As filed with the Securities and Exchange Commission on April 14, 1999.
Registration No. 333-72283
Registration No. 333-72283-01
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BANKATLANTIC BANCORP, INC. BBC CAPITAL TRUST I
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(Exact name of registrant as (Exact name of co-registrant
as specified in its charter) as specified in its charter)
Florida Delaware
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(State or other jurisdiction of (State or other jurisdiction
incorporation or organization) of incorporation or organization)
65-0507804 65-0835533
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(I.R.S. Employer (I.R.S. Employer
Identification Number) Identification Number)
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
Telephone (954) 760-5000
--------------------------
(Address, including Zip Code, and telephone
number, including area code, of registrant's and
co-registrant's principal executive offices)
Alan B. Levan
BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
Telephone (954) 760-5000
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(Name, address, including Zip Code, and
telephone number, including area code, of registrant's and
co-registrant's agent for service)
Please send copies of all communications to:
Alison W. Miller, Esq.
Michael I. Keyes, Esq.
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
150 West Flagler Street, Suite 2400
Miami, Florida 33130
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective, as determined in
light of market and other conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box |X|.
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 number of the earlier effective
registration statement for the same offering |_|.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box |_|.
<TABLE>
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Title of each class Proposed maxi- Amount of
of securities to be Amount to be Proposed maximum mum aggregate registration
registered registered offering price per unit (1)offering price (1) fee (1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9% Subordinated Debentures Due 2005 $21,000,000 --- --- ---
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9 1/2% Cumulative Trust Preferred
Securities of BBC Capital Trust I 2,990,000 shares --- --- ---
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9 1/2% Junior Subordinated Debentures
of BankAtlantic Bancorp, Inc.(2) (2) --- --- ---
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Guarantee of BankAtlantic Bancorp,
Inc. of certain obligations under
the Preferred Securities(3) (3) --- --- ---
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</TABLE>
(1) This Registration Statement pertains to offers and sales of previously
registered securities of the Registrants related to market-making
transactions by and through Ryan, Beck & Co., Inc., an affiliate of the
Registrants. Because registration fees with respect to these securities
were paid previously in connection with the registration of these
securities to the public, the amount of the registration fee payable with
respect to this Registration Statement is $0.
(2) The Junior Subordinated Debentures were purchased by BBC Capital Trust I
with the proceeds of the sale of the Trust Preferred Securities. Such
securities may later be distributed for no additional consideration to the
holders of the Trust Preferred Securities of BBC Capital Trust I upon its
dissolution and the distribution of its assets and no separate registration
fee is payable hereunder.
(3) No separate consideration has been or will be received for the Guarantee
and no separate registration fee is payable for the Guarantee.
--------------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
Prospectus Subject to Completion Dated April ____, 1999
$21,000,000
9% Subordinated Debentures Due 2005
BankAtlantic Bancorp, Inc.
and
2,990,000 Preferred Securities
BBC Capital Trust I
9 1/2% Cumulative Trust Preferred Securities
guaranteed by
BankAtlantic Bancorp, Inc.
-------------------------------
BankAtlantic Bancorp Subordinated Debentures:
/bullet/ were offered and sold to the public by BankAtlantic Bancorp.
/bullet/ are unsecured general obligations of BankAtlantic Bancorp subordinate
in right of payment to more senior debt.
/bullet/ are not listed on any securities exchange and are not included for
quotation on any quotation system.
The Trust:
/bullet/ sold its trust preferred securities to the public and its trust common
securities to BankAtlantic Bancorp.
/bullet/ used the proceeds from these sales to buy an equal amount of junior
subordinated debentures of BankAtlantic Bancorp.
/bullet/ distributes cash payments it receives on the junior subordinated
debentures it owns to the holders of the trust preferred securities
and the trust common securities.
The Trust Preferred Securities:
/bullet/ have no stated maturity but must be redeemed at the time that the
junior subordinated debentures are repaid.
/bullet/ are listed on the Nasdaq Stock Market's National Market under the
symbol "BANCP".
BankAtlantic Bancorp:
/bullet/ may choose to distribute its junior subordinated debentures pro rata
to the holders of the trust preferred securities and the trust
common securities.
/bullet/ fully and unconditionally guarantees on a subordinated basis the
Trust's payment on any trust preferred securities based on its
obligations under a guarantee, a trust agreement and an indenture.
This prospectus will be used by Ryan, Beck & Co., BankAtlantic Bancorp's
affiliate, in connection with market making transactions in these securities.
Sales will generally be made at prices related to prevailing market prices at
the time of sale.
Consider carefully the risk factors beginning on page 4 in this prospectus.
Please remember that these securities:
/bullet/ are not bank accounts or deposit accounts.
/bullet/ are not federally insured by the Federal Deposit Insurance
Corporation.
/bullet/ are not insured by any other state or federal agency.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is____________, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
----
Summary ........................................................... 1
Risk Factors........................................................ 4
Forward-looking Statements.......................................... 16
BBC Capital Trust I................................................. 17
Plan of Distribution................................................ 18
Description of the Subordinated Debentures.......................... 19
Description of the Trust Preferred Securities....................... 25
Description of the Junior Subordinated Debentures................... 36
Description of the Guarantee........................................ 45
Relationship Among the Trust Preferred Securities, the Junior
Subordinated Debentures and the Guarantee......................... 48
Federal Income Tax Consequences..................................... 50
Erisa Considerations................................................ 53
Legal Matters....................................................... 54
Experts............................................................. 54
Where You Can Find More Information................................. 54
<PAGE>
SUMMARY
This summary highlights selected information to assist you in getting an
initial overview of BankAtlantic Bancorp, BBC Capital Trust I and the securities
covered by this prospectus. It does not contain all the information that you
need to consider in making your investment decision. To understand all the terms
of these securities you should read the entire prospectus carefully.
BankAtlantic Bancorp
We are a Florida-based unitary savings bank holding company. Our principal
subsidiary is BankAtlantic, which:
/bullet/ is a federally-chartered, federally-insured savings bank organized in
1952,
/bullet/ provides traditional retail banking services and a full range of
commercial banking products and related financial services, including:
/bullet/ attracting checking and savings deposits from the public and
general business customers,
/bullet/ originating commercial real estate and business loans,
residential real estate loans and consumer loans,
/bullet/ purchasing wholesale residential loans from third parties,
and
/bullet/ making other permitted investments such as investments in
mortgage-backed securities, tax certificates and other
investment securities,
/bullet/ currently operates through 67 branch offices located primarily
in Miami-Dade, Broward and Palm Beach Counties in South Florida,
and
/bullet/ is regulated and examined by the Office of Thrift Supervision
and the FDIC.
Although our primary activities relate to the activities of our
wholly-owned subsidiary, BankAtlantic, our other activities include:
/bullet/ providing investment banking services and capital raising and
advisory services to the financial services industry through our
subsidiary, Ryan Beck, which:
/bullet/ was acquired by us during 1998, and
/bullet/ is an investment banking firm whose activities include
underwriting, distributing and trading tax-exempt
securities, and
/bullet/ engaging in real estate development and investment activities
through
/bullet/ our 100% owned subsidiary, St. Lucie West Holding
Corp., the developer of a master planned residential,
commercial and industrial community in St. Lucie
County, Florida, and
/bullet/ several investments in real estate development projects
in South Florida.
We are considering alternatives to our 100% ownership of our real estate
and development business conducted through BankAtlantic Development Corp.,
including:
/bullet/ a full or partial spin-off to shareholders,
/bullet/ a public offering for all or a portion of such operations, or
/bullet/ continued total ownership and operation.
Any partial or total disposition would be subject to regulatory approval
and the structure of the transaction could also be impacted by income tax
considerations.
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<PAGE>
At December 31, 1998, we had:
/bullet/ total assets of approximately $3.8 billion,
/bullet/ total deposits of $1.9 billion, and
/bullet/ total stockholders' equity of approximately $240 million.
Our principal executive offices are located at 1750 East Sunrise Boulevard,
Fort Lauderdale, Florida 33304. Our telephone number is (954) 760-5000.
BBC Capital Trust I
The Trust is a Delaware business trust. The Trust's activities are limited
to:
/bullet/ issuing the trust preferred securities and the trust common
securities,
/bullet/ using the proceeds from the sale of the trust preferred
securities and the trust common securities to purchase our junior
subordinated debentures,
/bullet/ maintaining its status as a grantor trust for federal income tax
purposes, and
/bullet/ engaging in other activities related to these purposes.
Four trustees manage the Trust. Three of our officers act as administrative
trustees of the Trust. Wilmington Trust Company acts both as the property
trustee and as the Delaware trustee of the Trust. The Trust's principal
executive offices and telephone number are the same as ours.
The Securities
You can find a description of the securities offered by this prospectus
beginning on page 19.
Risk Factors
Your investment in the subordinated debentures and trust preferred
securities will involve risk. You should carefully consider the discussion of
risks, and the other information in this prospectus before deciding whether an
investment in these securities is suitable for you.
Ratio of Earnings to Fixed Charges
The following table sets forth our ratio of earnings to fixed charges for
the fiscal years ended December 31, 1998, 1997, 1996, 1995 and 1994. The table
does not reflect income or expenses relating to our mortgage servicing business
which is treated as discontinued operations.
<TABLE>
For the Years Ended December 31,
--------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Excluding interest on deposits......... 1.19 1.80 2.26 2.22 3.33
Including interest on deposits......... 1.11 1.33 1.37 1.37 1.59
</TABLE>
Earnings represent income (loss) from continuing operations before
taxes, interest expense and non-cumulative preferred stock dividends.
Interest expense, other than on deposits, includes:
/bullet/ interest on long-term obligations,
/bullet/ borrowings from the Federal Home Loan Bank of Atlanta,
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<PAGE>
/bullet/ securities sold under agreements to repurchase, and
/bullet/ other funds borrowed.
Fixed charges represent:
/bullet/ all interest expense, with ratios presented both excluding and
including interest on deposits, and
/bullet/ the portion of rental expense considered to be representative of
interest.
Information about our losses for the year ended December 31, 1998 can be
found in Risk Factors under the caption "We Experienced a Loss for the Year and
Quarter Ended December 31, 1998" and in the documents incorporated by reference
in this prospectus.
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<PAGE>
RISK FACTORS
An investment in the subordinated debentures or the trust preferred
securities involves a high degree of risk. You should carefully consider,
together with the other information contained or incorporated by reference in
this prospectus, the following factors in evaluating us and our business and the
Trust before purchasing any of these securities.
Risks Associated With Us
Changes in Interest Rates Could Adversely Affect Our Net Interest Income and
Profitability and the Market Value of Our Assets
The majority of our assets and liabilities are monetary in nature and
subject us to significant risk from changes in interest rates. Changes in
interest rates can impact our net interest income as well as the valuation of
our assets and liabilities.
Impact of Changing Rates Generally on Our Net Interest Income
Our profitability is dependent to a large extent on our net interest
income. Net interest income is the difference between:
/bullet/ interest income on interest-earning assets, such as loans, and
/bullet/ interest expense on interest-bearing liabilities, such as
deposits.
Changes in market interest rates, or changes in the relationships between
short-term and long-term market interest rates, or changes in the relationships
between different interest rate indices, can affect the interest rates charged
on interest-earning assets differently than the interest rates paid on
interest-bearing liabilities. This difference could result in an increase in
interest expense relative to interest income. While we have attempted to
structure our asset and liability management strategies to mitigate the impact
on net interest income of changes in market interest rates, we cannot assure you
that we will be successful.
Impact of Prepayments on Our Net Interest Income and Profitability
Loan prepayments accelerate as interest rates fall. We experienced a high
volume of loan prepayments in our mortgage portfolio and our servicing portfolio
during 1998 due to historically low interest rates. Those prepayments adversely
affected our earnings during 1998. We completely amortize the related mortgage
servicing right upon prepayment of the associated loan. The yields earned on the
portion of our mortgage portfolio which were prepaid were greater than
alternative short term investments in which we reinvested the funds, also
adversely impacting 1998 earnings. Significant loan prepayments in our mortgage
portfolio and mortgage servicing rights portfolio in the future could have a
similar adverse effect on earnings. Prepayments of the underlying loans also
would have an adverse effect on our ability to sell mortgage servicing rights at
the value estimated at December 31, 1998. Additionally, increased prepayments
associated with purchased residential loans may result in increased amortization
of premiums on acquired loans, which would reduce interest income. At December
31, 1998, we serviced approximately 36,000 loans with outstanding principal
balances serviced of $3.5 billion and net mortgage servicing rights of $44.3
million.
Impact of Prepayments on the Market Value of Our Assets and Liabilities
Changes in general interest rate levels also affect the valuation of our
assets and liabilities that are interest rate sensitive. We may be required
under generally accepted accounting principles to establish a valuation
allowance to reflect a decline in the market value of our assets as a result of
changes in interest rates. For the year ended December 31, 1998, we established
-4-
<PAGE>
a valuation allowance of $10.7 million to reflect the decline in the market
value of our mortgage servicing rights primarily as a result of:
/bullet/ historically low interest rate levels, and
/bullet/ the anticipated acceleration of prepayments of the loans
associated with the mortgage servicing rights.
While we intend to exit the mortgage servicing business, our results of
operations would be adversely affected in future periods if changes in interest
rates adversely impact the market value of our assets and liabilities.
We Experienced a Loss for the Year and Quarter Ended December 31, 1998
We reported a loss for the year ended December 31, 1998 of $(8.0) million.
These results reflect:
/bullet/ income from continuing operations of $10.2 million, and
/bullet/ a loss from discontinued operations of $(18.2) million.
For the quarter ended December 31, 1998, we reported a net loss of $(10.1)
million. These results reflect:
/bullet/ a loss from continuing operations of $(4.3) million, and
/bullet/ a loss from discontinued operations of $(5.8) million.
Discontinued operations consist of our mortgage servicing business which we
decided to exit in the fourth quarter. We anticipate that we will complete the
disposition of this business by the second quarter of 1999.
Contributing to the loss from continuing operations for the quarter ended
December 31, 1998 were:
/bullet/ restructuring charges and write-downs of approximately $2.6
million,
/bullet/ an increase in the provision for loan losses of $9.6
million over the provision for the 1997 quarter due to
/bullet/ additional risks associated with our indirect consumer
lending portfolio,
/bullet/ our recent growth in small business lending, and
/bullet/ overall growth in our loan portfolio, and
/bullet/ an increase in non-interest expense relating to growth in asset
size and expanded operations.
The restructuring charges were the result of restructuring initiatives
implemented in the 1998 fourth quarter, including:
/bullet/ paying severance and benefit of approximately $1.0 million to
115 full-time employees whose employment was terminated,
/bullet/ discontinuing origination of indirect consumer loans,
/bullet/ closing of branches, and
/bullet/ closing our mortgage banking operations on Florida's West Coast.
We cannot assure you that:
/bullet/ the restructuring will result in improved efficiencies or
increased income, or
/bullet/ we will not experience a loss from operations in the future.
-5-
<PAGE>
Additionally, while we do not anticipate that our results will be further
impacted by discontinued operations, actual results will depend on future market
conditions.
Recent Growth in Our Total Assets and Our Loan Portfolio and a Recent Expansion
of Our Operations Has Resulted in Increased Expenses
During the last three years, we have grown rapidly and significantly.
/bullet/ Our total assets have increased from $1.75 billion at December 31,
1995 to $3.8 billion at December 31, 1998.
/bullet/ Our loan portfolio increased from $828.6 million at December 31,
1995, to $2.6 billion at December 31, 1998.
We have recently initiated several new business units, hired additional
personnel and taken steps to enhance and expand our operational and management
information systems. These steps are intended to support and manage our expanded
operations and to provide management resources to support further expansion and
growth.
While we have attempted to monitor our rapid growth and to maintain
adequate resources available to support continued growth, we cannot assure you
that we will be successful in managing all aspects of our growth. The growth and
expansion of operations through both mergers and acquisitions and internal
growth has resulted in a significant increase in the following non-interest
expenses:
/bullet/ employee compensation and benefits increased from $30.9 million in
1996 to $37.8 million in 1997 and to $57.5 million in 1998.
/bullet/ our occupancy and equipment costs increased from $12.8 million in
1996 to $17.7 million in 1997 and to $21.4 million in 1998.
/bullet/ employee compensation and benefits costs, excluding Ryan Beck and
real estate operations, increased from $37.7 million in 1997 to
$45.1 million in 1998.
These increased expenses were primarily the result of:
/bullet/ the acquisitions of Bank of North America, a South Florida
commercial bank, and Ryan Beck,
/bullet/ the opening of 10 new branches since January, 1998, and the growth
in the ATM network during 1998,
/bullet/ the start-up of new activities, including small business lending,
trade finance, direct consumer lending, sales management,
electronic banking, cash management, capital markets and
international lending, and
/bullet/ the conversion in 1996 of a substantial portion of BankAtlantic's
data processing functions to an outside service bureau.
Expenses associated with past growth have had, and expenses associated with
additional future growth will likely have, an adverse impact on earnings. We
implemented various restructuring initiatives in the fourth quarter of 1998 with
a view to streamlining our operations and improving efficiencies. However, we
cannot assure you that we will be successful in our efforts.
-6-
<PAGE>
Growth in Our Consumer and Small Business Loan Portfolio Subjects us to Greater
Credit Risk and Higher Levels of Charge-Offs
During the past several years, we have experienced significant growth in
our consumer loan portfolio, partially as a result of our acquisition of
financial institutions which had originated consumer loans in prior years.
Consumer loans, excluding second mortgages, increased to $253.5 million in 1998
from $48.8 million in 1994. A significant amount of these loans were indirect
automobile loans. Indirect automobile loans are loans which are funded through
automobile dealers rather than funded directly to our retail customers. At
December 31, 1998, $213 million of our consumer loan portfolio consisted of
indirect loans, primarily automobile loans.
Consumer loans, especially indirect automobile loans, present more credit
risk than other types of loans such as home equity or residential real estate
loans. They generally result in a higher level of charge-offs than other loans.
Charge-offs are amounts written off as uncollected. Our consumer loan net
charge-offs were $8.4 million in 1997 and $8.9 million in 1998. Our net
charge-offs attributable to indirect automobile loans were $6.4 million in 1997
and $8.0 million in 1998. During the fourth quarter of 1998, we discontinued the
origination of indirect automobile loans. However, we may re-enter this market
in the future. We may also experience additional losses in our current consumer
loan portfolio.
We began originating small business loans during the fourth quarter of
1997. We had $118.8 million of small business loans at December 31, 1998. We
experienced an increase during 1998 in delinquencies and charge-offs in our
small business loan portfolio, particularly in the fourth quarter of 1998. Our
small business loan net charge-offs were $2.0 million in 1998, including $1.5
million during the 1998 fourth quarter. While we have implemented personnel and
operating changes in our small business lending operations to address these
issues, there is no assurance that we will not experience additional significant
charge-offs attributable to small business lending in the future.
A Decline in the Real Estate Market or in the Economy in General May Result in
Additional Losses in Our Banking Activities
Our loans receivable increased by approximately $1.8 billion or 218% from
December 31, 1995 to December 31, 1998. Balances for all loan categories
increased due to:
/bullet/ $395.0 million of loans acquired in the Bank of North America
acquisition, and
/bullet/ wholesale residential loan purchases of $465.9 million in 1996,
$524.5 million in 1997 and $1.3 billion in 1998.
Our commercial real estate and construction and development loans increased
by approximately $308.5 million or 65.3% from December 31, 1995 to December 31,
1998. The real estate underlying many of those commercial real estate and
construction and development loans is concentrated in Broward, Miami-Dade and
Palm Beach Counties, Florida and may be in the early stages of development. Our
competitors over the last several years have also increased their funding
availability for commercial real estate projects. These increases could result
in over-building and a decline in real estate values.
The real estate securing the wholesale residential loans that we purchased
is generally located outside South Florida. These loans are subject to risks
associated with the economy where the collateral is located as well as
collection risks.
Declines in real estate values or in the economy generally could have a
material adverse impact on our results of operations based not only on the
nature of our assets and the composition of our loan portfolio, but also on our
real estate development activities.
-7-
<PAGE>
We Have Broad Authority to Make Acquisitions and Investments in Businesses Not
Engaged in Traditional Banking Activities
We generally have broad authority under applicable law to engage in various
types of business activities, including investments in real estate, real estate
development and real estate related businesses. We have historically made
acquisitions and investments as a means of diversifying our sources of
non-interest income and to increase non-interest revenues. Our acquisitions and
investments include:
/bullet/ Real Estate - we acquired St. Lucie West Holding Corp. in October
1997 for approximately $20 million. St. Lucie West Holding Corp. is
the developer of St. Lucie West, a master planned residential,
commercial and industrial community located in St. Lucie County,
Florida. In addition, we have made minority investments in real estate
development projects located in South Florida.
/bullet/ Equipment Leasing - in March 1998 we acquired Leasing Technology,
Inc., an equipment leasing and finance company located in South
Florida, in a stock for stock exchange valued at approximately $6.2
million. Leasing Technology is now operated as a subsidiary of
BankAtlantic.
/bullet/ Investment Banking and Brokerage Services - in June 1998 we
acquired Ryan Beck, in a stock for stock exchange valued at
approximately $38 million. Ryan Beck is operated as an independent,
autonomous subsidiary under the direction of its prior management.
These acquisitions and investments in businesses not engaged in traditional
banking activities subject us to the risks inherent in each of the business
activities.
We Engage in Real Estate Development and Investment Activities Which are
Speculative and Involve a High Degree of Risk
We currently engage in real estate development and investment activities
through St. Lucie West Holding Corp. and through our minority interests in real
estate development projects. The real estate industry is highly cyclical by
nature and future market conditions are uncertain. Factors which adversely
affect the real estate and home building industries include:
/bullet/ decreases in employment levels,
/bullet/ the availability and cost of financing,
/bullet/ decreases in demand,
/bullet/ unfavorable interest rates,
/bullet/ over-building,
/bullet/ a slow down in home sales and construction,
/bullet/ a surplus of available real estate and related projects, and
/bullet/ the significant volatility and fluctuations in underlying real
estate values.
In addition, St. Lucie West Holding Corp. incurred operating expenses of
approximately $5.2 million during 1998. Periodic sales of properties may be
insufficient to ensure profitability of St. Lucie West Holding Corp. Further, if
sales are not adequate to cover operating expenses we will be required to seek a
source of additional operating funds.
Declines in real estate values or in the economy generally could have a
material adverse impact on our results of operations based not only on our real
estate development activities, but also on the nature of our assets and the
composition of our loan portfolio.
-8-
<PAGE>
Our Activities are Regulated by the Office of Thrift Supervision and FDIC and
Other Regulators Who Possess Discretion in Their Supervisory and Enforcement
Activities
The banking industry is one of this country's most heavily regulated
industries. The Office of Thrift Supervision:
/bullet/ is BankAtlantic's chartering authority and its primary federal
regulator,
/bullet/ regulates, supervises and examines BankAtlantic, and
/bullet/ regulates and oversees us, as the holding company of BankAtlantic.
In addition to the Office of Thrift Supervision, the FDIC also regulates,
supervises and examines BankAtlantic by virtue of insuring its deposits up to
applicable limits. Furthermore, BankAtlantic is a member of the Federal Home
Loan Bank of Atlanta and, consequently, is subject to certain limited regulation
by the Federal Reserve Board. The regulation and supervision of financial
institutions is intended primarily for the protection of the FDIC insurance
funds and depositors. Regulatory authorities possess extensive discretion in
connection with their supervisory and enforcement activities. As an example,
banking regulators have in the past implemented regulations which have increased
capital requirements, insurance premiums and administrative, professional and
compensation expenses for the institutions which they regulate. Any change in
the existing regulatory structure or the laws or regulations applicable to us
could significantly affect our powers, authority and operations and our business
could be adversely affected.
We Have Many Competitors Who May Have Greater Financial Resources or Operate
under Fewer Regulatory Constraints
Our competitors include:
/bullet/ other savings institutions,
/bullet/ investment firms,
/bullet/ commercial banks,
/bullet/ finance companies,
/bullet/ mortgage banking companies,
/bullet/ money market funds,
/bullet/ financial consultants,
/bullet/ credit unions, and
/bullet/ real estate developers and operators.
Many of these competitors have substantially greater financial resources
than we have and, in some cases, operate under fewer regulatory constraints. We
compete not only with financial institutions headquartered in the State of
Florida but also with a growing number of financial institutions headquartered
outside of Florida who are active in the State.
The Year 2000 Problem Could Disrupt Our Business
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
computer applications could fail or create erroneous results by or at the year
2000. The consequences of incomplete or untimely resolution of year 2000 issues
represent an uncertainty that could affect future financial results.
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<PAGE>
The year 2000 problem poses the following principal risks to our business:
/bullet/ disruption of our business due to our failure to achieve year
2000 readiness,
/bullet/ disruption of our business due to failure of third parties to
achieve year 2000 readiness,
/bullet/ disruption in our loan operations due to failure of our borrowers
to achieve year 2000 readiness, and
/bullet/ litigation due to year 2000 noncompliance from customers,
borrowers and suppliers as a result of both internal and third
party system failures.
We have undertaken various initiatives intended to ensure that computer
applications will function properly with respect to dates in the year 2000 and
thereafter and have established a year 2000 action plan based on the guidelines
outlined in the Federal Financial Institutions Examination Council's "The Effect
of 2000 on Computer Systems".
However, we cannot assure you that our initiatives and action plan have
identified all costs, risks or possible losses which we may experience
associated with year 2000 issues. Due to the general uncertainty inherent in the
year 2000 problem, resulting in part from the uncertainty of the year 2000
readiness of third party suppliers, borrowers and customers, we are unable to
determine whether the consequences of year 2000 failures will have a material
impact on our results of operations, liquidity or financial condition.
Risks Associated with the Subordinated Debentures and the Trust Preferred
Securities
Regulatory Restrictions on Dividends and Other Distributions From BankAtlantic
and Our Subsidiaries' Obligations to Pay Creditors May Adversely Affect Our
Ability to Pay Interest on the Junior Subordinated Debentures and the
Subordinated Debentures
We are the holding company for BankAtlantic and own 100% of BankAtlantic's
outstanding capital stock. We depend upon dividends from BankAtlantic for a
significant portion of our revenues. BankAtlantic's ability to pay dividends or
make other capital distributions to us is governed by Office of Thrift
Supervision regulations, which focus primarily on BankAtlantic's regulatory
capital levels and net income. Office of Thrift Supervision regulations define
"capital distributions" as
/bullet/ cash dividends,
/bullet/ payments by a savings association or savings bank holding company
to repurchase or otherwise acquire its shares,
/bullet/ payments to shareholders of another entity in a cash-out merger,
and
/bullet/ other distributions charged against capital.
If an institution has regulatory capital that is at least equal to its
capital requirements both before and after giving effect to the distribution,
and has not been notified that it "is in need of more than normal supervision,"
the Office of Thrift Supervision deems it a "Tier 1 association." BankAtlantic
currently qualifies as a Tier 1 association under applicable Office of Thrift
Supervision regulations. The Office of Thrift Supervision permits a Tier 1
association to make capital distributions during a calendar year of up to the
greater of:
/bullet/ 100% of net income for the current calendar year, plus 50% of its
capital surplus, or
/bullet/ 75% of its net income over the most recent four quarters.
Capital surplus is the amount of capital in excess of an association's
regulatory capital requirements. However, the association seeking to pay the
capital distribution must first notify the Office of Thrift Supervision of its
intention and the Office of Thrift Supervision must not raise any objection to
the distribution. Any additional capital distributions would require prior
regulatory approval. Additionally, all capital distributions of BankAtlantic are
subject to the Office of Thrift Supervision' right to object to a distribution
on safety and soundness grounds. We cannot assure you that BankAtlantic will
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remain a Tier 1 association or that it will be in a position to make capital
distributions to us in an amount sufficient for us to satisfy our obligations.
Our ability to pay interest on the subordinated debentures and junior
subordinated debentures will be significantly dependent on the ability of our
subsidiaries to pay dividends or distributions to us in amounts sufficient to
service our obligations. Since we are a holding company, our right to
participate in any distribution of assets of a subsidiary, including
BankAtlantic, upon a liquidation or reorganization or otherwise is also subject
to the prior claims of creditors of the subsidiary, including depositors of
BankAtlantic. If we are a creditor of a subsidiary, our claims would be subject
to any prior security interest in the assets of the subsidiary and any
indebtedness of the subsidiary senior to ours. The subordinated debentures,
trust preferred securities and junior subordinated debentures will be
effectively subordinated to all existing and future liabilities of our
subsidiaries, including the rights of the depositors of BankAtlantic. At
December 31, 1998, we had liabilities of $3.5 billion and BankAtlantic had
liabilities of $3.3 billion, including $1.9 billion in deposits.
Trust Preferred Securities and Debentures Are Not Insured
The subordinated debentures, the trust preferred securities and the junior
subordinated debentures are not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC or by any other governmental
agency.
Risks Associated with the Subordinated Debentures
Holders of Our Senior Indebtedness and Creditors of Our Subsidiaries Have
Priority Over the Payment to be Paid Under the Subordinated Debentures
The subordinated debentures are subordinated to all of our current or
future senior indebtedness or liabilities which are not expressly by their terms
made subordinate or equal in right of payment to the subordinated debentures. As
of December 31, 1998, we had:
/bullet/ $151.2 million of indebtedness ranking equally with the
subordinated debentures,
/bullet/ $74.75 million of indebtedness ranking junior in right of payment
to the subordinated debentures, and
/bullet/ no senior indebtedness.
The indenture relating to the subordinated debentures does not limit our ability
to incur additional indebtedness, including senior indebtedness, or additional
indebtedness by BankAtlantic or our other subsidiaries.
The Indenture Provides for Limited Covenants Which Do Not Protect the Holders of
Subordinated Debentures or Impact Our Obligations Under These Securities
The covenants in the indenture are limited and do not protect holders of
subordinated debentures in the event of a material adverse change in our
financial condition or results of operations. In addition, payment of principal
of and interest on the subordinated debentures can only be accelerated if we:
/bullet/ fail to pay principal of or premium, if any, on the subordinated
debentures at maturity or upon redemption,
/bullet/ fail to pay interest on any of the subordinated debentures and
such failure continues for a 30-day period,
/bullet/ breach any of the provisions of the indenture and such breach
continues for a 60-day period after receipt of notice, or
/bullet/ reorganize or become bankrupt or insolvent in certain events.
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The indenture does not require us to:
/bullet/ adhere to any financial ratios or specified levels of liquidity,
or
/bullet/ repurchase, redeem or modify the terms of the subordinated
debentures upon a change in control or other events involving us
which may adversely affect the creditworthiness of the
subordinated debentures.
Therefore, neither the covenants nor the other provisions of the indenture
should be a significant factor in evaluating our obligations under the
subordinated debentures. See "Description of the Subordinated Debentures."
An Active Trading Market for the Subordinated Debentures May Not Develop
The subordinated debentures have no established trading market. We do not
intend to have the subordinated debentures authorized for quotation on the
National Association of Securities Dealers, Inc. Automated Quotation System or
any other quotation system or listed on any securities exchange. Although it has
no obligation to do so, Ryan Beck intends to make a market in the subordinated
debentures as long as the volume of trading and other market-making
considerations justify such an undertaking. However, a public market having
depth, liquidity and orderliness depends on the presence in the marketplace of a
sufficient number of buyers and sellers at any given time. Neither we nor market
makers have control over such a marketplace. In the event that Ryan Beck or any
other entity does not make a market in the subordinated debentures, you would be
limited to selling your subordinated debentures in privately negotiated
transactions. An active trading market will not likely develop for the
subordinated debentures. If a trading market does not develop, or is not
maintained, you may experience difficulty in reselling them or may be unable to
sell them at all. If an active trading market does develop, we cannot assure you
that it will continue. Additionally, since the prices of securities generally
fluctuate, we cannot assure you that purchasers of the subordinated debentures
will be able to sell them at or above the purchase price paid.
Risks Associated with the Trust Preferred Securities
Holders of Our Senior Indebtedness and Creditors of Our Subsidiaries Will Get
Paid Before You Will Get Paid Under the Guarantee or Junior Subordinated
Debentures
Our obligations under the guarantee agreement between us and the Trust and
under the junior subordinated debentures are unsecured and rank subordinate and
junior in right of payment to all of our current and future senior indebtedness
and liabilities which are not expressly by their terms subordinate or equal in
right of payment to the junior subordinated debentures. At December 31, 1998, we
had approximately $172.2 million of indebtedness outstanding ranking senior in
right of payment to the junior subordinated debentures. The junior subordinated
debentures are also effectively junior to all obligations of our subsidiaries.
Only our capital stock is currently junior in right of payment to the junior
subordinated debentures.
The indenture relating to the junior subordinated debentures, the guarantee
and the trust agreement do not limit our ability to incur additional secured or
unsecured debt, including indebtedness that ranks senior to the junior
subordinated debentures and the guarantee. See "Description of the
Guarantee-Status of the Guarantee" and "Description of the Junior Subordinated
Debentures-Subordination."
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Distributions on the Trust Preferred Securities Could Be Deferred; You May Have
To Include Interest In Your Taxable Income Before You Receive Cash
It is possible that you will not receive cash distributions for one or more
periods of up to 20 consecutive quarters each. If this occurs, you will have to
include accrued interest in your income for United States federal income tax
purposes before you actually receive the cash distributions.
So long as we are not in default on the payment of interest on the junior
subordinated debentures, we may defer interest payments on the junior
subordinated debentures one or more times for up to 20 consecutive quarters, but
not beyond the maturity date of the junior subordinated debentures. During a
deferral period, the Trust would defer distributions on the trust preferred
securities in a corresponding amount, but such distributions will continue to
accumulate interest.
If we defer interest payments and the Trust defers distributions on the
trust preferred securities, you will have to accrue interest income for United
States federal income tax purposes on your proportionate share of the deferred
interest on the junior subordinated debentures. As a result, you would have to
include that accrued interest in your gross income for United States federal
income tax purposes before you actually receive any cash attributable to that
income. In addition, you would not receive the cash related to that income from
the Trust if you disposed of your trust preferred securities before the record
date for any deferred distribution, even if you held the trust preferred
securities on the date that the payments would normally have been paid. See
"Federal Income Tax Consequences - Interest Income and Original Issue Discount."
We do not currently intend to exercise our right to defer paying interest
on the junior subordinated debentures. However, if we elect to exercise our
right in the future, the market price of the trust preferred securities is
likely to be adversely affected. The market price of the trust preferred
securities may, therefore, be more volatile than the market prices of other
securities on which interest income accrues that do not provide for such
optional deferrals.
The Trust Preferred Securities May be Redeemed Prior to Maturity; You May Be
Taxed on the Proceeds and You May Not Be Able to Reinvest the Proceeds at the
Same or Higher Rate of Return
If adverse changes in tax, investment company or bank regulatory law
discussed on page 27 occur and are continuing, we may be able to redeem the
junior subordinated debentures in whole, but not in part, within 180 days
following the occurrence of the event. We may also redeem the trust preferred
securities at our option on or after June 30, 2002. We will not exercise our
right of redemption unless we have received prior regulatory approval, if
approval is then required.
If the junior subordinated debentures are redeemed, the trust preferred
securities will be redeemed at a redemption price equal to the $25 liquidation
amount, plus accumulated and unpaid distributions to the redemption date. Under
current United States federal income tax law, the redemption of the trust
preferred securities would be taxable to you. For a discussion of possible tax
consequences of a redemption, see "Description of the Trust Preferred Securities
- - Redemption or Exchange" and "-Liquidation Distribution Upon Termination ." See
also "Risk Factors - The Junior Subordinated Debentures May Be Distributed to
the Holders of the Trust Preferred Securities and the Junior Subordinated
Debentures May Trade at a Lower Price Than What You Paid for the Trust Preferred
Securities" and "Federal Income Tax Consequences - Receipt of Junior
Subordinated Debentures or Cash Upon Liquidation of the Trust."
In addition, you may not be able to reinvest the money you receive in the
redemption at a rate that is equal to or higher than the rate of return you
received on the trust preferred securities. For a discussion of possible tax
consequences of a redemption, see "- Exchange of Preferred Securities for Junior
Subordinated Debentures; Redemption and Tax Consequences."
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We May Shorten the Maturity of the Junior Subordinated Debentures Which Will
Result in Early Redemption of the Trust Preferred Securities
We may, at any time, shorten the maturity of the junior subordinated
debentures to a date not earlier than June 30, 2002. If we shorten the maturity,
the mandatory redemption date for the trust preferred securities will be
correspondingly shortened. We will not exercise our right to shorten the
maturity date unless we have received prior regulatory approval, if approval is
then required. See "Description of the Junior Subordinated Debentures-General."
If We Do Not Make Payments on the Junior Subordinated Debentures, the Trust Will
Not Be Able to Pay Distributions and Other Payments on the Trust Preferred
Securities and the Guarantee Will Not Apply
To the extent not paid by the Trust and only if the Trust has available
funds, the guarantee provides that you will receive:
/bullet/ any accrued and unpaid distributions which the Trust must pay on
your trust preferred securities,
/bullet/ the redemption price if your trust preferred securities are
called for redemption, and
/bullet/ upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Trust, the lesser of the
/bullet/ $25 liquidation amount, plus accumulated and unpaid
distributions to the date of such event, and
/bullet/ the amount of the Trust's assets remaining available
for distribution to holders of the trust preferred
securities in liquidation of the Trust.
The ability of the Trust to timely pay amounts due on the trust preferred
securities depends solely upon our making the related payments on the junior
subordinated debentures when due. Accordingly, if we default on our obligation
to pay principal of or interest on the junior subordinated debentures, the Trust
will not have sufficient funds to pay distributions on, or the $25 liquidation
of, the trust preferred securities. In that case, you will not be able to rely
upon the guarantee for payment because the guarantee only applies if we make a
payment of principal or interest on the junior subordinated debentures. Instead,
you or the property trustee, Wilmington Trust Company, will have to sue us to
enforce the property trustee's rights under the indenture relating to the junior
subordinated debentures. See "You May Not be Able to Enforce Your Rights Against
Us Directly if an Event of Default Occurs; You May Have to Rely on the Property
Trustee to Enforce Your Rights" immediately below and "Description of the
Guarantee" for more information on how to sue us.
You May Not Be Able to Enforce Your Rights Against Us Directly if an Event of
Default Occurs; You May Have to Rely on the Property Trustee to Enforce Your
Rights
You are not always able to directly enforce rights against us if an event
of default occurs.
If an event of default under the junior subordinated debentures occurs and
is continuing, that event will also be an event of default under the trust
preferred securities. In that case, you would rely on the property trustee, as
the holder of the junior subordinated debentures, to enforce its rights against
us.
You may only sue us directly in the following circumstances:
/bullet/ if the holders of at least 25% in liquidation amount of the trust
preferred securities direct the property trustee to enforce its
rights under the indenture but it does not enforce its rights as
directed, holders of 25% in liquidation amount may sue us
directly to enforce the property trustee's rights.
/bullet/ if the event of default under the trust agreement occurs because
of our failure to pay interest or principal on the junior
subordinated debentures, you may sue us directly.
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See "Description of the Junior Subordinated Debentures-Enforcement of Certain
Rights by Holders of the Trust Preferred Securities" and "- Events of Default."
See also "Description of the Guarantee." The trust agreement provides that you
agree to the provisions of the guarantee and the indenture relating to the
junior subordinated debentures by accepting your trust preferred securities.
We Generally Will Control the Trust Because Your Voting Rights Are Very Limited;
Your Interests May Not be the Same as Our Interests
You will have no voting rights in the Trust except in limited circumstances
relating only to the modification of the trust preferred securities and the
exercise of the rights of the Trust as holder of the junior subordinated
debentures and the guarantee. In general, only we, as the sole holder of the
trust common securities, can appoint, replace or remove any of the trustees of
the Trust. We and the trustees of the Trust may amend the trust agreement
without your consent to ensure that the Trust will be classified for United
States federal income tax purposes as a grantor trust, even if such action
adversely affects your interests. See "Description of the Trust Preferred
Securities-Voting Rights; Amendment of Trust Agreement" and "- Removal of the
Trust's Trustees."
Recent Tax Legislation May Result in An Adverse Change in Tax Laws and a
Redemption of the Trust Preferred Securities
In a currently pending case in the Tax Court, Enron Corp. v. Commissioner,
TC Dkt. No. 6194-98, the IRS is challenging the deductibility of interest paid
on securities which are similar, but not identical, to the junior subordinated
debentures. Depending upon the result in that case, the IRS may also challenge
the deductibility of the interest paid on the junior subordinated debentures,
which could in turn trigger an adverse change in the tax laws and, thus, a
redemption of the junior subordinated debentures.
We cannot assure you that an adverse change in the tax laws will not occur.
Such an event could cause a redemption of the trust preferred securities,
subject to receipt of any required regulatory approvals. See "Description of the
Junior Subordinated Debentures-Redemption or Exchange" and "Description of the
Trust Preferred Securities-Redemption or Exchange."
The Junior Subordinated Debentures May Be Distributed to the Holders of the
Trust Preferred Securities and the Junior Subordinated Debentures May Trade at a
Lower Price Than What You Paid for the Trust Preferred Securities
Since we hold all of the trust common securities, we may terminate the
Trust prior to its expiration, either as a result of the occurrence of adverse
tax or regulatory events or at our option. Before exercising this right, we must
receive prior regulatory approval, if approval is then required. In such event
and based on the terms of the trust agreement, the Trust will distribute a pro
rata portion of the junior subordinated debentures to the holders of the trust
preferred securities and trust common securities in liquidation of the Trust in
exchange for such holder's securities. See "Description of the Trust Preferred
Securities-Redemption or Exchange - Tax Event Redemption, Investment Company
Event Redemption or Capital Treatment Event Redemption."
We cannot predict the market prices for the junior subordinated debentures
that may be distributed. Accordingly, the junior subordinated debentures that
you receive upon a distribution, or the trust preferred securities you hold
pending the distribution, may trade at a lower price than what you paid to
purchase the trust preferred securities.
Although we have agreed to use all reasonable efforts to list the junior
subordinated debentures on The Nasdaq Stock Market's National Market or Small
Cap Market or such stock exchanges, if any, on which the trust preferred
securities are then listed if this occurs, we cannot assure you that such
exchanges will approve the junior subordinated debentures for listing or that a
trading market will exist for the junior subordinated debentures.
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Under current United States federal income tax law, a distribution of
junior subordinated debentures upon the termination of the Trust would generally
not be taxable to you. If, however, the Trust is characterized as an association
taxable as a corporation at the time of its liquidation, the distribution of the
junior subordinated debentures would be taxable to you. Moreover, upon
occurrence of an adverse change in tax laws, a dissolution of the Trust in which
you receive cash may be taxable to you. See "Federal Income Tax
Consequences-Receipt of Junior Subordinated Debentures or Cash Upon Liquidation
of the Trust."
Because the Trust will rely on the payments it receives on the junior
subordinated debentures to fund all payments on the trust preferred securities
and because you may receive junior subordinated debentures in exchange for trust
preferred securities, you are also making an investment decision with regard to
the junior subordinated debentures as well as the trust preferred securities.
You should carefully review all the information regarding the junior
subordinated debentures and the trust preferred securities contained in this
prospectus.
The Indenture and the Trust Agreement Contain Limited Covenants or No Covenants
in Requiring Us to Comply with our Obligations Under the Junior Subordinated
Debentures
The indenture relating to the junior subordinated debentures contains few
covenants restricting our actions, and there are no covenants in the trust
agreement. As a result, neither the indenture nor the trust agreement:
/bullet/ protects you or the Trust in the event of a material adverse
change in our financial condition or results of operations,
/bullet/ limits our ability or the ability of any of our subsidiaries to
incur or assume additional indebtedness or other obligations, or
/bullet/ contains any financial ratios or specified levels of liquidity to
which we must adhere.
Therefore, you should not consider the provisions of these governing instruments
a significant factor in evaluating whether we will be able to comply or will
comply with our obligations under the junior subordinated debentures or the
guarantee.
An Active Trading Market for the Trust Preferred Securities May Not Develop or
Be Maintained
The trust preferred securities are listed on The Nasdaq Stock Market's
National Market. Ryan Beck intends to make a market in the trust preferred
securities but it is not obligated to do so and such market making may be
discontinued at any time. We cannot assure you that an active trading market
will develop for the trust preferred securities or, if such market develops,
that it will be maintained. Accordingly, you may experience difficulty reselling
the trust preferred securities or may be unable to sell them at all. Prices for
the trust preferred securities are determined in the marketplace and may be
influenced by many factors, including:
/bullet/ prevailing interest rates,
/bullet/ the liquidity of the market for the trust preferred securities,
/bullet/ investor perceptions of us, and
/bullet/ general industry and economic conditions.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus include forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. Some of the forward-looking
statements can be identified by the use of words such as "anticipate",
"believe", "estimate", "may", "intend", "expect", "will", "should", "seeks" and
similar expressions. Forward-looking statements are based largely on our
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expectations and involve inherent risks and uncertainties. A number of important
factors could cause actual results to differ materially from those in the
forward-looking statements. Some factors include:
/bullet/ the potential adverse impact on BankAtlantic's operations and
profitability of changes in interest rates and future legislation,
/bullet/ economic conditions, both generally and particularly in areas
where we or our subsidiaries, including BankAtlantic, operate or
hold assets,
/bullet/ interest rate and credit risk associated with BankAtlantic's loan
portfolio,
/bullet/ BankAtlantic's recent rapid growth and increased operating
expenses and its announced restructuring which may not prove to
be successful,
/bullet/ regulatory limitations on our and BankAtlantic's ability to pay
dividends, and
/bullet/ the highly competitive nature of our and BankAtlantic's
businesses.
Many of these factors are beyond our control and beyond the control of
BankAtlantic. For a discussion of factors that could cause actual results to
differ, please see the discussion under "Risk Factors" contained in this
prospectus and in other information contained in our publicly available SEC
filings.
BBC CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law by:
/bullet/ the execution of a trust agreement by us, as depositor, and the
trustees of the Trust, and
/bullet/ the filing of a certificate of trust with the Secretary of State
of the State of Delaware.
The trust agreement for the Trust sets forth the terms of the trust preferred
securities and trust common securities. The trust preferred securities of the
Trust constitute all of the preferred securities of the Trust, and we acquired
all of the trust common securities. The Trust used all of the proceeds from the
sale of its trust preferred securities and trust common securities to purchase
our junior subordinated debentures. The trust common securities represent an
aggregate liquidation amount of approximately $2,311,875 which equals
approximately 3% of the total capital of the Trust of $77,061,875. The trust
preferred securities represent the remaining 97% of the total capital of the
Trust. The trust common securities:
/bullet/ have terms substantially identical to the trust preferred
securities,
/bullet/ generally rank equal to the trust preferred securities in priority
of payment, and
/bullet/ rank junior to the trust preferred securities in priority of
payment in the case of distributions, redemptions and liquidations
following any default by us on the junior subordinated debentures.
See "Description of the Trust Preferred Securities-Subordination
of Trust Common Securities."
Our junior subordinated debentures are the Trust's only assets; thus, payments
under the junior subordinated debentures are the sole revenue of the Trust. The
Trust has a term of 31 years, but may terminate earlier as provided in the trust
agreement.
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PLAN OF DISTRIBUTION
The 9% subordinated debentures are not listed on any securities exchange or
included for quotation on any quotation system, and therefore no established
trading market exists for such debentures. The trust preferred securities are
listed on The Nasdaq Stock Market's National Market. Ryan Beck, our wholly-owned
subsidiary and our affiliate, intends to make a market in the subordinated
debentures and the trust preferred securities, but it is under no obligation to
do so, and such market making, if commenced, may be discontinued at any time in
its discretion.
Ryan Beck will use this prospectus in connection with offers and sales
related to market making transactions in the subordinated debentures and trust
preferred securities. Ryan Beck may act as principal or agent in such
transactions. Such sales will be made at prices relating to prevailing market
prices at the time of sale or otherwise. We cannot assure you as to the
liquidity of such subordinated debentures and trust preferred securities or that
an active or liquid trading market will develop or, if developed, that it will
be sustained.
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DESCRIPTION OF THE SUBORDINATED DEBENTURES
The subordinated debentures are a series of debt securities issued under an
indenture, dated as of September 22, 1995, between us and American Bank National
Association (predecessor to First Star Corporate Trust Services), as trustee.
The subordinated debentures are not savings accounts or deposits and are not
insured by the FDIC or any other governmental agency. The terms and provisions
of the subordinated debentures include those stated in the indenture and those
made part of the indenture by reference to the Trust Indenture Act of 1939 as in
effect on the date of the indenture. THE FOLLOWING IS A DESCRIPTION OF THE
MATERIAL TERMS OF THE SUBORDINATED DEBENTURES. THE FOLLOWING SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE INDENTURE, INCLUDING THE DEFINITIONS IN THE
INDENTURE OF CERTAIN TERMS USED BELOW. YOU SHOULD READ THE ENTIRE INDENTURE AND
THE TRUST INDENTURE ACT FOR A COMPLETE UNDERSTANDING OF THE TERMS OF THE
SUBORDINATED DEBENTURES. For purposes of this section, the term "Company" means
only BankAtlantic Bancorp and not its subsidiaries.
General
The subordinated debentures:
/bullet/ are general obligations of ours limited to $23 million in
aggregate principal amount,
/bullet/ are not secured by our assets or otherwise,
/bullet/ do not have the benefit of a sinking fund for the retirement of
principal,
/bullet/ rank equal to all of our subordinated indebtedness,
/bullet/ are subordinated in right of payment to all of our current or
future Senior Indebtedness (as we define this term in
"- Subordination") or liabilities which are not expressly by
their terms subordinate or equal in right of payment to the
subordinated debentures, and which may include our obligations to
BankAtlantic.
We, or any of our subsidiaries including BankAtlantic, may incur additional
indebtedness constituting Senior Indebtedness or indebtedness that ranks equal
to the subordinated debentures. The indenture relating to the subordinated
debentures does not limit the total indebtedness that either we or any of our
subsidiaries may incur. As of December 31, 1998, the Company had outstanding no
Senior Indebtedness and $51.2 million in principal amount of 6 3/4% convertible
subordinated debentures and $100.0 million in principal amount of 55/8%
convertible subordinated debentures, each of which rank equal to the
subordinated debentures. Because we are a holding company, our right to
participate in any distribution of assets of our subsidiary, including
BankAtlantic, upon any liquidation or reorganization or otherwise of such
subsidiary is subject to the prior claims of creditors of the subsidiary,
including depositors in BankAtlantic, except to the extent that we may be
recognized as a creditor of the subsidiary. Thus, the ability of holders of the
subordinated debentures to benefit indirectly from such distribution is affected
by such claims of creditors.
The subordinated debentures mature on October 1, 2005, unless redeemed
earlier at our option. See "-- Redemption or Repurchase of Subordinated
Debentures." The subordinated debentures bear interest at the rate of 9% per
annum. Interest is payable semi-annually on April 1 and October 1 of each year
to the person in whose name the subordinated debenture (or any predecessor
subordinated debenture) is registered at the close of business on the preceding
March 15 or September 15, as the case may be. Interest on the subordinated
debentures is computed on the basis of a 360-day year or twelve 30-day months.
The trustee of the subordinated debentures pays the principal and interest on
the subordinated debentures when due by check mailed to the person entitled to
payment.
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Our primary source of funds for the payment of principal and interest on
the subordinated debentures is dividends from BankAtlantic. From time to time
while the subordinated debentures are outstanding, BankAtlantic may be subject
to regulatory or contractual constraints that restrict its ability to pay
dividends to us.
Redemption or Repurchase of Subordinated Debentures
We may redeem the subordinated debentures at our option, in whole or in
part, at any time, on not less than 30 days notice, but not more than 60 days
prior to the redemption date and at the redemption prices shown below.
The following are the redemption prices expressed as percentages of
principal amount, plus accrued interest to the redemption date, if the
subordinated debentures are redeemed during the twelve month period beginning
October 1 of the years indicated below:
1998........................... 106%
1999........................... 105%
2000........................... 104%
2001........................... 103%
2002........................... 102%
2003........................... 101%
2004 and thereafter............ 100%
We may at any time repurchase the subordinated debentures at any price
in the open market or otherwise. Subordinated debentures so purchased by us may
be held or resold or, at our discretion, may be surrendered to the trustee for
cancellation.
Subordination
The principal and premium, if any, and interest on the subordinated
debentures are subordinate and junior in right of payment to the prior payment
in full of all of our Senior Indebtedness. The indenture does not limit the
amount of Senior Indebtedness or other indebtedness, secured or unsecured, that
we or any of our subsidiaries may incur. If our payments on Senior Indebtedness
are accelerated, we will be prohibited from making any payment of principal,
premium or interest on the subordinated debentures until payments of the Senior
Indebtedness are made or provided for. If we dissolve, wind up, liquidate or
reorganize and our assets are distributed, payment of principal, premium or
interest on the subordinated debentures will be subordinated, to the extent and
in the manner set forth in the indenture, to the prior payment in full of Senior
Indebtedness. If our assets are distributed in any such proceeding, certain of
our general creditors may recover more, ratably, than holders of the
subordinated debentures by reason of such subordination.
"Indebtedness" means:
/bullet/ all of our obligations for borrowed money, whether or not the
recourse of the lender is to the whole of our assets or only to a
portion of such assets,
/bullet/ all of our indebtedness which is evidenced by a note,
debenture, bond or other similar instrument, including lease
obligations that we incur with respect to any property acquired
or leased and used in our business that is required to be
recorded as a capitalized lease,
/bullet/ all of our indebtedness representing the unpaid balance of the
purchase price of any goods or other property or balance owed for
any services rendered,
/bullet/ all of our indebtedness, including capitalized lease obligations,
incurred, assumed or given in an acquisition, whether by way of
purchase, merger or otherwise, of any business, real property or
other assets,
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/bullet/ any indebtedness of others described in the preceding four bullet
points that we have guaranteed or for which we are otherwise
liable, and
/bullet/ any amendment, renewal, extension, deferral, modification,
restructuring or refunding of any such indebtedness, obligation or
guarantee.
"Senior Indebtedness" means any and all of our Indebtedness, except any
particular Indebtedness, the instrument creating or evidencing the Indebtedness
or pursuant to which the Indebtedness is outstanding expressly provides that
such Indebtedness shall be subordinate or shall rank equal in right of payment
to the subordinated debentures.
Certain Covenants
The indenture contains certain customary covenants found in indentures
under the Trust Indenture Act, including covenants with respect to:
/bullet/ paying principal and interest,
/bullet/ maintaining an office or agency for administering the
subordinated debentures,
/bullet/ holding funds for payments on the subordinated debentures in
trust,
/bullet/ paying taxes and other claims,
/bullet/ maintaining our properties and our corporate existence, and
/bullet/ delivering annual certifications to the trustee.
Restrictions on Dividends
The indenture provides that we cannot:
/bullet/ declare or pay dividends on, or purchase, redeem or acquire for
value our capital stock,
/bullet/ return any capital to holders of capital stock, or distribute any
assets to holders of capital stock,
unless, from and after the date of any such dividend declaration or the date of
any such purchase, redemption, payment or distribution specified above, we
retain cash, cash equivalents or marketable securities in an amount sufficient
to cover two consecutive semi-annual interest payments on the subordinated
debentures following the date of any of the foregoing events. The indenture
further provides that the amount of any interest payment made by us with respect
to the subordinated debentures after any of the foregoing events shall be
deducted from the aggregate amount of cash or cash equivalents which we are
required to retain pursuant to the foregoing provision.
The indenture does not generally prohibit or restrict us from pledging or
BankAtlantic from selling any shares of BankAtlantic capital stock or other debt
securities of BankAtlantic. However, the indenture prohibits:
/bullet/ BankAtlantic to issue to BankAtlantic Financial Corporation or
Mr. Alan B. Levan, any of BankAtlantic's capital stock or debt
securities, or
/bullet/ the pledge of any of BankAtlantic's capital stock now or
hereafter owned by us in favor of BankAtlantic Financial
Corporation or Mr. Levan.
Defaults and Remedies
As provided in the indenture, an event of default results if we:
/bullet/ fail to pay principal of or premium, if any, on the subordinated
debentures at maturity or upon redemption, whether or not such
payment is prohibited by the subordination provisions,
/bullet/ fail to pay interest on any of the subordinated debentures when
due and such failure continues for a period of 30 days, whether
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or not such payment is prohibited by the subordination
provisions,
/bullet/ fail to comply with any of our other agreements or covenants in,
or provisions of, the indenture and such default continues for
the period of 60 days after the trustee notifies us or the
holders of at least 25% in principal amount of the outstanding
subordinated debentures notify us in writing of the default,
and
/bullet/ reorganize or become bankrupt or insolvent in certain events.
The notice referred to in the third bullet point must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default".
The trustee of the subordinated debentures shall give such notice if so
requested in writing by the holders of at least 25% in principal amount of the
subordinated debentures then outstanding. Any notice required to be delivered by
the trustee to us shall be given promptly after the trustee becomes aware of
such default or is requested by the holders to deliver such notice.
The indenture provides that the trustee will, within 90 days after the
occurrence of any default known to it, mail to the holders of the subordinated
debentures notice of such default. If we default in paying principal of or
interest on any of the subordinated debentures, the trustee shall be protected
in withholding such notice if it in good faith determines that the withholding
of such notice is in the interest of the holders of the subordinated debentures.
The indenture permits the acceleration of payment of principal of the
subordinated debentures only upon an event of default resulting from our failing
to pay principal or interest on the subordinated debentures or if we reorganize
or become bankrupt or insolvent in certain events. If such an event of default
is continuing, the indenture provides that the trustee or holders of not less
than 30% in aggregate principal amount of the subordinated debentures then
outstanding, by notice in writing to us (and to the trustee if given by the
holders), may declare all unpaid principal of all the subordinated debentures to
be immediately due and payable. Holders of a majority in principal amount of the
subordinated debentures then outstanding may rescind an acceleration and its
consequences and may waive past defaults upon conditions provided in the
indenture. No holder of subordinated debentures may pursue any remedy under the
indenture unless:
/bullet/ such holder has previously given to the trustee written notice
of a continuing event of default, and
/bullet/ the holders of at least 30% in principal amount of the
subordinated debentures then outstanding
/bullet/ have requested the trustee in writing to pursue the
remedy,
/bullet/ offered the Trust indemnity satisfactory to the
trustee against loss, liability and expense to be
incurred by pursuing the remedy, and
/bullet/ the trustee has failed so to act within 60 days after
receipt of such request.
The indenture requires us to file periodic reports with the trustee as to
the absence of defaults.
Satisfaction, Discharge and Defeasance
The indenture provides that we will at our option either
/bullet/ be deemed to have paid and discharged the entire indebtedness
represented by our obligations under the subordinated debentures,
except for
/bullet/ the obligation to pay the principal of, premium, if
any, and interest on, the subordinated debentures, and
/bullet/ certain obligations to
/bullet/ register the transfer or exchange of the
subordinated debentures,
/bullet/ replace temporary or mutilated, destroyed,
lost or stolen subordinated debentures,
/bullet/ maintain an office or agency in respect to
the subordinated debentures, and
/bullet/ hold moneys for payment in trust, or
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/bullet/ cease to be under any obligation to comply with certain terms,
provisions or conditions of the indenture (those terms,
provisions or conditions described in the indenture under
"Consolidation, Merger or Sale") or the terms, provisions or
conditions of the subordinated debentures,
in either case, on the 91st day after
/bullet/ we have paid or caused to be paid all other sums payable
with respect to the outstanding subordinated debentures and we
have delivered to the trustee a certificate from an authorized
officer and an opinion of legal counsel, each stating that all
conditions precedent relating to the satisfaction and discharge
of the entire indebtedness on all of the outstanding subordinated
debentures have been complied with, /bullet/ we have deposited
or caused to be deposited irrevocably with the trustee as a trust
fund specifically pledged as security for the benefit of the
holders of the subordinated debentures,
/bullet/ dollars in an amount or
/bullet/ direct obligations of the United States of America
(which through the payment of interest and principal in
respect thereof in accordance with their terms will
provide, not later than the due date of any payment of
principal, premium, if any, and interest on the
outstanding subordinated debentures) in an amount, or
/bullet/ a combination of the two above,
in any case, sufficient to pay and discharge each installment of
principal of and interest or premium, if any, on the outstanding
subordinated debentures on the dates such installments of
interest or principal or premium, if any, are due, and
/bullet/ no event of default has occurred and is continuing on the date
of such deposit.
Among the conditions of our exercising any such option, we are required to
deliver to the trustee an opinion of independent counsel of recognized standing
to the effect that the
/bullet/ deposit and related defeasance would not cause the holders of the
subordinated debentures to recognize income, gain or loss for
United States federal income tax purposes, and
/bullet/ holders will be subject to United States federal income tax in
the same amounts, in the same manner and at the same times as
would have been the case if such deposit and related defeasance
had not occurred.
Modification of the Indenture
The indenture provides that we and the trustee may, without the consent of
any holders of subordinated debentures, enter into supplemental indentures for
purposes, among other things, of:
/bullet/ evidencing the succession of us to another person and the
assumption by any such successor of our covenants,
/bullet/ making any change that does not adversely affect the rights of
any holders of subordinated debentures, or
/bullet/ curing any ambiguity, defect or inconsistency.
as long as any of the foregoing will not adversely affect the interest of any
holder in any material respect.
Most of the terms of the indenture and the subordinated debentures may be
modified with the consent of the holders of not less than two-thirds of the
principal amount of subordinated debentures then outstanding. However, each
holder must agree to:
/bullet/ extend the maturity,
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/bullet/ reduce the principal amount or the rate of interest on the
subordinated debentures,
/bullet/ reduce the redemption percentage, or
/bullet/ reduce the two thirds percentage required for modification.
We may omit in any particular instance to comply with any covenant or
condition as set forth in the indenture if before the time for such compliance
two-thirds of the holders of the principal amount of subordinated debentures
then outstanding shall either waive such compliance in such instance or
generally waive compliance with such covenant or condition. No such waiver may
extend to or affect such covenant or condition except to the extent so expressly
waived. Until such waiver has become effective, our obligation and the duties of
the trustee in respect of any such covenant will remain in full force and
effect. No supplemental indenture will affect the seniority rights of the
holders of Senior Indebtedness without the consent of such holders.
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DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The trust preferred securities were issued pursuant to the terms of a trust
agreement. The trust agreement is qualified as an indenture under the Trust
Indenture Act. Four trustees manage the Trust:
/bullet/ Wilmington Trust Company acts as both property trustee and
Delaware trustee, and
/bullet/ three of our officers act as administrative trustees of the
Trust.
Wilmington Trust Company also acts as indenture trustee for the trust preferred
securities under the trust agreement for purposes of complying with the
provisions of the Trust Indenture Act. THE FOLLOWING IS A DESCRIPTION OF THE
MATERIAL TERMS OF THE TRUST PREFERRED SECURITIES. THE FOLLOWING SUMMARY OF
CERTAIN PROVISIONS OF THE TRUST PREFERRED SECURITIES AND THE TRUST AGREEMENT
DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE TRUST AGREEMENT, THE DELAWARE BUSINESS TRUST ACT, AND THE TRUST INDENTURE
ACT. YOU SHOULD READ THE ENTIRE TRUST AGREEMENT, DELAWARE BUSINESS TRUST ACT,
AND TRUST INDENTURE ACT FOR A COMPLETE UNDERSTANDING OF THE TERMS OF THE TRUST
PREFERRED SECURITIES. Wherever particular defined terms of the trust agreement
are referred to, but not defined herein, such defined terms are incorporated
herein by reference.
General
In accordance with the terms of the trust agreement, the trustees, on
behalf of the Trust, issued the trust preferred securities and trust common
securities. We own all of the trust common securities. The trust preferred
securities represent preferred undivided beneficial interests in the assets of
the Trust. The holders of the trust preferred securities are entitled to a
preference in certain circumstances with respect to distributions and amounts
payable on redemption or liquidation over the trust common securities, as well
as other benefits as described in the trust agreement. The trust agreement does
not permit the Trust to issue any securities other than the trust preferred
securities and the trust common securities or to incur any indebtedness.
The trust preferred securities rank equal to, and payments are made on such
securities on a proportional basis, with the trust common securities, except as
described under "-Subordination of Trust Common Securities." The property
trustee holds the junior subordinated debentures in trust for the benefit of the
holders of the trust preferred securities and the trust common securities. The
guarantee executed by us for the benefit of the holders of the trust preferred
securities is a guarantee on a subordinated basis with respect to the trust
preferred securities, but does not guarantee payment of distributions or amounts
payable on redemption or liquidation of such trust preferred securities when the
Trust does not have funds on hand available to make such payments. Wilmington
Trust Company, as guarantee trustee, holds the guarantee for the benefit of the
holders of the trust preferred securities. See "Description of the Guarantee."
Distribution
Payment of Distributions. Distributions on each trust preferred security
will be fixed at the annual rate of 9 1/2% of the stated liquidation amount of
$25 per trust preferred security. The liquidation amount is the amount that you
are entitled to receive if the Trust is terminated and its assets are
distributed to the holders of its securities. The Trust will pay distributions
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, to the holders of the trust preferred securities as they appear on the
books and records of the Trust on the relevant record dates. The record date
will be the 15th day of the month in which the relevant distribution payments
occur. The amount of distributions payable for any period is computed on the
basis of a 360-day year of twelve 30-day months. If distributions are payable on
a day that is not a business day, then payment of that distribution will be made
on the next succeeding day that is a business day, and without any interest or
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other payment for any delay (with the same force and effect as if made on the
payment date). A "business day" means any day other than a Saturday or a Sunday,
a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
corporate trust office of the property trustee or the indenture trustee is
closed for business.
Extension Period. So long as we are not in default on the interest payments
on the junior subordinated debentures, we have the right to defer interest
payments on the junior subordinated debentures at any time, or from time to
time, by extending the interest payment period for a period not exceeding 20
consecutive quarters, but not beyond the maturity of the junior subordinated
debentures. As a consequence, the Trust would also defer quarterly distributions
on the trust preferred securities during any such deferral period. The
distributions will continue to accumulate, with interest, at an annual rate of 9
1/2%, compounded quarterly during the deferral period. The term "distributions"
includes any additional distributions payable unless otherwise stated. If we
defer interest payments on the junior subordinated debentures, we would be
restricted from the following:
/bullet/ declaring or paying dividends or distributions on, or
redeeming, purchasing, acquiring or making a liquidation payment
of, any of our capital stock, other than
/bullet/ reclassifying any class of our capital stock into
another class of capital stock,
/bullet/ paying dividends or distributions in any class of our
common stock,
/bullet/ declaring a dividend in connection with
/bullet/ implementing a shareholder rights plan,
/bullet/ issuing stock under any such plan in the
future, or
/bullet/ redeeming or repurchasing any such rights
in accordance with such plan, and
/bullet/ purchasing our common stock related to the rights
under any of our benefit plans for our or our
subsidiaries' directors, officers or employees,
/bullet/ making any payment of principal, interest or premium, if any,
on or repaying, repurchasing or redeeming any of our debt
securities that rank equal to or junior in interest to the junior
subordinated debentures or making any guarantee payments with
respect to any guarantee by us of the debt securities of any our
subsidiaries if such guarantee ranks equal to or junior in
interest to the junior subordinated debentures (other than
payments under the guarantee), or
/bullet/ redeeming, purchasing or acquiring less than all of the
junior subordinated debentures or any of the trust preferred
securities.
Upon the termination of any such deferral period and the payment of all amounts
then due, we may elect to begin a new deferral period, subject to the above
requirements. Subject to the foregoing, we are not limited on the number of
times that we may elect to begin a deferral period.
We do not currently intend on exercising our right to defer payments of
interest by extending the interest payment period on the junior subordinated
debentures.
Source of Distribution. The Trust's funds available for distribution to
holders of its trust preferred securities are limited to payments received from
the junior subordinated debentures that the Trust purchased from the proceeds of
the issuance and sale of its trust preferred securities and trust common
securities. See "Description of the Junior Subordinated Debentures." The Trust
pays distributions through the property trustee. The property trustee holds
amounts received from the junior subordinated debentures in the property account
for the benefit of the holders of the trust preferred securities and the trust
common securities. If we do not make interest payments on the junior
subordinated debentures, the property trustee will not have funds available to
pay distributions on the trust preferred securities. The payment of
distributions is guaranteed by us but only if and to the extent the Trust has
funds legally available for the payment of such distributions and cash
sufficient to make such payments. See "Description of the Guarantee."
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Redemption or Exchange
General. The junior subordinated debentures will mature on June 30, 2027.
We will have the right, subject to receipt of prior regulatory approval if then
required under applicable capital guidelines or regulatory policies, to redeem
the junior subordinated debentures:
/bullet/ on or after June 30, 2002, in whole at any time or in part from
time to time, or
/bullet/ at any time, in whole, but not in part, within 180 days
following the occurrence of a Tax Event, an Investment Company
Event or a Capital Treatment Event (as such terms are defined
below).
Subject to the foregoing events, we will not have the right to purchase the
junior subordinated debentures, in whole or in part, from the Trust until after
June 30, 2002. See "Description of the Junior Subordinated Debentures-General."
"Tax Event" means the Trust receives an opinion of counsel experienced in
such matters to the effect that, as a result of:
/bullet/ any amendment to, or change, including any announced prospective
change, in the laws or any regulations under the laws of the
United States or any political subdivision or taxing authority
affecting taxation, which amendment or change is effective
on or after the date the trust preferred securities are issued
under the trust agreement, or
/bullet/ any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which
pronouncement or decision is announced on or after the date the
trust preferred securities are issued under the trust agreement,
in each case, there is more than an insubstantial risk that:
/bullet/ we cannot, or within 90 days of the date of such opinion we
will not be able to, deduct interest payable to the Trust on the
junior subordinated debentures, in whole or in part, for United
States federal income tax purposes,
/bullet/ the Trust is, or will be within 90 days after the date of
such opinion of counsel, subject to United States federal income
tax with respect to income received or accrued on the junior
subordinated debentures, or
/bullet/ the Trust is, or will be within 90 days after the date of
such opinion of counsel, subject to more than a de minimis amount
of other taxes, duties, assessments or other governmental
charges.
We must request and receive an opinion with regard to such matters within a
reasonable period of time after we become aware of the possible occurrence of
any of the foregoing events.
"Investment Company Event" means the Trust receives an opinion of counsel
experienced in such matters to the effect that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, the Trust is or will be considered an "investment company"
that is required to be registered under the Investment Company Act, which change
becomes effective on or after the date the trust preferred securities are
originally issued.
"Capital Treatment Event" means we have reasonably determined that, as a
result of:
/bullet/ any amendment to, or change, including any proposed change,
in the laws or any regulations under the laws of the United
States or any political subdivision or taxing authority affecting
taxation, which amendment or change is effective on or after
the date the trust preferred securities are issued under
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the trust agreement, or
/bullet/ any official or administrative pronouncement or action or
judicial decision interpreting or applying such laws or
regulations, which pronouncement or decision is announced on or
after the date the trust preferred securities are issued under
the trust agreement,
in each case, there is more than an insubstantial risk that we will not be
entitled to treat an amount equal to the liquidation amount of the trust
preferred securities as "Tier 1 Capital" (or the then equivalent of Tier 1
Capital) for the purposes of the capital adequacy guidelines of the Federal
Reserve or any successor regulatory authority with jurisdiction over bank
holding companies, or any capital adequacy guidelines as then in effect and
applicable to us. Currently no capital adequacy guidelines apply to savings bank
holding companies such as us.
Mandatory Redemption. A redemption or repayment of the junior subordinated
debentures will cause a mandatory redemption of the trust preferred securities
and the trust common securities. When we repay or redeem some or all of the
junior subordinated debentures, whether at maturity or upon earlier redemption,
the property trustee will apply the proceeds from the repayment or redemption to
redeem the same proportionate amount of trust preferred securities and trust
common securities. The redemption price per security will equal the $25
liquidation amount, plus accumulated and unpaid distributions to the date of
redemption. If less than all of the junior subordinated debentures are to be
repaid or redeemed, then the aggregate liquidation amount of the trust preferred
securities and the trust common securities to be redeemed will be allocated pro
rata, or approximately 97% to the trust preferred securities and 3% to the trust
common securities, except in an event of default under the indenture.
Distribution of Junior Subordinated Debentures. Subject to our having
received prior regulatory approval if then required, we, as holder of the trust
common securities, will have the right at any time to:
/bullet/ dissolve, wind-up or terminate the Trust, and
/bullet/ after satisfaction of the liabilities of creditors of the
Trust as provided by applicable law, distribute the junior
subordinated debentures to the holders of trust preferred
securities and trust common securities in liquidation of the
Trust. See "-Liquidation Distribution Upon Termination."
Tax Event Redemption, Investment Company Event Redemption or Capital
Treatment Event Redemption. If a Tax Event, an Investment Company Event or a
Capital Treatment Event occurs and is continuing, we have the right to redeem
the junior subordinated debentures in whole, but not in part, and thereby cause
a mandatory redemption of the trust preferred securities and trust common
securities in whole, but not in part, at the appropriate redemption price
discussed above in "-Mandatory Redemption" within 180 days following the
occurrence of such Tax Event, Investment Company Event or Capital Treatment
Event. If such an event occurs and we do not elect to:
/bullet/ redeem the junior subordinated debentures and thereby cause
a mandatory redemption of the trust preferred securities and
trust common securities, or
/bullet/ liquidate the Trust and distribute the junior subordinated
debentures to holders of the trust preferred securities and trust
common securities in liquidation of the Trust as described below
under "-Liquidation Distribution Upon Termination,"
such trust preferred securities will remain outstanding and any Additional
Interest (as such term is defined below) may be payable on the junior
subordinated debentures. "Additional Interest" means the additional amounts as
may be necessary in order that the amount of distributions then due and payable
by the Trust on the outstanding trust preferred securities and trust common
securities will not be reduced as a result of any additional taxes, duties and
other governmental charges to which the Trust has become subject as a result of
a Tax Event.
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We cannot assure you as to the market prices of the trust preferred
securities or the junior subordinated debentures that may be distributed in
exchange for trust preferred securities if the Trust were to dissolve and
liquidate. The trust preferred securities that an investor may purchase, or the
junior subordinated debentures that an investor may receive upon the Trust's
dissolution and liquidation, may trade at a discount to the price that the
investor paid to purchase the trust preferred securities.
Redemption Procedures
The Trust may not redeem fewer than all of the outstanding trust preferred
securities unless it has paid all accumulated and unpaid distributions on all
the trust preferred securities for all quarterly distribution periods
terminating on or prior to the date of redemption. The Trust may redeem trust
preferred securities only in an amount equal to the funds it has on hands and
legally available to pay the redemption price. See "-Subordination of Trust
Common Securities."
The property trustee will give you notice of the redemption at least 30
days but not more than 60 days before the date fixed for redemption. See
"Description of the Junior Subordinated Debentures-Redemption or Exchange." If
the property trustee gives a notice of redemption in respect of the trust
preferred securities, then, by 12:00 noon, eastern standard time, on the date of
redemption, if the funds are available for payment, the property trustee will:
/bullet/ irrevocably deposit with Wilmington Trust Company, as the
current paying agent for the trust preferred securities, funds
sufficient to pay the applicable redemption price, and
/bullet/ give the paying agent irrevocable instructions and authority
to pay the redemption price to the holders of the trust
securities upon surrender of their certificates evidencing such
trust preferred securities.
Notwithstanding the foregoing, distributions payable on or prior to the date of
redemption for any trust preferred securities called for redemption will be
payable to the holders of such trust preferred securities on the relevant record
dates. Once notice of redemption is given and funds are deposited as required,
then all rights of the holders of such trust preferred securities so called for
redemption will cease, except the right of the holders of such trust preferred
securities to receive the redemption price, but without interest. At that time,
those trust preferred securities will cease to be outstanding. If any date fixed
for redemption is not a business day, then payment of the redemption price will
be made on the next succeeding day which is a business day, without any interest
or other payment for the delay. If payment of the redemption price for the trust
preferred securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by us under the guarantee, then distributions on
such trust preferred securities will continue to accumulate at the then
applicable rate, from the date of redemption to the date of actual payment. In
this case, the actual payment date will be considered the date fixed for
redemption for purposes of calculating the redemption price. See "Description of
the Guarantee."
Subject to applicable law, including without limitation United States
federal securities law, and as long as we have not and are not continuing to
exercise our right to defer interest payments, we or our subsidiaries may at any
time and from time to time purchase outstanding trust preferred securities by
tender, in the open market or by private agreement, and may resell such trust
preferred securities.
The redemption price will be paid and any distribution of junior
subordinated debentures to the holders of the trust preferred securities will be
made to recordholders as they appear on the books and records of the Trust on
the relevant record date. The record date will be 15 days prior to the relevant
redemption or distribution date.
If the Trust redeems less than all of the trust preferred securities and
trust common securities, then the aggregate liquidation amount of such
securities to be redeemed will be allocated approximately 3% to the trust common
securities and 97% to the trust preferred securities, except if an event of
default has occurred. In such case, holders of the trust preferred securities
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will be paid first. See"-Subordination of Trust Common Securities" immediately
below for a more complete discussion. The property trustee will select the
particular trust preferred securities to be redeemed on a pro rata basis from
the outstanding trust preferred securities not previously called for redemption,
by any method the property trustee deems fair and appropriate. The method may
provide for the selection for redemption of portions equal to $25 or an integral
multiple in excess of $25 of the liquidation amount of trust preferred
securities of a denomination larger than $25. The property trustee will promptly
notify the registrar for the trust preferred securities in writing of the trust
preferred securities selected for redemption and, in the case of any trust
preferred securities selected for partial redemption, the liquidation amount
thereof to be redeemed. For all purposes of the trust agreement, unless the
context otherwise requires, all provisions relating to the redemption of trust
preferred securities will relate to the portion of the aggregate liquidation
amount of trust preferred securities which has been or is to be redeemed.
Unless we default in paying the redemption price on the junior subordinated
debentures, on and after the date of redemption, interest will cease to accrue
on such junior subordinated debentures or portions of such debentures called for
redemption. In addition, distributions will cease to accrue on the related trust
preferred securities or portions of such securities called for redemption.
Subordination of Trust Common Securities
Payment of distributions on, and the redemption price of, the trust
preferred securities and trust common securities will be made on a proportionate
basis, based on the aggregate liquidation amount of such trust preferred
securities and trust common securities. However, if an event of default under
the indenture has occurred and is continuing on any distribution date or
redemption date, then no payments may be made on the trust common securities
unless all unpaid amounts due on the trust preferred securities have been paid
in full or provided for, as appropriate.
In the case of any event of default under the trust agreement resulting
from an event of default under the indenture, we, as holder of the trust common
securities, will be deemed to have waived any right to act upon the event of
default under the trust agreement until the effects of all such events of
default with respect to the trust preferred securities have been cured, waived
or otherwise eliminated. Until all such events of default under the trust
agreement with respect to the trust preferred securities have been so cured,
waived or otherwise eliminated, the property trustee will act solely on behalf
of the holders of the trust preferred securities and not on behalf of us, as
holder of the trust common securities, and only the holders of the trust
preferred securities will have the right to direct the property trustee to act
on their behalf.
Liquidation Distribution Upon Termination
We have the right at any time to dissolve, wind-up or terminate the Trust
and cause the junior subordinated debentures to be distributed to the holders of
the trust preferred securities. Such right is subject, however, to our having
received prior regulatory approval if then required under applicable capital
guidelines or regulatory policies.
Pursuant to the trust agreement, the Trust will automatically terminate
upon expiration of its term and will terminate earlier on the first to occur of:
/bullet/ certain events involving our bankruptcy, dissolution or
liquidation,
/bullet/ the distribution of a proportionate amount of the junior
subordinated debentures to the holders of the trust preferred
securities and trust common securities, if we, as depositor, have
given written direction to the property trustee to terminate the
Trust (which direction is optional and wholly within our
discretion as depositor),
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/bullet/ redemption of all of the trust preferred securities as
described under "Description of the Trust Preferred
Securities-Redemption or Exchange-Mandatory Redemption," or
/bullet/ the entry of an order for the dissolution of the Trust by a
court of competent jurisdiction.
If an early termination occurs as described in the first, second and fourth
bullet points above, the Trust will be liquidated by the trustees as
expeditiously as the trustees determine to be possible, after satisfying
creditor liabilities of the Trust as provided by applicable law, by distributing
to the holders of such trust preferred securities and trust common securities a
proportionate amount of the junior subordinated debentures. If such distribution
is determined by the property trustee not to be practical, after satisfying
creditor liabilities of the Trust as provided by applicable law, such holders
will be entitled to receive, out of the assets of the Trust available for
distribution to holders, an amount equal to, in the case of holders of trust
preferred securities, the aggregate of the $25 liquidation amount plus
accumulated and unpaid distributions to the date of payment. If such amount
cannot be paid in full because the Trust has insufficient assets available, then
the amounts payable directly by the Trust on the trust preferred securities will
be paid on a pro rata basis. We, as the holder of the trust common securities,
will be entitled to receive distributions upon any such liquidation pro rata
with the holders of the trust preferred securities, except that, if an event of
default under the indenture has occurred and is continuing, the trust preferred
securities will have a priority over the trust common securities. See
"-Subordination of Trust Common Securities."
After the liquidation date is fixed for any distribution of junior
subordinated debentures in exchange for trust preferred securities:
/bullet/ such trust preferred securities will no longer be deemed to
be outstanding, and
/bullet/ any certificates representing trust preferred securities will
be deemed to represent the junior subordinated debentures
/bullet/ having a principal amount equal to the liquidation
amount of the trust preferred securities, and
/bullet/ bearing accrued and unpaid interest in an amount
equal to the accumulated and unpaid distributions on
the trust preferred securities
until such certificates are presented to the administrative trustees and
their agent for transfer or reissuance.
Under current United States federal income tax law and interpretations and
assuming, as expected, that the Trust is treated as a grantor trust, a
distribution of the junior subordinated debentures should not be taxable to you.
If there is a change in law, a change in legal interpretation, a Tax Event or
other circumstances, however, the distribution could be taxable to you. See
"Federal Income Tax Consequences-Receipt of Junior Subordinated Debentures or
Cash Upon Liquidation of the Trust." If we elect not to redeem the junior
subordinated debentures prior to maturity or to liquidate the Trust and
distribute the junior subordinated debentures to you, the trust preferred
securities will remain outstanding until the junior subordinated debentures are
repaid. If we elect to liquidate the Trust and thereby cause the junior
subordinated debentures to be distributed to you in liquidation of the Trust, we
will continue to have the right to shorten the maturity of the junior
subordinated debentures, subject to certain conditions. See "Description of the
Junior Subordinated Debentures-General."
Events of Default; Notice
Any one of the following events constitutes an event of default under the
trust agreement with respect to the trust preferred securities:
/bullet/ the occurrence of an event of default under the indenture with
respect to the junior subordinated debentures (see "Description
of the Junior Subordinated Debentures - Events of Default"),
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/bullet/ default by the Trust in paying any distribution when it becomes
due and payable, and continuing such default for a period of 30
days,
/bullet/ default by the Trust in paying any redemption price of any
trust preferred security or trust common security when it becomes
due and payable,
/bullet/ default in performing, or breach, in any material respect, of
any covenant or warranty of the trustees in the trust agreement
(other than in the immediately preceding two bullet points), and
continuation of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to
the trustees by the holders of at least 25% in aggregate
liquidation amount of the outstanding trust preferred securities,
a written notice
/bullet/ specifying such default or breach,
/bullet/ requiring such default or breach to be remedied, and
/bullet/ providing that such notice is a "Notice of Default"
under the trust agreement, or
/bullet/ the occurrence of certain events of bankruptcy or insolvency with
respect to the property trustee and our failure to appoint a
successor property trustee within 60 days of such event.
Within five business days after an event of default actually known to the
property trustee occurs, the property trustee will transmit notice of such event
of default to the holders of the trust preferred securities, the administrative
trustees and us, as depositor, unless such event of default has been cured or
waived. We, as depositor, and the administrative trustees are required to file
annually with the property trustee a certificate as to whether or not they have
complied with all the conditions and covenants applicable to them under the
trust agreement.
If an event of default with respect to the junior subordinated debentures
has occurred and is continuing, the trust preferred securities will have a
preference over the trust common securities upon termination of the Trust. See
"-Liquidation Distribution Upon Termination." The existence of such an event of
default does not entitle the holders of trust preferred securities to accelerate
the maturity of their securities.
Removal of the Trust's Trustees
Unless an event of default under the junior subordinated debentures has
occurred and is continuing, any trustee may be removed at any time by the holder
of the trust common securities. If an event of default has occurred and is
continuing, the property trustee and the Delaware trustee may be removed by the
holders of a majority in liquidation amount of the outstanding trust preferred
securities. The holders of the trust preferred securities will not in any event,
however, have the right to vote to appoint, remove or replace the administrative
trustees. Such voting rights are vested exclusively in us as the holder of the
trust common securities. A trustee cannot resign or be removed and a successor
trustee cannot be appointed until the successor trustee accepts the appointment
in accordance with the provisions of the trust agreement.
Voting Rights; Amendment of Trust Agreement
Except as described in this section, under "Description of the
Guarantee-Amendments and Assignment" and as otherwise required by law and the
trust agreement, the holders of the trust preferred securities have no voting
rights.
The trust agreement may be amended from time to time by us, the property
trustee and the administrative trustees, without the consent of the holders of
the trust preferred securities:
/bullet/ with respect to a successor trustee's accepting his appointment,
/bullet/ to cure any ambiguity, correct or supplement any provisions in
such trust agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to
matters or questions arising under the trust agreement if such
amendment is no inconsistent with the other provisions of the
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trust agreement; provided that
/bullet/ such action may not adversely affect in any material
material respect the interests of any holder of trust
preferred securities or trust common securities, and
/bullet/ any amendments of the trust agreement will become
effective when notice of such amendment is given to the
holders of trust preferred securities and trust common
securities, or
/bullet/ to modify, eliminate or add to any provisions of the trust
agreement to such extent as is necessary to ensure that the Trust
will
/bullet/ be classified for United States federal income tax
purposes as a grantor trust at all times that any trust
preferred securities or trust common securities are
outstanding, or
/bullet/ not be required to register as an "investment company"
under the Investment Company Act.
The trust agreement may otherwise be amended by the trustees and us with
/bullet/ the consent of holders of a majority in aggregate liquidation
liquidation amount of the outstanding trust preferred securities
and trust common securities, and
/bullet/ an opinion of counsel received by the trustees to the effect
that such amendment or the exercise of any power granted to the
trustees in accordance with such amendment will not affect the
Trust's
/bullet/ s tatus as a grantor trust for United States federal
income tax purposes, or
/bullet/ exemption from status as an "investment company" under
the Investment Company Act.
Notwithstanding anything in this section to the contrary, without the
consent of each holder of trust preferred securities and trust common
securities, the trust agreement may not be amended to
/bullet/ change the amount or timing of any distribution on the trust
preferred securities and trust common securities or otherwise
adversely affect the amount of any distribution required to be
made in respect of the trust preferred securities and trust
common securities as of a specified date, or
/bullet/ restrict the right of a holder of trust preferred securities
and trust common securities to institute suit for the enforcement
of any such payment of distributions on or after such date.
As long as any junior subordinated debentures are held by the property
trustee, the trustees will not, without obtaining the prior approval of the
holders of a majority in aggregate liquidation amount of all outstanding trust
preferred securities, and an opinion of counsel experienced in such matters to
the effect that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes:
/bullet/ direct the time, method and place of
/bullet/ conducting any proceeding for any remedy available to
the indenture trustee, or
/bullet/ executing any trust or power conferred on the property
trustee with respect to the junior subordinated
debentures,
/bullet/ waive any past default that is waivable under the indenture,
/bullet/ exercise any right to rescind or annul a declaration that
the principal of all the junior subordinated debentures will be
due and payable, or
/bullet/ consent to any amendment, modification or termination of the
indenture or the junior subordinated debentures, where such
consent is required.
If a consent under the indenture relating to the junior subordinated debentures
requires the consent of each holder of the debentures affected by such consent,
the property trustee will not give such consent without the prior consent of
each holder of the trust preferred securities. No vote or consent of the holders
of trust preferred securities will be required for the Trust to redeem and
cancel its trust preferred securities in accordance with the trust agreement.
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The trustees may not revoke any action previously authorized or approved by
a vote of the holders of the trust preferred securities except by subsequent
vote of the holders of the trust preferred securities. The property trustee will
notify each holder of trust preferred securities of any notice of default with
respect to the junior subordinated debentures.
Registrar and Transfer Agent
The property trustee acts as the registrar and the transfer agent for the
trust preferred securities. Registration of transfers of trust preferred
securities will be effected without charge by or on behalf of the Trust, except
for the payment of any tax or other governmental charges that may be imposed in
connection with any transfer or exchange. In the event of any redemption, the
Trust will not be required to:
/bullet/ issue, register the transfer of, or exchange any trust
preferred securities during a period beginning at the opening of
business 15 days before the date of mailing of a notice of
redemption of any trust preferred securities called for
redemption and ending at the close of business on the day of such
mailing, or
/bullet/ register the transfer of or exchange any trust preferred
securities so selected for redemption, in whole or in part,
except the unredeemed portion of any trust preferred securities
being redeemed in part.
Information Concerning the Property Trustee
The property trustee:
/bullet/ other than upon the occurrence and during the continuance of
an event of default under the trust agreement, undertakes to
perform only such duties as are specifically set forth in such
trust agreement,
/bullet/ after such an event of default, must exercise the same degree of
care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs, and
/bullet/ is under no obligation to exercise any of the powers vested
in it by the trust agreement at the request of any holder of
trust preferred securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might
be incurred thereby.
The property trustee will take such action as we direct and if not so
directed, will take such action as it deems advisable and in the best interests
of the holders of the trust preferred securities and trust common securities if:
/bullet/ no event of default under the trust agreement has occurred and is
continuing,
/bullet/ the property trustee is
/bullet/ required to decide between alternative causes of
action,
/bullet/ required to construe ambiguous provisions in the trust
agreement, or
/bullet/ is unsure of the application of any provision of the
trust agreement, and
/bullet/ the matter is not one on which holders of trust preferred
securities are entitled under the trust agreement to vote.
In this case, the property trustee will have no liability except for its own bad
faith, negligence or willful misconduct.
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Miscellaneous
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that:
/bullet/ the Trust will not be deemed to be an "investment company"
required to be registered under the Investment Company Act,
/bullet/ the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes,
and
/bullet/ the junior subordinated debentures will be treated as our
indebtedness for United States federal income tax purposes.
In this connection, we and the administrative trustees are authorized to take
any action:
/bullet/ that we collectively deem necessary or desirable in our
discretion, and
/bullet/ which is not inconsistent with
/bullet/ applicable law,
/bullet/ the certificate of trust of the Trust, or
/bullet/ the trust agreement.
Holders of trust preferred securities have no preemptive or similar rights.
The trust agreement and the trust preferred securities will be governed by,
and construed in accordance with, the internal laws of the State of Delaware.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
The Trust invested the proceeds from issuing the trust preferred securities
and the consideration we paid for the trust common securities into the junior
subordinated debentures issued by us. The junior subordinated debentures were
issued as unsecured debt under the indenture, dated as of April 30, 1997,
between us and Wilmington Trust Company, as indenture trustee. The indenture is
qualified as an indenture under the Trust Indenture Act. THE FOLLOWING IS A
DESCRIPTION OF THE MATERIAL TERMS OF THE JUNIOR SUBORDINATED DEBENTURES. THE
FOLLOWING SUMMARY OF CERTAIN PROVISIONS OF THE JUNIOR SUBORDINATED DEBENTURES
AND THE INDENTURE DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE INDENTURE AND THE TRUST INDENTURE ACT. YOU SHOULD
READ THE ENTIRE INDENTURE AND TRUST INDENTURE ACT FOR A COMPLETE UNDERSTANDING
OF THE TERMS OF THE JUNIOR SUBORDINATED DEBENTURES. Wherever particular defined
terms of the indenture are referred to, but not defined herein, such defined
terms are incorporated herein by reference.
General
We issued the junior subordinated debentures as unsecured debt under the
indenture. The junior subordinated debentures are limited in aggregate principal
amount to approximately $77,061,875. This amount equals the sum of the aggregate
stated liquidation amount of the trust preferred securities and the amount of
capital that we contributed to the Trust in exchange for the trust common
securities. Until the Trust is liquidated, the junior subordinated debentures
will generally be held in the name of the property trustee in trust for the
benefit of the holders of the trust preferred securities.
The junior subordinated debentures bear interest at the annual rate of
9 1/2% from the original date of issuance until the principal becomes due and
payable. We will pay interest quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, to the persons or entities in whose
name each junior subordinated debenture is registered, subject to certain
exceptions, at the close of business on the business day prior to the date such
interest payment is due. The amount of interest payable for any period is
computed on the basis of a 360-day year of twelve 30-day months. Interest
payments not paid when due will accrue interest, compounded quarterly, at the
annual rate of 9 1/2%. The term "interest," as used herein, includes quarterly
interest payments, interest on quarterly interest payments not paid on the
applicable date an interest payment is due and Additional Interest, as
applicable. The interest payment provisions for the junior subordinated
debentures correspond to the distribution provisions for the trust preferred
securities. "See Description of the Trust Preferred Securities --
Distributions."
The entire principal amount of the junior subordinated debentures will
mature and become due and payable, together with any accrued and unpaid
interest, on June 30, 2027. We may shorten such date at any time to any date not
earlier than June 30, 2002, subject to our receiving prior regulatory approval
if then required under applicable capital guidelines or regulatory policies. In
the event that we elect to shorten the maturity date of the junior subordinated
debentures, we will give notice of our election to the indenture trustee, the
Trust and to the holders of the junior subordinated debentures no more than 180
days and no less than 90 days prior to the effectiveness of such notice.
The indenture does not provide holders of the junior subordinated
debentures protection in the event of a highly leveraged transaction or other
similar transaction involving us that may adversely affect such holders.
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Option to Extend Interest Payment Period
As long as an event of default under the junior subordinated debentures
has not occurred or is continuing, we have the right under the indenture at any
time and from time to time during the term of the junior subordinated
debentures, to defer payments of interest by extending the interest payment
period
/bullet/ for a period not exceeding 20 consecutive quarters, but
/bullet/ not beyond the maturity date of the junior subordinated
debentures.
At the end of any deferral period, we will pay all interest then accrued and
unpaid, together with interest on the accrued and unpaid interest as permitted
by law, compounded quarterly, at the annual rate of 9 1/2%. During such period,
interest will continue to accrue and holders of junior subordinated debentures,
or the holders of trust preferred securities if such securities are then
outstanding, will be required to accrue and recognize income for United States
federal income tax purposes. See "Federal Income Tax Consequences-Interest
Income and Original Issue Discount."
During any such deferral period, we may not:
/bullet/ declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment of, any of our
capital stock (other than under the guarantee) other than:
/bullet/ reclassifying any class of our capital stock into
another class of capital stock,
/bullet/ paying dividends or distributions in any class of our
common stock (i.e., stock dividends),
/bullet/ declaring a dividend in connection with
/bullet/ implementing a shareholder rights plan,
/bullet/ issuing securities under any such plan in
the future, or
/bullet/ redeeming or repurchasing any such rights
in accordance with any shareholder rights
plan, and
/bullet/ purchasing our common stock related to the rights
under any of our benefit plans for our or our
subsidiaries' directors, officers or employees.
/bullet/ make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any of our debt securities that
rank equal to or junior in interest to the junior subordinated
debentures or make any guarantee payments with respect to any
guarantee by us of the debt securities of any of our subsidiaries
if such guarantee ranks equal to or junior in interest to the
junior subordinated debentures (other than payments under the
guarantee), or
/bullet/ redeem, purchase or acquire less than all of the junior
subordinated debentures or any of the trust preferred securities.
The restrictions described above will also apply if:
/bullet/ we default on our obligations under the indenture relating
to the junior subordinated debentures, or
/bullet/ we default on our obligations under the guarantee of the
trust preferred securities.
Prior to our terminating any such deferral period, we may further extend
the interest payment period. However, the deferral period, including all
previous and further extensions, may not exceed 20 consecutive quarters or
extend beyond the maturity date of the junior subordinated debentures. Upon
terminating any such deferral period and the payment of all amounts then due, we
may elect to begin a new deferral period subject to the above requirements.
We will give the property trustee, the administrative trustees and the
indenture trustee notice of our election of such deferral period at least two
business days before the earlier of:
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/bullet/ the next date distributions on the trust preferred securities
and trust common securities would be payable except for the
election to begin such deferral period, or
/bullet/ the date the Trust is required to give notice to The Nasdaq
Stock Market's National Market (or other applicable
self-regulatory organization) or to holders of the trust
preferred securities of the record date, or the date such
distributions are payable, but in any event at least one business
day before such record date.
Subject to the foregoing, we are not limited on the number of times that we may
elect to begin a deferral period.
Additional Sums
If the Trust or the property trustee is required to pay any additional
taxes, duties or other governmental charges as a result of the occurrence of a
Tax Event, then we will pay as Additional Interest on the junior subordinated
debentures any additional amounts as may be required so that the net amounts
received and retained by the Trust after paying any such additional taxes,
duties or other governmental charges will not be less than the amounts the Trust
would have received had such additional taxes, duties or other governmental
charges not been imposed.
Redemption or Exchange
We have the right, subject to prior regulatory approval if then required
under applicable capital guidelines or regulatory policies, to redeem the junior
subordinated debentures:
/bullet/ on or after June 30, 2002, in whole at any time or in part from
time to time, or
/bullet/ at any time in whole, but not in part, within 180 days
following the occurrence of a Tax Event, an Investment Company
Event or a Capital Treatment Event. See "Description of the Trust
Preferred Securities - Redemption or Exchange."
In either case, the redemption price will equal 100% of the principal amount to
be redeemed, plus any accrued and unpaid interest, including compounded interest
and Additional Interest, if any, to the date of redemption.
We will mail a notice of any redemption at least 30 days but not more than
60 days before the redemption date to each holder of junior subordinated
debentures to be redeemed at its registered address. Unless we default in paying
the redemption price for the junior subordinated debentures, on and after the
redemption date interest ceases to accrue on such junior subordinated debentures
or portions of such junior subordinated debentures called for redemption.
The junior subordinated debentures are not subject to any sinking fund.
Distribution Upon Liquidation
As described under "Description of the Trust Preferred
Securities-Liquidation Distribution Upon Termination," under certain
circumstances involving the termination of the Trust and upon receiving prior
regulatory approval if then required under applicable regulatory policies or
guidelines, we may distribute the junior subordinated debentures to the holders
of the trust preferred securities and trust common securities in liquidation of
the Trust after satisfaction of liabilities to creditors of the Trust as
provided by applicable law. If the junior subordinated debentures are
distributed to the holders of trust preferred securities, we will use our best
efforts to list the junior subordinated debentures on The Nasdaq Stock Market's
National Market or such stock exchanges, if any, on which the trust preferred
securities are then listed. We cannot assure you as to the market price of any
junior subordinated debentures that may be distributed to the holders of trust
preferred securities.
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Subordination
The indenture provides that the junior subordinated debentures rank
subordinate and junior in right of payment to all of our Senior Debt and
Subordinated Debt, as such terms are defined below. We may not make payments of
principal, including redemption payments, or interest on the junior subordinated
debentures if:
/bullet/ any of our Senior Debt and Subordinated Debt is not paid when due
and
/bullet/ any applicable grace period after the default has
ended, and
/bullet/ the default has not been cured or waived or ceased to
exist,
/bullet/ the maturity of any of our Senior Debt and Subordinated Debt
has been accelerated because of an event of default and the
acceleration has not been rescinded, or
/bullet/ any judicial proceeding is pending with respect to any such
defaults discussed above.
The holders of our Senior Debt and Subordinated Debt will first receive
payment in full of principal of, premium, if any, and interest on such Senior
Debt and Subordinated Debt before the holders of junior subordinated debentures
will receive or retain any payment in respect of the principal of or interest on
the junior subordinated debentures, in the event of any payment or distribution
of our assets to creditors upon
/bullet/ our liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets, or
/bullet/ our bankruptcy, insolvency, debt restructuring or similar
proceedings in connection with any insolvency or bankruptcy
proceedings.
In this event, any payment or distribution on the junior subordinated debentures
that would otherwise be payable in respect of the junior subordinated debentures
but for the subordination provision will be paid or delivered directly to the
holders of our Senior Debt and Subordinated Debt with the priorities then
existing among the holders of such Debt until all of our Senior Debt and
Subordinated Debt have been paid in full.
If the maturity date of any junior subordinated debentures has been
accelerated, the holders of all of our outstanding Senior Debt and Subordinated
Debt at the time of such acceleration will first be entitled to receive payment
in full of all amounts due on such Debt, including any amounts due upon
acceleration, before the holders of the junior subordinated debentures will be
entitled to receive or retain any payment in respect of the principal of or
interest on the junior subordinated debentures.
As used herein with respect to the junior subordinated debentures, the
following terms shall have the following meanings:
/bullet/ "Debt" means, with respect to us, whether recourse is to all
or a portion of our assets and whether or not contingent:
/bullet/ any of our obligations for money borrowed,
/bullet/ any of our obligations evidenced by:
/bullet/ bonds,
/bullet/ debentures,
/bullet/ notes,
/bullet/ or other similar instruments, including
obligations incurred in connection with the
acquisition of property, assets or
businesses,
/bullet/ all of our obligations for reimbursement on any
letter of credit, banker's acceptances or similar
facilities issued for our account,
/bullet/ all of our obligations issued or assumed as the
deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business),
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/bullet/ all of our capital lease obligations, and
/bullet/ all obligations of the type referred to in the
bullet points above and all of our dividends, the
payment of which, in either case, we have guaranteed or
are responsible or liable, directly or indirectly, as
obligor or otherwise.
/bullet/ "Senior Debt" means, with respect to us, the principal of,
premium, if any, and interest, if any (including interest
accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to us whether or not such claim for
post-petition interest is allowed in such proceeding), on Debt,
whether incurred on, prior to or after the date of the indenture,
unless the instrument creating or evidencing the Debt or in which
such Debt is outstanding provides that such obligations are not
superior in right of payment to the junior subordinated
debentures or to other Debt which is equal to, or subordinated
to, the junior subordinated debentures.
The term "Senior Debt" does not include:
/bullet/ any of our Debt which when incurred and without
respect to any election under section 1111(b) of the
United States Bankruptcy Code of 1978, as amended, was
without recourse to us,
/bullet/ any of our Debt to any of our subsidiaries,
/bullet/ any Debt to any of our employees,
/bullet/ any Debt which by its terms is subordinated to
trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that
payments made to the holders of such Debt by the
holders of the junior subordinated debentures as a
result of the subordination provisions of the indenture
would be greater than they otherwise would have been as
a result of any obligation of such holders to pay
amounts over to the obligees on such trade accounts
payable or accrued liabilities arising in the ordinary
course of business as a result of subordination
provisions to which such Debt is subject, and
/bullet/ Debt which constitutes Subordinated Debt.
/bullet/ "Subordinated Debt" means, with respect to us, the principal
of, premium, if any, and interest, if any (including interest
accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to us whether or not such claim for
post-petition interest is allowed in such proceeding), on Debt,
whether incurred on, prior to or after the date of the indenture,
which is by its terms expressly provided to be junior and
subordinate to our other Debt (other than the junior subordinated
debentures).
The indenture does not limit the amount of additional Senior Debt and
Subordinated Debt that may be issued or incurred by us. We expect from time to
time to issue or incur additional indebtedness constituting Senior Debt and
Subordinated Debt. As of December 31, 1998, we had outstanding
/bullet/ no Senior Debt, and
/bullet/ approximately $172.2 million of Subordinated Debt.
Because we are a holding company, our junior subordinated debentures are
effectively subordinated to all existing and future liabilities of our
subsidiaries, including obligations to depositors of BankAtlantic.
Registrar and Transfer Agent
The indenture trustee acts as the registrar and the transfer agent for the
junior subordinated debentures. Junior subordinated debentures may be registered
for transfer (with the form of transfer endorsed thereon, or a satisfactory
written instrument of transfer, duly executed) at the office of the registrar.
As long as we maintain a transfer agent in the place of payment, we may at any
time:
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/bullet/ rescind the designation of any such transfer agent, or
/bullet/ approve a change in the location through which any such transfer
agent acts.
We may at any time designate additional transfer agents for the junior
subordinated debentures. If we redeem the junior subordinated debentures, we or
the indenture trustee will not be required to:
/bullet/ issue, register the transfer of or exchange junior subordinated
debentures during a period:
/bullet/ beginning at the opening of business 15 days before the
day that the junior subordinated debentures are
selected to be redeemed, and
/bullet/ ending at the close of business on the day of mailing
of the relevant notice of redemption, or
/bullet/ transfer or exchange any junior subordinated debentures so
selected to be redeemed, except, in the case of any junior
subordinated debentures being redeemed in part, then any portion
of the junior subordinated debentures not being redeemed.
Modification of Indenture
We and the indenture trustee may, from time to time without the consent of
the holders of the junior subordinated debentures, amend, waive or supplement
the indenture for specified purposes, including, among other things:
/bullet/ curing ambiguities, defects or inconsistencies, and
/bullet/ qualifying, or maintaining the qualification of, the
indenture under the Trust Indenture Act.
The indenture permits us and the indenture trustee, with the consent of the
holders of not less than a majority in principal amount of the outstanding
junior subordinated debentures, to modify most of the terms of the indenture.
However, each holder of the outstanding junior subordinated debentures affected
by any proposed modification must agree to:
/bullet/ extend the fixed maturity of the junior subordinated debentures,
/bullet/ reduce the principal amount of the junior subordinated
debentures,
/bullet/ reduce the rate or extend the time of payment of interest on the
junior subordinated debentures, or
/bullet/ reduce the percentage of principal amount of junior subordinated
debentures required to consent to any such modification.
So long as any of the trust preferred securities remain outstanding, the
holders of at least a majority of the aggregate liquidation amount of the trust
preferred securities must consent to:
/bullet/ any modification that requires the consent of the holders of the
junior subordinated debentures,
/bullet/ any termination of the indenture, and
/bullet/ any waiver of any event of default under the junior subordinated
debentures.
If the consent of the holder of each junior subordinated debenture is required,
then a modification will not be effective until each holder of trust preferred
securities and trust common securities has consented to the modification.
Events of Default
The indenture provides that any of the following with respect to the junior
subordinated debentures that has occurred and is continuing constitutes an event
of default:
/bullet/ we fail to pay any interest on the junior subordinated debentures
when due and such failure continues for a period of 30 days
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(subject to the deferral of any due date in the case we extend
any interest payments),
/bullet/ we fail to pay any principal on the junior subordinated
debentures when due whether at maturity, upon redemption,
by a declaration or otherwise,
/bullet/ we fail to observe or perform in any material respect certain
other covenants contained in the indenture for 90 days after
written notice to us from
/bullet/ the indenture trustee, or
/bullet/ the holders of at least 25% in aggregate outstanding
principal amount of the junior subordinated debentures,
or
/bullet/ we become bankrupt, insolvent or reorganize in certain events.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the indenture
trustee. The indenture trustee, or the holders of not less than 25% in aggregate
outstanding principal amount of the junior subordinated debentures, may declare
the principal due and payable immediately upon an event of default under the
junior subordinated debentures. The holders of a majority in aggregate
outstanding principal amount of the junior subordinated debentures may annul
such declaration and waive the default:
/bullet/ if the default (other than the non-payment of the principal
of the junior subordinated debentures which has become due solely
by such acceleration) has been cured, and
/bullet/ a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been
deposited with the indenture trustee.
If an event of default has occurred and is continuing, the property trustee
will have the right:
/bullet/ to declare the principal of and the interest on such junior
subordinated debentures, and any other amounts payable under the
indenture, to be due and payable, and
/bullet/ to enforce its other rights as a creditor with respect to such
junior subordinated debentures.
An event of default under the indenture also constitutes an event of default
under the trust agreement. The holders of the trust preferred securities, upon
an event of default, have the right to direct the property trustee to exercise
its rights as the holder of junior subordinated debentures. See "Description of
the Trust Preferred Securities- Voting Rights; Amendment of Trust Agreement."
We are required to file annually with the indenture trustee a certificate
as to whether or not we are in compliance with all the conditions and covenants
applicable to us under the indenture.
Enforcement of Certain Rights by Holders of the Trust Preferred Securities
You, as a holder of trust preferred securities, may sue us directly for
enforcement of payment to you of amounts owed on the junior subordinated
debentures equal to the aggregate liquidation amount of your trust preferred
securities if:
/bullet/ an event of default under the junior subordinated debentures
has occurred and is continuing, and
bullet/ such an event is attributable to our failure to pay interest
on or the principal of the junior subordinated debentures when
due.
In addition, if holders of at least 25% in liquidation amount of the trust
preferred securities direct the property trustee to enforce its rights under the
indenture but it does not enforce its rights as directed, holders of 25% in
liquidation amount may sue us directly to enforce the property trustee rights.
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In connection with such direct lawsuit, we will have a right of set-off
under the indenture to the extent of any payment made by us to you in such
lawsuit. We may not amend the indenture to remove the foregoing right to bring a
direct lawsuit without the prior written consent of the holders of all of the
trust preferred securities. If the right to bring such a lawsuit is removed, the
Trust may become subject to the reporting obligations under the Securities
Exchange Act of 1934.
You will not be able to exercise directly any remedies, other than those
set forth in the preceding paragraph, available to the holders of the junior
subordinated debentures unless there has been an event of default under the
trust agreement. See "Description of the Trust Preferred Securities-Events of
Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
We may not consolidate with or merge into any other person or entity or
convey or transfer our properties and assets substantially as an entirety to any
person or entity, and any person or entity may not consolidate with or merge
into us or sell, convey, transfer or otherwise dispose of its properties and
assets substantially as an entirety to us, unless:
/bullet/ we consolidate with or merge into another person or entity
or convey or transfer our properties and assets substantially as
an entirety to any person or entity, the successor person or
entity is organized under the laws of the United States or any
State or the District of Columbia, and such successor person or
entity expressly assumes by supplemental indenture our
obligations on the junior subordinated debentures issued under
the indenture,
/bullet/ immediately after giving effect thereto, no event of default
under the indenture, and no event which, after notice or lapse of
time or both, would become an event of default under the
indenture, has occurred and is continuing, and
/bullet/ certain other conditions prescribed in the indenture are met.
Satisfaction and Discharge
Except as to our obligations to pay certain sums due pursuant to the
indenture and to provide certain officers' certificates and opinions of counsel
described in the indenture, the indenture will cease to be of further effect and
we will be deemed to have satisfied and discharged the indenture when, among
other things, all junior subordinated debentures not previously delivered to the
indenture trustee for cancellation:
/bullet/ have become due and payable, or
/bullet/ will become due and payable within one year of their stated
maturity or are to be called for redemption within one year, and
we deposit or cause to be deposited with the indenture trustee funds, in trust,
for the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the junior subordinated debentures not previously delivered to
the indenture trustee for cancellation, for the principal and interest to the
date of the deposit or to their maturity or redemption date, as the case may be.
Information Concerning the Indenture Trustee
The indenture trustee has and is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the indenture trustee is under no
obligation to exercise any of the powers vested in it by the indenture at the
request of any holder of junior subordinated debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred by such request. The indenture trustee is not required
to expend or risk its own funds or otherwise incur personal financial liability
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in the performance of its duties if the indenture trustee reasonably believes
that repayment or adequate indemnity is not reasonably assured to it.
Miscellaneous
For so long as trust preferred securities and trust common securities
remain outstanding, we will:
/bullet/ maintain directly or indirectly 100% ownership of the trust
common securities of the Trust, except that certain successors
which are permitted by the indenture may succeed to our ownership
of such securities, and
/bullet/ use our reasonable efforts, consistent with the terms and
provisions of the trust agreement, to cause the Trust to remain
classified as a grantor trust and not as an association taxable
as a corporation for United States federal income tax purposes.
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DESCRIPTION OF THE GUARANTEE
The trust preferred securities guarantee agreement was executed and
delivered by us concurrently with the issuance of the trust preferred securities
for the benefit of the holders of the trust preferred securities. The guarantee
is qualified as an indenture under the Trust Indenture Act. The guarantee
trustee, Wilmington Trust Company:
/bullet/ acts as indenture trustee under the guarantee for purposes of
complying with the provisions of the Trust Indenture Act, and
/bullet/ holds the guarantee for the benefit of the holders of the trust
preferred securities.
THE FOLLOWING IS A DESCRIPTION OF THE MATERIAL TERMS OF THE GUARANTEE. THE
FOLLOWING SUMMARY OF CERTAIN PROVISIONS OF THE GUARANTEE DOES NOT PURPORT TO BE
COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE GUARANTEE AND THE
TRUST INDENTURE ACT. YOU SHOULD READ THE ENTIRE GUARANTEE AND TRUST INDENTURE
ACT FOR A COMPLETE UNDERSTANDING OF THE TERMS OF THE GUARANTEE. Wherever
particular defined terms of the guarantee are referred to, but not defined
herein, such defined terms are incorporated herein by reference.
General
The guarantee is an irrevocable guarantee on a subordinated basis of the
Trust's obligations under the trust preferred securities, but applies only to
the extent that the Trust has funds sufficient to make the payments. In
accordance with the guarantee, we irrevocably and unconditionally agree, to the
extent set forth in the guarantee, to pay in full on a subordinated basis to the
holders of the trust preferred securities, the Guarantee Payments, as such term
is defined below, as and when due, regardless of any defense, right of set-off
or counterclaim that the Trust may have or assert, other than the defense of
payment. The following payments on the trust preferred securities, if not fully
paid by or on behalf of the Trust (the "Guarantee Payments"), will be covered by
the guarantee:
/bullet/ any accrued and unpaid distributions required to be paid on
the trust preferred securities, if the Trust has funds available
to make the payment,
/bullet/ the redemption price for any trust preferred securities called
for redemption, if the Trust has funds available to make the
payment, and
/bullet/ upon a voluntary or involuntary dissolution, winding up or
liquidation of the Trust, other than in connection with the
distribution of junior subordinated debentures to the holders of
trust preferred securities or a redemption of all of the trust
preferred securities, the lesser of
/bullet/ the aggregate of the $25 liquidation amount and all
accumulated and unpaid distributions on the trust
preferred securities to the date of payment, if the
Trust has funds available to make the payment, and
/bullet/ the amount of assets of the Trust remaining
available for distribution to holders of the trust
preferred securities in liquidation of the Trust.
Our obligation to make a Guarantee Payment may be satisfied by:
/bullet/ direct payment of the required amounts by us to the holders of the
trust preferred securities, or
/bullet/ causing the Trust to pay such amounts to such holders.
The guarantee does not apply to any payment of distributions due if the
Trust lacks funds legally available for payment. If we do not make interest
payments on the junior subordinated debentures, the Trust will not pay
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distributions on the trust preferred securities and will not have funds legally
available for payment. In that event, holders of the trust preferred securities
would not be able to rely upon the guarantee for payment.
Status of the Guarantee
The guarantee constitutes our unsecured obligation and ranks subordinate
and junior in right of payment to all of our Senior Debt and Subordinated Debt
in the same manner as the junior subordinated debentures. The guarantee does not
limit the amount of additional Senior Debt and Subordinated Debt that we may
incur.
The guarantee constitutes a guarantee of payment and not of collection,
which means that a party may sue us directly to enforce its right under the
guarantee without first instituting a legal proceeding against the Trust, the
guarantee trustee or any other person or entity. The guarantee will be
discharged and be of no further force and effect upon:
/bullet/ paying the Guarantee Payments in full if not paid by the Trust,
or
/bullet/ distribution of the junior subordinated debentures to the holders
of the trust preferred securities.
Since our right to participate in any distribution of assets of a
subsidiary, including BankAtlantic, upon a liquidation or reorganization or
otherwise is subject to the prior claims of creditors of the subsidiary, our
obligations under the guarantee are therefore effectively subordinated to all
existing and future liabilities of our subsidiaries, including BankAtlantic.
Events of Default
An event of default under the guarantee will occur upon our failure to
perform any of our payment or other obligations under the guarantee. The holders
of not less than a majority in aggregate liquidation amount of the trust
preferred securities have the right to direct:
/bullet/ the time, method and place of conducting any proceeding for
any remedy available to the guarantee trustee in respect of the
guarantee, or
/bullet/ the exercise of any trust or power conferred upon the
guarantee trustee under the guarantee.
We, as guarantor, are required to file annually with the guarantee trustee
a certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to us under the guarantee.
Termination of the Guarantee
The guarantee will terminate and be of no further force and effect upon:
/bullet/ full payment of the redemption price of the trust preferred
securities, o full payment of the amounts payable upon the
Trust's liquidation, or
/bullet/ distribution of the junior subordinated debentures to the holders
of the trust preferred securities.
The guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of the trust preferred securities must restore
payment of any sums paid under such trust preferred securities or the guarantee.
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Information Concerning the Guarantee Trustee
The guarantee trustee, other than during the occurrence and continuance of
a default by us under the guarantee:
/bullet/ undertakes to perform only such duties as are specifically set
forth in the guarantee and,
/bullet/ after a default under the guarantee, must exercise the same
degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs.
Subject to such provisions, the guarantee trustee is not obligated to exercise
any of the powers vested in it by the guarantee at the request of any holder of
any trust preferred securities, unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred by such
request.
Expense Agreement
In accordance with the agreement as to expenses and liabilities that we
entered into under the trust agreement, we irrevocably and unconditionally
guarantee the full payment of any costs, expenses or liabilities of the Trust to
each person or entity to whom the Trust becomes indebted or liable, other than
obligations of the Trust to pay amounts due to the holders of the trust
preferred securities or other similar interests in the Trust. Third party
creditors of the Trust may proceed directly against us under the agreement as to
expenses and liabilities, regardless of whether these creditors had notice of
the agreement.
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RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
Full and Unconditional Guarantee
We irrevocably guarantee payments of distributions and other amounts due on
the trust preferred securities if the Trust has funds available for such
payments, as and to the extent set forth under "Description of the Guarantee."
We and the Trust believe that our combined obligations under the junior
subordinated debentures, the indenture, the trust agreement, the agreement as to
expenses and liabilities, and the guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee, on a subordinated basis, of payment of
distributions and other amounts due on the trust preferred securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes this guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the trust preferred
securities.
If and to the extent that we do not make payments on the junior
subordinated debentures, the Trust will not pay distributions or other amounts
due on the trust preferred securities. The guarantee does not cover payment of
distributions when the Trust does not have sufficient funds to pay
distributions. In such event, the holder of trust preferred securities may sue
us directly for enforcement of payment of these distributions. Our obligations
under the guarantee are subordinate and junior in right of payment to all of our
Senior Debt and Subordinated Debt.
Sufficiency of Payments
As long as we pay interest and other amounts when due on the junior
subordinated debentures, our payments will be sufficient to cover distributions
and other payments due on the trust preferred securities, primarily because:
/bullet/ the aggregate principal amount of the junior subordinated
debentures is equal to the sum of the aggregate liquidation
amount of the trust preferred securities and trust common
securities,
/bullet/ the interest rate and interest and other payment dates on the
junior subordinated debentures match the distribution rate and
distribution and other payment dates for the trust preferred
securities,
/bullet/ we will pay for all costs, expenses and liabilities of the Trust,
other than the obligations of the Trust to holders of the trust
preferred securities, and
/bullet/ the trust agreement further provides that the Trust will not
engage in any activity that is not consistent with the limited
purposes of the Trust.
Enforcement Rights of Holders of Trust Preferred Securities
A holder of any trust preferred security may sue us directly to enforce its
rights under the guarantee without first suing the guarantee trustee, the Trust
or any other person or entity. A default or event of default under any of our
Senior Debt and Subordinated Debt would not constitute a default or event of
default under the trust preferred securities, the junior subordinated debentures
or the guarantee. In the event, however, of payment defaults under, or
acceleration of, our Senior Debt and Subordinated Debt, the subordination
provisions of the indenture provide that no payments may be made on the junior
subordinated debentures until such Senior Debt and Subordinated Debt has been
paid in full or any default in payment under such Debt has been cured or waived.
If we fail to make required payments on the junior subordinated debentures, such
failure would constitute an event of default under the trust preferred
securities.
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Limited Purpose of the Trust
The trust preferred securities evidence preferred undivided beneficial
interest in the assets of the Trust. The Trust exists for the sole purpose of
issuing the trust preferred securities and trust common securities and investing
the proceeds thereof in junior subordinated debentures. A principal difference
between the rights of a holder of a trust preferred security and the rights of a
holder of a junior subordinated debenture is that a holder of a junior
subordinated debenture is entitled to receive from us the principal amount of
and interest accrued on junior subordinated debentures held, while a holder of
trust preferred securities is entitled to receive distributions from the Trust
or from us under the guarantee, if and to the extent the Trust has funds
available for the payment of such distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Trust involving the liquidation of the junior subordinated debentures, the
holders of the trust preferred securities will be entitled to receive, out of
assets held by the Trust, the $25 liquidation amount and all accumulated and
unpaid distributions on the trust preferred securities to the date of
liquidation in cash. See "Description of the Trust Preferred
Securities-Liquidation Distribution Upon Termination." Upon our voluntary or
involuntary liquidation or bankruptcy, the property trustee, as holder of the
junior subordinated debentures, would be our subordinated creditor, subordinated
in right of payment to all of our Senior Debt and Subordinated Debt, but
entitled to receive payment in full of principal and interest before any of our
shareholders receive payments or distributions. Since we are the guarantor under
the guarantee and have agreed to pay for all costs, expenses and liabilities of
the Trust (other than the obligations of the Trust to the holders of its trust
preferred securities), the positions of a holder of the trust preferred
securities and a holder of the junior subordinated debentures relative to our
other creditors and to our shareholders if we liquidate or become bankrupt are
expected to be substantially the same.
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FEDERAL INCOME TAX CONSEQUENCES
General
The following is a summary of the material United States federal income tax
considerations that may be relevant to the purchasers of trust preferred
securities. The statements of law or legal conclusions set forth in this summary
constitute the opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A., counsel to us and the Trust, of the United States federal income tax
consequences of the purchase, ownership and disposition of the trust preferred
securities that our counsel anticipates to be material to investors. We have
filed the opinion as Exhibit 8.1 to the registration statement of which this
prospectus forms a part. The conclusions expressed in this summary are based
upon current provisions of the Internal Revenue Code of 1986, regulations under
the Internal Revenue Code and current administrative rulings and court
decisions. These laws are subject to change at any time, possibly on a
retroactive basis. Subsequent changes may cause tax consequences to vary
substantially from the consequences described below. Furthermore, the
authorities on which the following summary is based are subject to various
interpretations, and therefore the United States federal income tax treatment of
the purchase, ownership, and disposition of trust preferred securities may
differ from the treatment described below.
We have not attempted to comment on all United States federal income tax
matters affecting purchasers of trust preferred securities. Moreover, the
discussion generally focuses on holders of trust preferred securities who are
individual citizens or residents of the United States and hold trust preferred
securities as capital assets. The discussion does not address:
/bullet/ all the tax consequences that may be relevant to holders who
may be subject to special tax treatment, such as, for example,
banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities
or currencies, tax-exempt investors, or persons that will hold
the trust preferred securities as a position in a "straddle," as
part of a "synthetic security" or "hedge," "conversion
transaction" or other integrated investment, or as other than a
capital asset,
/bullet/ the tax consequences to persons that have a functional currency
other than the U.S. dollar,
/bullet/ the tax consequences to shareholders, partners or beneficiaries
of a holder of trust preferred securities, and
/bullet/ any aspects of state, local or foreign tax laws or alternative
minimum tax consequences.
We urge you to consult your tax advisor as to the particular tax
consequences of purchasing, owning and disposing of the trust preferred
securities, including the application and effect of United States federal,
state, local, foreign and other tax laws.
Classification of the Junior Subordinated Debentures
We take the position that the junior subordinated debentures will be
classified for United States federal income tax purposes as our indebtedness
under current law. By accepting the trust preferred securities, you agree to
treat:
/bullet/ the junior subordinated debentures as indebtedness for United
States federal income tax purposes, and
/bullet/ the trust preferred securities as evidence of an indirect
beneficial ownership interest in the junior subordinated
debentures.
Our counsel believes that, under current law, and based upon the
representations, facts and assumptions set forth in this section, the junior
subordinated debentures will be classified as indebtedness for United States
federal income tax purposes. We cannot assure you, however, that our position
will not be challenged by the Internal Revenue Service or, if challenged, that
such a challenge will not be successful. The remainder of this discussion
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assumes that the junior subordinated debentures will be classified for United
States federal income tax purposes as our indebtedness.
Classification of the Trust
Under current law and assuming full compliance with the terms of the trust
agreement and indenture (and certain other documents described in this
prospectus), the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, you generally will
be treated as owning an undivided beneficial interest in the junior subordinated
debentures, and you will be required to include in your gross income your
allocable share of interest, or OID (original issue discount), if any, paid or
accrued on the junior subordinated debentures.
Interest Income and Original Issue Discount
Under applicable Treasury regulations, a "remote" contingency that stated
interest will not be timely paid will be ignored in determining whether a debt
instrument is issued with OID. We believe that the likelihood of our exercising
our option to defer payments of interest is remote. Based on the foregoing, we
believe that the junior subordinated debentures will not be considered to be
issued with OID at the time of their original issuance and, accordingly, you
should include in gross income your allocable share of interest on the junior
subordinated debentures in accordance with your method of tax accounting.
If we exercise our option to defer the payment of interest on the junior
subordinated debentures, they would be treated at that time as issued with OID,
and all stated interest (and de minimis OID, if any) on the junior subordinated
debentures would thereafter be treated as OID as long as the junior subordinated
debentures remained outstanding. In such event, all of your taxable interest
income with respect to the junior subordinated debentures would be accounted for
as OID on an economic accrual basis regardless of your method of tax accounting,
and actual distributions of stated interest would not be reported as taxable
income. Consequently, you would be required to include in gross income OID, on a
current basis, over the period that the instrument is held, even though we would
not make any actual cash payments during the deferral period.
Because the Treasury regulations have not been addressed in any published
rulings or other published interpretations issued by the Internal Revenue
Service, it is possible that the Internal Revenue Service could take a position
contrary to the position we have taken.
Because income on the trust preferred securities will constitute interest
income for United States federal income tax purposes, corporate holders of trust
preferred securities will not be entitled to claim a dividends-received
deduction in respect of such income.
Subsequent uses of the term "interest" in this summary include income in
the form of OID.
Market Discount and Acquisition Premium
You (other than those of you who purchased the trust preferred securities
upon original issuance) may be considered to have acquired your undivided
interests in the junior subordinated debentures with "market discount" or
"acquisition premium" as such phrases are defined for United States federal
income tax purposes. In this event, you are advised to consult your tax advisors
as to the income tax consequences of the acquisition, ownership and disposition
of the trust preferred securities. The gain on the disposition of a debt
obligation acquired subsequent to its original issuance at a market discount
generally is treated as ordinary income, not capital gain, to the extent of the
"accrued market discount" as such term is defined below. This rule is not
applicable if the market discount at the time of acquisition of the debt
obligation is de minimis (less than 0.25 percent of the stated redemption price
of the junior subordinated debentures multiplied by the number of complete
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years remaining to maturity). In the case of the junior subordinated debentures,
market discount would generally be the excess of:
/bullet/ the issue price of the junior subordinated debentures plus
OID, if any, includable in the income of all prior holders over
/bullet/ the current holder's initial bases in the junior subordinated
debentures.
The accrued market discount would be the amount calculated by multiplying
the market discount by a fraction:
/bullet/ the numerator of which is the number of days the junior
subordinated debentures have been held by the holder, and
/bullet/ the denominator of which is the number of days after the
holder's acquisition of the Junior Subordinated Debentures up to
and including the maturity date.
If you have acquired the trust preferred securities with "acquisition
premium," i.e. at a price in excess of its face amount, this premium is
generally amortizable by offsetting interest income, at your election, over the
remaining term of the trust preferred security.
Receipt of Junior Subordinated Debentures or Cash Upon Liquidation of The Trust
Under certain circumstances, as described under "Description of the Trust
Preferred Securities-Redemption or Exchange" and "-Liquidation Distribution Upon
Termination," if we exercise our right to terminate the Trust and cause the
junior subordinated debentures to be distributed to you on a basis proportionate
to your ownership in the trust preferred securities, the distribution will be
treated as a nontaxable event to you under current United States federal income
tax law. In that event, you would have an adjusted tax basis in the junior
subordinated debentures that you receive equal to the adjusted tax basis in the
trust preferred securities that you surrender, and the holding period of the
junior subordinated debentures would include the period during which you held
the trust preferred securities.
If, however, a Tax Event occurs which results in the Trust being treated as
an association taxable as a corporation at the time of the termination, the
distribution would constitute a taxable event to you. If we redeem the junior
subordinated debentures for cash and the Trust distributes the proceeds of the
redemption to holders in redemption of their trust preferred securities, the
redemption would be treated, for United States federal income tax purposes, as a
sale of the trust preferred securities in which you would recognize gain or loss
as described immediately below. Also see "Description of the Trust Preferred
Securities-Redemption or Exchange" and "-Liquidation Distribution Upon
Termination."
Sales of Trust Preferred Securities
Upon the sale of trust preferred securities, you will recognize gain or
loss in an amount equal to the difference between your adjusted tax basis in the
trust preferred securities and the amount realized in the sale. If the junior
subordinated debentures are deemed to be issued with OID as a result of our
deferral of any interest payment, or otherwise, your tax basis in the trust
preferred securities generally will be increased by OID previously includable in
your gross income to the date of disposition and decreased by distributions or
other payments received by such holder on the trust preferred securities since
and including the date of commencement of the first deferral period. Such gain
or loss generally will be a capital gain or loss (except to the extent of any
accrued interest with respect to your proportionate share of the junior
subordinated debentures required to be included in income and except to the
extent of accrued market discount) and generally will be a long-term capital
gain or loss if you have held the trust preferred securities for more than one
year.
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<PAGE>
If we exercise our option to defer any payment of interest on the junior
subordinated debentures, the trust preferred securities may trade at a price
that does not accurately reflect the value of accrued but unpaid interest with
respect to the underlying junior subordinated debentures. In the event of such a
deferral, if you dispose of your trust preferred securities between record dates
for payments of distributions thereon, you will be required to include accrued
but unpaid interest on the junior subordinated debentures to the date of
disposition as OID, but may not receive the cash related thereto. However, you
will add such amount to your adjusted tax basis in the trust preferred
securities. To the extent the selling price is less than your adjusted tax basis
in the trust preferred securities, you will recognize a capital loss. Capital
losses generally cannot be applied to offset ordinary income for United States
federal income tax purposes.
Backup Withholding and Information Reporting
Generally, income on the trust preferred securities will be reported to you
on Forms 1099. Such forms should be mailed to you by January 31 following each
calendar year. Payments made on, and proceeds from the sale of, the trust
preferred securities may be subject to a "backup" withholding tax (currently at
31%) unless you comply with certain identification and other requirements. Any
amounts withheld under the backup withholding rules will be allowed as a credit
against your United States federal income tax liability, provided the required
information is provided to the Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON YOUR
PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR TAX ADVISORS WITH RESPECT TO YOUR
TAX CONSEQUENCES FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE TRUST
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Employee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code ("Plans"), generally may purchase trust preferred securities,
subject to the investing fiduciary's determination that the investment in trust
preferred securities satisfies ERISA's fiduciary standards and other
requirements applicable to investments by the Plan.
In any case, we and/or any of our affiliates may be considered a "party in
interest" (within the meaning of ERISA) or a "disqualified person" (within the
meaning of Section 4975 of the Internal Revenue Code) with respect to certain
plans, which generally include:
/bullet/ Plans maintained or sponsored by, or contributed to by, any
such persons,
/bullet/ Plans with respect to which we or our affiliate are a
fiduciary, or
/bullet/ Plans for which we or our affiliate provide services.
The acquisition and ownership of trust preferred securities by a Plan, or by an
individual retirement arrangement or other Plans described in Section 4975(e)(1)
of the Internal Revenue Code, with respect to which we or any of our affiliates
are considered a party in interest or a disqualified person may constitute or
result in a prohibited transaction under ERISA or Section 4975 of the Internal
Revenue Code, unless such trust preferred securities are acquired pursuant to
and in accordance with an applicable exemption.
Any Plans or other entities whose assets include Plan assets subject to
ERISA or Section 4975 of the Internal Revenue Code proposing to acquire trust
preferred securities should consult with their own counsel.
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<PAGE>
LEGAL MATTERS
The validity of the subordinated debentures have been passed upon for
us by Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Miami, Florida
33130, our counsel.
Certain matters of Delaware law relating to the validity of the trust
preferred securities, the enforceability of the trust agreement and the
formation of the Trust have been passed upon by Richards, Layton & Finger,
special Delaware counsel to us and the Trust. Certain legal matters for us and
the Trust, including the validity of the guarantee and the junior subordinated
debentures, have been passed upon for us and the Trust by Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A., counsel to us and the Trust. Stearns Weaver
Miller Weissler, Alhadeff & Sitterson, P.A. has relied on the opinion of
Richards, Layton & Finger as to matters of Delaware law. Certain matters
relating to United States federal income tax considerations have been passed
upon for us by Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
EXPERTS
The consolidated financial statements of BankAtlantic Bancorp, Inc. as of
December 31, 1998 and 1997, and for each of the years in the three-year period
ended December 31, 1998, have been incorporated by reference herein and in the
registration statement on Form S-3 in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements, and other information with the SEC. You
can read and copy these reports, proxy statements, and other information
concerning BankAtlantic Bancorp at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the Public Reference Room. The SEC maintains an internet
site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC, including BankAtlantic Bancorp. Our Class A common stock is quoted on
the New York Stock Exchange and our Class B common stock is quoted on the Nasdaq
Stock Market's National Market System. These reports, proxy statements and other
information are also available for inspection at the offices of the New York
Stock Exchange, 20 Broad Street, New York City, New York 10005, and the National
Association of Securities Dealers, Inc., Report Section, 1735 K Street N.W.,
Washington, D.C. 20006.
This prospectus is part of a registration statement that we and the Trust
filed with the SEC. You can obtain the full registration statement from the SEC
as indicated above, or from us.
The SEC allows us to "incorporate by reference" the information we file
with the SEC. This permits us to disclose important information to you by
referring to these filed documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference our Annual Report on Form 10-K for the year ended December 31,
1998, filed with the SEC on March 26, 1999, and any future filings made with the
SEC under Sections 13(a), 13(c), 14 or 15(d) under the Securities Exchange Act
of 1934 until we withdraw the registration statement.
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<PAGE>
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Corporate Secretary
BankAtlantic Bancorp
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
(954) 760-5000
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Registration Fee..................................................$ 0
Legal Fees and Expenses...............................................$ 10,000
Accounting Fees and Expenses......................................... $ 5,000
Printing and Mailing Expenses.........................................$ 5,000
Blue Sky Fees and Expenses............................................$ 500
TOTAL FEES AND EXPENSES..........................................$ 20,500
-------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850 of the Florida Business Corporation Act and the Articles
of Incorporation and Bylaws of BankAtlantic Bancorp, Inc. (the "Company")
provide for indemnification of the Company's directors and officers against
claims, liabilities, amounts paid in settlement and expenses in a variety of
circumstances, which may include liabilities under the Securities Act of 1933,
as amended (the "Securities Act"). In addition, the Company carries insurance
permitted by the laws of the State of Florida on behalf of Directors, officers,
employees or agents which may cover liabilities under the Securities Act.
Under the Trust Agreement of BBC Capital Trust I ("BBC Capital"), the
Company will agree to indemnify each of the Trustees of BBC Capital or any
predecessor Trustee for BBC Capital, and to hold each Trustee harmless against,
any loss, damage, claim, liability or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the Trust Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties under the Trust Agreement.
ITEM 16. EXHIBITS
The following exhibits were previously filed or are filed herewith or
incorporated by reference to documents previously filed, as indicated below:
EXHIBITS DESCRIPTION
- -------- -----------
3.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-3, filed on June 5, 1996
(Registration No. 333-05287))
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2
to the Company's Registration Statement on Form S-4, filed on May
5, 1994 (Registration No. 33-77708))
4.1 Indenture with respect to the Company's 9 1/2% Junior
Subordinated Debentures Due 2027 (incorporated by reference to
Exhibit 4.1 to the Registrants' Registration Statement on Form
S-3, filed on March 21, 1997 (Registration No. 333-23771))
4.2 Indenture with respect to the Company's 9% Subordinated
Debentures Due 2005 (incorporated by reference to Exhibit 4.1 to
the Company's Registration Statement on Form S-2, filed on August
25, 1995 (Registration No. 33-96184))
4.3 Specimen Junior Subordinated Debenture (included as an exhibit to
the Indenture filed as Exhibit 4.1)
4.4 Specimen Subordinated Debenture (included as Section 2.3 of the
Indenture filed as Exhibit 4.2)
II-3
<PAGE>
4.5 Certificate of Trust of BBC Capital (incorporated by reference to
Exhibit 4.3 to the Registrants' Registration Statement on Form
S-3, filed on March 21, 1997 (Registration No. 333-23771))
4.6 Trust Agreement of BBC Capital (incorporated by reference to
Exhibit 4.4 to the Registrants' Registration Statement on Form
S-3, filed on March 21, 1997 (Registration No. 333-23771))
4.7 Amended and Restated Trust Agreement of BBC Capital (incorporated
by reference to Exhibit 4.5 to the Registrants' Registration
Statement on Form S-3, filed on March 21, 1997 (Registration No.
333-23771))
4.8 Specimen Certificate for Cumulative Trust Preferred Security of
BBC Capital (included as an exhibit to the Amended and Restated
Trust Agreement filed as Exhibit 4.7)
4.9 Guarantee Agreement for BBC Capital (incorporated by reference to
Exhibit 4.7 to Amendment No. 1 to the Registrants' Registration
Statement on Form S-3, filed on April 22, 1997 (Registration No.
333-23771))
4.10 Agreement as to Expenses and Liabilities (included as an exhibit
to the Amended and Restated Trust Agreement filed as Exhibit 4.7)
5.1 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A. regarding validity of the issuance of the Subordinated
Debentures*
5.2 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A. regarding validity of the issuance of the Junior
Subordinated Debentures*
5.3 Opinion of Richards, Layton & Finger, special Delaware counsel,
regarding validity of the issuance of the Cumulative Trust
Preferred Securities issued by BBC Capital*
8.1 Tax Opinion of Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A.*
12 Statement regarding computation of earnings to fixed charges
(incorporated by reference to Exhibit 12.1 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1998,
filed on March 26, 1999)
23.1 Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A. (included in Exhibits 5.1, 5.2 and Exhibit 8.1)*
23.2 Consent of Richards, Layton & Finger (included in Exhibit 5.3)*
23.3 Consent of KPMG LLP
24 Power of Attorney (included with signature pages to this
Registration Statement)*
25.1 Form T-1: Statement of Eligibility of American Bank National
Association (predecessor to First Star Corporate Trust Services)
to act as trustee under the Indenture relating to the
Subordinated Debentures (incorporated by reference to Exhibit 25
to the Company's Registration Statement on Form S-2, filed on
August 25, 1995 (Registration No. 33-96184))
25.2 Form T-1: Statement of Eligibility of Wilmington Trust Company to
act as trustee under the Indenture relating to the Junior
Subordinated Debentures (incorporated by reference to Exhibit
25.1 to the Registrants' Registration Statement on Form S-3,
filed on March 21, 1997 (Registration No. 333-23771))
25.3 Form T-1: Statement of Eligibility of Wilmington Trust Company to
act as trustee under the Amended and Restated Trust Agreement
(incorporated by reference to Exhibit 25.2 to the Registrants'
Registration Statement on Form S-3, filed on March 21, 1997
(Registration No. 333- 23771))
II-4
<PAGE>
25.4 Form T-1: Statement of Eligibility of Wilmington Trust Company to
act as trustee under the Guarantee Agreement for BBC Capital
(incorporated by reference to Exhibit 25.3 to the Registrants'
Registration Statement on Form S-3, filed on March 21, 1997
(Registration No. 333- 23771))
- ---------------------
*Previously filed.
ITEM 17. UNDERTAKINGS
(1) Each of the undersigned Registrants hereby undertake:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
and of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Securities and
Exchange Commission (the "Commission") pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed or furnished to the Commission by the
Registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
that are incorporated by reference in the Registration Statement.
(b) That, for the purpose 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 offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) 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.
(2) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrants pursuant to the foregoing provisions, or
otherwise, the Registrants have been advised that in the opinion of
the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants
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 Registrants will, unless in
the opinion of their counsel the matter has been settled by
controlling
II-5
<PAGE>
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Fort Lauderdale, State of Florida, on the 14 day of April, 1999.
BANKATLANTIC BANCORP, INC.
By: /s/ Alan B. Levan
----------------------------------
Alan B. Levan,
Chairman of the Board of Directors,
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, BBC Capital
Trust I certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Fort Lauderdale, State of Florida, on the 14 day of April, 1999.
BBC CAPITAL TRUST I
By: /s/ Alan B. Levan
----------------------------------
Alan B. Levan,
Trustee
By: /s/ Frank V. Grieco
-----------------------
Frank V. Grieco,
Trustee
By: /s/ Jarett Levan
--------------------
Jarett Levan,
Trustee
Pursuant to the requirements of the Securities Act of 1933, this Amendment
has been signed by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Alan B. Levan Chairman of the Board April 14, 1999
- ------------------------- Chief Executive Officer
Alan B. Levan and President
* Vice-Chairman of the April 14, 1999
- ------------------------- Board
John E. Abdo
/s/ Frank V. Grieco Senior Executive Vice April 14, 1999
- ------------------------- President and Principal
Frank V. Grieco Financial and Accounting
Officer
* Director April 14, 1999
- -------------------------
Ben A. Plotkin
II-7
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
* Director April 14, 1999
- -------------------------
Steven M. Coldren
* Director April 14, 1999
- -------------------------
Mary E. Ginestra
* Director April 14, 1999
- -------------------------
Bruno DiGiulian
* Director April 14, 1999
- -------------------------
Charlie C. Winningham, II
* By:/s/ Alan B. Levan
----------------------
Alan B. Levan,
Attorney-in-Fact
II-8
<PAGE>
INDEX TO EXHIBITS
-----------------
Sequentially
EXHIBIT DESCRIPTION Numbered Page
- ------- ----------- -------------
23.3 Consent of KPMG LLP
II-9
EXHIBIT 23.3
ACCOUNTANT'S CONSENT
The Board of Directors
BankAtlantic Bancorp, Inc.:
We consent to the use of our report incorporated by reference herein and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Fort Lauderdale, Florida
April 12, 1999
