) "Central Board" shall mean the Board of Directors of
Central.
(p) "Central Common Stock" shall mean the common stock, par
value $.01 per share, of Central.
(q) "Central Disclosure Schedule" shall mean that document
containing the written detailed information prepared by Central and
heretofore delivered by Central to BankUnited which appropriately
cross-references each Section of the Agreement to which that Section of
the Central Disclosure Schedule applies.
(r) "Central ERISA Plan" shall have the meaning set forth in
Section 5.13(a).
(s) "Central Financial Statements" shall have the meaning set
forth in Section 5.05.
(t) "Central's Net Worth" shall mean the net worth of Central
as determined in accordance with GAAP as at the month end prior to the
Effective Time and as adjusted for events occurring between such month
end and the Effective Time which either individually or in the
aggregate have had or immediately will have a Material Adverse Effect
on Central.
(u) "Closing Net Worth" shall mean Central's Net Worth, but
not including (i) filing fees paid to regulatory authorities or to the
SEC in connection with the approvals for the transaction, other cost of
this transaction including, without limitation, legal fees of Central,
employee severance costs, printing costs and finder's fees up to a
maximum pre-tax sum not to exceed $850,000, the estimated amounts of
which are set forth on Central Disclosure Schedule
2
<PAGE>
1.01(u); (ii) depreciation or appreciation of individual investments in
Central's investment portfolio subsequent to the date hereof. .
(v) "Closing" shall have the meaning set forth in Section
2.02.
(w) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder.
(x) "Condition" shall have the meaning set forth in Section
5.01.
(y) "Current Employee" shall have the meaning set forth in
Section 8.10. (z) "Effective Time" shall have the meaning set forth in
Section 2.03.
(aa) "Employee" shall mean any current or former employee,
officer or director, independent contractor or retiree of Central and
any dependent or spouse thereof.
(ab) "Environmental Law" shall have the meaning set forth in
Section 5.26.
(ac) "ERISA" shall have the meaning set forth in Section 5.13.
(ad) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(ae) "Exchange Agent" shall have the meaning set forth in
Section 3.01(c).
(af) "Exchange Ratio" shall have the meaning set forth in
Section 3.01(a).
(ag) "Expenses" shall have the meaning set forth in Section
8.13.
(ah) "FDIA" shall mean the Federal Deposit Insurance Act.
(ai) "FDIC" shall mean the Federal Deposit Insurance
Corporation.
(aj) "FMV" shall mean the average closing price for BankUnited
Common Stock on the NASDAQ System computed for the 20-day trading
period ending three business days prior to Closing.
(ak) "GAAP" shall mean generally accepted accounting
principles in the United States.
(al) "Hired Employees" shall have the meaning set forth in
Section 8.10.
(am) "HOLA" shall mean the Home Owners' Loan Act of 1933, as
amended.
(an) "In the Ordinary Course" shall have the meaning set forth
in Section 7.02(a).
3
<PAGE>
(ao) "Indemnified Party" shall have the meaning set forth in
Section 8.07.
(ap) "Liens" shall have the meaning set forth in Section 5.03.
(aq) "Material Adverse Effect" shall mean any event,
occurrence or circumstance which (a) has or is reasonably likely to
have a material adverse effect on the financial condition, results of
operations, business or prospects of Central, taken as a whole, or
BankUnited and its Subsidiaries, taken as a whole, as applicable, or
(b) would materially impair such party's ability to perform its
obligations under this Agreement or the consummation of any of the
transactions contemplated hereby, provided, that Material Adverse
Effect shall not be deemed to include any effect resulting from (i)
changes in banking and similar laws of general applicability or
interpretations thereof by courts or governmental authorities, (ii)
changes in GAAP or regulatory accounting principles or requirements; or
(iii) fees and expenses of counsel, accountants, and advisors, and
costs related to this Agreement.
(ar) "Merger" shall have the meaning set forth in the recitals
to this Agreement.
(as) "NASD" shall mean the National Association of Securities
Dealers, Inc.
(at) "NASDAQ" shall mean the NASDAQ Stock Market, Inc.
(au) "OTS" shall mean the Office of Thrift Supervision.
(av) "Person" or "person" shall mean any individual,
corporation, association, partnership, group (as defined in Section
13(d)(3) of the Exchange Act), joint venture, trust or unincorporated
organization, or a government or any agency or political subdivision
thereof.
(aw) "Proxy Statement" shall have the meaning set forth in
Section 5.19.
(ax) "Registration Statement" shall have the meaning set forth
in Section 5.19.
(ay) "Regulatory Agreement" shall have the meaning set forth
in Section 5.12(b).
(az) "Regulatory Authorities" shall have the meaning set forth
in Section 5.12(b).
(ba) "Reports" shall have the meaning set forth in Section
5.18.
(bb) "SEC" shall mean the Securities and Exchange Commission.
(bc) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(bd) "Securities Laws" shall have the meaning set forth in
Section 5.04(c).
4
<PAGE>
(be) "Securities Reporting Documents" shall have the meaning
set forth in Section 6.06.
(bf) "Stockholders' Meeting" shall have the meaning set forth
in Section 5.19.
(bh) "Subsidiary" shall mean, in the case of either BankUnited
or Central, any corporation, association or other entity in which it
owns or controls, directly or indirectly, 25% or more of the
outstanding voting securities or 25% or more of the total equity
interest; provided, however, that the term shall not include any such
entity in which such voting securities or equity interest is owned or
controlled in a fiduciary capacity, without sole voting power, or was
acquired in securing or collecting a debt previously contracted in good
faith.
(bg) "Surviving Corporation" shall have the meaning set forth
in Section 2.01(a).
(bh) "Tax Return" shall mean any report, return, information
return or other information required to be supplied to a taxing
authority in connection with Taxes, including, without limitation, any
return of an affiliated or combined or unitary group that includes
Central or its Subsidiaries.
(bi) "Tax" or "Taxes" shall mean all federal, state, local and
foreign taxes, charges, fees, levies, imposts, duties or other
assessments, including, without limitation, income, gross receipts,
excise, employment, sales, use, transfer, license, payroll, franchise,
severance, stamp, occupation, windfall profits, environmental, federal
highway use, commercial rent, customs duties, capital stock, paid up
capital, profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax or governmental fee of any kind whatsoever,
imposed or required to be withheld by the United States or any state,
local, foreign government or subdivision or agency thereof, including,
without limitation, any interest, penalties or additions thereto.
(bj) "Termination Fee" shall have the meaning set forth in
Section 8.13.
(bk) "Voting Power" shall mean the right to vote generally in
the election of Directors of Central through the beneficial ownership
of Central Common Stock.
ARTICLE II
THE MERGER AND RELATED TRANSACTIONS
2.01 MERGER.
(a) Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 2.03 of this Agreement),
Central shall be merged with and into BankUnited's wholly owned
subsidiary, BankUnited, FSB, in accordance with the provisions of
applicable law
5
<PAGE>
and with the effect provided therein. The separate corporate existence
of Central shall thereupon cease, and BankUnited, FSB shall be the
surviving corporation in the Merger (the "Surviving Corporation").
(b) As of the Effective Time, the articles of incorporation
and the bylaws of BankUnited, FSB shall be the articles of
incorporation and the bylaws of the Surviving Corporation.
(c) The directors and officers of BankUnited, FSB immediately
prior to the Effective Time shall be the directors and officers of the
Surviving Corporation, in each case, until their respective successors
are duly elected and qualified.
(d) All assets of Central as they exist at the Effective Time
shall pass to and vest in the Surviving Corporation without any
conveyance or other transfer. The Surviving Corporation shall be
responsible and liable for all of the liabilities of every kind and
description of Central as of the Effective Time.
(e) The name of the Surviving Corporation shall be BankUnited,
FSB. The location of the home office of the Surviving Corporation shall
be 255 Alhambra Circle, Coral Gables, Florida 33134. The locations of
offices of the Surviving Corporation are set forth in Exhibit B hereto.
(f) Upon the consummation of the Merger, the savings account
holders of Central Bank shall be issued savings accounts of the
Surviving Corporation containing substantially the same terms and
conditions as those issued by Central Bank.
2.02 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") will take place at the offices of Stuzin and
Camner, P. A. in Miami, Florida at 10:00 A.M. on the date that the Effective
Time occurs, or at such other time, and at such other place, as may be mutually
agreed upon by BankUnited and Central.
2.03 EFFECTIVE TIME. The effective time of the consummation of the
Merger (the "Effective Time") shall occur on or promptly after the first
business day following the last to occur of (i) the date that is 30 days after
the date of the last order of the appropriate regulatory authorities approving
the Merger, (ii) the effective date of the last order, approval, or exemption of
any other federal or state regulatory agency approving or exempting the Merger,
if such action is required, (iii) the expiration of all required waiting periods
after the filing of all notices to all federal or state regulatory agencies
required for consummation of the Merger, and (iv) the date on which the
stockholders of Central approve this Agreement, in each case as contemplated
hereby. The Effective Time may occur at such other date and time as the parties
hereto shall agree to in writing.
2.04 FURTHER ACTIONS. To facilitate the Merger , each of the parties
will execute such additional agreements and documents and take such other
actions as BankUnited reasonably determines to be necessary or appropriate to
effect the intent of this Agreement, provided such action does not impose any
additional liabilities on Central or diminish Central's benefits under this
Agreement.
6
<PAGE>
ARTICLE III
MANNER OF CONVERTING SHARES
3.01 CONVERSION.
(a) Subject to the provisions of this Article III and of
Article I, at the Effective Time, by virtue of the Merger and without
any action on the part of the holders thereof, the shares of the
constituent corporations shall be converted as follows:
(i) Each share of capital stock of BankUnited, FSB
issued and outstanding immediately prior to the Effective Time
shall remain outstanding as one share of capital stock of the
Surviving Corporation;
(ii) Subject to adjustment as described in subsection
(b) hereof, each share of Central Common Stock issued and
outstanding immediately prior to the Effective Time shall be
converted into and become the right to receive 3.37 shares of
BankUnited Common Stock, provided, however, that
(1) if the fair market value ("FMV") of BankUnited
Common Stock is more than $14.30 per share, the Exchange Ratio
shall be computed as follows:
3.37 X (14.30 + ((FMV - 14.30) X .5))
-------------------------------------
FMV
(2) or if the FMV of BankUnited Common Stock is less
than $11.70 per share, the Exchange Ratio shall be computed as
follows:
3.37 X 11.70
------------
FMV
(3) or if the FMV of BankUnited Common Stock is less
than $9.50 per share the Exchange Ratio will be 4.15;
provided, however, that if the FMV is less than $9.50 per
share then this Agreement may be terminated in accordance with
Section 10.01(a).
FMV shall be determined by using the average closing price for
BankUnited Common Stock on the NASDAQ System computed for the 20-day trading
period ending three business days prior to the Effective Time.
(b) Notwithstanding any other provision of this Agreement,
each holder of shares of Central capital stock exchanged pursuant to
the Merger, who would otherwise have been entitled to receive a
fraction of a share of BankUnited Common Stock (after taking into
account all certificates delivered by such holder) shall receive, in
lieu thereof, cash (without interest) in an amount equal to such
fractional part of a share of BankUnited Common Stock multiplied by
FMV. No such holder will be entitled to dividends, voting rights or any
other rights as a stockholder in respect of any fractional share.
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(c) At the Effective Time, the stock transfer books of Central
shall be closed as to holders of Central capital stock immediately
prior to the Effective Time and no transfer of Central capital stock by
any such holder shall thereafter be made or recognized. If, after the
Effective Time, certificates are properly presented in accordance with
Article IV of this Agreement to the exchange agent, American Stock
Transfer and Trust Company (the "Exchange Agent"), such certificates
shall be canceled and exchanged for certificates representing the
appropriate number of shares of BankUnited Common Stock and a check
representing the amount of cash in lieu of fractional shares, if any,
into which the Central capital stock represented thereby was converted
in the Merger. Any other provision of this Agreement notwithstanding,
neither BankUnited nor the Exchange Agent shall be liable to a holder
of Central capital stock for any amount paid or property delivered in
good faith to a public official pursuant to any applicable abandoned
property, escheat, or similar law. In the event any certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such certificate to be lost, stolen or
destroyed and, if required by the Exchange Agent, the posting by such
person of a bond in such amount as the Exchange Agent may reasonably
direct as indemnity against any claim that may be made against it with
respect to such certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed certificate the BankUnited Common
Stock deliverable in respect thereof pursuant to this Agreement.
ARTICLE IV
EXCHANGE OF SHARES
4.01 EXCHANGE PROCEDURES. Promptly after the Effective Time (but in no
event more than three business days following the Effective Time), BankUnited
and Central shall cause the Exchange Agent to mail appropriate transmittal
materials (which shall specify that delivery shall be effected, and risk of loss
and title to the certificates theretofore representing shares of Central capital
stock shall pass, only upon proper delivery of such certificates to the Exchange
Agent) to the former stockholders of Central . After the Effective Time, each
holder of shares of Central capital stock issued and outstanding at the
Effective Time (other than shares to be canceled pursuant to Section 3.01(b))
shall surrender the certificate or certificates theretofore representing such
shares, together with such transmittal materials properly executed, to the
Exchange Agent and promptly upon surrender (but in no event more than three
business days following receipt by the Exchange Agent) shall receive in exchange
therefor the consideration provided in Section 3.01 of this Agreement. The
certificate or certificates for Central capital stock so surrendered shall be
duly endorsed as the Exchange Agent may require. To the extent provided by
Section 3.01 (c), each holder of shares of Central capital stock issued and
outstanding at the Effective Time also shall receive, upon surrender of the
certificate or certificates representing such shares, cash in lieu of any
fractional shares of BankUnited Common Stock to which such holder would
otherwise be entitled. BankUnited shall not be obligated to deliver the
consideration to which any former holder of Central capital stock is entitled as
a result of the Merger until such holder surrenders his certificate or
certificates representing shares of Central capital stock for exchange as
provided in this Article IV or, in the case of a certificate which has been
lost, stolen or destroyed, the Exchange Agent receives an appropriate affidavit
and/or bond as provided in Section 3.01(c). In addition, certificates
surrendered for exchange by any person constituting an "affiliate" of Central
for purposes of Rule 145(c) under the Securities Act shall not be exchanged for
certificates representing whole shares of BankUnited
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Common Stock until BankUnited has received a written agreement from such person
as provided in Section 8.06. Certificates representing BankUnited Common Stock
issued in the Merger to any person constituting an "affiliate" of Central for
purposes of Rule 145(c) under the Securities Act shall bear the following
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, APPLIES. NO TRANSFER OF SUCH
SHARES SHALL BE VALID OR EFFECTIVE UNTIL THE CONDITIONS OF SUCH
RULE HAVE BEEN FULFILLED."
If any certificate for shares of BankUnited Common Stock, or any check
representing cash, is to be issued in a name other than that in which a
certificate surrendered for exchange is issued, the certificate so surrendered
shall be properly endorsed and otherwise in proper form for transfer and the
person requesting such exchange shall affix any requisite stock transfer tax
stamps to the certificate surrendered or provide funds for their purchase or
establish to the satisfaction of the Exchange Agent that such taxes are not
payable.
4.02 VOTING AND DIVIDENDS. Former stockholders of record of Central
shall be entitled to vote after the Effective Time at any meeting of BankUnited
stockholders the number of whole shares of BankUnited Common Stock into which
their respective shares of Central capital stock are converted, regardless of
whether such holders have exchanged their certificates representing Central
capital stock for certificates representing BankUnited Common Stock in
accordance with the provisions of this Agreement. Until surrendered for exchange
in accordance with the provisions of Section 4.01, each certificate theretofore
representing shares of Central capital stock shall from and after the Effective
Time represent for all purposes only the right to receive shares of BankUnited
Common Stock and cash, as set forth in this Agreement. No dividend or other
distribution payable to the holders of record of BankUnited Common Stock, at or
as of any time after the Effective Time, shall be paid to the holder of any
certificate representing shares of Central capital stock issued and outstanding
at the Effective Time until such holder physically surrenders such certificate
for exchange as provided in Section 4.01, promptly after which time all such
dividends or distributions shall be paid (without interest).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CENTRAL
Central represents and warrants to BankUnited, subject to such
exceptions and limitations as are set forth below or in the Central Disclosure
Schedule, as follows:
5.01 ORGANIZATION, STANDING, AND AUTHORITY. Central is a corporation
duly organized validly existing and in good standing under the laws of the State
of Florida. Central is duly qualified to do business and in good standing in all
jurisdictions (whether federal, state, local or foreign) where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified and in which the failure to be duly qualified would have a material
adverse effect on the financial condition, results of operations or business
(the "Condition") of Central and its Subsidiaries on a consolidated basis or on
the ability of Central to consummate the transactions contemplated hereby.
Central has all
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requisite corporate power and authority to carry on its business as now
conducted and to own, lease and operate its assets, properties and business,
except where the failure to have such power and authority would not have a
Material Adverse Effect, and to execute and deliver this Agreement and perform
the terms of this Agreement. Central has in effect all federal, state, local and
foreign governmental, regulatory and other authorizations, permits and licenses
(collectively, "Authorizations") necessary for it to own or lease its properties
and assets and to carry on its business as now conducted, the absence of which,
either individually or in the aggregate, would have a Material Adverse Effect.
5.02 CENTRAL CAPITAL STOCK.
(a) The authorized capital stock of Central consists of
900,000 shares of Common Stock. At September 30, 1997, there were
outstanding 450,000 shares of Central Common Stock. All of the issued
and outstanding shares of Central capital stock are duly and validly
issued and outstanding and are fully paid and nonassessable. None of
the outstanding shares of the Central capital stock has been issued in
violation of any preemptive rights or any provision of Central's
Articles of Incorporation. As of September 30, 1997 no other shares of
capital stock had been reserved for issuance for any purpose.
(b) Except as set forth in Section 5.02 of the Central
Disclosure Schedule, there are no shares of capital stock, or other
equity securities of Central outstanding and no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible
into or exchangeable for, shares of the capital stock of Central or
contracts, commitments, understandings or arrangements by which Central
is or may be bound to issue any equity security of Central including
any additional shares of its capital stock or options, warrants or
rights to purchase or acquire any additional shares of its capital
stock. There are no contracts, commitments, understandings or
arrangements by which Central or any of its Subsidiaries is or may be
bound to transfer any shares of the capital stock of any Subsidiary of
Central, except for a transfer to Central or any of its wholly owned
Subsidiaries and except as set forth in Section 5.02 of the Central
Disclosure Schedule, and there are no agreements, understandings or
commitments relating to the right of Central to vote or to dispose of
such shares, other than such as are held in a fiduciary capacity.
(c) Except as set forth in Section 5.02 of the Central
Disclosure Schedule, there are no securities required to be issued by
Central under any Central Stock Plan, dividend reinvestment plan or
similar plan.
5.03 SUBSIDIARIES. Section 5.03 of the Central Disclosure Schedule
contains a complete list of Central's Subsidiaries. All of the issued and
outstanding shares of each Subsidiary are owned by Central and no equity
securities are or may become required to be issued by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of any Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Subsidiary is bound to issue
additional shares of its capital stock or options, warrants or rights to
purchase or acquire any additional shares of its capital stock. All of the
shares of capital stock of each Subsidiary are fully paid and nonassessable and
are owned free and clear of any claim, lien, pledge or encumbrance of whatsoever
kind ("Liens"). Each Subsidiary (i) is duly organized, validly existing, and in
good standing under the
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laws of the jurisdiction in which it is incorporated or organized, (ii) is duly
qualified to do business and in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and in which the
failure to be so qualified would have a Material Adverse Effect, (iii) has all
requisite corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted and (iv) has in effect all
Authorizations necessary for it to own or lease its properties and assets and to
carry on its business as now conducted, the absence of which Authorizations,
individually or in the aggregate, would have a Material Adverse Effect.
5.04 AUTHORIZATION OF MERGER AND RELATED TRANSACTIONS.
(a) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action in respect thereof
on the part of Central, including approval of the Merger by its Board
of Directors, subject to the approval of the stockholders of Central
with respect to the Merger to the extent required by applicable law.
This Agreement, subject to any requisite regulatory and stockholder
approval hereof with respect to the Merger, represents a valid and
legally binding obligation of Central, enforceable against Central in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, and similar laws of
general applicability affecting creditors rights generally and by
general principles of equity (whether applied in a proceeding at law or
in equity).
(b) Except as set forth in Section 5.04 of the Central
Disclosure Schedule, neither the execution and delivery of this
Agreement by Central, nor the consummation by Central of the
transactions contemplated hereby nor compliance by Central with any of
the provisions hereof will (i) conflict with or result in a breach of
any provision of Central's Articles of Incorporation or bylaws or (ii)
constitute or result in a breach of any term, condition or provision
of, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give rise to any right
of termination, cancellation or acceleration with respect to, or result
in the creation of any Lien upon, any property or assets of any of
Central or its Subsidiaries pursuant to any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or obligation
to which any of them is a party or by which any of them or any of their
properties or assets may be subject and that would individually or in
the aggregate have a Material Adverse Effect, or (iii) subject to
receipt of the requisite approvals referred to in Section 9.01 of this
Agreement, violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Central or its Subsidiaries or any of their
properties or assets.
(c) Other than (i) in connection with complying with the
provisions of applicable state corporate and securities laws, the
Securities Act, the Exchange Act, and the rules and regulations of the
SEC or the OTS promulgated thereunder (the "Securities Laws"), and (ii)
consents, authorizations, approvals or exemptions required from the
OTS, no notice to, filing with, authorization of, exemption by, or
consent or approval of any public body or authority is necessary for
the consummation by Central of the Merger and the other transactions
contemplated in this Agreement.
5.05 CENTRAL FINANCIAL STATEMENTS. Central (i) has delivered to
BankUnited copies of the audited consolidated statements of financial condition
of Central and its Subsidiaries as of December
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31, 1996 and 1995, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the two years in the period
ended December 31, 1996, (ii) copies of the unaudited consolidated statement of
financial condition and operations as of November 30, 1997; (iii) until the
Closing will deliver to BankUnited promptly upon the filing thereof with any
applicable regulatory authorities copies of the consolidated statements of
financial condition and related consolidated statements of operations,
stockholders' equity and cash flows included in any filing with any applicable
regulatory authorities, and (iv) until the Closing will deliver to BankUnited
within 20 days of the end of each month copies of monthly consolidated
statements of financial condition and related consolidated statements of
operations (collectively, the "Central Financial Statements"). The Central
Financial Statements (as of the dates thereof and for the periods covered
thereby) (A) are or will be in accordance with the books and records of Central
and its Subsidiaries, which are or will be complete and accurate in all material
respects and which have been or will have been maintained in accordance with
good business practices, and (B) present or will present fairly the consolidated
financial position and the consolidated results of operations, changes in
stockholders' equity and cash flows of Central and its Subsidiaries as of the
dates and for the periods indicated, in accordance with GAAP consistently
applied except as disclosed, subject in the case of interim financial statements
to normal recurring year-end adjustments and except for the absence of certain
footnote information in the unaudited statements. Central has delivered to
BankUnited (i) copies of all management letters prepared by Deloitte & Touche
LLP (and any predecessor thereto) delivered to Central since January 1, 1994 and
(ii) copies of audited balance sheets and related statements of income, changes
in stockholders' equity and cash flows for any Subsidiary of Central since
January 1, 1992 for which a separate audit has been performed.
5.06 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the
Central Disclosure Schedule, neither Central nor any of its Subsidiaries has any
obligations or liabilities (contingent or otherwise) in the aggregate amount of
$75,000 or more, except obligations and liabilities (i) which are fully accrued
or reserved against in the consolidated balance sheet of Central and its
Subsidiaries as of December 31, 1996 included in the Central Financial
Statements or reflected in the notes thereto, or (ii) which were incurred after
December 31, 1996 in the ordinary course of business consistent with past
practice. Except as set forth in Section 5.06 of the Central Disclosure
Schedule, since December 31, 1996 neither Central nor any of its Subsidiaries
has incurred or paid any obligation or liability which would have a Material
Adverse Effect.
5.07 COMMITMENTS. Except as set forth in the Central Disclosure
Schedule, neither Central nor any of its Subsidiaries has any liability or
commitment to loan, fund or advance any money in an amount in excess of $250,000
in any single transaction with one of its customers or in aggregate transactions
in excess of $500,000 with one of its customers.
5.08 TAX MATTERS. Except as set forth in Section 5.08 of the Central
Disclosure Schedule:
(a) All Tax Returns required to be filed by or on behalf of
Central or any of its Subsidiaries have been timely filed, or requests
for extensions have been timely filed, granted and have not expired,
for periods ending on or before December 31, 1996, and all such returns
filed are complete and accurate in all material respects and all taxes
due have been timely paid.
(b) There are no audits, examinations, deficiencies or refund
litigation or matters in controversy with respect to any Taxes that
might reasonably be expected individually or in the aggregate to result
in a determination the effect of which would have a Material Adverse
Effect.
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All Taxes due with respect to completed and settled examinations or
concluded litigation have been paid or adequately reserved for.
(c) Central has not executed an extension or waiver of any
statute of limitations on the assessment or collection of any Tax due
that is currently in effect.
(d) In the Judgement of Central Management, adequate provision
for any Taxes due or to become due for Central and any of its
Subsidiaries for any period or periods through and including November
30, 1997, has been made and is reflected on the November 30, 1997
financial statements included in the Central Financial Statements. In
the Judgement of Central Management Estimated Tax payments have been
paid as required by statute or regulation and in amounts determined in
good faith based upon current estimates of any tax bill. Deferred Taxes
of Central and its Subsidiaries have been provided for in the Central
Financial Statements in accordance with GAAP, applied on a consistent
basis.
(e) Central and its Subsidiaries have collected and withheld
all Taxes which they have been required to collect or withhold and have
timely submitted all such collected and withheld amounts to the
appropriate authorities. Central and its Subsidiaries are in compliance
with the back-up withholding and information reporting requirements
under (1) the Code, and (2) any state, local or foreign laws, and the
rules and regulations, thereunder.
(f) Neither Central nor any of its Subsidiaries has made any
payments, is obligated to make any payments, or is a party to any
contract, agreement or other arrangement that could obligate it to make
any payments that would not be deductible under Section 28OG of the
Code.
5.09 ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses (the
"Allowance") shown on the consolidated statement of condition of Central and its
Subsidiaries as of December 31, 1996 included in the Central Financial
Statements and the Allowance shown on the consolidated statement of condition of
Central and its Subsidiaries, as of November 30, 1997 and the dates subsequent
to the execution of this Agreement included in the Central Financial Statements
are sufficient in accordance with GAAP. Management is unaware of any specific
changes in the financial condition of operations of any borrower, or group of
borrowers, related by ownership or collateral, which, in the aggregate, could
result in a Material Adverse Affect.
5.10 OTHER TAX AND REGULATORY MATTERS. To the best knowledge of
Central's management, neither Central nor any of its Subsidiaries has taken or
agreed to take any action or has any knowledge of any fact or circumstance that
would (i) prevent the transactions contemplated hereby, including the Merger,
from qualifying as a reorganization within the meaning of Section 368 of the
Code, or (ii) materially impede or delay receipt of any approval referred to in
Section 9.01(e).
5.11 PROPERTIES. Except as disclosed in any Reporting Document filed
since December 31, 1996 and prior to the date hereof and except for Liens
arising, in the ordinary course of business after the date hereof, Central and
its Subsidiaries have good and marketable title, free and clear of all Liens
that are material to the Condition of Central and its Subsidiaries on a
consolidated basis, to all their material properties and assets whether tangible
or intangible, real, personal or mixed, reflected in the Central Financial
Statements as being owned by Central and its Subsidiaries as of the date hereof.
All buildings, and all fixtures, equipment and other property and assets which
are material to its business
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on a consolidated basis, held under leases or subleases by any of Central or its
Subsidiaries are held under valid instruments enforceable in accordance with
their respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
affecting creditors rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity). Substantially all of
Central's and Central's Subsidiaries' equipment in regular use has been
adequately maintained and is in good serviceable condition, reasonable wear and
tear excepted.
5.12 COMPLIANCE WITH LAWS.
(a) To the best knowledge of Central's management, except as
set forth in Section 5.12(a) of the Central Disclosure Schedule, each
of Central and its Subsidiaries is in compliance with all laws, rules,
regulations, policies, guidelines, reporting and licensing requirements
and orders applicable to its business or to its employees conducting
its business, and with its internal policies and procedures except for
failures to comply which will in the aggregate not result in a Material
Adverse Effect.
(b) Except as set forth in Section 5.12(b) of the Central
Disclosure Schedule, neither Central nor any of its Subsidiaries has
received since January 1, 1995, any notification or communication from
any agency or department of any federal, state or local government,
including, the Florida Department of Banking, the FDIC, and the staffs
thereof (collectively, the "Regulatory Authorities") (i) asserting that
any of Central or its Subsidiaries is not in substantial compliance
with any of the statutes, regulations, or ordinances which such agency,
department or Regulatory Authority enforces, or the internal policies
and procedures of such company, (ii) threatening to revoke any license,
franchise, permit or governmental authorization which is material to
the Condition of Central and its Subsidiaries on a consolidated basis,
(iii) requiring or threatening to require Central or any of its
Subsidiaries, or indicating that Central or any of its Subsidiaries may
be required, to enter into a cease and desist order, agreement or
memorandum of understanding or any other agreement restricting or
limiting or purporting to restrict or limit in any manner the
operations of Central or any of its Subsidiaries, including, without
limitation, any restriction on the payment of dividends, or (iv)
directing, restricting or limiting, or purporting to direct, restrict
or limit in any manner the operations of Central or any of its
Subsidiaries, including, without limitation, any restriction on the
payment of dividends (any such notice, communication, memorandum,
agreement or order described in this sentence herein referred to as a
"Regulatory Agreement").
(c) Neither Central nor any of its Subsidiaries has consented
to or entered into any Regulatory Agreement which remains in effect as
of the date of this Agreement.
(d) Neither Central nor any of its Subsidiaries is required by
Section 32 of FDIA to give prior notice to a federal banking agency of
the proposed addition of an individual to its board of directors or the
employment of an individual as a senior executive officer.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Central has delivered to BankUnited prior to the execution
of this Agreement true and complete copies, a list of which has been
provided as Central Disclosure Schedule
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5.13(a) (or, in the case of bonus or other incentive plans, summaries
thereof and financial data with respect thereto) of all material
pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, sick pay,
bonus or other material incentive plans, all other material employee
programs, arrangements or agreements, whether arrived at through
collective bargaining or otherwise, all material medical, vision,
dental or other health plans, all life insurance plans and all other
material employee benefit plans or fringe benefit plans, including,
without limitation, all "employee benefit plans" as that term is
defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), currently adopted by, maintained by,
sponsored in whole or in part by, or contributed to by Central or any
of its Subsidiaries or any affiliate thereof for the benefit of any
Employee or under which any Employee is eligible to participate and
under which Central or any of its Subsidiaries could have any liability
contingent or otherwise (collectively, the "Central Benefit Plans").
Any of the Central Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to
herein as a "Central ERISA Plan." Any of the Central Benefit Plans
pursuant to which Central is or may become obligated to, or obligated
to cause any of its Subsidiaries or any other Person to, issue, deliver
or sell shares of capital stock of Central or any of its Subsidiaries,
or grant, extend or enter into any option, warrant, call, right,
commitment or agreement to issue, deliver or sell shares, or any other
interest in respect of capital stock of Central or any of its
Subsidiaries, is referred to herein as a "Central Stock Plan." No
Central Benefit Plan is or has been a multiemployer plan within the
meaning of Section 3(37) of ERISA. Central has set forth in Section
5.13 of the Central Disclosure Schedule (i) a list of all of the
Central Benefit Plans, (ii) a list of Central Benefit Plans that are
Central ERISA Plans, (iii) a list of Central Benefit Plans that are
Central Stock Plans and (iv) a list of the number of shares covered by,
exercise prices for, and holders of, all stock options granted and
available for grant under the Central Stock Plans.
(b) To the best knowledge of Central's management, all Central
Benefit Plans are in compliance with the applicable terms of ERISA and
the Code and any other applicable laws, rules and regulations the
breach or violation of which could reasonably be expected to result in
a Material Adverse Effect.
(c) All liabilities under any Central Benefit Plan are fully
accrued or reserved against in the Central Financial Statements in
accordance with GAAP. No Central ERISA Plan which is a defined benefit
pension plan has any "unfunded current liability," as that term is
defined in Section 302(d)(8)(A) of ERISA, and the present fair market
value of the assets of any such plan exceeds the plan's "benefit
liabilities," as that term is defined in Section 4001(a)(16) of ERISA,
when determined under actuarial factors that would apply if the plan
terminated in accordance with all applicable legal requirements.
(d) Neither Central nor any of its Subsidiaries has any
obligations for retiree health and life benefits under any Central
Benefit Plan or otherwise, except as set forth in the Central
Disclosure Schedule. There are no restrictions on the rights of Central
or its Subsidiaries to amend or terminate any such Central Benefit Plan
without incurring any material liability thereunder, except for such
restrictions as would not have a Material Adverse Effect.
(e) Except as set forth in the Central Disclosure Schedule,
neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby or
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thereby will (i) result in any payment (including, without limitation,
severance, golden parachute or otherwise) becoming due to any Employees
under any Central Benefit Plan or otherwise, (ii) increase any benefits
otherwise payable under any Central Benefit Plan or (iii) result in any
acceleration of the time of payment or vesting of any such benefits.
5.14 COMMITMENTS AND CONTRACTS. Except as set forth in the Central
Disclosure Schedule, neither Central nor any of its Subsidiaries is a party or
subject to, or has amended or waived any rights under, any of the following
(whether written or oral, express or implied):
(a) any employment contract or understanding (including any
understandings or obligations with respect to severance or termination
pay liabilities or fringe benefits) with any Employees, including in
any such person's capacity as a consultant (other than those which are
terminable at will by Central or such Subsidiary without cost to
Central or any Subsidiary);
(b) any labor contract or agreement with any labor union;
(c) any contract not made in the usual, regular and ordinary
course of business containing non-competition covenants which limit the
ability of Central or any of its Subsidiaries to compete in any line of
business or which involve any restriction of the geographical area in
which Central or its Subsidiaries may carry on its business (other than
as may be required by law or applicable Regulatory Authorities);
(d) any real or personal property lease with annual rental
payments aggregating $5,000 or more;
(e) any employment or other contract requiring the payment of
additional amounts as "change in control" payments as a result of
transactions contemplated by this Agreement;
(f) any agreement with respect to (i) the acquisition of the
assets or stock of another financial institution or (ii) the sale of
one or more bank branches which would require additional payments by
Central after the date of this Agreement;
(g) any outstanding interest rate exchange or other derivative
contract;
(h) any commitment or contract to acquire real property, other
than by lease; or
(i) any other agreement to which Central or any of its
Subsidiaries is a party requiring payment by Central or any of its
Subsidiaries in excess of $10,000 during the remainder of the term of
such agreement, except as set forth in Section 5.14 of the Central
Disclosure Schedule.
5.15 MATERIAL CONTRACT DEFAULTS. Neither Central nor any of its
Subsidiaries is, or has received any notice or has any knowledge that any party
is in default in any respect under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which Central or any
of its Subsidiaries is a party or by which Central or any of its Subsidiaries or
the assets, business or operations thereof may be bound or affected or under
which it or its respective assets, business or operations receives benefits,
except for those defaults which would not have, individually or in the
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aggregate, a Material Adverse Effect and there has not occurred any event that
with the lapse of time or the giving of notice of both would constitute such a
default. No consent of any party to any contract to which Central or any of its
Subsidiaries is a party is required in connection with the consummation of the
transactions contemplated by this Agreement. The provisions of this Section are
not intended to apply to loans.
5.16 LEGAL PROCEEDINGS. Except as set forth in Section 5.16 of the
Central Disclosure Schedule, there are no actions, suits, proceedings or
investigations by Regulatory Authorities or any other Person instituted or
pending or, to the best knowledge of Central 's management, threatened against
Central or any of its Subsidiaries, or against any property, asset, interest or
right of any of them, that might reasonably be expected to result in a judgment
in excess of $10,000 or that might reasonably be expected to threaten or impede
the consummation of the transactions contemplated by this Agreement. Neither
Central nor any of its Subsidiaries is a party to any agreement or instrument or
is subject to any charter or other corporate restriction or any judgment, order,
writ, injunction, decree, rule, regulation, code or ordinance that, individually
or in the aggregate, might reasonably be expected to have a Material Adverse
Effect or might reasonably be expected to threaten or impede the consummation of
the transactions contemplated by this Agreement.
5.17 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996,
except as set forth in Section 5.17 of the Central Disclosure Schedule, neither
Central nor any of its Subsidiaries has (A) incurred or paid any liability or
obligation (contingent or otherwise) which individually or in the aggregate has
had or is reasonably likely to have a Material Adverse Effect, (B) suffered any
change in its Condition which individually or in the aggregate is reasonably
likely to have a Material Adverse Effect, (C) failed to operate its business
consistent in all material respects with past practice, or (D) changed any
accounting practices, except as mandated by the Financial Accounting Standards
Board.
5.18 REPORTS. Since January 1, 1993, Central and each of its
Subsidiaries have filed on a timely basis all reports and statements, together
with all amendments required to be made with respect thereto (collectively
"Reports"), that they were required to file with (i) the Florida Department of
Banking, (ii) the FDIC, and (iii) any other applicable state securities or
banking authorities (except, in the case of state securities authorities,
filings which are not material). No Reports with respect to periods beginning on
or after January 1, 1993, and until the Closing contained or will contain any
information that was false or misleading with respect to any material fact or
omitted or will omit to state any material fact necessary in order to make the
statements therein not misleading and each such Report contained or will contain
all information required to be stated therein.
5.19 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by Central for inclusion in the registration statement on Form
S-4, or other appropriate form, to be filed with the SEC by BankUnited under the
Securities Act in connection with the transactions contemplated by this
Agreement (the "Registration Statement"), or the proxy statement to be used by
Central in connection with obtaining all required approvals of its stockholders
as contemplated by this Agreement (the "Proxy Statement") will, in the case of
the Proxy Statement, when it is first mailed to the stockholders of Central
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which such statements are made, not misleading, or, in the
case of the Registration Statement, when it becomes effective, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading, or in the case
of the Proxy Statement
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or any amendment thereof or supplement thereto, at the time of the meeting of
the stockholders of Central to be held pursuant to Section 8.03 of this
Agreement, including any adjournments thereof (the "Stockholders' Meeting"), be
false or misleading with respect to any material fact or omit to state any
material fact necessary to correct any statement or remedy any omission in any
earlier communication with respect to the solicitation of any proxy for the
Stockholders' Meeting. All documents that Central is responsible for filing with
any Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable law. The information which is set forth in the Central Disclosure
Schedule by Central for the purposes of this Agreement is true and accurate in
all material respects.
5.20 INSURANCE. In the judgment of Central's management, Central and
each of its Subsidiaries are presently insured, and during each of the past five
calendar years has been insured, for reasonable amounts against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. In the judgment of Central's management, the
policies of fire, theft, banker's blanket bond, liability (including directors
and officers liability insurance) and other insurance maintained with respect to
the assets or businesses of Central and its Subsidiaries provide adequate
coverage against all pending or threatened claims, and the fidelity bonds in
effect as to which any of Central or any of its Subsidiaries is a named insured
are sufficient for their purpose, except where the failure to have such coverage
would not have a Material Adverse Effect. Such policies are listed and briefly
described in Section 5.20 of the Central Disclosure Schedule.
5.21 LABOR. No material work stoppage involving Central or its
Subsidiaries is pending or, to the best knowledge of Central 's management,
threatened. Neither Central nor any of its Subsidiaries is involved in, or, to
the best knowledge of Central 's management, threatened with or affected by, any
labor or other employment related dispute, arbitration, lawsuit or
administrative proceeding which might reasonably be expected to have a Material
Adverse Effect. Employees of Central and its Subsidiaries are not represented by
any labor union, and, to the best knowledge of Central 's management, no labor
union is attempting to organize employees of Central or any of its Subsidiaries.
5.22 MATERIAL INTERESTS OF CERTAIN PERSONS. Except as set forth in the
Central Disclosure Schedule, no executive officer or director of Central, nor
any "associate" (as such term is defined in Rule 14a-1 under the Exchange Act)
of any such executive officer or director, has any material interest in any
material contract or property real or personal, tangible or intangible, used in
or pertaining to the business of Central or any of its Subsidiaries, other than
loans made by Central to any such executive officer, director or associate.
5.23 REGISTRATION OBLIGATIONS. Neither Central nor any of its
Subsidiaries is under any obligation, contingent or otherwise, presently in
effect or which will survive the Merger to register any of its securities under
the Securities Act.
5.24 BROKERS AND FINDERS. Except as set forth in Section 5.24 of the
Central Disclosure Schedule, neither Central nor any of its Subsidiaries nor any
of their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees in connection with this Agreement or the
transactions contemplated hereby.
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5.25 TAKEOVER LAWS. If applicable, Central has taken all steps
necessary to irrevocably exempt the transactions contemplated by this Agreement
from any applicable state or federal takeover law and from any applicable
charter or contractual provision containing change of control or anti-takeover
provisions.
5.26 ENVIRONMENTAL MATTERS. To the best knowledge of Central's
management, without inquiry, except as set forth in Section 5.26 of the Central
Disclosure Schedule, neither Central, any of its Subsidiaries, nor any
properties owned or operated by Central or any of its Subsidiaries or held as
collateral by Central or any of its Subsidiaries has been or is in violation of
or liable under any Environmental Law (as hereinafter defined) and no properties
owned or leased by Central or any of its Subsidiaries or held as collateral by
Central or any of its Subsidiaries, while owned or leased by Central or any of
its Subsidiaries or while held as collateral by Central or any of its
Subsidiaries, have been or are in violation of any Environmental Law, except for
such violations or liabilities that, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect. There are no actions, suits
or proceedings, or demands, claims, notices or investigations (including without
limitation notices, demand letters or requests for information from any
environmental agency) instituted or pending, or to the best knowledge of Central
's management, threatened relating to the liability of any properties owned,
leased or operated by Central or any of its Subsidiaries under any Environmental
Law, except for liabilities or violations that would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any
Regulatory Authority relating to (i) the protection, preservation or restoration
of the environment (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface soil, subsurface soil, plant
and animal life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently listed,
defined, designated or classified as hazardous, toxic radioactive or dangerous,
or otherwise regulated, whether by type or by quantity, including any material
containing any such substance as a component.
5.27 SUPPORT OF STOCKHOLDERS. To induce BankUnited to enter into this
Agreement Central has obtained or will deliver within five (5) business days to
BankUnited letter agreements from all directors who are stockholders, Michael
Weintraub (in his fiduciary capacity) and Philip Frost, M.D. to the effect that
they will vote in favor of the merger at the stockholder meeting and will
otherwise support the merger .
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BANKUNITED
BankUnited represents and warrants to Central as follows:
6.01 ORGANIZATION, STANDING AND AUTHORITY. BankUnited is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. BankUnited is duly qualified to do business and in good
standing in all jurisdictions (whether federal, state, local or foreign) where
its ownership or leasing of property or the conduct of its business requires it
to be so qualified and in which
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the failure to be duly qualified would have a Material Adverse Effect .
BankUnited has all requisite corporate power and authority to carry on its
business as now conducted and to own, lease and operate its assets, properties
and business, and to execute and deliver this Agreement and perform the terms of
this Agreement. BankUnited is duly registered as a savings and loan holding
company under the HOLA. BankUnited has all Authorizations necessary for it to
own or lease its properties and assets and to carry on its business as now
conducted, the absence of which, either individually or in the aggregate, would
have a Material Adverse Effect .
6.02 BANKUNITED CAPITAL STOCK. The authorized capital stock of
BankUnited consists of 33,000,000 shares of BankUnited common stock and
10,000,000 shares of BankUnited Preferred Stock. At September 30, 1997, there
were issued and outstanding 9,532,783 shares of BankUnited common stock and
2,175,296 shares of BankUnited Preferred Stock and no other shares of capital
stock of any class. All of the issued and outstanding shares of BankUnited
common stock and BankUnited Preferred Stock are duly and validly issued and
outstanding and are fully paid and nonassessable.
6.03 SUBSIDIARIES. Section 6.03 of the BankUnited Disclosure Schedule
contains a complete list of BankUnited's Subsidiaries. Except as disclosed in
ss. 6.03 of the BankUnited Disclosure Schedule, all of the issued and
outstanding shares of each Subsidiary are owned by BankUnited and no equity
securities are or may become required to be issued by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of any Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Subsidiary is bound to issue
additional shares of its capital stock or options, warrants or rights to
purchase or acquire any additional shares of its capital stock. All of the
shares of capital stock of each Subsidiary are fully paid and nonassessable and
are owned free and clear of any Liens. Each Subsidiary (i) is duly organized,
validly existing, and in good standing under the laws of the jurisdiction in
which it is incorporated or organized, (ii) is duly qualified to do business and
in good standing in all jurisdictions (whether federal, state, local or foreign)
where its ownership or leasing of property or the conduct of its business
requires it to be so qualified and in which the failure to be so qualified would
have a Material Adverse Effect on BankUnited, (iii) has all requisite corporate
power and authority to own or lease its properties and assets and to carry on
its business as now conducted and (iv) has in effect all Authorizations
necessary for it to own or lease its properties and assets and to carry on its
business as now conducted, the absence of which Authorizations, individually or
in the aggregate, would have a Material Adverse Effect on BankUnited.
6.04 AUTHORIZATION OF MERGER AND RELATED TRANSACTIONS.
(a) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action in respect thereof
on the part of BankUnited, including approval of the Merger by its
Board of Directors. Stockholder approval is not required. This
Agreement, subject to any requisite regulatory approval hereof with
respect to the Merger, represents a valid and legally binding
obligation of BankUnited, enforceable against BankUnited in accordance
with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, and similar laws of
general applicability affecting creditors rights generally and by
general principles of equity (whether applied in a proceeding at law or
in equity).
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(b) Neither the execution and delivery of this Agreement by
BankUnited, nor the consummation by BankUnited of the transactions
contemplated hereby nor compliance by BankUnited with any of the
provisions hereof will (i) conflict with or result in a breach of any
provision of BankUnited's articles of incorporation or bylaws or (ii)
constitute or result in a breach of any term, condition or provision
of, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give rise to any right
of termination, cancellation or acceleration with respect to, or result
in the creation of any Lien upon any property or assets of any of
BankUnited or its Subsidiaries pursuant to any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or obligation
to which any of them is a party or by which any of them or any of their
properties or assets may be subject, and that would, in any such event,
have a Material Adverse Effect on BankUnited or the transactions
contemplated hereby or thereby or (iii) subject to receipt of the
requisite approvals referred to in Section 9.01 of this Agreement,
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to BankUnited or any of its Subsidiaries or any
of their properties or assets.
(c) Other than (i) in connection with complying with the
provisions of applicable state corporate and securities laws, the
Securities Act, the Exchange Act, and the rules and regulations of the
SEC or the OTS promulgated thereunder (the "Securities Laws"), and (ii)
consents, authorizations, approvals or exemptions required from the
OTS, no notice to, filing with, authorization of, exemption by, or
consent or approval of any public body or authority is necessary for
the consummation by Central of the Merger and the other transactions
contemplated in this Agreement.
6.05 FINANCIAL STATEMENTS. BankUnited (i) has delivered, or will
deliver promptly upon filing, to Central copies of the consolidated balance
sheets and the related consolidated statements of income, consolidated
statements of changes in shareholders' equity and consolidated statements of
cash flows (including related notes and schedules) of BankUnited and its
consolidated Subsidiaries as of and for the period ended September 30, 1997, and
for the period ended September 30, 1996 included on an annual report filed or to
be filed on Form 10-K by BankUnited pursuant to the Securities Laws (a
"BankUnited SEC Document"), and (ii) until the Closing will deliver to Central
promptly upon the filing thereof with the SEC copies of the consolidated balance
sheets and related consolidated statements of income, consolidated statements of
changes in shareholders' equity and consolidated statements of cash flows
(including related notes and schedules) included in any BankUnited SEC Documents
filed subsequent to the execution of this Agreement (clauses (i) and (ii)
collectively, the "BankUnited Financial Statements"). The BankUnited Financial
Statements (as of the dates thereof and for the periods covered thereby) (A) are
or will be in accordance with the books and records of BankUnited and its
Consolidated Subsidiaries, which are or will be complete and accurate in all
material respects and which have been or will have been maintained in accordance
with good business practices, and (B) present or will present fairly the
consolidated financial position and the consolidated results of operations,
changes in shareholders' equity and cash flows of BankUnited and its
Subsidiaries as of the dates and for the periods indicated, in accordance with
GAAP, subject in the case of interim financial statements to normal recurring
year-end adjustments and except for the absence of certain footnote information
in the unaudited statements.
6.06 SECURITIES REPORTING DOCUMENTS. Since October 1, 1992, BankUnited
and each of its Subsidiaries has filed on a timely basis all material reports,
schedules, registration statements and definitive proxy statements ("Securities
Reporting Documents"), together with all amendments required
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to be made with respect thereto, that they were required to file with (i) the
SEC, including without limitation, all quarterly reports on Form 10-Q, annual
reports on Form 10-K, and current reports on Form 8-K, (ii) the OTS, (iii) the
FDIC, (iv) any other applicable state securities or banking authorities (except
in the case of state securities authorities, filings that were not material),
and (v) the NASD. No Securities Reporting Document of BankUnited with respect to
periods beginning on or after October 1, 1992 and until the Closing contained or
will contain any information that was false or misleading with respect to any
material fact or omitted or will omit to state any material fact necessary in
order to make the statements therein not misleading and each Securities
Reporting Document of BankUnited contained or will contain all information
required to be stated therein.
6.07 ABSENCE OF UNDISCLOSED LIABILITIES. Neither BankUnited nor any of
its Subsidiaries has any obligations or liabilities (contingent or otherwise) in
the aggregate amount of $630,000 or more, except obligations and liabilities (i)
which are fully accrued or reserved against in the consolidated balance sheet of
BankUnited and its Subsidiaries as of September 30, 1997 included in the
BankUnited Financial Statements or reflected in the notes thereto, or (ii) which
were incurred after September 30, 1997 in the ordinary course of business
consistent with past practice. Since September 30, 1997 neither BankUnited nor
any of its Subsidiaries has incurred or paid any obligation or liability which
would have a Material Adverse Effect on BankUnited.
6.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 1997,
except as set forth in Section 6.08 of the BankUnited Disclosure Schedule,
neither BankUnited nor any of its Subsidiaries has (A) incurred or paid any
liability or obligation (contingent or otherwise) which individually or in the
aggregate had or is reasonably likely to have a Material Adverse Effect on
BankUnited, (B) suffered any change in its Condition which individually or in
the aggregate is reasonably likely to have a Material Adverse Effect on
BankUnited, (C) failed to operate its business consistent in all material
respects with past practice, or (D) changed any accounting practices, except as
mandated by the FASB.
6.09 COMPLIANCE WITH LAWS.
(a) Each of BankUnited and its Subsidiaries is in compliance
with all laws, rules, regulations, policies, guidelines, reporting and
licensing requirements and orders applicable to its business or to its
employees conducting its business, and with its internal policies and
procedures except for failures to comply which will in the aggregate
not result in a Material Adverse Effect on BankUnited.
(b) Neither BankUnited nor any of its Subsidiaries has
received any notification or communication from any agency or
department of any federal, state or local government, including, the
OTS, the FDIC, and the staffs thereof (collectively, the "Regulatory
Authorities") (i) asserting that any of BankUnited or its Subsidiaries
is not in substantial compliance with any of the statutes, regulations,
or ordinances which such agency, department or Regulatory Authority
enforces, or the internal policies and procedures of such company, (ii)
threatening to revoke any license, franchise, permit or governmental
authorization which is material to the Condition of BankUnited and its
Subsidiaries on a consolidated basis, (iii) requiring or threatening to
require BankUnited or any of its Subsidiaries, or indicating that
BankUnited or any of its Subsidiaries may be required to enter into a
cease and desist order, agreement or memorandum of understanding or any
other agreement restricting or limiting or purporting to restrict or
limit in any manner the operations of BankUnited or any of its
Subsidiaries, including, without limitation,
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any restriction on the payment of dividends, or (iv) directing,
restricting or limiting, or purporting to direct, restrict or limit in
any manner the operations of BankUnited or any of its Subsidiaries,
including, without limitation, any restriction on the payment of
dividends (any such notice, communication, memorandum, agreement or
order described in this sentence herein referred to as a "BankUnited
Regulatory Agreement").
(c) Neither BankUnited nor any of its Subsidiaries has
consented to or entered into any BankUnited Regulatory Agreement or
memorandum of understanding.
(d) Neither BankUnited nor any of its Subsidiaries is required
by Section 32 of FDIA to give prior notice to a federal banking agency
of the proposed addition of an individual to its board of directors or
the employment of an individual as a senior executive officer.
6.10 ALLOWANCE FOR LOAN LOSSES. The Allowance shown on the consolidated
statement of condition of BankUnited and its Subsidiaries as of September 30,
1997 included in the BankUnited Financial Statements and the Allowance shown on
the consolidated statement of condition of BankUnited and its Subsidiaries, as
of dates subsequent to the execution of this Agreement included in the
BankUnited Financial Statements will be, in each case as of the dates thereof,
adequate to provide for losses relating to or inherent in the loan and lease
portfolios (including accrued interest receivables) of BankUnited and its
Subsidiaries; other extensions of credit (including letters of credit and
commitments to make loans or extend credit) by BankUnited and its Subsidiaries;
and the off balance sheet exposures, if any, of BankUnited and its Subsidiaries.
6.11 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by BankUnited for inclusion in the Registration Statement or the
Proxy Statement will, in the case of the Proxy Statement, when it is first
mailed to the stockholders of Central contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which such
statements are made, not misleading or, in the case of the Registration
Statement, when it becomes effective, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein not misleading, or in the case of the Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Stockholders'
Meeting, be false or misleading with respect to any material fact or omit to
state any material fact necessary to correct any statement or remedy any
omission in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that BankUnited is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable law, including applicable provisions of the
Securities Laws.
6.12 CAPITAL STOCK. At the Effective Time, and upon issuance pursuant
to this Agreement the BankUnited Common Stock issued pursuant to the Merger will
be duly authorized, validly issued, fully paid and nonassessable and not subject
to preemptive rights.
6.13 PROPERTIES. Except as disclosed in any Reporting Document filed
since September 30, 1997 and prior to the date hereof and except for Liens
arising, in the ordinary course of business after the date hereof, BankUnited
and its Subsidiaries have good and marketable title, free and clear of all Liens
that are material to the Condition of BankUnited and its Subsidiaries on a
consolidated basis, to all their material properties and assets whether tangible
or intangible, real, personal or mixed, reflected in the
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BankUnited Financial Statements as being owned by BankUnited and its
Subsidiaries as of the date hereof. All buildings, and all fixtures, equipment
and other property and assets which are material to its business on a
consolidated basis, held under leases or subleases by any of BankUnited or its
Subsidiaries are held under valid instruments enforceable in accordance with
their respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
affecting creditors rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity). Substantially all of
BankUnited's and BankUnited's Subsidiaries' equipment in regular use has been
adequately maintained and is in good serviceable condition, reasonable wear and
tear excepted.
6.14 TAX AND REGULATORY MATTERS. Neither BankUnited nor any of its
Subsidiaries has taken or agreed to take any action or has any knowledge of any
fact or circumstance that would prevent the transactions contemplated hereby,
including the Merger, from qualifying as a reorganization within the meaning of
Section 368 of the Code; or materially impede or delay receipt of any approval
referred to in Section 9.01.
6.15 LITIGATION. There are no judicial proceedings of any kind or
nature pending or, to the knowledge of BankUnited, threatened against BankUnited
before any court or arbitral tribunal or before or by any governmental
department, agency or instrumentality involving the validity of the BankUnited
Common Stock, the transactions contemplated by this Agreement or which would
result in a Material Adverse Effect on BankUnited.
6.16 BROKERS AND FINDERS. Neither BankUnited nor any of its
Subsidiaries nor any of their respective officers, directors or employees has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finder's fees, and no broker or
finder has acted directly or indirectly for BankUnited or any of its
Subsidiaries in connection with this Agreement or the transactions contemplated
hereby.
6.17 MATERIAL CONTRACT DEFAULTS. Neither BankUnited nor any of its
Subsidiaries is, or has received any notice or has any knowledge that any party
is, in default in any respect under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which BankUnited or
any of its Subsidiaries is a party or by which BankUnited or any of its
Subsidiaries or the assets, business or operations thereof may be bound or
affected or under which it or its respective assets, business or operations
receives benefits, except for those defaults which would not have, individually
or in the aggregate, a Material Adverse Effect on BankUnited; and there has not
occurred any event that with the lapse of time or the giving of notice of both
would constitute such a default. No consent of any party to any contract to
which BankUnited or any of its Subsidiaries is a party is required in connection
with the consummation of the transactions contemplated by this Agreement.
6.18 INSURANCE. BankUnited and each of its Subsidiaries are presently
insured, and during each of the past five calendar years has been insured, for
reasonable amounts against such risks as companies engaged in a similar business
would, in accordance with good business practice, customarily be insured. The
policies of fire, theft, banker's blanket bond, liability (including directors
and officers liability insurance) and other insurance maintained with respect to
the assets or businesses of BankUnited and its Subsidiaries provide adequate
coverage against all pending or threatened claims, and the fidelity bonds in
effect as to which any of BankUnited or any of its Subsidiaries is a named
insured are sufficient
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for their purpose, except where the failure to have such coverage would not have
a Material Adverse Effect on BankUnited.
ARTICLE VII
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
7.01 CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME. During the period
from the date of this Agreement to the Effective Time, Central shall, and shall
cause each of its Subsidiaries to, (i) conduct its business in the usual,
regular and ordinary course consistent with past practice (other than
transactions made pursuant to contracts in existence on the date hereof and
described in Sections 7.01 or 7.02 of the Central Disclosure Schedule) and (ii)
use its best efforts to maintain and preserve intact its business organization,
employees and advantageous business relationships and retain the services of its
officers and key Employees.
7.02 FORBEARANCES OF CENTRAL. Except as required by law, regulation or
Regulatory Authorities, during the period from the date of this Agreement to the
Effective Time, Central shall not, and shall not permit any of its Subsidiaries
to, without the prior written consent of BankUnited (and Central shall provide
BankUnited with prompt notice of any events referred to in this Section 7.02
occurring after the date hereof):
(a) other than in the ordinary course of business consistent
with past practice since September 30, 1994 ("In the Ordinary Course"),
incur any indebtedness for borrowed money (it being understood and
agreed that incurrence of indebtedness In the Ordinary Course shall
include, without limitation, the creation of deposit liabilities,
purchases of federal funds, sales of certificates of deposit and
entering into repurchase agreements), assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of
any other individual, corporation or other entity, or enter into any
commitment to loan or make any loan or advance other than In the
Ordinary Course;
(b) adjust, split, combine or reclassify any capital stock;
make, declare or pay any dividend or make any other distribution on, or
directly or indirectly redeem, purchase or otherwise acquire, any
shares of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock,
or grant any stock appreciation rights or grant any individual,
corporation or other entity any right to acquire any shares of its
capital stock; or issue any additional shares of capital stock, or any
securities or obligations convertible into or exchangeable for any
shares of its capital stock;
(c) sell, transfer, mortgage, encumber or otherwise dispose of
any of its properties or assets to any individual, corporation or other
entity, or cancel, release or assign any indebtedness to any such
person or any claims held by any such person, except in the ordinary
course of business consistent with past practice or pursuant to
contracts or agreements in force at the date of this Agreement;
(d) other than In the Ordinary Course or in connection with
contracts in existence on the date hereof and described in Section 7.02
of the Central Disclosure Schedule, make any
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material investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other
entity;
(e) enter into or terminate any contract or agreement
involving annual payments in excess of $20,000 and which cannot be
terminated without penalty upon 30 days notice, or make any change in,
or extension of, any of its leases or contracts involving, annual
payments in excess of $20,000 and which cannot be terminated without
penalty upon 30 days notice;
(f) increase or modify in any manner the compensation or
fringe benefits of any of its Employees or pay any pension or
retirement allowance not required by any existing plan or agreement to
any such Employees, or become a party to, amend or commit itself to any
pension, retirement, profit-sharing or welfare benefit plan or
agreement or employment agreement with or for the benefit of any
Employee other than routine adjustments in compensation and fringe
benefits In the Ordinary Course or accelerate the vesting of any stock
options or other stock-based compensation;
(g) take any action that would prevent or impede the Merger
from qualifying as a reorganization within the meaning of Section 368
of the Code;
(h) settle any claim, action or proceeding involving the
payment of money damages in excess of $20,000, except In the Ordinary
Course;
(i) amend its articles of incorporation or its bylaws;
(j) fail to maintain any Regulatory Agreements, material
licenses and permits or to file in a timely fashion all federal, state,
local and foreign tax returns;
(k) make any capital expenditures of more than $20,000
individually or $50,000 in the aggregate;
(1) fail to maintain each Central Benefit Plan or timely make
all contributions or accruals required thereunder in accordance with
GAAP applied on a consistent basis;
(m) issue any additional shares of Central capital stock;
(n) agree to, or make any commitment to, take any of the
actions prohibited by this Section 7.02;
(o) purchase any securities other than in accordance with past
practices; or
(p) purchase or originate any loans or issue letter of credit
(excluding renewals or advances under existing credit facilities to
their customers and their affiliates consistent with past practices)
individually in an amount greater than $500,000;
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ARTICLE VIII
ADDITIONAL AGREEMENTS
8.01 ACCESS AND INFORMATION.
(a) During the period from the date of this Agreement through
the Effective Time:
(i) Each of Central and BankUnited shall, and shall
cause its Subsidiaries to afford the other, and their
respective accountants, counsel and other representatives,
reasonable access during normal business hours to their
respective properties, books, contracts, tax returns,
commitments and records at any time, and from time to time,
for the purpose of conducting any review or investigation
reasonably related to the Merger, and each of the parties will
cooperate fully with all such reviews and investigations. The
party seeking such access shall provide the other party with
reasonable notice of such request.
(ii) BankUnited shall provide copies of its
Securities Reporting Documents to Central and its advisors for
purposes of any review or report to its Board of Directors in
evaluating the Merger.
(b) During the period from the date of this Agreement through
the Effective Time, Central shall furnish to BankUnited (i) all Reports
referred to in Section 5.18 promptly upon the filing thereof, (ii) a
copy of each Tax Return filed by it and (iii) monthly and other interim
financial statements in the form prepared by Central for its internal
use. During this period, Central also shall notify BankUnited promptly
of any material change in the Condition of Central or any of its
Subsidiaries.
(c) During the period from the date of this Agreement through
the Effective Time BankUnited shall promptly furnish to Central (i) all
BankUnited Financial Statements referred to in Section 6.05(ii), (ii) a
copy of each Tax Return filed by it and (iii) monthly and other interim
financial statements in the form prepared by BankUnited for its
internal use. During this period BankUnited also shall notify Central
promptly of any material change in the Condition of BankUnited or any
of its Subsidiaries.
(d) Notwithstanding the foregoing provisions of this Section
8.01, 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 such representation and
warranty shall survive such investigation; provided, however, that if a
party discovers information during the course of such investigation
which may affect the party's decision to proceed with the Merger, then
the party shall promptly advise the other party of its discovery and
decision whether to complete or terminate the Merger.
(e) BankUnited agrees that it will keep confidential any
information furnished to it in connection with the transactions
contemplated by this Agreement, except to the extent that such
information (i) was already known to BankUnited and was received from a
source other than Central or any of its Subsidiaries, directors,
officers, employees or agents, (ii) thereafter was
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lawfully obtained from another source, or (iii) is required to be
disclosed by BankUnited or its agents or representatives to the SEC,
the NASD, the OTS, the FDIC or any other governmental agency or
authority, or is otherwise required to be disclosed by BankUnited or
its agents or representatives by law. BankUnited agrees not to use such
information, and to implement safeguards and procedures that are
reasonably designed to prevent such information from being used, for
any purpose other than in connection with the transactions contemplated
by this Agreement.
(f) Central shall cooperate, and shall cause its Subsidiaries,
accountants, counsel and other representatives to cooperate, with
BankUnited and its accountants, counsel and other representatives, in
connection with the preparation by BankUnited of any applications and
documents required to obtain the Approvals which cooperation shall
include providing all information, documents and appropriate
representations as may be necessary in connection therewith.
(g) From and after the date of this Agreement, each of
BankUnited and Central shall use its reasonable best efforts to satisfy
or cause to be satisfied all conditions to their respective obligations
under this Agreement. While this Agreement is in effect, neither
BankUnited nor Central shall take any actions, or omit to take any
actions, which would cause this Agreement to become unenforceable in
accordance with its terms.
(h) Central shall provide to BankUnited as part of the Central
Disclosure Schedule a list of deposits by officers, directors and
holders of five percent (5%) or more of the Central Common Stock, as of
December 22, 1997, which exceed for each such person in the aggregate
$10,000. "Officers" shall mean vice-presidents and above.
8.02 REGISTRATION STATEMENT; REGULATORY MATTERS.
(a) BankUnited shall (i) prepare and file with the SEC as soon
as is reasonably practicable the Registration Statement necessary to
register the shares of BankUnited's Common Stock to be issued pursuant
to the Merger, (ii) use its best efforts to cause the Registration
Statement to become effective, and (iii) take any action required to be
taken under any applicable state blue sky or securities laws in
connection therewith. Central and its Subsidiaries shall furnish
BankUnited with all information concerning Central, its Subsidiaries
and the holders of Central Common Stock as BankUnited may reasonably
request in connection with the foregoing.
(b) BankUnited and Central shall cooperate and use their
respective best efforts (i) to prepare all documentation, to effect all
filings and to obtain all permits, consents, approvals and
authorizations of all third parties, Regulatory Authorities and other
governmental authorities necessary to consummate the transactions
contemplated by this Agreement, including, without limitation, any such
approvals or authorizations required by the OTS and (ii) to cause the
Merger to be consummated as expeditiously as reasonably practicable.
8.03 STOCKHOLDERS' APPROVAL. Central shall call a meeting of its
stockholders to be held as soon as practicable for the purpose of voting upon
the Merger and related matters. The Board of Directors of Central shall submit
for approval of its stockholders the matters to be voted upon at the
Stockholders' Meeting, and shall recommend approval of such matters and use its
best efforts (including,
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without limitation, soliciting proxies for such approvals) to obtain such
stockholder approval. The covenants under this Section 8.03 are subject to the
exercise by the Board of Directors of its fiduciary obligations.
8.04 PRESS RELEASES. Prior to the public dissemination of any press
release or other public disclosure of information about this Agreement, the
Merger or any other transaction contemplated hereby, the parties to this
Agreement shall mutually agree as to the form and substance of such release or
disclosure.
8.05 NOTICE OF DEFAULTS. Central and BankUnited shall each promptly
notify the other of (i) any material change in its business, operations or
prospects, (ii) any complaints, investigations or hearings (or communications
indicating that the same may be contemplated) of any Regulatory Authority, (iii)
the institution or the threat of material litigation involving such party, or
(iv) any event or condition that might be reasonably expected to cause any of
its representations, warranties or covenants set forth herein not to be true and
correct in all material respects as of the Effective Time.
8.06 MISCELLANEOUS AGREEMENTS AND CONSENTS; AFFILIATES AGREEMENTS.
Subject to the terms and conditions of this Agreement, each of the parties
hereto agrees to use its respective best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement as expeditiously as reasonably
practicable, including, without limitation, using their respective best efforts
to lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby. BankUnited and Central shall use their best efforts to obtain consents
of all third parties and Regulatory Authorities necessary or, in the reasonable
opinion of BankUnited or Central, desirable for the consummation of the
transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of BankUnited
shall be deemed to have been granted authority in the name of Central to take
all such necessary or desirable action.
Without limiting the foregoing, Central will, at the request of
BankUnited, take such actions, or forbear from taking such actions, as may be
reasonably necessary to identify each of its "affiliates" for purposes of Rule
145 under the Securities Act and to cause each person so identified to deliver
to BankUnited within 10 days after the execution of this Agreement a written
agreement in the form attached hereto as Exhibit D providing that such person
shall not sell, pledge, transfer or otherwise dispose of any capital stock to be
received by such person as part of the BankUnited Common Stock received in
exchange for Central capital stock, except in compliance with the applicable
provisions of the Securities Act.
8.07 INDEMNIFICATION OF CENTRAL . For three years after the Effective
Time, BankUnited shall indemnify, defend and hold harmless the present and
former officers, directors, employees and agents of Central and its Subsidiaries
(each, an "Indemnified Party") after the Effective Time against all losses,
expenses, claims, judgments, fines, damages or liabilities arising out of any
claim, action, suit, proceedings or investigations arising out of any actions or
omissions occurring on or prior to the Effective Time to the full extent then
permitted under Florida law.
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At or prior to the Effective Time, BankUnited shall purchase $1 million
of directors and officers liability insurance coverage for the Indemnified
Parties with respect to costs that may be incurred by the Indemnified Parties,
which coverage shall be for a term of three years commencing at the Effective
Time and shall have a deductible of $50,000; provided, however, that in no event
shall BankUnited expend in order to obtain such insurance, an amount in excess
of a total of $15,000 in premiums (the "Maximum Amount") for coverage for such
three year period. If the amount of the total premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, BankUnited shall use
its reasonable best efforts to maintain the most advantageous policies (in terms
of coverage) of directors and officers insurance for a total three year premium
equal to the Maximum Amount.
If BankUnited or any of its successors or assigns (i) shall consolidate
with or merge into any other corporation or entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) shall transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provision shall be made so that the successors and assigns of the BankUnited
shall assume the obligations set forth in this Section 8.07.
8.08 CERTAIN CHANGE OF CONTROL MATTERS. From and after the date hereof,
Central shall take all action necessary so that the execution and delivery of
this Agreement will not increase any benefits otherwise payable under any
Central Benefit Plan.
8.09 STOCK EXCHANGE LISTING. BankUnited shall use its best efforts to
list, prior to the Effective Time, on the NASDAQ, upon official notice of
issuance, the shares of BankUnited Common Stock to be issued to holders of
Central capital stock in the Merger.
8.10 EMPLOYEE BENEFITS.
(a) Central shall provide BankUnited in Section 8.10 of the
Central Disclosure Schedule the names of all Central Employees
(including full and part-time employees) as of the date of the Central
Disclosure Schedule (the "Current Employees"), and, as to each Current
Employee, such Current Employee's date of hire, current compensation,
and current severance benefits.
(b) BankUnited and Central agree as follows:
(i) BankUnited shall offer, where possible,
employment to the employees of Central and its subsidiary following the
Effective Time. As soon as reasonably practicable after the date of
this Agreement BankUnited and Central shall consult with each other in
order for BankUnited in its sole discretion to determine which
employees of Central will become employees of BankUnited after the
Effective Time.
(ii) All employees of Central and their dependents,
who are enrolled in a group health plan made available by Central, who
would lose coverage in the event such employee's employment is
terminated by Central or BankUnited in connection with the Merger,
shall be eligible for group health coverage, consistent with the
requirements of the Consolidated Omnibus Budget Reconciliation Act
("COBRA") requirements of the Internal Revenue Code and ERISA, as in
effect on the date of such termination, for the applicable period set
forth in the Internal Revenue Code. BankUnited agrees that any
pre-existing condition, limitation or exclusion in its health plan
shall not apply to Hired Employees (as hereinafter defined) or their
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covered dependents who are covered under a group health plan maintained
by Central and who then change that coverage to the group health plan
coverage offered by BankUnited at the time that such Continuing
Employees are first given the option to enroll in BankUnited's group
health plan.
(iii) All employees who accept employment with
BankUnited as of the Effective Time ("Hired Employees") shall be
eligible to participate in the employee benefit plans and other fringe
benefits of BankUnited, including sickness benefit days and vacation
days, on the same terms and conditions as those provided from time to
time by BankUnited to its similarly situated officers and employees,
giving effect, for eligibility and vesting of benefits, to years of
service with Central as if such service were with BankUnited.
(iv) All employees who are not offered employment by
BankUnited shall be entitled to receive payment in lieu of accrued vacation and
sick days, consistent with Central past practice and policy.
8.11 CERTAIN ACTIONS. No party shall take any action which would
adversely affect or delay the ability of either BankUnited or Central to obtain
any necessary approvals of any Regulatory Authority or other governmental
authority required for the transactions contemplated hereby or to perform its
covenants and agreements under this Agreement. No party shall take any action
that would prevent or impede the Merger from qualifying as a reorganization
within the meaning of Section 368 of the Code.
8.12 ACQUISITION PROPOSALS. Central shall not, and shall use its best
efforts to cause its officers, directors and employees and any investment
banker, attorney, accountant, or other agent retained by it or its Subsidiaries
not to (i) initiate, encourage or solicit, directly or indirectly, the making of
any proposal or offer (an "Acquisition Proposal") to acquire all or any
significant part of the business and properties or capital stock of Central or
its Subsidiaries, whether by merger, purchase of securities or assets, tender
offer or otherwise (an "Acquisition Transaction"), or initiate, directly or
indirectly, any contact with any person in an effort to or with a view towards
soliciting any Acquisition Proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any other person any information with
respect to, an Acquisition Proposal. Notwithstanding the foregoing, Central may
(i) furnish or cause to be furnished information subject to a confidentiality
agreement in a form satisfactory to BankUnited, (ii) in response to an
Acquisition Proposal, issue a communication to its security holders of the type
contemplated by Rule 14d-9(e) under the Exchange Act, and (iii) participate in
discussions and negotiations directly and through its representatives with
persons who have sought the same if, in each instance the Central Board
determines, based as to legal matters on the written advice of outside legal
counsel, that the failure to furnish such information or to negotiate with such
entity or group or to take and disclose such position would be inconsistent with
the proper exercise of the fiduciary duties of the Central Board. In the event
Central receives an Acquisition Proposal or such discussions are sought to be
initiated or continued with Central, it shall promptly inform BankUnited as to
the material terms thereof.
8.13 TERMINATION FEE. To compensate BankUnited for entering into this
Agreement, taking action to consummate the transactions hereunder and incurring
the costs and expenses related thereto and other losses and expenses, including
the foregoing by BankUnited of other opportunities, Central and BankUnited agree
as follows:
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(a) Provided that BankUnited shall not be in material breach
of its obligations under this Agreement (which breach has not been
cured promptly following receipt of written notice thereof by Central
specifying in reasonable detail the basis of such alleged breach),
Central shall pay to BankUnited the sum of $550,000 (the "Termination
Fee") plus reasonable out-of-pocket expenses, not in excess of $35,000
(including, without limitation, amounts paid or payable to banks and
investment bankers, fees and expenses of counsel and printing expenses)
(such expenses are hereinafter referred to as the "Expenses") incurred
by BankUnited or any of its affiliates in connection with or arising
out of transactions contemplated by this Agreement, regardless of when
those expenses are incurred, if this Agreement is terminated (i) by
BankUnited under the provisions of Section 10.01(d) and an Acquisition
Event shall occur within nine (9) months from the date the Agreement is
terminated, or (ii) by Central under the provisions of Section
10.01(g). BankUnited shall provide Central with an itemization of
Expenses. If BankUnited is entitled to the Termination Fee and recovery
of Expenses, the recovery of such sums shall be its sole remedy.
"Acquisition Event" shall mean any of the following: (i) any
person or group (as defined in Section 13(d)(3) of the Exchange Act),
other than BankUnited or any person or group who as of the date hereof
own 25% or less of any class of equity securities, shall have acquired,
pursuant to a tender offer, exchange offer or otherwise, beneficial
ownership (including pursuant to the acquisition of options) of 50 % or
more of any class of equity securities of Central; or (ii) any such
person or group shall have received approval from the OTS to acquire
ownership of 50 % or more of any class of equity securities of Central
and (iii) the equivalent total consideration paid for whatever purpose
to Central's selling shareholders on a pro rata basis, based on the
number of shares sold or acquired, as the case may be, would exceed an
amount equal to $19,714,499 if the pro rate consideration received or
to be paid per share is multiplied by 450,000.
(b) Any payment required by paragraph (a) of this Section
shall become payable within ten business days after termination of the
Agreement.
(c) Central acknowledges that the agreements contained in this
Section 8.13 are an integral part of the transactions contemplated in
this Agreement, and that without these agreements, BankUnited would not
enter into this Agreement; accordingly, if Central fails to promptly
pay the Termination Fee or Expenses when due, Central shall in addition
thereto pay to BankUnited all costs and expenses (including fees and
disbursements of counsel) incurred in collecting such Termination Fee
or Expenses, as the case may be, together with interest on the amount
of the Termination Fee or Expenses (or any unpaid portion thereof) from
the date such payment was required to be made until the date such
payment is received by BankUnited at the prime rate as in effect from
time to time during such period.
ARTICLE IX
CONDITIONS
9.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each of BankUnited and Central to effect the Merger
and the other transactions
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contemplated hereby shall be subject to the fulfillment or waiver at or prior to
the Effective Time of the following conditions:
(a) The stockholders of Central shall have approved all
matters relating to the Merger required under applicable law at the
Stockholders' Meeting.
(b) This Agreement, the Merger, and the other transactions
contemplated hereby shall have been approved by the OTS and any other
Regulatory Authorities whose approval is required for consummation of
the transactions contemplated hereby, which approvals are subject to no
conditions that in the reasonable judgment of BankUnited would unduly
restrict it or its Subsidiaries or affiliates in their respective
spheres of operations and business activities after the Effective Time.
(c) The Registration Statement shall have been declared
effective and shall not be subject to a stop order or any threatened
stop order.
(d) Neither BankUnited nor Central shall be subject to any
active litigation which seeks any order, decree or injunction of a
court or agency of competent jurisdiction to enjoin or prohibit the
consummation of the Merger and there shall be in effect no order,
decree, or injunction of any court or agency of competent jurisdiction,
directing that the consummation of the transactions contemplated by
this Agreement be prohibited or enjoined.
(e) The shares of BankUnited Common Stock issuable pursuant to
the Merger shall have been authorized for trading on the NASDAQ upon
official notice of issuance.
(f) Holders of no more than ten percent of the outstanding
capital stock of Central shall have exercised dissenters' rights under
Florida law.
(g) Central and BankUnited shall have received an opinion of
Counsel to BankUnited addressed to Central and BankUnited in form
reasonably satisfactory to each of them, that for federal income tax
purposes, the Merger will qualify as a reorganization under the
provisions of Section 368 of the Code.
9.02 CONDITIONS TO OBLIGATIONS OF CENTRAL TO EFFECT THE MERGER. The
obligations of Central to effect the Merger shall be subject to the fulfillment
or waiver at or prior to the Effective Time of the following additional
conditions:
(a) The Board of Directors of Central shall have approved this
Agreement, the Merger and all matters related to the Merger.
(b) The representations and warranties of BankUnited set forth
in Article VI hereof shall be true and correct in all material respects
as of the date of this Agreement and as of the Effective Time (as
though made on and as of the Effective Time except to the extent such
representations and warranties are by their express provisions made as
of a specified date) and
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Central shall have received a certificate signed by the chairman and
chief executive officer, executive vice president or other duly
authorized officer of BankUnited to that effect.
(c) BankUnited shall have performed in all material respects
all obligations required to be performed by it under this Agreement
prior to the Effective Time, and Central shall have received a
certificate signed by the chairman and chief executive officer,
executive vice president or other duly authorized officer of BankUnited
to that effect.
(d) No event, occurrence, or circumstance shall have occurred
that would constitute a Material Adverse Effect as to BankUnited.
9.03 CONDITIONS TO OBLIGATIONS OF BANKUNITED TO EFFECT THE MERGER. The
obligations of BankUnited to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the following
additional conditions:
(a) The Board of Directors of BankUnited shall have approved
this Agreement, the Merger and all matters related to the Merger,
including the issuance of the BankUnited Common Stock.
(b) The representations and warranties of Central set forth in
Article V hereof shall be true and correct in all material respects as
of the date of this Agreement as of the Effective Time (as though made
on and as of the Effective Time except to the extent such
representations and warranties are by their express provisions made as
of a specified date) and BankUnited shall have received a certificate
signed by the chairman or the chief executive officer or other duly
authorized officer of Central to that effect.
(c) Central shall have performed in all material respects all
obligations required to be performed by it under this Agreement prior
to the Effective Time, and BankUnited shall have received a certificate
signed by the chairman or the chief executive officer or other duly
authorized officer of Central to that effect.
(d) BankUnited shall have received an opinion of counsel for
Central addressed to BankUnited and in form reasonably satisfactory to
it as to the validity of the approvals of the Merger by the directors
and stockholders of Central .
(e) No event, occurrence, or circumstance shall have occurred
that would constitute a Material Adverse Effect as to Central.
(f) As of the Effective Time the Closing Net Worth shall not
be less than $10,000,000.
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ARTICLE X
TERMINATION
10.01 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement, the Merger and
the other transactions contemplated hereby by the stockholders of BankUnited and
Central or both, this Agreement may be terminated and the Merger abandoned at
any time prior to the Effective Time:
(a) by Central if the FMV of BankUnited Common Stock is less
than $9.50 per share, or by either party if the FMV of BankUnited
Common Stock is less than $9 per share; or
(b) by mutual consent of the Board of Directors of BankUnited
and the Board of Directors of Central; or
(c) by the Board of Directors of BankUnited or the Board of
Directors of Central if (i) the OTS has denied approval of the Merger
and such denial has become final and nonappealable or has approved the
Merger subject to conditions that in the reasonable judgment of
BankUnited would unduly restrict it or its subsidiaries or affiliates
in their respective spheres of operations and business activities after
the Effective Time or (ii) the Effective Time does not occur by June
30, 1998, unless said time is extended by written agreement of Central
and BankUnited; or
(d) by BankUnited (if it is not in material breach of any of
its obligations hereunder) pursuant to notice in the event of a breach
or failure by Central that has a Material Adverse Effect in the context
of the transactions contemplated hereby of any representation,
warranty, covenant or agreement by Central contained herein which has
not been, or cannot be, cured within 30 days after written notice of
such breach is given to Central; provided, however, that except for
warranties and representations set forth in Sections 5.01, 5.02, 5.03,
5.04(a) and 5.27 hereof, BankUnited may not terminate this Agreement on
account of a breach of a warranty or representation made by Central in
this Agreement, unless such breach (i) arises out of an event which
occurs subsequent to December 22, 1997 or (ii) arises out of an event
or state of facts which occurred or existed prior to the date hereof
and which was not discovered during BankUnited's due diligence
investigation of Central, which in the case of either (i) or (ii)
hereof (x) constitutes or causes a material breach of a warranty and
representation made by Central in this Agreement and (y) has a Material
Adverse Effect; or
(e) by Central (if it is not in material breach of any of its
obligations hereunder) pursuant to notice in the event of a breach or
failure by BankUnited that is material in the context of the
transactions contemplated hereby of any representation, warranty,
covenant or agreement by BankUnited contained herein which has not
been, or cannot be, cured within 30 days after written notice of such
breach is given to BankUnited; or
(f) by either party if the stockholders of Central fail to
approve the Merger at the Stockholder's Meeting; or
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(g) by Central if (i) there shall not have been a material
breach of any covenant or agreement on the part of Central under this
Agreement and (ii) prior to the Effective Time, a corporation,
partnership, person or other entity or group shall have made a bona
fide Acquisition Proposal that the Central Board determines in its good
faith judgment and in the exercise of its fiduciary duties, based as to
legal matters on the reasonable advice of legal counsel and as to
financial matters on the reasonable advice of an investment banking
firm of national reputation, is more favorable to the Central
stockholders than the Merger and that the failure to terminate this
Agreement and accept such alternative Acquisition Proposal would be
inconsistent with the proper exercise of such fiduciary duties;
provided, however, that termination under this clause (ii) shall not be
deemed effective until payment of the Termination Fee required by
Section 8.13.
(h) by BankUnited if the Closing Net Worth is less than
$10,000,000.
10.02 INTENTIONALLY DELETED
10.03 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.01, this Agreement shall
become void and have no effect, except that (i) the provisions of Section
8.01(e), 8.13, 10.03 and Section 11.01 shall survive any such termination and
abandonment, and (ii) no party shall be relieved or released from any liability
arising out of an intentional breach of any provision of this Agreement.
10.04 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS FOLLOWING
THE EFFECTIVE TIME. The parties hereto agree that none of the respective
representations, warranties, obligations, covenants and agreements of the
parties contained in this Agreement except for Sections 3.01(c), 4.01, 8.01(e)
and 8.13 or in any certificate, document or instrument delivered in connection
herewith, shall survive the Effective Time, regardless of any investigation made
by the parties hereto.
ARTICLE XI
GENERAL PROVISIONS
11.01 EXPENSES. Unless otherwise agreed by the parties in writing, each
party hereto shall bear its own expenses incident to preparing, entering into
and carrying out this Agreement and to consummating the Merger, except that
BankUnited and Central shall divide equally all printing expenses and filing
fees incurred in connection with this Agreement, the Registration Statement and
the Proxy Statement. In no event shall Central's share exceed $35,000.00.
11.02 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
this Agreement contains the entire agreement between the parties hereto with
respect to the transactions contemplated hereunder and thereunder, and such
agreements supersede all prior arrangements or understandings with respect
thereto, written or oral. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors. Other than as expressly set forth in this Agreement, nothing in this
Agreement, expressed or implied, is intended to confer upon any
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individual, corporation or other entity, other than BankUnited, Central and the
Surviving Corporation, or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
11.03 AMENDMENTS. To the extent permitted by law, this Agreement may be
amended by a subsequent writing signed by each of BankUnited and Central ;
provided, however, that the provisions hereof relating to the manner or basis in
which shares of Central capital stock will be exchanged for the BankUnited
Common Stock shall not be amended after the Stockholders' Meeting without any
requisite approval of the holders of the issued and outstanding shares of
Central capital stock entitled to vote thereon.
11.04 WAIVERS. Prior to or at the Effective Time, each of BankUnited
and Central shall have the right to waive any default in the performance of any
term of this Agreement by the other, to waive or extend the time for the
compliance or fulfillment by the other of any and all of the other's obligations
under this Agreement and to waive any or all of the conditions precedent to its
obligations under this Agreement, except any condition which, if not satisfied,
would result in the violation of any law or applicable governmental regulation.
11.05 NO ASSIGNMENT. None of the parties hereto may assign any of its
rights or delegate any of its obligations under this Agreement to any other
person or entity. Any such purported assignment or delegation that is made
without the prior written consent of the other parties to this Agreement shall
be void and of no effect.
11.06 NOTICES. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered by hand,
overnight delivery service or by registered or certified mail, postage prepaid
to the persons at the addresses set forth below (or at such other address as may
be provided hereunder), and shall be deemed to have been delivered as of the
date so delivered:
Central: Central Bank
1428 Brickell Avenue
Suite 105
Miami, FL 33131
Attention: Dr. Ernest M. Halpryn,
Chairman of the Board
Copy to Counsel: Greenberg, Traurig, et. al.
1221 Brickell Avenue
Miami, FL 33131
Attention: David S. Kenin, Esq.
BankUnited: BankUnited Financial Corporation
255 Alhambra Circle
Coral Gables, Florida 33134
Attention: Alfred R. Camner,
Chairman of the Board and President
Samuel A. Milne,
Executive Vice President and
Chief Financial Officer
37
<PAGE>
Copy to Counsel: Stuzin and Camner, P.A.
550 Biltmore Way, Suite 700
Coral Gables, Florida 33134
Attention: Marsha D. Bilzin, Esq.
11.07 SPECIFIC PERFORMANCE. The parties hereby acknowledge and agree
that the failure of either party to fulfill any of its covenants and agreements
hereunder, including the failure to take all such actions as are necessary on
its part to cause the consummation of the Merger, will cause irreparable injury
for which damages, even if available, will not be an adequate remedy.
Accordingly, except where a Termination Fee has been tendered as provided in
Section 8.13 , each party hereby consents to the issuance of injunctive relief
by any court of competent jurisdiction to compel performance of the other
party's obligations hereunder and to the granting by any such court of the
remedy of the specific performance hereunder.
11.08 GOVERNING LAW. This Agreement shall in all respects be governed
by and construed in accordance with the laws of the State of Florida.
11.09 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same instrument.
11.10 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.11 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement, or in any other instrument referred to herein,
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument.
38
<PAGE>
IN WITNESS WHEREOF, BankUnited and Central have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
BANKUNITED FINANCIAL CORPORATION
By:
------------------------------
James A. Dougherty
Executive Vice President and
Chief Operating Officer
CENTRAL BANK
By:
------------------------------
Ernest M. Halpryn
Chairman of the Board
39
<PAGE>
EXHIBIT A
TERM
NAME AND ADDRESS EXPIRES
- ---------------- -------
DIRECTORS
- ---------
Allen M. Bernkrant 1999
P.O. Box 56-1122
Miami, FL 33256-1122
Lawrence H. Blum 1998
SunTrust Building - 10th Floor
1 Southeast Third Avenue
Miami, FL 33131
Alfred R. Camner 1998
255 Alhambra Circle
Coral Gables, FL 33134
James A. Dougherty 1998
255 Alhambra Circle
Coral Gables, FL 33134
Earline G. Ford 1999
255 Alhambra Circle
Coral Gables, FL 33134
Bruce D. Friesner 1999
5431 North 36th Court
Hollywood, FL 33021
Patricia L. Frost 1998
4400 Biscayne Boulevard
Miami, Florida 33137
Marc D. Jacobson 2000
3050 Biscayne Boulevard
Fourth Floor
Miami, FL 33137
Marc Lipsitz 2000
550 Biltmore Way
Suite 700
Coral Gables, FL 33134
Neil Messinger, M.D. 2000
10801 S.W. 93rd Court
Miami, FL 33176
Anne W. Solloway 2000
8124 S.W. 87th Terrace
Miami, FL 33143
40
<PAGE>
EXHIBIT B
CURRENT BANKUNITED LOCATIONS:
- -----------------------------
CORAL GABLES CORPORATE OFFICE
255 Alhambra Circle
Coral Gables, Florida 33134
(305) 569-2000
DADE COUNTY
Coral Gables branch
255 Alhambra Circle
Coral Gables, Florida 33134
South Miami branch
6075 Sunset Drive
South Miami, Florida 33143
BROWARD COUNTY
Coconut Creek branch
4913 Coconut Creek Parkway
Coconut Creek, Florida 33063
Coral Springs branch
1307 University Drive
Coral Springs, Florida 33071
Deerfied Beach branch
2201 West Hillsboro Boulevard
Deerfield Beach, Florida 33442
Hallandale branch
501 Golden Isles Drive
Hallandale, Florida 33009
Hollywood branch
4350 Sheridan Street
Hollywood, Florida 33021
41
<PAGE>
Lauderdale-by-the-Sea branch
227 Commercial Boulevard
Lauderdale-by-the-Sea, Florida 33308
Pembroke Pines branch
100 South Flamingo Road
Pembroke Pines, Florida 33027
Pompano Beach branch
1313 North Ocean Boulevard
Pompano Beach, Florida 33062
Tamarac branch
5779 North University Drive
Tamarac, Florida 33321
PALM BEACH COUNTY
Boca Hamptons
9050 Kimberly Boulevard, Suite 68
Boca Raton, Florida 33434
Boca Raton branch
21222 St. Andrews Boulevard
Boca Raton, Florida 33434
Boynton Beach branch
117 N. Congress Avenue
Boynton Beach, Florida 33426
West Delray Beach branch
7431-39 West Atlantic Avenue
Delray Beach, Florida 33446
West Palm Beach branch
2911-C North Military Trail
West Palm Beach, Florida 33409
LOCATIONS TO BE ACQUIRED WITH CENTRAL BANK
- ------------------------------------------
Main Office
7970 N.W. 36 Street
Miami, Florida 33166
42
<PAGE>
Coral Gables branch
999 Ponce de Leon Boulevard
Coral Gables, Florida 33134
Palm Springs Mile Office
1291 West 49 Street
Hialeah, Florida 33012
Palmetto Lake Office
16800 N.W. 67 Avenue
Hialeah, Florida 33015
43
<PAGE>
EXHIBIT C
BankUnited Financial Corporation
255 Alhambra Circle
Coral Gables, Florida 33134
Re: Proposed Merger with Central Bank
Gentlemen:
The undersigned, directors of Central Bank, who are also stockholders
in said Bank and the undersigned, Michael Weintraub (in his fiduciary capacity)
and Phillip Frost, both of whom are stockholders in Central Bank, agree that
they will vote their stock in favor of the proposed merger at the stockholders'
meeting and that they will otherwise support the proposed merger.
Very truly yours,
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
Date:
------------------------------------
44
<PAGE>
EXHIBIT D
Rule 145 Affiliate Agreement
Pursuant to Section 8.06
of the Agreement and Plan of Merger
45
<PAGE>
Name (please print)_________________________
December ___, 1997
BankUnited Financial Corporation
255 Alhambra Circle
Coral Gables, Florida 33134
Dear Madam or Sir:
This letter is delivered to you in compliance with Section 8.06 of the
Agreement and Plan of Merger, dated December __, 1997 (the "Agreement"), between
BankUnited Financial Corporation ("BankUnited") and Central Bank ("Central"),
providing for the merger (the "Merger") of Central with and into BankUnited.
1. The undersigned represents and warrants to you that the shares of
Class A Common Stock of BankUnited (the "BankUnited Stock"), which the
undersigned shall receive in exchange for shares of common stock of Central are
not being acquired by the undersigned with a view to their distribution except
to the extent and in the manner provided for in paragraph (d) of Rule 145 under
the Securities Act of 1933, as amended (the "Act"). The undersigned agrees that
the undersigned will not sell, transfer or otherwise dispose of any shares of
BankUnited Stock to be received by the undersigned in connection with the Merger
unless (i) such sale, transfer, or other disposition has been registered under
this Act, (ii) such sale, transfer, or other disposition is made in conformity
with the volume and other applicable limitations of Rule 145 under the Act, or
(iii) the undersigned at the undersigned's expense delivers to BankUnited an
opinion of counsel in form and substance reasonably satisfactory to BankUnited
to the effect that the proposed transfer of BankUnited Stock does not violate
the federal securities laws.
2. The undersigned acknowledges that to the extent the undersigned
believed necessary, the undersigned discussed this letter and any applicable
limitations upon the resale of BankUnited Stock with either counsel for
undersigned or counsel for Central. The undersigned agrees that BankUnited may
place the legend set forth below on the certificate or certificates for any or
all BankUnited Stock to be received by the undersigned in connection with the
Merger and may file stop-transfer instructions with respect to such shares with
the transfer agent for such shares. The undersigned understands that the legend
set forth on the certificate or certificates for BankUnited Stock to be received
by the undersigned shall be removed as well as the related stop-transfer
instructions when such restrictions are no longer applicable to such shares.
46
<PAGE>
3. Pursuant to the provisions of the preceding paragraph, the
certificate or certificates evidencing BankUnited Stock received by the
undersigned may bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE
ISSUED IN A TRANSACTION TO WHICH RULE 145
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, APPLIES. NO TRANSFER OF SUCH SHARES SHALL
BE VALID OR EFFECTIVE UNTIL THE CONDITIONS OF SUCH
RULE HAVE BEEN FULFILLED."
Very truly yours,
------------------------------------
Signature
47
<PAGE>
APPENDIX B
CENTRAL BANK
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1997 AND 1996
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Central Bank:
We have audited the accompanying statements of condition of Central Bank (the
"Bank") as of December 31, 1997 and 1996, and the related statements of income,
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Bank's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Central Bank at December 31, 1997 and 1996,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
February 27, 1998
<PAGE>
<TABLE>
<CAPTION>
CENTRAL BANK
STATEMENTS OF CONDITION
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------------------
1997 1996
ASSETS
<S> <C> <C>
Cash and due from banks $ 5,038,421 $ 3,606,042
Federal funds sold 9,600,000 14,500,000
----------- -----------
Total cash and cash equivalents 14,638,421 18,106,042
Securities available for sale 24,392,060 20,262,139
Investments held to maturity 5,106,835 6,186,456
Loans, net 46,295,515 45,077,840
Property and equipment, net 141,165 198,192
Interest receivable 661,580 670,353
Other assets 1,153,653 631,347
----------- -----------
TOTAL $92,389,229 $91,132,369
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest-bearing $25,177,148 $24,218,712
----------- -----------
Interest-bearing:
NOW 9,780,614 8,134,403
Money market 9,135,664 10,487,544
Savings 2,253,256 1,994,537
Time $100,000 and over 14,180,711 13,323,601
Other time 12,297,973 11,978,183
----------- -----------
Total interest-bearing 47,648,218 45,918,268
----------- -----------
Total deposits 72,825,366 70,136,980
Securities sold under agreements to repurchase 8,333,888 11,070,433
Accrued interest payable 167,788 180,433
Other liabilities 184,681 128,873
----------- -----------
Total liabilities 81,511,723 81,516,719
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $6 par value, 900,000 shares authorized,
450,000 shares issued and outstanding 2,700,000 2,700,000
Capital surplus 1,800,000 1,800,000
Retained earnings 6,238,326 5,089,150
Net unrealized gain on securities available for sale,
net of taxes 139,180 26,500
----------- -----------
Total stockholders' equity 10,877,506 9,615,650
----------- -----------
TOTAL $92,389,229 $91,132,369
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
CENTRAL BANK
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------------
1997 1996
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 4,464,307 $ 4,223,234
Investment securities 1,907,717 1,522,466
Federal funds sold 568,477 594,301
----------- -----------
Total 6,940,501 6,340,001
----------- -----------
INTEREST EXPENSE:
Deposits 1,795,262 1,471,149
Securities sold under agreements to repurchase 593,306 532,200
----------- -----------
Total 2,388,568 2,003,349
----------- -----------
NET INTEREST INCOME 4,551,933 4,336,652
PROVISION FOR LOAN LOSSES 275,000 360,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,276,933 3,976,652
----------- -----------
OTHER INCOME:
Service charges on deposit accounts 1,031,384 1,048,279
Other service charges and fees 180,725 154,217
Gain (loss) on sale of securities
available for sale, net 1,983 (4,398)
----------- -----------
Total 1,214,092 1,198,098
----------- -----------
OTHER EXPENSES:
Salaries and employee benefits 1,771,422 1,669,947
Occupancy and equipment 713,172 698,769
Other 1,177,993 1,041,674
----------- -----------
Total 3,662,587 3,410,390
----------- -----------
INCOME BEFORE INCOME TAXES 1,828,438 1,764,360
PROVISION FOR INCOME TAXES 679,262 627,090
----------- -----------
NET INCOME $ 1,149,176 $ 1,137,270
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
CENTRAL BANK
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- -----------------------------------------------------------------------------------------------------------------------------
NET
UNREALIZED TOTAL
COMMON STOCK CAPITAL RETAINED GAIN (LOSS) ON STOCKHOLDERS'
SHARES AMOUNT SURPLUS EARNINGS SECURITIES EQUITY
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
JANUARY 1, 1996 450,000 $ 2,700,000 $ 1,800,000 $ 3,951,880 $ 155,228 $ 8,607,108
Net income 1,137,270 1,137,270
Net change in unrealized loss
on securities available for sale,
net of taxes of $79,926 (128,728) (128,728)
------- ----------- ----------- ----------- --------- -----------
BALANCE,
DECEMBER 31, 1996 450,000 2,700,000 1,800,000 5,089,150 26,500 9,615,650
Net income 1,149,176 1,149,176
Net change in unrealized gain
on securities available for sale,
net of taxes of $67,042 112,680 112,680
------- ----------- ----------- ----------- --------- -----------
BALANCE,
DECEMBER 31, 1997 450,000 $ 2,700,000 $ 1,800,000 $ 6,238,326 $ 139,180 $ 10,877,506
======= =========== =========== =========== ========= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
CENTRAL BANK
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
- -----------------------------------------------------------------------------------------
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,149,176 $ 1,137,270
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 98,008 111,090
Net (discount accretion) premium amortization
of investment securities (63,903) 29,240
Provision for deferred taxes 176 (89,468)
Provision for loan losses 275,000 360,000
Net (gain) loss on sale or calls of securities
available for sale (1,983) 4,400
Loss on other real estate owned 1,461
Loss on disposal of fixed assets 745
(Increase) decrease in accrued interest receivable 8,773 (79,804)
Increase in other assets (522,482) (2,747)
(Decrease) increase in accrued interest payable (12,645) 49,864
Decrease in other liabilities (11,234) (118,243)
----------- -----------
Net cash provided by operating activities 921,092 1,401,602
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale and maturities of
securities available for sale 5,259,343 8,342,701
Purchase of securities available for sale (9,141,151) (12,649,768)
Principal repayments of investments held to maturity 1,077,116 219,291
Net increase in loans (1,677,994) (5,299,015)
Net decrease in time deposits with banks 276,000
Proceeds from sale of other real estate owned 183,858
Purchases of property and equipment (41,726) (59,450)
----------- -----------
Net cash used by investing activities (4,340,554) (9,170,241)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits 2,688,386 4,665,768
(Decrease) increase in securities sold under
agreements to repurchase (2,736,545) 3,398,875
----------- -----------
Net cash (used) provided by financing activities (48,159) 8,064,643
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (3,467,621) 296,004
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 18,106,042 17,810,038
----------- -----------
CASH AND CASH EQUIVALENTS, END OF YEAR $14,638,421 $18,106,042
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 2,401,213 $ 1,970,786
=========== ===========
Income taxes $ 693,250 $ 750,000
=========== ===========
OTHER NON-CASH INVESTING ACTIVITIES:
Collateral for installment loans
transferred to other assets $ 1,137,000 $ 915,000
=========== ===========
Collateral for real estate loans
transferred to other real estate owned $ 185,000
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
CENTRAL BANK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Central Bank (the "Bank") is a state bank chartered under the banking laws of
the State of Florida. The Bank is engaged in the commercial banking business and
provides a variety of related financial products and services through its
branches in Dade County, Florida. The Bank is subject to the regulations of
certain federal and state agencies and undergoes periodic examinations by those
regulatory authorities.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following summarizes the
more significant accounting and reporting policies of the Bank:
CASH AND CASH EQUIVALENTS - For purposes of the statements of cash flows, the
Bank considers cash and due from banks and federal funds sold as cash and cash
equivalents. Generally, federal funds are sold for one-day periods.
INVESTMENT SECURITIES - Investment securities are classified as either held to
maturity, trading, or available for sale, with distinct accounting treatment for
each classification. Investments held to maturity are carried at cost, adjusted
for amortization of premium or accretion of discount, which is recognized as an
adjustment to interest income. Securities available for sale are carried at fair
value with unrealized gains and losses included in stockholders' equity on an
after-tax basis. The Bank did not maintain a trading portfolio at December 31,
1997 and 1996.
Gains or losses from the sale or redemption of investments are determined using
the specific identification method.
LOANS - Loans are stated at the amount of unpaid principal, reduced by purchase
discount, unearned interest, deferred loan fees and an allowance for loan
losses. Interest on loans is primarily recognized using the simple interest
method. The discount on purchased loans is being accreted using a method that
approximates the effective interest method over the estimated life of the loans.
Unearned interest is being amortized over the life of the loan as a yield
adjustment under a method that approximates a level yield.
LOAN ORIGINATION AND COMMITMENT FEES - Loan origination and commitment fees and
the direct incremental costs related to such fees are deferred and amortized
over the life of the loan as a yield adjustment under a method which
approximates a level yield.
PROVISION FOR LOAN LOSSES - Provisions for loan losses, which increase the
allowance for loan losses, are established by charges to income. Such allowances
represent the amounts which, in management's judgment, are adequate to absorb
loans which may become uncollectible. The adequacy of the allowance is
determined by management's continuing evaluation of the loan portfolio in light
of past loss experience, present economic conditions and other factors
considered relevant by management at the financial statement date. Anticipated
changes in economic factors which may influence the level of the allowance
-6-
<PAGE>
are considered in the evaluation by management when the likelihood of the
changes can be reasonably determined. In estimating the allowance for loan
losses, consideration is given to asset performance, the financial condition of
borrowers or guarantors, additional collateral provided, current and anticipated
economic conditions, appraisals of collateral, cost of disposal, and holding
costs. While management uses the best information available to make such
evaluations, future adjustments to the allowance may be necessary, which may be
material, if economic conditions differ substantially from the assumptions used
in the evaluation. If additions to the original estimate of the allowance for
loan losses are deemed necessary, they will be reported in earnings in the
period in which they become reasonably estimable.
Management believes that the allowance for loan losses is adequate; however,
regulatory agencies, as an integral part of their examination process,
periodically review the Bank's allowance for loan losses. Such agencies may
require the Bank to recognize additions to the allowance based on their judgment
of information available to them at the time of their examination.
Statement of Financial Accounting Standards ("SFAS") No. 114, ACCOUNTING BY
CREDITORS FOR IMPAIRMENT OF A LOAN, and SFAS No. 118, ACCOUNTING BY CREDITORS
FOR IMPAIRMENT OF A LOAN - RECOGNITION AND DISCLOSURES, an amendment of SFAS No.
114, address the accounting for impairment of certain loans when it is probable
that all amounts due pursuant to the contractual terms of the loan will not be
collected. Adoption of these standards entailed the identification of commercial
business and commercial real estate loans which are considered impaired under
the provisions of SFAS No. 114. Groups of smaller-balance homogeneous loans
(generally residential mortgage and consumer installment and other loans) are
collectively evaluated for impairment.
Under the provisions of these standards, a loan is impaired when, based on
current information and events, it is probable that a creditor will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. Individually identified impaired loans are measured based on the
present value of payments expected to be received, using the historical
effective loan rate as the discount rate. Alternatively, measurement may also be
based on observable market prices or for loans that are solely dependent on the
collateral for repayment, measurement may be based on the fair value of the
collateral. Loans that are to be foreclosed are measured based on the fair value
of the collateral. If the recorded investment in the impaired loan exceeds the
measure of fair value, a valuation is required as a component of the allowance
for loan losses. Changes to the valuation allowance are recorded as a component
of the provision for loan losses.
PROPERTY AND EQUIPMENT - Property and equipment is stated at cost, less
accumulated depreciation. Depreciation is provided, generally using the
straight-line method, over estimated useful lives which range from 3 to 12
years.
OTHER ASSETS - Other assets include repossessed automobiles. The repossessed
vehicles are recorded at the lower of the loan amount or the fair value of the
vehicle on the date of foreclosure as determined by industry information. Any
excess of the loan balance over the estimated fair value of the repossessed
vehicle is charged to the allowance for loan losses. Any losses on the sale of
repossessed vehicles are charged to earnings.
-7-
<PAGE>
INCOME TAXES - The Bank accounts for its income taxes under the liability
method. The liability method requires that deferred tax assets and liabilities
be recorded based on the difference between the tax basis of assets and
liabilities and their carrying amounts for financial reporting purposes,
referred to as "temporary differences." Under this method, deferred taxes are
adjusted for tax rate changes as they occur.
INTEREST RATE RISK - The Bank is engaged principally in providing commercial and
industrial loans, real estate and construction loans (both adjustable rate and
fixed rate), and fixed rate installment loans. The Bank also purchases
investment securities which primarily provide fixed rate returns over medium
terms. Loans and investment securities are primarily funded by short-term
liabilities that have interest rates that vary with market rates over time.
The Bank has interest-earning assets with a longer average duration than its
interest-bearing liabilities. The shorter duration of the interest-bearing
liabilities indicates that the Bank could be exposed to interest rate risk
because, in a rising rate environment, liabilities will be repricing faster at
higher interest rates, thereby reducing the fair value of net interest-earning
assets and net interest income. Net interest income and the fair value of net
interest-earning assets will fluctuate based upon changes in interest rates and
changes in the levels of interest-sensitive assets and liabilities.
RECLASSIFICATION OF PRIOR YEAR BALANCES - Certain prior year balances have been
reclassified to conform to current year classifications.
2. INVESTMENT SECURITIES
Amortized cost and estimated fair values of securities available for sale and
investments held to maturity are summarized as follows:
<TABLE>
<CAPTION>
Securities Available for Sale:
DECEMBER 31, 1997
-----------------------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 804,853 $ 15,431 $ 820,284
U.S. Agency securities 23,230,759 213,533 $ (7,516) 23,436,776
Federal Reserve Bank stock 135,000 135,000
----------- -------- -------- -----------
$24,170,612 $228,964 $ (7,516) $24,392,060
=========== ======== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
-----------------------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 1,559,425 $ 17,474 $ (724) $ 1,576,175
U.S. Agency securities 18,125,639 104,008 (79,043) 18,150,604
Corporate obligations 400,360 400,360
Federal Reserve Bank stock 135,000 135,000
----------- -------- -------- -----------
$20,220,424 $121,482 $(79,767) $20,262,139
=========== ======== ======== ===========
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Investments Held to Maturity:
DECEMBER 31, 1997
--------------------------------------------------------------------
GROSS GROSS ESTIMATED
BOOK UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 1,501,026 $ (10,396) $ 1,490,630
U.S. Agency securities 3,605,809 $ 15,578 (21,557) 3,599,830
----------- -------- --------- -----------
$ 5,106,835 $ 15,578 $ (31,953) $ 5,090,460
=========== ======== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------------------------------------------------
GROSS GROSS ESTIMATED
BOOK UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 1,502,517 $ (28,296) $ 1,474,221
U.S. Agency securities 4,683,939 $ 16,427 (49,610) 4,650,756
----------- -------- --------- -----------
$ 6,186,456 $ 16,427 $ (77,906) $ 6,124,977
=========== ======== ========= ===========
</TABLE>
The Bank's investment portfolio includes investments in derivative financial
instruments (specifically structured notes in the form of step-up Agency
securities) at December 31, 1997 and 1996. These structured notes have coupon
rates that increase at specified intervals, are callable by the issuer and
mature in 1998. Due to a callable provision of the notes, interest is being
accrued at the rate stated for the current period.
The book value and estimated fair value of these derivative financial
instruments are summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
-------------------------------- -------------------------------------
ESTIMATED ESTIMATED
BOOK FAIR BOOK FAIR
VALUE VALUE VALUE VALUE
<S> <C> <C> <C> <C>
Held to maturity $ 2,250,000 $ 2,245,185 $ 2,250,000 $ 2,233,500
=========== =========== =========== ===========
</TABLE>
-9-
<PAGE>
Actual maturities of investment securities may differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties. As of December 31, 1997, the book
value and fair values of investment securities, by contractual maturity, are as
follows:
<TABLE>
<CAPTION>
SECURITIES AVAILABLE INVESTMENTS HELD
FOR SALE TO MATURITY
-------------------------------------------------------------------------
ESTIMATED ESTIMATED
BOOK FAIR BOOK FAIR
VALUE VALUE VALUE VALUE
<S> <C> <C> <C> <C>
Within one year $ 3,751,026 $ 3,735,816
One to five years $ 10,218,178 $ 10,275,104 109,144 116,562
Five to ten years 2,941,850 2,998,370 190,864 193,126
Over ten years 11,010,584 11,118,586 1,055,801 1,044,956
------------ ------------ ----------- -----------
$ 24,170,612 $ 24,392,060 $ 5,106,835 $ 5,090,460
============ ============ =========== ===========
</TABLE>
Proceeds from sales of securities available for sale during 1996 were
approximately $3,858,000. Gross realized gains amounted to approximately $20,400
and gross realized losses amounted to approximately $24,800 for the year ended
December 31, 1996. There were no sales of securities available for sale during
1997.
At December 31, 1997, securities with a book value of approximately $20,462,000
and a fair value of approximately $20,609,000 were pledged to secure securities
sold under agreements to repurchase and public funds.
3. LOANS
The composition of loans is as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
<S> <C> <C>
Commercial and industrial $ 8,137,712 $ 9,707,932
Real estate and construction 15,006,741 14,433,495
Installment 21,851,166 19,261,585
Home equity line 1,062,830 1,067,148
Other 233,313 637,194
----------- -----------
Total 46,291,762 45,107,354
============ ============
Add (deduct):
Unearned interest 945,917 933,390
Unearned income (919) (7,018)
Deferred loan fees (23,668) (45,977)
Allowance for loan losses (917,577) (909,909)
----------- -----------
$ 46,295,515 $ 45,077,840
============ ============
</TABLE>
-10-
<PAGE>
The Bank's real estate and commercial lending activities are primarily with
customers located in Dade County, Florida. Collateral required for these types
of loans is based upon management's evaluation of the respective credit risk in
accordance with the Bank's credit policies. However, these types of loans are
dependent on, among other things, economic conditions in Dade County, Florida.
Management closely monitors its loan concentrations by industry and type of
collateral, as well as individual borrowers. Installment loans are primarily for
new vehicles through programs with automotive dealerships.
Repossessed vehicles included in other assets amounted to approximately $227,000
and $118,000 at December 31, 1997 and 1996, respectively.
At December 31, 1997 and 1996, the recorded investment in non-accrual loans,
also considered impaired under SFAS No. 114, was approximately $16,000 and
$302,000, respectively. Such loans had a related allowance for loan losses of
approximately $28,000 at December 31, 1996. If non-accrual loans were on full
accrual, additional interest income of approximately $23,000 would have been
recorded for 1997 and 1996.
A summary of the activity in the allowance for loan losses for the years ended
December 31, 1997 and 1996 is as follows:
1997 1996
Balance, beginning of year $ 909,909 $ 711,556
Provision for credit losses 275,000 360,000
Loan charge-offs, net (267,332) (161,647)
--------- ---------
Balance, end of year $ 917,577 $ 909,909
========= =========
4. PROPERTY AND EQUIPMENT
A summary of property and equipment is as follows:
DECEMBER 31, DECEMBER 31,
1997 1996
Furniture and equipment $ 717,240 $ 731,925
Leasehold improvements 452,585 448,621
Automobiles 55,321 55,321
----------- -----------
Total 1,225,146 1,235,867
Less: accumulated depreciation (1,083,981) (1,037,675)
----------- -----------
$ 141,165 $ 198,192
=========== ===========
Leasehold improvements are amortized over the shorter of the related lease term
or their estimated useful lives.
-11-
<PAGE>
The future minimum payments by year and in the aggregate, on leases that have
initial terms of one year or more at December 31, 1997, are as follows:
YEAR ENDING
DECEMBER 31: AMOUNT
1998 $ 340,235
1999 293,819
2000 152,433
---------
Total minimum lease payments $ 786,487
=========
Rent expense charged to operations was approximately $342,000 and $365,000 for
the years ended December 31, 1997 and 1996, respectively.
5. DEPOSITS
Time deposits at December 31, 1997 mature as follows:
AMOUNT
Maturing in six months or less $ 18,453,699
Maturing between six months and one year 4,621,280
Maturing between one and three years 3,346,966
Maturing beyond three years 56,739
------------
Total $ 26,478,684
============
6. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
Securities sold under agreements to repurchase are generally transacted with the
Bank's deposit customers and mature within one to ninety days from the
transaction date.
The following table sets forth certain information pertaining to securities sold
under agreements to repurchase at December 31:
1997 1996
Balances outstanding $ 8,333,888 $ 11,070,433
============ ============
Largest amount outstanding
at any month-end $ 13,800,823 $ 16,371,828
============ ============
Average balance outstanding
during the year $ 12,455,432 $ 12,111,871
============ ============
Weighted average interest
rate for the year 4.75 % 4.40 %
============ ============
-12-
<PAGE>
7. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Bank utilizes various financial
instruments with off-balance sheet risk to meet the financing needs of its
customers. These off-balance sheet activities include commitments to fund lines
of credit and to extend letters of credit. The credit and market risks
associated with these instruments are generally managed in conjunction with the
Bank's balance sheet activities and are subject to normal credit policies and
monitoring procedures. The Bank's exposure to loss is represented by the
contractual amount of the commitments. At December 31, 1997, the Bank had
commitments to customers for approximately $4,374,000 in letters of credit and
approximately $7,675,000 for unused portions of lines of credit. Management does
not anticipate any significant losses as a result of these commitments.
The Bank is a party to certain legal actions arising in the normal course of
business. In the opinion of management, the ultimate outcome of such litigation
will not have a material effect on the financial position of the Bank.
8. STOCKHOLDERS' EQUITY
The components of retained earnings are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
<S> <C> <C>
Capital surplus allocated to retained earnings $ 118,022 $ 118,022
Retained earnings 6,120,304 4,971,128
---------- ----------
Total $6,238,326 $5,089,150
========== ==========
</TABLE>
There were no dividends paid in 1997 or 1996. The declaration of dividends by
the Bank is subject to certain limitations under the Florida Banking Statutes.
At December 31, 1997, approximately $2,286,000 of retained earnings were
available for dividend declaration without prior regulatory approval.
9. INCOME TAXES
The components of the provision for income taxes for the years ended December
31, 1997 and 1996 are as follows:
DECEMBER 31, DECEMBER 31,
1997 1996
Current income taxes:
Federal $ 636,658 $ 653,393
State 42,428 63,165
--------- ---------
Total 679,086 716,558
Deferred income taxes 176 (89,468)
--------- ---------
Total income tax provision $ 679,262 $ 627,090
========= =========
-13-
<PAGE>
The composition of the net deferred tax asset is as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
<S> <C> <C>
Depreciation and amortization $ 42,937 $ 57,721
Allowance for loan losses 279,718 256,940
Deferred loan fees 9,131 17,301
Unrealized gain on securities available for sale (82,268) (15,226)
--------- ---------
Total net deferred tax asset included in other assets $ 249,518 $ 316,736
========= =========
</TABLE>
The Bank's provision for income taxes differs from the amounts determined by
applying the federal income tax rate to income before income taxes for the
following reasons:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Federal tax at statutory rates $ 621,667 34.00 % $ 599,889 34.00 %
State income taxes net of
federal income tax benefit 34,671 1.90 33,058 1.87
Meals and entertainment disallowance 5,919 0.32 6,823 0.39
Miscellaneous 17,005 0.93 (12,680) (0.72)
--------- ----- --------- -----
Effective tax rates $ 679,262 37.15 % $ 627,090 35.54 %
========= ===== ========= =====
</TABLE>
10. REGULATORY MATTERS
The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory and possibly additional discretionary actions by
regulators that, if undertaken, could have direct material effect on the Bank's
financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Bank must meet specific capital
guidelines that involve quantitative measures of the Bank's assets, liabilities,
and certain off-balance sheet items as calculated under regulatory accounting
practices. The Bank's capital amounts and classifications are also subject to
qualitative judgments by the regulators about components, risk weightings, and
other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 1997, that the Bank
meets all capital adequacy requirements to which it is subject.
As of December 31, 1997 and 1996, the most recent notification from the Office
of the Comptroller of the State of Florida - Department of Banking and Finance
categorized the Bank as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, the Bank must
maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios
as set forth in the table below. There are no conditions or events since that
notification that management believes have changed the institution's category.
-14-
<PAGE>
The Bank's actual capital amounts and ratios are also presented in the table.
<TABLE>
<CAPTION>
REQUIRED
TO BE CATEGORIZED
AS WELL CAPITALIZED
REQUIRED UNDER PROMPT
FOR CAPITAL CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
----------------------- ---------------------- ----------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1997:
Total Capital (to Risk Weighted Assets) $11,454,605 20.0 % $4,568,000 8.0 % $5,710,000 10.0 %
=========== ==== ========== === ========== ===
Tier I Capital (to Risk Weighted Assets) $10,738,326 18.8 % $2,284,000 4.0 % $3,426,000 6.0 %
=========== ==== ========== === ========== ===
Tier I Capital (to Average Assets) $10,738,326 11.6 % $2,774,000 3.0 % $4,623,000 5.0 %
=========== ==== ========== === ========== ===
As of December 31, 1996:
Total Capital (to Risk Weighted Assets) $10,272,026 18.9 % $4,352,000 8.0 % $5,440,000 10.0 %
=========== ==== ========== === ========== ===
Tier I Capital (to Risk Weighted Assets) $ 9,589,150 17.6 % $2,176,000 4.0 % $3,264,000 6.0 %
=========== ==== ========== === ========== ===
Tier I Capital (to Average Assets) $ 9,589,150 11.3 % $2,537,000 3.0 % $4,228,000 5.0 %
=========== ==== ========== === ========== ===
</TABLE>
11. TRANSACTIONS WITH RELATED PARTIES
Directors, officers, and their affiliates have borrower and depositor
relationships with the Bank in the ordinary course of business with terms
approximating market. Approximate balances are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
<S> <C> <C>
Loans $ 1,274,000 $ 1,555,000
Available portions under line of credit agreements 479,000 466,000
Securities sold under agreement to repurchase 2,390,000 5,632,000
Deposits 9,460,000 10,545,000
</TABLE>
12. MERGER
On December 30, 1997, the Bank entered into an agreement to be merged with and
into BankUnited, FSB. Provided the agreement is approved by the Bank's
shareholders and the appropriate regulatory authorities, the merger is expected
to be consummated in the second quarter of 1998.
* * * * * *
-15-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
COMPARISON OF THE YEARS ENDED DECEMBER 31, 1997 AND 1996
RESULTS OF OPERATIONS
The following is a discussion and analysis of Central's results of operations.
The discussion and analysis should be read in conjunction with Central's
financial statements and corresponding notes included elsewhere in this Joint
Proxy Statement/Prospectus.
Central's net income increased $12,000 or 1.0% to $1.15 million for the year
ended December 31, 1997 compared to $1.14 million for the year ended December
31, 1996. The increase in net income was primarily due to a $215,000 increase in
net interest income, a reduction in the loan loss provision of $85,000 and a
$16,000 increase in non-interest income, partially offset by increases of
$252,000 in operating expenses and $52,000 in income taxes.
The primary component of earnings for most financial institutions, including
Central, is net interest income. Net interest income is the difference between
the interest income received on its interest-earning assets and the interest
paid on its interest-bearing liabilities. Net interest income is determined
primarily by interest rate spread and the relative amounts of interest-earning
assets and interest-bearing liabilities.
NET INTEREST INCOME
Net interest income increased $215,000 or 5.0% to $4.6 million for the year
ended December 31, 1997 compared to $4.3 million for the year ended December 31,
1996. The increase in net interest income was primarily due to an increase of
$7.7 million in average interest-earning assets, partially offset by an increase
of $5.2 million in average interest-bearing liabilities. Average loans
outstanding increased $2.9 million, average Federal funds sold declined $735,000
and average investments increased $5.5 million, while average interest-bearing
deposits increased $4.9 million and average securities sold under agreement to
repurchase increased $356,000. The increases in the loan and deposit portfolios
were primarily due to success in attracting new customers through advertising,
referrals, growth in consumer lending and continued improvement in business
conditions in Dade County, Florida during the year ended December 31, 1997.
These increases were offset by a decrease in the net interest rate spread from
5.52% in 1996 to 5.28% in 1997.
INTEREST INCOME
Interest income increased $601,000 or 9.5% to $6.9 million for the year ended
December 31, 1997 compared to $6.3 million for the year ended December 31, 1996.
The increase in interest income was primarily due to an increase of $5.5 million
in the average balance of investments outstanding during the year ended December
31, 1997 compared to the year ended December 31, 1996. Correspondingly, Central
experienced a 22.4% increase in its generally higher yielding
1
<PAGE>
consumer loan portfolio in 1997 compared to 1996. The increase in loans
outstanding was primarily a result of continued economic improvement in Dade
County, Florida during the year ended December 31, 1997.
INTEREST EXPENSES
The increase in interest expense of $386,000 or 19.3% to $2.4 million for the
year ended December 31, 1997 compared to $2.0 million for the year ended
December 31, 1996 was due primarily to a $5.2 million increase in the average
balance of interest-bearing liabilities. Increases in the average balance of
deposits resulted primarily from continued deposit account growth from loyal,
long term customers especially in the form of NOW accounts, certificates of
deposit and a securities repurchase sweep program.
<TABLE>
<CAPTION>
NET INTEREST INCOME, AVERAGE BALANCE AND RATES:
YEAR ENDING DECEMBER 31,
1997 1996
--------------------------- ----------------------------
AVERAGE YIELD/ AVERAGE YIELD/
(DOLLARS IN THOUSANDS) BALANCE INTEREST RATE BALANCE INTEREST RATE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning assets:
Loans* $46,056 $4,464 9.69% $43,149 $4,223 9.79%
Federal funds sold** 10,354 569 5.50 11,089 594 5.36
Taxable investment securities 29,808 1,908 6.40 24,293 1,523 6.27
- --------------------------------------------------------------------------------------------------
Total interest-earning assets $86,218 $6,941 8.05% $78,531 $6,340 8.07%
Other assets 6,236 6,039
- --------------------------------------------------------------------------------------------------
Total $92,454 $84,570
- --------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW accounts $ 7,513 $ 161 2.14% $ 6,320 $ 121 1.91%
Money market accounts 10,471 263 2.51 11,578 279 2.41
Savings deposits 2,262 46 2.03 2,243 45 2.01
Certificate of deposits 25,629 1,326 5.17 20,880 1,026 4.91
Securities sold u/a repurchase 12,459 593 4.76 12,103 532 4.40
- --------------------------------------------------------------------------------------------------
Total interest-bearing liabilities $58,334 $2,389 4.10 $53,124 $2,003 3.77
- --------------------------------------------------------------------------------------------------
Non-interest-bearing deposits 22,989 21,653
Other liabilities 1,015 788
Shareholders'equity 10,116 9,005
- --------------------------------------------------------------------------------------------------
Total liabilities and
shareholders' equity $92,454 $84,570
- --------------------------------------------------------------------------------------------------
Net interest income/net interest
rate spread $4,552 3.95% $4,337 4.30%
- --------------------------------------------------------------------------------------------------
Net average interest-earning
assets/net interest margin $27,884 5.28% $25,407 5.52%
- --------------------------------------------------------------------------------------------------
Ratio of average interest-earning
assets to average interest-bearing
liabilities 1.48x 1.48x
- --------------------------------------------------------------------------------------------------
</TABLE>
* Includes non accrual loans which are not significant
** Includes interest bearing deposits (1996) which are not significant
Net interest income before the provision for losses can be analyzed in terms of
the impact of changing rates and changing volumes of interest-earning assets and
liabilities. The following table sets forth certain information regarding
changes in net interest income due to changes in the average balance of
interest-earning assets and interest-bearing liabilities and due to changes in
average rates for the period indicated. For purposes of this table, rate/volume
changes have been allocated solely to rate changes and non-accrual loans are
included in average balances.
2
<PAGE>
- --------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31, 1997 VERSUS 1996
INCREASE (DECREASE) DUE TO CHANGE IN:
---------------------------------------
AVERAGE AVERAGE NET
(DOLLARS IN THOUSANDS) RATE VOLUME CHANGE
- --------------------------------------------------------------------------------
Interest income:
Loans - net $ (43) $284 $241
Federal funds sold 16 (41) (25)
Taxable investment securities 32 353 385
- --------------------------------------------------------------------------------
5 596 601
- --------------------------------------------------------------------------------
Interest expense:
NOW accounts 15 25 40
Money market accounts 12 (28) (16)
Savings deposits 1 - 1
Certificates of deposit 54 246 300
Securities sold u/a repurchase 44 17 61
- --------------------------------------------------------------------------------
126 260 386
- --------------------------------------------------------------------------------
Net interest income $(121) $336 $215
- --------------------------------------------------------------------------------
PROVISION FOR LOAN LOSSES
The provision for loan losses reflects management's assessment of the adequacy
of the allowance for loan losses. The amount of future provisions is a function
of the ongoing evaluation of the allowance for loan losses, which considers the
characteristics of the loan portfolio, economic conditions and other relevant
factors.
The provision for loan losses decreased $85,000 or approximately 23.6% to
$275,000 for the year ended December 31, 1997 compared to $360,000 for the year
ended December 31, 1996. The allowance for loan losses as a percent of total
loans is approximately 1.98% at December 31, 1997, which represents a slight
decrease over the ratio of 2.02% at December 31, 1996. Central had $107,000 in
non-performing loans at December 31, 1997 representing 0.23% of total loans.
This amount is significantly less than non-performing loans at December 31, 1996
which totaled $365,000, representing 0.79% of total loans. Additionally, there
were no significant changes in the risk composition of Central's loan portfolio
from December 31, 1996 to December 31, 1997,
Management's evaluation of the allowance for loan losses includes applying
relevant risk factors to the entire loan portfolio, including non-performing
loans. Risk factors applied to the performing loan portfolio are based, in part,
on Central's recent loss history and consider the current portfolio's
characteristics, current economic conditions and other relevant factors.
Non-performing loans are carried at fair value based on the most recent
information available. The amount of the provision for loan losses is a function
of management's evaluation of the
3
<PAGE>
allowance for loan losses. Based upon the procedures performed in evaluating the
allowance for loan losses at December 31, 1997, management believes that the
allowance is adequate.
In accordance with Central's asset classification policy, non-performing loans
(loans contractually past-due 90 days or more) are recorded at the estimated
fair value of the collateral underlying the loan, for collateral dependent
loans, or the net present value of estimated future cash flows discounted at the
loan's original effective interest rate. As a result, any expected losses from
loans identified as non-performing at December 31, 1997 have been recognized by
Central and should not have a future impact on the allowance for loan losses
unless the condition of the loan further deteriorates.
OTHER INCOME
Other income increased $16,000 or 1.3%, remaining essentially unchanged for the
year ended December 31, 1997 compared to the year ended December 31, 1996. Fee
income generated by Central's international department increased $40,000 or
48.2% to $123,000 for the year ended December 31, 1997 compared to $83,000 for
the year ended December 31, 1996 to offset declines in certain other
non-interest income categories.
OTHER EXPENSES
Other expenses increased $252,000 or 7.4% to $3.7 million for the year ended
December 31, 1997 compared to $3.4 million for the year ended December 31, 1996,
primarily due to increases in employee compensation and benefits and operating
expenses. Employee compensation and benefits increased approximately $102,000 or
6.1% to $1.8 million primarily due to an increase in both staff and health and
life insurance premiums. Operating expenses increased $137,000 for the year
ended December 31, 1997 compared to the year ended December 31, 1996 primarily
due to an increase in legal expense relating to the disposition of other real
estate owned and ongoing litigation.
INCOME TAXES
Income tax expense increased $52,000 or 8.3% to $679,000 for the year ended
December 31, 1997 compared to the year ended December 31, 1996 due to an
increase in net income before taxes as well as an increase in the effective tax
rate.
LIQUIDITY
Central's liquid assets consist primarily of cash and cash equivalents and
marketable securities. Considerations in managing the Company's liquidity
position include scheduled cash flows from existing assets, contingencies and
liabilities, as well as projected liquidity needs arising from approved
extensions of credit. Furthermore, the liquidity position is monitored daily by
management to maintain a level of liquidity conducive to efficient operations
and is continuously evaluated as part of the asset/liability management process.
4
<PAGE>
Central's cash inflows consist primarily of amounts generated from new deposits,
loan repayments, loan and investment maturities, periodic payments and calls of
investments and sales, if any, of investments available for sale. Cash outflows
consist primarily of originations of loans and purchases of investments. Sources
of borrowings include securities repurchase agreements with customers.
Access to funds from depositors is affected by the rate Central pays on
certificates of deposit and other deposits and convenience and service provided
to transaction-based account holders. The rate Central pays on certificates of
deposit is dependent on, among other things, economic conditions and rates paid
by other financial institutions within Central's area. Central manages the cash
inflows and outflows from certificates of deposit by increasing or decreasing
its certificate of deposit rates.
Central's sources of liquidity are impacted by various matters, some of which
are beyond the control of Central. Scheduled loan repayments are a relatively
stable source of funds while loan and investment prepayments and deposit flows
vary widely in reaction to market conditions, dictated primarily by prevailing
interest rates. Investment sales are influenced by general market demand and
other market conditions. Central's ability to borrow at attractive rates is
affected by its credit ratings and other market conditions.
In order to manage the uncertainty inherent in its sources of funds, Central
continually evaluates alternate sources of funds and attempts to maintain and
develop diversity and flexibility in the number of such sources. The effect of a
decline in any one source of funds often can be offset by use of an alternative
source, although potentially at a different cost to Central.
CAPITAL COMPLIANCE
Central is subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory, and possibly additional, discretionary action by
regulators that, if undertaken, could have a direct material effect on Central's
financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, Central must meet specific capital
guidelines that involve quantitative measures of Central's assets, liabilities
and certain off-balance sheet items as calculated under regulatory accounting
practices. Central's capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings and
other factors.
Quantitative measures established by regulation to ensure capital adequacy
require Central to maintain minimum amounts and ratios of total and Tier I
capital to risk weighted assets and of Tier I capital to average assets. As of
December 31, 1997, Central exceeded all adequacy requirements to which it is
subject. See Note 10 to Central Financial Statements.
5
<PAGE>
ASSET/LIABILITY MANAGEMENT
Management of interest rate sensitivity involves matching the maturity and
repricing dates of interest-earning assets with those of interest-bearing
liabilities in an effort to manage the impact of fluctuating interest rates on
net interest margins.
Central has established various levels and frequencies of oversight in its
asset/liability management. The Officers' Asset/Liability Committee meets
weekly, the Board of Directors meet monthly and, on a quarterly basis, either
the Board Asset/Liability Investment Committee or the full Board of Directors,
at its regularly scheduled meeting, will meet to establish, communicate,
coordinate and control asset/liability procedures. Further, these meetings
enable Central to monitor the volume and mix of its interest-sensitive assets
and liabilities consistent with overall liquidity, capital, growth, risk and
profitability goals.
Traditionally, interest rate sensitivity was only measured as the difference
between the amount of assets and liabilities subject to changes in interest
rates over a variety of time horizons. The display of these differences over
various time horizons is known as the balance sheet gap. That is, institutions
which are asset-sensitive (positive gap) have more assets than liabilities
maturing or repricing within specific time periods and are likely to benefit in
periods of rising interest rates, but to suffer as rates decrease. Similarly,
institutions which are liability-sensitive (negative gap) are likely to benefit
in periods of declining rates, but experience a negative impact on net interest
income as market rates increase.
Recent studies have shown, however, that most institutions with zero gaps still
experience earnings changes. This is due to differences in how asset yields and
liability costs adjust to rate changes. Central has been able to account for
these differences by weighting the difference in change of asset yields and
liability costs when compared to a change in a closely followed index, such as
the prime rate. Once interest-sensitive assets and interest-sensitive
liabilities are weighted according to their historical reaction to changes in
the prime rate, Central can better project the effect on earnings. This
measurement is known as the income statement gap.
Central utilizes the simulation modeling services of third-party vendors. These
models project the effects on Central's earnings, within 200 basis point changes
(both upward and downward), on both a balance sheet gap basis and an income
statement gap basis.
The following table presents Central's exposure to interest rate risk at
December 31, 1997, on a balance sheet gap basis:
6
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1997
ONE YEAR 1 TO 3 3 TO 5 OVER 5
OR LESS YEARS YEARS YEARS TOTAL
- --------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total interest-earning assets* $47,545 $13,150 $ 7,931 $16,634 $85,260
Total interest-bearing liabilities 52,578 3,347 57 - 55,982
- --------------------------------------------------------------------------------------------------------------
Interest rate sensitivity gap $(5,033) $ 9,803 $ 7,874 $16,634 $29,278
==============================================================================================================
Cumulative interest rate
sensitivity gap $(5,033) $ 4,770 $12,644 $29,278
==============================================================================================================
Cumulative interest rate
sensitive gap as a percentage
of total assets (5.4%) 5.2% 13.7% 31.7%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Includes projected periodic cash flows from all loan categories; all
adjustable or variable rate securities are included in the time horizon
coinciding with the next scheduled adjustment.
In preparing the table above, certain assumptions have been made. Fixed rate
mortgage and consumer loans are scheduled according to projected cash flows.
Investment securities are shown based on the earlier of repricing or contractual
maturity. NOW, money market and savings accounts are assumed to reprice
immediately and are included in one year or less. Certificates of deposit and
securities repurchase agreements are shown according to contractual maturity.
The above schedule is based on the latest available assumptions and should not
be regarded as indicative of the actual prepayments and withdrawals that may be
experienced by Central.
IMPACT OF INFLATION
The financial statements and related financial information presented herein have
been prepared in accordance with generally accepted accounting principles, which
require the measurement of financial position and operating results in terms of
historical dollars without considering changes in the relative purchasing power
of money over time due to inflation. Unlike most industrial companies, virtually
all of the assets and liabilities of a financial institution are monetary in
nature. As a result, interest rates have a more significant impact on a
financial institution's performance than the effects of general levels of
inflation. Interest rates do not necessarily move in the same direction or same
magnitude as the price of goods and services.
7
<PAGE>
FINANCIAL CONDITION
Central's total assets increased $1.3 million or 1.4% to $92.4 million at
December 31, 1997 compared to $91.1 million at December 31, 1996. This increase
in total assets generally reflects increases in net loans and securities
available for sale. The overall increase in Central assets was facilitated by an
increase in stockholders' equity of $1.3 million or 13.5% to $10.9 million at
December 31, 1997 compared to $9.6 million at December 31, 1996.
Net loans increased $1.2 million or 2.7% to $46.3 million at December 31, 1997
compared to $45.1 million at December 31, 1996; investments increased by $3.1
million or 11.7% to $29.5 million at December 31, 1997 compared to $26.4 million
at December 31, 1996; and cash and cash equivalents decreased $3.5 million or
19.3% to $14.6 million at December 31, 1997 compared to $18.1 million at
December 31, 1996.
YEAR 2000
Central developed an action plan to resolve any Year 2000 compliance issues.
Data processing for Central's major applications is performed by a third party
service bureau utilized by BankUnited, which has indicated that its systems will
be Year 2000 compliant. BankUnited has indicated that it does not anticipate
that the Year 2000 issue will be material to BankUnited's operations or
financial condition. Central does not anticipate that the Year 2000 issue will
be material to Central's operations or financial condition.
<PAGE>
APPENDIX C
SECTION 552.14 OF THE
REGULATIONS OF THE
OFFICE OF THRIFT SUPERVISION
<PAGE>
APPENDIX C
CODE OF FEDERAL REGULATIONS
TITLE 12--BANKS AND BANKING
Chapter V- Office of Thrift Supervision, Department of The Treasury
Part 552-Incorporation, Organization, and Conversion of
Federal Stock Associations
Section 552.14 Dissenter and appraisal rights.
(a) RIGHT TO DEMAND PAYMENT OF FAIR OR APPRAISED VALUE. Except as
provided in paragraph (b) of this section, any stockholder of a Federal stock
association combining in accordance with Section 552.13 of this part shall have
the right to demand payment of the fair or appraised value of his stock:
PROVIDED, That such stockholder has not voted in favor of the combination and
complies with the provisions of paragraph (c) of this section.
(b) EXCEPTIONS. No stockholder required to accept only qualified
consideration for his or her stock shall have the right under this section to
demand payment of the stock's fair or appraised value, if such stock was listed
on a national securities exchange or quoted on the National Association of
Securities Dealers' Automated Quotation System ("NASDAQ") on the date of the
meeting at which the combination was acted upon or stockholder action is not
required for a combination made pursuant to Section 552.13(h)(2) of this part.
"Qualified consideration" means cash, shares of stock of any association or
corporation which at the effective date of the combination will be listed on a
national securities exchange or quoted on NASDAQ, or any combination of such
shares of stock and cash.
(c) PROCEDURE- (1) NOTICE. Each constituent Federal stock association
shall notify all stockholders entitled to rights under this section, not less
than twenty days prior to the meeting at which the combination agreement is to
be submitted for stockholder approval, of the right to demand payment of
appraised value of shares, and shall include in such notice a copy of this
section. Such written notice shall be mailed to stockholders of record and may
be part of management's proxy solicitation for such meeting.
(2) DEMAND FOR APPRAISAL AND PAYMENT. Each stockholder electing to
make a demand under this section shall deliver to the Federal stock association,
before voting on the combination, a writing identifying himself or herself and
stating his or her intention thereby to demand appraisal of and payment for his
or her shares. Such demand must be in addition to and separate from any proxy or
vote against the combination by the stockholder.
(3) NOTIFICATION OF EFFECTIVE DATE AND WRITTEN OFFER. Within ten
days after the effective date of the combination, the resulting association
shall:
(i) Give written notice by mail to stockholders of constituent
Federal stock associations who have complied with the
provisions of paragraph (c)(2) of this section and have not
voted in favor of the combination, of the effective date of
the combination;
<PAGE>
(ii) Make a written offer to each stockholder to pay for
dissenting shares at a specified price deemed by the
resulting association to be the fair value thereof; and
(iii) Inform them that, within sixty days of such date, the
respective requirements of paragraphs (c)(5) and (c)(6) of
this section (set out in the notice) must be satisfied.
The notice and offer shall be accompanied by a balance sheet and
statement of income of the association the shares of which the dissenting
stockholder holds, for a fiscal year ending not more than sixteen months before
the date of notice and offer, together with the latest available interim
financial statements.
(4) ACCEPTANCE OF OFFER. If within sixty days of the effective date of
the combination the fair value is agreed upon between the resulting association
and any stockholder who has complied with the provisions of paragraph (c)(2) of
this section, payment therefor shall be made within ninety days of the effective
date of the combination.
(5) PETITION TO BE FILED IF OFFER NOT ACCEPTED. If within sixty days of
the effective date of the combination the resulting association and any
stockholder who has complied with the provisions of paragraph (c)(2) of this
section do not agree as to the fair value, then any such stockholder may file a
petition with the Office, with a copy by registered or certified mail to the
resulting association, demanding a determination of the fair market value of the
stock of all such stockholders. A stockholder entitled to file a petition under
this section who fails to file such petition within sixty days of the effective
date of the combination shall be deemed to have accepted the terms offered under
the combination.
(6) STOCK CERTIFICATES TO BE NOTED. Within sixty days of the effective
date of the combination, each stockholder demanding appraisal and payment under
this section shall submit to the transfer agent his certificates of stock for
notation thereon that an appraisal and payment have been demanded with respect
to such stock and that appraisal proceedings are pending. Any stockholder who
fails to submit his or her stock certificates for such notation shall no longer
be entitled to appraisal rights under this section and shall be deemed to have
accepted the terms offered under the combination.
(7) WITHDRAWAL OF DEMAND. Notwithstanding the foregoing, at any time
within sixty days after the effective date of the combination, any stockholder
shall have the right to withdraw his or her demand for appraisal and to accept
the terms offered upon the combination.
(8) VALUATION AND PAYMENT. The Director shall, as he or she may elect,
either appoint one or more independent persons or direct appropriate staff of
the Office to appraise the shares to determine their fair market value, as of
the effective date of the combination, exclusive of any element of value arising
from the accomplishment or expectation of the combination.
2
<PAGE>
Appropriate staff of the Office shall review and provide an opinion on
appraisals prepared by independent persons as to the suitability of the
appraisal methodology and the adequacy of the analysis and supportive data. The
Director after consideration of the appraisal report and the advice of the
appropriate staff shall, if he or she concurs in the valuation of the shares,
direct payment by the resulting association of the appraised fair market value
of the shares, upon surrender of the certificates representing such stock.
Payment shall be made, together with interest from the effective date of the
combination, at a rate deemed equitable by the Director.
(9) COSTS AND EXPENSES. The costs and expenses of any proceeding under
this section may be apportioned and assessed by the Director as he or she may
deem equitable against all or some of the parties. In making this determination
the Director shall consider whether any party has acted arbitrarily,
vexatiously, or not in good faith in respect to the rights provided by this
section.
(10) VOTING AND DISTRIBUTION. Any stockholder who has demanded
appraisal rights as provided in paragraph (c)(2) of this section shall
thereafter neither be entitled to vote such stock for any purpose nor be
entitled to the payment of dividends or other distributions on the stock (except
dividends or other distribution payable to, or a vote to be taken by
stockholders of record at a date which is on or prior to, the effective date of
the combination): PROVIDED, That if any stockholder becomes unentitled to
appraisal and payment of appraised value with respect to such stock and accepts
or is deemed to have accepted the terms offered upon the combination, such
stockholder shall thereupon be entitled to vote and receive the distributions
described above.
(11) STATUS. Shares of the resulting association into which shares of
the stockholders demanding appraisal rights would have been converted or
exchanged, had they assented to the combination, shall have the status of
authorized and unissued shares of the resulting association.
3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROXY STATEMENT-PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Articles IX of the Articles of Incorporation of BankUnited provides
that BankUnited shall indemnify its officers and directors to the fullest extent
permitted by law.
The Bylaws of BankUnited provide that BankUnited will indemnify any
person against whom an action is brought or threatened because that person is or
was a director, officer or employee of BankUnited for any amount for which that
person becomes liable under a judgment in such action and reasonable costs and
expenses, including attorneys' fees. Such indemnification may only be made,
however, if (i) final judgment on the merits is in his or her favor or (ii) in
case of settlement, final judgment against him or her or final judgment in his
or her favor, other than on the merits, if a majority of the Board of Directors
of BankUnited determines that he or she was acting in good faith within the
scope of his or her duties and for a purpose he or she could have reasonably
believed under the circumstances was in the best interests of BankUnited.
Section 607.0831 of the Florida Business Corporation Act provides,
among other things, that a director is not personally liable for monetary
damages to a company or any other person for any statement, vote, decision, or
failure to act, by the director, regarding corporate management or policy,
unless the director breached or failed to perform his or her duties as a
director and such breach or failure constitutes (a) a violation of criminal law,
unless the director had reasonable cause to believe his or her conduct was
lawful or had no reasonable cause to believe his or her conduct was unlawful;
(b) a transaction from which the director derived an improper personal benefit;
(c) a circumstance under which the liability provisions of Section 607.0834 of
the Florida Business Corporation Act (relating to the liability of the directors
for improper distributions) are applicable; (d) willful misconduct or a
conscious disregard for the best interest of BankUnited in the case of a
proceeding by or in the right of BankUnited to procure a judgment in its favor
or by or in the right of a shareholder; or (e) recklessness or an act or
omission in bad faith or with malicious purpose or with wanton and willful
disregard of human rights, safety or property, in a proceeding by or in the
right of someone other than such company or a shareholder.
Section 607.0850 of the Florida Business Corporation Act authorizes,
among other things, BankUnited to indemnify any person who was or is a party to
any proceeding (other than an action by or in the right of BankUnited) by reason
of the fact that he is or was a director, officer, employee or agent of
BankUnited (or is or was serving at the request of BankUnited in such a position
for any entity) against liability incurred in connection with such proceeding,
if he or she acted in good faith and in a manner reasonably believed to be in
the best interests of BankUnited and, with respect to criminal proceedings, had
no reasonable cause to believe his or her conduct was unlawful.
Florida law requires that a director, officer or employee be
indemnified for expenses (including attorneys' fees) to the extent that he or
she has been successful on the merits or otherwise in the defense of any
proceeding. Florida law also allows expenses of defending a proceeding to be
advanced by a company before the final disposition of the proceedings, provided
that the officer, director or employee undertakes to repay such advance if it is
ultimately determined that indemnification is not permitted.
Florida law states that the indemnification and advancement of expenses
provided pursuant to Section 607.0850 is not exclusive and that indemnification
may be provided by a company pursuant to other means, including agreements or
bylaw provisions. Florida law prohibits indemnification or advancement of
expenses, however, if a judgment or other final adjudication establishes that
the actions of a director, officer or employee constitute (i) a violation of
criminal law, unless he or she had reasonable cause to believe his or her
conduct was lawful or had no reasonable cause to believe his or her conduct was
unlawful; (ii) a transaction from which such person derived an improper personal
benefit; (iii) willful misconduct or conscious disregard for the best interests
of BankUnited in the case of a derivative action or a proceeding by or in the
right of a shareholder, or (iv) in the case of a director, a circumstance under
which the liability provisions of Section 607.0834 of the Florida Business
Corporation Act (relating to the liability of directors for improper
distributions) are applicable.
<PAGE>
BankUnited has purchased director and officer liability insurance that
insures directors and officers against liabilities in connection with the
performance of their duties.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.* The following is a list of Exhibits to this Registration
Statement;
EXHIBIT
NUMBER DESCRIPTION
------ -----------
2.1 Agreement and Plan of Merger, dated July 15, 1996, between
BankUnited and Suncoast Savings and Loan Association, FSA.
(Exhibit 2.1 to BankUnited's Form S-4 Registration Statement,
File No. 333-13211, as filed with the Securities and Exchange
Commission on October 1, 1996).
2.2 Agreement and Plan of Merger between BankUnited and Consumers
Bancorp, Inc. dated September 19, 1997 ( Exhibit 2.2 to
BankUnited's Form S-4 Registration Statement, File No.
333-39921, as filed with the Securities and Exchange
Commission on November 10, 1997).
2.3 Agreement and Plan of Merger between BankUnited and Central
Bank dated December 30, 1997. (Exhibit 2.1 to BankUnited's
Current Report on Form 8-K, dated December 30, 1997 as filed
with the Securities and Exchange Commission on January 2,
1998).
3.1 Articles of Incorporation of BankUnited (Exhibit 3.1 to
BankUnited's Form 10-K Report for the year ended September 30,
1997 [the "1997 10-Q"], as filed with the Securities and
Exchange Commission on December 29, 1997).
3.2 Statement of Designation of Series I Class A Common Stock and
Class B Common Stock of BankUnited (included as an appendix to
Exhibit 3.1).
3.3 Statement of Designation of Noncumulative Convertible
Preferred Stock, Series A, of BankUnited (included as an
appendix to Exhibit 3.1).
3.4 Statement of Designation of Noncumulative Convertible
Preferred Stock, Series B of BankUnited (included as appendix
to Exhibit 3.1).
3.5 Statement of Designation of 8% Noncumulative Convertible
Preferred Stock, Series 1993 of BankUnited (included as an
appendix to Exhibit 3.1).
3.6 Statement of Designation of 9% Noncumulative Perpetual
Preferred Stock of BankUnited (included as an appendix to
Exhibit 3.1).
3.7 Statement of Designation of 8% Noncumulative Convertible
Preferred Stock, Series 1996 of BankUnited (included as an
appendix to Exhibit 3.1).
3.8 Form of Letter Agreement between BankUnited and the holders of
shares of BankUnited's Noncumulative Convertible Preferred
Stock, Series B (Exhibit 3.8 to the 1997 10-K).
3.9 Bylaws of BankUnited (Exhibit 4.5 to BankUnited's Form S-8
Registration Statement, File No. 333-43211, as filed with the
Securities and Exchange Commission on November 14, 1996).
II-2
<PAGE>
4.1 Agreement for Advances and Security Agreement with Blanket
Floating Lien dated as of September 25, 1992, between
BankUnited, FSB (the "Bank") and the Federal Home Loan Bank of
Atlanta (Exhibit 4.1 to the Bank's Form 10-K for the year
ended September 30, 1992, filed with the Securities and
Exchange Commission as an exhibit to BankUnited's Form 8-K
dated March 25, 1993).
4.2 Forms of Series 15A-F, Series 18E and Series 20A-F of
Subordinated Notes of the Bank (Exhibit 4.3 to BankUnited's
Form S-4 Registration Statement, File No. 33-55232, as filed
with the Securities and Exchange Commission on December 2,
1992).
5.1 Opinion of Stuzin and Camner, P.A. as to validity of the
issuance of the Class A Common Stock.
8.1 Opinion of Kronish, Lieb, Weiner & Hellman LLP regarding
federal income tax matters.***
10.1 Non-Statutory Stock Option Plan, as amended, (Exhibit 4.9 to
BankUnited's Form S-8 Registration Statement, File No.
33-76882, as filed with the Securities and Exchange Commission
on March 24, 1994). **
10.2 1992 Stock Bonus Plan, as amended (Exhibit 10.2 to
BankUnited's Form 10-K Report for the year ended September 30,
1994 [the "1994 10-K"]).**
10.3 1994 Incentive Stock Option Plan. (Exhibit 10.3 to the 1994
10-K).**
10.4 The Bank's Profit Sharing Plan. (Exhibit 10.4 to BankUnited's
Form S-2 Registration Statement, File No. 33-80791, as filed
with the Securities and Exchange Commission on December 22,
1995).**
10.5 1996 Incentive Compensation and Stock Award Plan (Exhibit 10.5
to BankUnited's Form 10-K Report for the year ended September
30, 1996).**
10.6 Purchase and Assumption Agreement dated March 20, 1995 by and
among BankUnited, the Bank, SouthTrust Corporation, SouthTrust
of Florida, Inc. and SouthTrust Bank of the Suncoast (Exhibit
10.1 to BankUnited's Form 10-Q Report for the quarter ended
March 31, 1995 [the "March 31, 1995 10-Q"]).
10.7 Purchase and Assumption Agreement dated March 20, 1995 by and
among BankUnited, the Bank, SouthTrust Corporation, SouthTrust
of Florida, Inc., and SouthTrust Bank of Southwest Florida,
N.A. (Exhibit 10.2 to the March 31, 1995 10-Q).
10.8 First Amendment to Purchase and Assumption Agreement dated
July 27, 1995 by and among BankUnited, the Bank, SouthTrust
Corporation, SouthTrust of Florida, Inc., and SouthTrust Bank
of the Suncoast (Exhibit 10.1 to BankUnited's Form 10-Q Report
for the quarter ended June 30, 1995 [the "June 30, 1995
10-Q"]).
10.9 First Amendment to Purchase and Assumption Agreement dated
July 27, 1995 by and among BankUnited, the Bank, SouthTrust
Corporation, SouthTrust of Florida, Inc., and SouthTrust of
Southwest Florida, N.A. (Exhibit 10.2 to the June 30, 1995
10-Q).
10.10 Form of Employment Agreement between BankUnited and Alfred R.
Camner (Exhibit 10.10 to BankUnited's 10-K Report for the year
ended September 30, 1996).
10.11 Form of Employment Agreement between BankUnited and Earline G.
Ford (Exhibit 10.11 to BankUnited's 10-K Report for the year
ended September 30, 1996).
II-3
<PAGE>
10.12 Form of Employment Agreement between BankUnited and certain of
its senior officers (Exhibit 10.12 to BankUnited's 10-K Report
for the year ended September 30, 1996).
10.13 Junior Subordinated Indenture with respect to BankUnited's
10 1/4% Junior Subordinated Debentures. (Exhibit 4.1A to the
Company's Registration Statement on Form S-4, File No.
333-24025, as filed with the Securities and Exchange
Commission on March 27, 1997).
10.14 Supplemental Indenture (Exhibit 4.1B to the Company's
Registration Statement on Form S-4, File No. 333-24025, as
filed with the Securities and Exchange Commission on March 27,
1997).
10.15 Form of Amended and Restated Trust Agreement of BankUnited
Capital. (Exhibit 4.3 to the Company's Registration Statement
on Form S-4, No. 333-24025, as filed with the Securities and
Exchange Commission on March 27, 1997).
10.16 Form of Amended and Restated Guarantee Agreement for
BankUnited Capital. (Exhibit 4.5 to the Company's Registration
Statement on Form S-4, No. 333-24025, as filed with the
Securities and Exchange Commission on March 27, 1997).
10.17 Form of Agreement as to Expenses and Liabilities (included as
an exhibit to Exhibit 99.6 to the Company's Registration
Statement on Form S-4, No. 333-24025, as filed with the
Securities and Exchange Commission on March 27, 1997).
10.18 Registration Rights Agreement (Exhibit 4.6 to the Company's
Registration Statement on Form S-4, No. 333-24025, as filed
with the Securities and Exchange Commission on March 27,
1997).
10.19 Registration Rights Agreement (Exhibit 4.7 to the Company's
Registration Statement on Form S-4, No. 333-24025, as filed
with the Securities and Exchange Commission on March 27,
1997).
10.20 Purchase Agreement (Exhibit 99.4 to the Company's Registration
Statement on Form S-4, No. 333-24025, as filed with the
Securities and Exchange Commission on March 27, 1997).
10.21 Purchase Agreement (Exhibit 99.5 to the Company's Registration
Statement on Form S-4, No. 333-24025, as filed with the
Securities and Exchange Commission on March 27, 1997).
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Stuzin and Camner, P.A. (set forth in Exhibit 5.1
to this Registration Statement).
23.4 Consent of Kronish, Lieb, Weiner & Hellman LLP (set forth in
Exhibit 8.1 to this Registration Statement).
24.1 Power of attorney (set forth on the signature page in Part II
of this Registration Statement).
99.1 Form of proxy cards.
- ----------
* Exhibits containing a parenthetical reference in their description are
incorporated herein by reference from the documents described in the
parenthetical reference.
** Exhibits 10.1-10.5 are compensatory plans or arrangements.
II-4
<PAGE>
*** To be filed by amendment.
ITEM 22. UNDERTAKINGS.
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 Proxy Statement-Prospectus
required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Proxy Statement-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 Proxy Statement-Prospectus filed with the Commission
pursuant to Rule 424(b) (/section/230.424(b) of this chapter) 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.
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the Proxy
Statement-Prospectus pursuant to Item 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.
The undersigned Registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and BankUnited being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
The undersigned Registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a Proxy Statement-Prospectus which is a part of this Registration
II-5
<PAGE>
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 Proxy
Statement-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.
The Registrant undertakes that every Proxy
Statement-Prospectus (i) that is filed pursuant to the immediately preceding
paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of
the Securities Act 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, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offering therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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 Item 20 of this Registration Statement, 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 Act 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 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 Act and will
be governed by the final adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coral Gables, State of
Florida on April 10, 1998.
BANKUNITED FINANCIAL CORPORATION
By:/S/ ALFRED R. CAMNER
------------------------------------
Alfred R. Camner
Chairman of the Board, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Alfred R. Camner, Earline G. Ford and
Marc Jacobson and each of them, his true and lawful attorney-in-fact and agent
with full power of substitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, or any Registration Statement
relating to this offering to be effective upon filing pursuant to Rule 462(b)
under the Securities Act of 1933, and to file the same, with all exhibits
thereto and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent, 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 to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute, may lawfully do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on April 10, 1998 by the following
persons in the capacities indicated.
<TABLE>
<S> <C>
/S/ ALFRED R. CAMNER
- -------------------------------------- Chairman of the Board, Chief Executive
Alfred R. Camner Officer, President and Director
(Principal Executive Officer)
/S/ LAWRENCE H. BLUM
- -------------------------------------- Vice Chairman of the Board and Director
Lawrence H. Blum
/S/ JAMES A. DOUGHERTY
- -------------------------------------- Chief Operating Officer, Executive Vice
James A. Dougherty President and Director
/S/ EARLINE G. FORD
- -------------------------------------- Executive Vice President, Treasurer and
Earline G. Ford Director
</TABLE>
II-7
<PAGE>
<TABLE>
<S> <C>
/S/ SAMUEL A. MILNE
- -------------------------------------- Executive Vice President and Chief Financial
Samuel A. Milne Officer (Principal Financial Officer)
/S/ CLIFFORD A. HOPE
- -------------------------------------- Executive Vice President and Chief Accounting
Clifford A. Hope Officer (Principal Accounting Officer)
/S/ MARC LIPSITZ
- -------------------------------------- Corporate Secretary and Director
Marc Lipsitz
/S/ ALLEN M. BERNKRANT
- -------------------------------------- Director
Allen M. Bernkrant
- -------------------------------------- Director
Bruce Friesner
- -------------------------------------- Director
Patricia L. Frost
- -------------------------------------- Director
Marc D. Jacobson
/S/ NEIL MESSINGER
- -------------------------------------- Director
Neil Messinger
/S/ ANNE W. SOLLOWAY
- -------------------------------------- Director
Anne W. Solloway
</TABLE>
II-8
<PAGE>
BANKUNITED FINANCIAL CORPORATION
INDEX TO EXHIBITS *
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER PAGE
------ ------------
<S> <C>
5.1 Opinion of Stuzin and Camner, P.A. as to the validity of the
issuance of the BankUnited Class A Common Stock.
8.1 Opinion of Kronish, Lieb, Weiner & Hellman LLP regarding
federal income tax matters.**
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Stuzin and Camner, P.A. (set forth in Exhibit 5.1
to this Registration Statement).
23.4 Consent of Kronish, Lieb, Weiner & Hellman LLP (set forth in
Exhibit 8.1 to this Registration Statement).
99.1 Form of Proxy Cards
</TABLE>
- ----------
* Exhibits containing a parenthetical reference in their description are
incorporated by reference from the documents described in the
parenthetical reference.
** To be filed by amendment.
II-9
Exhibit 5.1
April 10, 1998
BankUnited Financial Corporation
255 Alhambra Circle
Coral Gables, Florida 33134
Ladies and Gentlemen:
We are acting as your counsel with regard to the issuance by BankUnited
Financial Corporation (the "Company") of shares of its Series I Class A Common
Stock, $.01 par value (the "Class A Common Stock"), pursuant to a Registration
Statement on Form S-4 filed with the Securities and Exchange Commission on April
10, 1998 (the "Registration Statement"). The Class A Common Stock will be issued
and exchanged pursuant to the Agreement and Plan of Merger dated December 30,
1997 between the Company and Central Bank which is described in the Registration
Statement.
We are familiar with the relevant documents and materials used in
preparing the Registration Statement. Based on our review of such relevant
documents and materials, and of such other documents and materials as we have
deemed necessary and appropriate, we are of the following opinion:
The Class A Common Stock, when issued and exchanged pursuant
to the Agreement and Plan of Merger dated December 30, 1997 between the
Company and Central Bank in the manner described in the Registration
Statement, will be legally issued, fully paid and non-assessable.
We hereby consent to the use of our opinion as an Exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Proxy Statement-Prospectus that is a part of the Registration
Statement.
Very truly yours,
/S/ STUZIN AND CAMNER,
PROFESSIONAL ASSOCIATION
-----------------------------
STUZIN AND CAMNER,
PROFESSIONAL ASSOCIATION
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Proxy Statement -
Prospectus constituting part of this Registration Statement on Form S-4 of
BankUnited Financial Corporation of our report dated November 12, 1997 appearing
on page 55 of BankUnited Financial Corporation's Annual Report on Form 10-K/A
for the year ended September 30, 1997. We also consent to the reference to us
under the heading "Experts" in such Proxy Statement - Prospectus.
/S/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Miami, Florida
April 9, 1998
Exhibit 23.2
INDEPENDENT AUDITORS CONSENT
We consent to the use in this Registration Statement of BankUnited
Financial Corporation on Form S-4 of our report relating to the financial
statements of Central Bank dated February 27, 1998 appearing in the Proxy
Statement-Prospectus, which is part of this Registration Statement. We also
consent to the reference to us under the headings "Central Selected Financial
Data" and "Experts" in such Proxy Statement-Prospectus.
/S/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Miami, Florida
April 8, 1998
Exhibit 99.1
REVOCABLE PROXY
CENTRAL BANK
7970 N.W. 36TH STREET
MIAMI, FLORIDA 33166
SPECIAL MEETING OF STOCKHOLDERS
MAY 21, 1998, 11:00 A.M.
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CENTRAL
BANK FOR USE ONLY AT THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21,
1998, AND AT ANY ADJOURNMENTS THEREOF.
The undersigned hereby appoints the Chairman of the Board, with the
full power of substitution, to act as attorney and proxy for the undersigned,
and to vote all shares of Common Stock of Central Bank (the "Company") which the
undersigned is entitled to vote, at the Special Meeting of Stockholders to be
held at the Union Planters Bank Building, 1221 Brickell Avenue, Miami, Florida
33131, 22nd Floor, on May 21, 1998 at 11:00 a.m., local time, and at any and all
adjournments thereof.
You are encouraged to specify your choices by marking the appropriate
box BELOW. You need not mark any box if you wish to vote in accordance with the
Board of Directors' recommendations, only sign on the REVERSE SIDE. The proxy
cannot vote your shares unless you sign, date and return this card.
1. The adoption of an Agreement and Plan of Merger (the "Merger
Agreement") by and among BankUnited Financial. ("BankUnited
Financial") and the Company, pursuant to which, the Company
will merge with and BankUnited, FSB, a federal savings bank,
and the wholly owned subsidiary of BankUnited Financial, with
BankUnited, FSB being the surviving institution. In connection
with the Merger, each share of common stock, $6.00 par value
per share, of the Company shall be canceled and automatically
converted into the right to receive 3.37 shares of BankUnited
Common Stock, subject to adjustment based upon the fair market
value of BankUnited Common Stock.
In his discretion, the proxy is authorized to vote upon such
other business as may properly come before the Special
Meeting, and any adjournments or postponements thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED ON BACK SIDE)
<PAGE>
(CONTINUED FROM REVERSE SIDE)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
THE PROXY IS REVOCABLE AND, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTIONS ARE MADE BUT THIS PROXY IS
PROPERLY EXECUTED, THIS PROXY WILL BE VOTED FOR THE MATTERS MENTIONED.
Please mark, date and sign as your name appears below and return in the
envelope.
- --------------------------------------------------------------------------------
Signature
- --------------------------------------------------------------------------------
Signature if held jointly
DATED: ___________________, 1998
Please sign exactly as your name appears on
this card. When signing as attorney,
executor, administrator, trustee or
guardian, please give your full title.
If shares are held jointly, each holder
may sign but only one signature is
required.
