As filed with the Securities and Exchange Commission on February 12, 1999.
Registration No. 333-________
Registration No. 333-_____-01
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
<TABLE>
<S> <C>
BANKATLANTIC BANCORP, INC. BBC CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
65-0507804 65-0835533
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
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
--------------
(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>
<CAPTION>
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 --- --- ---
- ----------------------------------------------------------------------------------------------------------------------------
9 1/2% Cumulative Trust Preferred
Securities of BBC Capital Trust I 2,990,000 shares --- --- ---
- ----------------------------------------------------------------------------------------------------------------------------
9 1/2% Junior Subordinated Debentures
of BankAtlantic Bancorp, Inc.(2) (2) --- --- ---
- ----------------------------------------------------------------------------------------------------------------------------
Guarantee of BankAtlantic Bancorp,
Inc. of certain obligations under
the Preferred Securities(3) (3) --- --- ---
============================================================================================================================
</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.
================================================================================
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION DATED FEBRUARY 12, 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
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED, AS DESCRIBED HEREIN, BY
BANKATLANTIC BANCORP, INC.
----------
BANKATLANTIC BANCORP SUBORDINATED DEBENTURES:
/bullet/ were offered and sold to the public by BankAtlantic Bancorp.
/bullet/ will mature on October 1, 2005 and accrue interest at the rate of 9%
per annum.
/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 preferred securities (representing undivided beneficial
interests in the trust) to the public.
/bullet/ sold its common securities to BankAtlantic Bancorp.
/bullet/ used the proceeds from these sales to buy an equal amount of 9 1/2%
junior subordinated debentures of BankAtlantic Bancorp.
/bullet/ distributes cash payments it receives on the junior subordinated
debentures to the holders of the preferred securities and the 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, INC.:
/bullet/ pays principal and interest on its junior subordinated debentures,
subject to payment on its more senior debt.
/bullet/ may choose to distribute the junior subordinated debentures pro rata to
the holders of the preferred securities and the common securities.
/bullet/ fully and unconditionally guarantees on a subordinated basis the
Trust's payment on the preferred securities based on several
obligations described in this Prospectus.
This Prospectus has been prepared in connection with the trust
preferred securities and 9% subordinated debentures and will be used by Ryan,
Beck & Co., Inc., an affiliate of BankAtlantic Bancorp, in connection with
offers and sales related to market making transactions in these securities. Ryan
Beck may act as principal or agent in these transactions. Sales will be made at
prices related to prevailing market prices at the time of sale or otherwise.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 6 IN THIS PROSPECTUS.
PLEASE NOTE 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 February , 1999
----------
<PAGE>
TABLE OF CONTENTS
PAGE
----
Prospectus Summary....................................................... 1
Risk Factors............................................................. 6
Plan of Distribution..................................................... 19
Description of the Debentures............................................ 20
Description of the Preferred Securities.................................. 25
Description of the Junior Subordinated Debentures........................ 34
Description of the Guarantee............................................. 42
Relationship Among the Preferred Securities, the Junior Subordinated
Debentures and the Guarantee........................................ 44
Certain Federal Income Tax Consequences.................................. 46
ERISA Considerations..................................................... 49
Legal Matters............................................................ 49
Experts.................................................................. 50
Incorporation of Certain Documents by Reference.......................... 50
Available Information.................................................... 50
<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, but 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 read the entire Prospectus
carefully.
THE COMPANY
BankAtlantic Bancorp, Inc., which is referred to in this Prospectus as
the "Company," is a unitary savings bank holding company organized in April 1994
under the laws of the State of Florida for the purpose of becoming the holding
company of BankAtlantic, A Federal Savings Bank ("BankAtlantic"). The Company
owns all of the outstanding capital stock of BankAtlantic. At September 30,
1998, the Company had consolidated total assets of approximately $3.7 billion
and total stockholders' equity of approximately $247 million. BFC Financial
Corporation ("BFC"), which is controlled by the Chairman and Vice Chairman of
the Company, is a unitary savings bank holding company which at September 30,
1998 owned approximately 25% of the issued and outstanding Class A Common Stock
of the Company (the "Class A Common Stock") and approximately 47% of the issued
and outstanding Class B Common Stock of the Company (the "Class B Common
Stock"). BFC's principal business activity is its ownership of the Company's
stock. BFC also holds investments in real estate and mortgage notes. The
Company's principal executive offices are located at 1750 East Sunrise
Boulevard, Fort Lauderdale, Florida 33304. Its telephone number is (954)
760-5000.
BankAtlantic is a federally-chartered, federally-insured savings bank
organized in 1952 which provides traditional retail banking services and a full
range of commercial banking products and related financial services. The
principal business of BankAtlantic is attracting checking and savings deposits
from the public and general business customers and using these deposits to
originate commercial real estate and business loans, residential real estate
loans and consumer loans, to purchase wholesale residential loans from third
parties and to make other permitted investments including investments in
mortgage-backed securities, tax certificates and other investment securities.
BankAtlantic currently operates through 70 branch offices located primarily in
Miami-Dade, Broward and Palm Beach Counties in South Florida. BankAtlantic is
regulated and examined by the Office of Thrift Supervision (the "OTS") and the
Federal Deposit Insurance Corporation (the "FDIC") and its deposit accounts are
insured up to applicable limits by the FDIC.
The Company's primary activities relate to its ownership of
BankAtlantic's capital stock. However, during 1998, the Company acquired Ryan,
Beck & Co., Inc. ("Ryan Beck"), an investment banking firm that underwrites,
distributes and trades tax-exempt securities and provides capital raising and
advisory services to the financial services industry. Ryan Beck intends to
effect market making transactions involving the Company's subordinated
debentures (the "Debentures") and preferred securities. The Company also engages
in real estate development and investment activities through St. Lucie West
Holding Corp., the developer of a master planned residential, commercial and
industrial community in St. Lucie County, Florida, and through several minority
interest investments in real estate development projects in South Florida.
However, the Board of Directors of the Company has announced that it is
considering the spin-off of the Company's real estate and development business
through a distribution to the Company's shareholders of the capital stock of
BankAtlantic Development Corp., a wholly-owned subsidiary of BankAtlantic. The
spin-off is subject to a number of conditions including the receipt of board
approval and regulatory approvals. See "-Recent Developments".
THE TRUST
The Company created BBC Capital Trust I, a Delaware business trust
("BBC Capital"), pursuant to (i) a trust agreement, dated as of March 21, 1997,
executed by the Company, as depositor, and Wilmington Trust Company, as Property
Trustee (the "Property Trustee") and as Delaware Trustee (the "Delaware
Trustee"), and certain
-1-
<PAGE>
administrative trustees (the "Administrative Trustees" and collectively with the
Property Trustee and Delaware Trustee, the "Trustees"), and (ii) a certificate
of trust filed with the Secretary of State of the State of Delaware on March 21,
1997. The Company and the Trustees executed an amended and restated trust
agreement for BBC Capital (as so amended and restated, the "Trust Agreement"),
which set forth the terms of BBC Capital's 9 1/2% cumulative trust preferred
securities (the "Preferred Securities") and common trust securities (the "Common
Securities" and, together with the Preferred Securities will be referred to
herein as the "Trust Securities").
BBC Capital's activities are limited solely to:
/bullet/ issuing the Preferred Securities and the Common Securities;
/bullet/ using the proceeds from the sale of the Preferred Securities
and the Common Securities to purchase the Company's 9 1/2%
junior subordinated debentures due 2027 (the "Junior
Subordinated Debentures");
/bullet/ maintaining its status as a grantor trust for federal income
tax purposes; and
/bullet/ engaging in other activities that are necessary or incidental
to these purposes.
The Company purchased all of the Common Securities. The Common
Securities represent an aggregate liquidation amount of approximately $2,311,875
which equals approximately 3% of BBC Capital's total capitalization of
$77,061,875. The Preferred Securities represent the remainder 97% of BBC
Capital's total capitalization. The Common Securities have terms substantially
identical to, and rank equal in priority of payment with, the Preferred
Securities. However, if the Company defaults on the Junior Subordinated
Debentures, then cash distributions and liquidation, redemption and other
amounts payable on the Common Securities will be subordinate to the Preferred
Securities in priority of payment. See "Description of the Preferred
Securities-Subordination of Common Securities." The assets of BBC Capital
consist solely of the Junior Subordinated Debentures; thus, payments under the
Junior Subordinated Debentures are the sole revenue of BBC Capital.
BBC Capital has a term of 31 years, but may terminate earlier as
provided in the Trust Agreement.
The principal executive offices of BBC Capital are located at 1750 East
Sunrise Boulevard, Fort Lauderdale, Florida 33304. Its telephone number is (954)
760-5000.
THE SECURITIES
You can find a description of the securities offered by this Prospectus
beginning on page 20.
RISK FACTORS
Before you make an investment decision, you should consider all of the
information contained in this Prospectus. In particular, you should evaluate the
factors discussed under "Risk Factors," including:
/bullet/ the potential adverse impact on BankAtlantic's profitability
of changes in interest rates;
/bullet/ BankAtlantic's recent rapid growth and increased operating
expenses and its announced restructuring which may not prove
to be successful;
/bullet/ BankAtlantic's loan portfolio is subject to both interest rate
and credit risk;
/bullet/ regulatory limitations on the Company's and BankAtlantic's
ability to pay dividends;
/bullet/ the highly competitive nature of the Company's and
BankAtlantic's businesses; and
/bullet/ sources of payment to holders of the Company's securities.
-2-
<PAGE>
RECENT DEVELOPMENTS
OPERATING RESULTS
The Company reported a loss for the year ended December 31, 1998 of
$(8.0) million, or $(.22) fully diluted loss per share, for its Class A Common
Stock and its Class B Common Stock, compared to December 31, 1997 income of
$27.8 million, or fully diluted income per share of $.78 for its Class A Common
Stock and $.77 for its Class B Common Stock.
The results for the year ended December 31, 1998 are comprised of
income from continuing operations of $10.2 million, or fully diluted earnings
per share of $.29 for the Class A Common Stock and $.26 for the Class B Common
Stock, and a loss from discontinued operations of $(18.2) million, or a fully
diluted loss per share from discontinued operations of $(.51) for the Class A
Common Stock and $(.48) for the Class B Common Stock. As discussed below, the
Company is exiting the mortgage servicing business and accordingly the results
of this line of business are characterized as discontinued operations.
Comparable amounts for the year ended December 31, 1997 were income from
continuing operations of $23.7 million, or fully diluted earnings per share of
$.67 for the Class A Common Stock and the Class B Common Stock, and income from
discontinued operations of $4.1 million, or fully diluted earnings per share of
$.11 for the Class A Common Stock and $.10 for the Class B Common Stock.
For the quarter ended December 31, 1998, the Company reported a net
loss of $(10.1) million compared to net income of $8.2 million for the same
period in 1997. The Company reported a loss from continuing operations for the
fourth quarter of 1998 of $(4.3) million compared to income from continuing
operations of $7.8 million for the fourth quarter of 1997. Loss from
discontinued operations for the fourth quarter of 1998 was $(5.8) million
compared to income from discontinued operations of $393,000 for the same period
in 1997.
Contributing to the loss from continuing operations for the fourth
quarter of 1998 were restructuring charges and write-downs of $2.6 million and
an increase in the provision for loan losses from $2.4 million for the fourth
quarter of 1997 to $12.0 million for the fourth quarter of 1998. These charges
were partially offset by a $3.1 million gain relating to the freezing of
benefits under the Company's defined benefit pension plan. The provision for
loan losses was increased as a result of additional risks associated with the
Company's indirect consumer lending portfolio, the Company's recent growth in
small business lending, and credit risks arising as the Company's borrowers face
Year 2000 issues.
The Company's stockholders' equity was $240 million at December 31,
1998, compared to $207 million at December 31, 1997. Total assets of the Company
increased to $3.8 billion at December 31, 1998, compared to $3.1 billion at
December 31, 1997.
RESTRUCTURING INITIATIVES
Included in the fourth quarter and year end 1998 results are the impact
of various restructuring initiatives announced by the Company on December 15,
1998 as part of a year long efficiency study aimed at streamlining operations,
improving efficiencies and increasing non-interest income. A summary of the
announced restructuring initiatives and the related restructuring charges are
summarized below:
/bullet/ the Company reduced its full time employees by approximately
185. Approximately 100 of these individuals were no longer
employed by the Company at December 31, 1998, and it is
anticipated that approximately 15 employees, related to the
closing of three branches, will be released by the end of the
first quarter of 1999. The remaining 70 employees are
associated with the mortgage servicing business and are
expected to remain with the Company through the second quarter
of 1999. Severance and benefits associated with the downsizing
is estimated to be approximately $1.9 million and is included
in 1998 charges. Total annual compensation and benefits
related to
-3-
<PAGE>
employees impacted by the restructuring were approximately
$4.6 million for continued operations and approximately $2.0
million for discontinued operations.
/bullet/ the Company will exit the mortgage servicing business. While
this business has been a strong performer for the Company over
the years, the current volatility in financial markets has
made earnings unpredictable. During the third quarter of 1998,
the Company established a $15 million valuation allowance for
impairment of mortgage servicing rights ("MSRs"). The
estimated loss in exiting this line of business is $10 million
and is included in the loss from discontinued operations. The
Company anticipates that disposition of this business will
take approximately six months. At December 31, 1998, the
number of loans being serviced was approximately 36,000, with
outstanding principal balances serviced of approximately $3.5
billion and net MSRs of $44 million.
/bullet/ the Company is considering a spin-off to all shareholders as a
dividend of 100% of the capital stock of BankAtlantic
Development Corporation ("BDC"), a 100% owned service
corporation subsidiary of BankAtlantic. Included in this
subsidiary is the St. Lucie West master planned community as
well as five joint ventures. There is currently approximately
$43 million in capital in this subsidiary. While
BankAtlantic's regulatory capital would not be impacted by the
spin-off because all capital in BDC is already excluded from
the calculation of regulatory capital, the spin-off will
decrease the Company's assets. The spin-off is subject to a
number of conditions, including the prior receipt of
regulatory approvals.
/bullet/ the Company announced that it will discontinue new production
in the indirect automobile consumer loan business. At December
31, 1998, the indirect portfolio totaled $220 million and will
be liquidated over time through portfolio run-off.
/bullet/ the Company will close and merge three branches.
/bullet/ the Company announced that it will freeze the present status
of its defined benefit pension plan and is exploring
alternative employee benefit programs, including enhanced
401(k) benefits.
/bullet/ the Company closed its mortgage banking operations on
Florida's West Coast. The Company will continue to offer
residential loans throughout Florida with centralized
processing and underwriting of these loans.
There is no assurance that the restructuring will result in improved
efficiencies or increased income. Additionally, while management of the Company
does not anticipate that the Company's results will be further impacted from
discontinued operations, actual results will depend on future market conditions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the nine months ended September 30, 1998 and for the fiscal years
ended December 31, 1997, 1996, 1995, 1994 and 1993. Earnings represent income
from continuing operations before taxes, interest expense and non-cumulative
preferred stock dividends. Fixed charges represent all interest expense (ratios
are presented both excluding and including interest on deposits) and the portion
of rental expense considered to be representative of interest. Interest expense
(other than on deposits) includes interest on long-term obligations, borrowings
from the Federal Home Loan Bank ("FHLB") of Atlanta, securities sold under
agreements to repurchase and other funds borrowed.
-4-
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
FOR THE NINE MONTHS --------------------------------
ENDED SEPTEMBER 30, 1998 1997 1996 1995 1994 1993
------------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding interest on deposits......... 1.37 1.80 2.26 2.22 3.33 6.09
Including interest on deposits......... 1.21 1.33 1.37 1.37 1.59 1.65
</TABLE>
Information about losses at the Company for the year ended December 31, 1998 can
be found in this summary under the caption "Recent Developments."
-5-
<PAGE>
RISK FACTORS
An investment in the Debentures or the Preferred Securities involves a
high degree of risk. You should carefully consider, together with the other
information contained in this Prospectus, the following factors in evaluating
the Company and its business and BBC Capital before purchasing the Debentures or
the Preferred Securities.
Some of the statements contained in this Prospectus are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). The words "anticipate", "believe",
"estimate", "may", "intend", "expect" and similar expressions identify certain
of these forward-looking statements. Actual results could differ materially from
those suggested by these forward-looking statements. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, including:
/bullet/ economic factors (both generally and particularly in areas
where the Company or its subsidiaries, including BankAtlantic,
operate or hold assets),
/bullet/ interest rate and credit risk associated with BankAtlantic's
loan portfolio,
/bullet/ the potential adverse impact on BankAtlantic's operations and
profitability of changes in interest rates and future
legislation,
/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 the Company's and BankAtlantic's
ability to pay dividends, and
/bullet/ the highly competitive nature of the Company's and
BankAtlantic's businesses.
Many of these factors are beyond the Company's control and beyond the control of
BankAtlantic.
RISKS ASSOCIATED WITH THE COMPANY
POTENTIAL IMPACT OF CHANGES IN INTEREST RATES
The majority of the Company's assets and liabilities are monetary in
nature and subject the Company to significant risk from changes in interest
rates. Changes in interest rates can impact the Company's net interest income as
well as the valuation of its assets and liabilities.
INTEREST RATE SENSITIVITY GAP
BankAtlantic's profitability is dependent to a large extent on its net
interest income, which is the difference between its interest income on its
interest-earning assets (such as loans) and its interest expense on its
interest-bearing liabilities (such as deposits). Like most financial
institutions, changes in general interest rate levels and other economic factors
affect BankAtlantic's profitability. If there is a mismatch between the dollar
amount of repricing or maturing assets (such as loans) and liabilities (such as
time deposits), a financial institution is said to have an "interest rate
sensitivity gap." A financial institution's interest rate risk arises from an
interest rate sensitivity gap. Financial institutions measure this interest rate
risk in terms of the ratio of the interest rate sensitivity gap to the
institution's total assets. If more assets reprice or mature over a given time
frame than liabilities, the financial institution is considered
"asset-sensitive." This risk is reflected as a positive gap. Conversely, if more
liabilities reprice or mature over a given time frame than assets, the financial
institution will be considered "liability-sensitive." This risk is reflected as
a negative gap.
An asset-sensitive position (i.e., a positive gap) will generally
enhance earnings in a rising interest rate environment (because more
interest-earning assets will be repriced or replaced at higher interest rates
than interest-paying liabilities). In a falling interest environment an
asset-sensitive position will generally negatively impact
-6-
<PAGE>
earnings (since more interest-earning assets will be repriced or replaced at
lower interest rates than interest-bearing liabilities). Conversely, a
liability-sensitive position (i.e., a negative gap) will generally enhance
earnings in a falling interest rate environment (more interest-bearing
liabilities are replaced or repriced at lower rates than interest-earning
assets) and negatively impact earnings in a rising interest rate environment
(more interest-bearing liabilities will be replaced or repriced at higher rates
than interest-earning assets).
At September 30, 1998, BankAtlantic had a one year negative
cumulative gap of 2.80%. This negative one year gap position may, as noted
above, have a negative impact on BankAtlantic's earnings in a rising interest
rate environment. However, it is important to note that the Company makes a
number of assumptions to calculate its interest rate sensitivity gap. These
assumptions relate to interest rates, loan prepayment rates and deposit decay
rates and the assumptions may not prove to be correct. Accordingly, the
Company's interest rate sensitivity gap may not accurately reflect the impact of
changes in interest rates on the Company's profitability. In addition,
management of BankAtlantic may take reactive measures in response to changes in
interest rates that may not be reflected in the calculation of its interest rate
sensitivity gap. While BankAtlantic has attempted to structure its asset and
liability management strategies to mitigate the impact on net interest income of
changes in market interest rates, there is no assurance that these strategies
will be successful.
ADVERSE IMPACT OF ACCELERATED PREPAYMENTS ON NET INTEREST INCOME
Generally, as interest rates fall, loan prepayments accelerate. Owing
in part to current historically low interest rates, BankAtlantic experienced a
high volume of loan prepayments in its mortgage portfolio and in its servicing
portfolio during the nine months ended September 30, 1998. Those prepayments
adversely affected its earnings during this period, especially during the three
months ended September 30, 1998. Loan servicing and other loan fee income
declined by $3.9 million as a result of increased mortgage prepayments during
the nine-month period, including the amortization of premiums associated with
MSRs relating to the prepaid loans. BankAtlantic amortized the MSRs because the
prepayment of the associated loans terminated the servicing associated with
them. The yields earned with respect to the portion of BankAtlantic's mortgage
portfolio which were prepaid were greater than alternative short term
investments in which BankAtlantic reinvested such funds, also adversely impacted
earnings for the nine-month period. Significant loan prepayments in
BankAtlantic's mortgage portfolio and MSR portfolio in the future could have a
similar adverse effect on earnings. Prepayments of the underlying loans also
have an adverse effect on BankAtlantic's ability to sell MSRs at a profit. At
September 30, 1998, BankAtlantic serviced approximately 31,000 loans with
outstanding principal balances serviced of $3.0 billion and net MSRs of $51.7
million.
ADVERSE IMPACT OF ACCELERATED PREPAYMENTS ON VALUATION OF FINANCIAL
INSTRUMENTS
Changes in general interest rate levels also affect the valuation of
the Company's assets and liabilities, including MSRs, that are interest rate
sensitive. The Company may be required under generally accepted accounting
principles to establish a valuation allowance to reflect a decline in the market
value of its assets as a result of changes in interest rates. For the three
months ended September 30, 1998, BankAtlantic established a valuation allowance
of $15 million to reflect the decline in the market value of its MSRs primarily
as a result of historically low interest rate levels and the anticipated
acceleration of prepayments of the loans associated with the MSRs. While the
Company intends to exit the mortgage servicing business, the Company's results
of operations would be adversely affected in future periods if changes in
interest rates adversely impacts the market value of its assets and liabilities.
See "Summary-Recent Developments".
RECENT RAPID GROWTH AND INCREASED OPERATING EXPENSES
During the last three years, the Company and BankAtlantic have grown
rapidly and significantly. Total assets of the Company have increased from $1.75
billion at December 31, 1995 to $2.6 billion at December 31, 1996, to $3.1
billion at December 31, 1997 and to approximately $3.7 billion at September 30,
1998. The Company also experienced a significant level of loan growth. The
Company's loan portfolio increased from $828.6 million at
-7-
<PAGE>
December 31, 1995, to $2.5 billion at September 30, 1998. Part of such growth
reflects the Company's acquisition of Bank of North America ("BNA"), a
commercial bank located in South Florida.
The Company has recently initiated several new business units, hired
additional personnel and taken steps to enhance and expand its operational and
management information systems. These steps are intended to support and manage
its expanded operations and to provide management resources to support further
expansion and growth.
The Company has attempted to monitor its rapid growth, the adequacy of
management and the resources available to support continued growth. However,
there is no assurance that the Company will be successful in managing all
aspects of its growth. The growth and expansion of operations through both
mergers and acquisitions and internal growth has resulted in a significant
increase in assets, loans and deposits, as well as increases in non-interest
expenses. Employee compensation and benefits increased 21.13% from $33.2 million
to $40.2 million for 1996 compared to 1997. During the same period, its
occupancy and equipment costs also increased 37.1% from $13.6 million to $18.7
million. Employee compensation and benefits costs increased 43.6% from $28.8
million during the nine months ended September 30, 1997 to $41.5 million during
the nine months ended September 30, 1998. Employee compensation and benefits
costs at BankAtlantic alone (which excludes Ryan Beck and real estate
operations) increased 22.7% from $28.8 million during the nine months ended
September 30, 1997 to $35.4 million during the nine months ended September 30,
1998. Likewise, occupancy and equipment costs increased 18.7% from $13.8 million
during the nine months ended September 30, 1997 to $16.4 million during the nine
months ended September 30, 1998. These increased expenses were primarily
attributable to:
/bullet/ the BNA and Ryan Beck acquisitions,
/bullet/ the opening of new branch offices, including 10 new branches
since January, 1998, and the growth in the ATM network during
1998
/bullet/ the start-up by BankAtlantic of new business units, including
small business lending, trade finance, direct consumer
lending, sales management, electronic banking, cash management
and capital markets, and
/bullet/ the conversion of a substantial portion of BankAtlantic's data
processing functions in October of 1996 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.
On December 15, 1998, the Company announced various restructuring
initiatives with a view to streamlining the Company's operations and improving
efficiencies. See "Summary - Recent Developments". However, there is no
assurance that the Company will be successful in its efforts.
CONSUMER LOAN PORTFOLIO - INDIRECT AUTOMOBILE LENDING
During the past several years, BankAtlantic has experienced significant
growth in its consumer loan portfolio, partially as a result of its acquisition
of financial institutions which had originated consumer loans in prior years.
Consumer loans (excluding second mortgages) increased to $259 million at
September 30, 1998 from $48.8 million at December 31, 1994. A significant amount
of these loans were indirect automobile loans (loans which BankAtlantic funds
through automobile dealers rather than funding directly to its retail
customers). At September 30, 1998, $216 million of BankAtlantic's consumer loan
portfolio consisted of indirect loans, primarily automobile loans.
Consumer loans, especially indirect automobile loans, generally present
more credit risk than other types of loans such as home equity or residential
real estate loans. Because these loans present a greater risk, they also
generally result in a higher level of charge-offs (amounts written off as
uncollected) than those of other loans. During the year ended December 31, 1997
and the nine months ended September 30, 1998, consumer loan net charge-offs were
$8.4 million and $6.0 million, respectively, of which $6.6 million and $5.3
million, respectively, were
-8-
<PAGE>
attributable to indirect automobile loans. On December 15, 1998, the Company
announced that BankAtlantic has discontinued the production of new indirect
automobile consumer loans because available interest rate spreads and credit
quality are not consistent with its long term goals. See "Summary-Recent
Developments." However, BankAtlantic may re-enter this market in the future and
may suffer additional losses in its current consumer loan portfolio.
LOAN PORTFOLIO CONSIDERATIONS
Loans receivable, net at BankAtlantic (the amount payable to
BankAtlantic on the loans it originates less its reserve for nonpaying loans)
increased by approximately $1.7 billion or 207% at September 30, 1998 from
December 31, 1995. Balances for all loan categories increased in 1996, 1997 and
in the first three quarters of 1998 due to approximately $395.0 million of loans
acquired in connection with the acquisition of BNA and approximately $465.9
million, $524.5 million and $1.1 billion of wholesale residential loan purchases
during 1996, 1997 and the nine months ended September 30, 1998, respectively.
BankAtlantic's commercial real estate and construction and development
loans increased by approximately $247.2 million or 52.3% at September 30, 1998
from December 31, 1995. 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. BankAtlantic's 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. A
decline in the real estate market, or in economic conditions in general, in
Broward, Miami-Dade and Palm Beach counties could have a material adverse effect
on BankAtlantic's financial condition and results of operations.
The real estate securing the wholesale residential loans purchased by
BankAtlantic is generally located outside BankAtlantic's primary market area.
These loans are subject to risks associated with the economy where the
collateral is located and additional risks regarding collection.
BROAD ACQUISITION AUTHORITY
Under applicable law, the Company generally has broad authority to
engage in various types of business activities, including investments in real
estate, real estate development and real estate related businesses. The Company
has historically made acquisitions and investments as a means of diversifying
its sources of non-interest income and to increase non-interest revenues.
BankAtlantic and the Company have made, among others, the following acquisitions
and investments:
/bullet/ REAL ESTATE - BankAtlantic acquired St. Lucie West Holding
Corp. ("SLWHC") in October 1997 for approximately $20 million.
SLWHC is the developer of St. Lucie West, a master planned
residential, commercial and industrial community located in
St. Lucie County, Florida. In addition, BankAtlantic and the
Company have made minority investments in real estate
development projects located in South Florida.
/bullet/ EQUIPMENT LEASING - On March 20, 1998 the Company acquired
Leasing Technology, Inc. ("LTI"), an equipment leasing and
finance company located in South Florida, in a stock for stock
exchange valued at approximately $6.2 million. The Company
contributed the capital stock of LTI to BankAtlantic shortly
after the acquisition and LTI is now operated as a subsidiary
of BankAtlantic.
/bullet/ INVESTMENT BANKING AND BROKERAGE SERVICES - On June 30, 1998,
the Company acquired Ryan Beck, in a stock for stock exchange
valued at approximately $38 million. Ryan Beck is operated as
an independent, autonomous subsidiary of the Company under the
direction of its current management.
-9-
<PAGE>
These acquisitions of and investments in businesses not engaged in
traditional banking activities subject the Company to the risks inherent in the
businesses of the acquired companies.
REAL ESTATE DEVELOPMENT ACTIVITIES
The Company currently engages in real estate development and investment
activities, both through SLWHC and through BankAtlantic's minority interests in
real estate development projects. The real estate industry is highly cyclical by
nature and future market conditions are uncertain. Accordingly, investments in
real estate activities are highly speculative and represent a high degree of
risk. 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, SLWHC, the developer of St. Lucie West, incurred operating
expenses of approximately $3.7 million for the nine months ended September 30,
1998. Periodic sales of properties in St. Lucie West may be insufficient to
ensure profitability of SLWHC. Further, if sales are not adequate to cover
operating expenses, SLWHC or BDC will be required to seek a source of additional
operating funds.
While the Company has announced that it is considering a spin-off of
its real estate activities in BDC to its shareholders, there is no assurance
that the spin-off will be effected. See "Summary-Recent Developments." Further,
declines in real estate values or in the economy generally could have a material
adverse impact on the Company's results of operations based on the nature of the
Company's assets and the composition of BankAtlantic's loan portfolio.
REGULATORY OVERSIGHT
The banking industry is one of this country's most heavily regulated
industries. The OTS is BankAtlantic's chartering authority and its primary
federal regulator. The OTS regulates, supervises and examines BankAtlantic. The
OTS also regulates and oversees the Company, as the holding company of
BankAtlantic. In addition to the OTS, 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 FHLB of Atlanta and,
consequently, is subject to certain limited regulation by the Federal Reserve
Board. The regulation and supervision of financial institutions governs their
activities and 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 implemented regulations which have increased capital
requirements, have increased insurance premiums and have resulted in increased
administrative, professional and compensation expenses for the institutions
which they regulate. Any change in the existing regulatory structure or the
applicable statutes could have a material impact on BankAtlantic and the Company
and their respective operations. Additional future legislation and regulations
could significantly affect the powers, authority and operations of BankAtlantic
and the Company and their competitors. Any such future legislation or regulation
could have a material adverse effect on BankAtlantic and the Company and their
respective operations.
-10-
<PAGE>
COMPETITION
Competitors of BankAtlantic and the Company include:
/bullet/ other savings institutions,
/bullet/ investment firms,
/bullet/ commercial banks,
/bullet/ finance companies,
/bullet/ mortgage banking companies,
/bullet/ money market funds,
/bullet/ credit unions, and
/bullet/ real estate developers and operators.
Many of these competitors have substantially greater financial
resources than the Company and, in some cases, operate under fewer regulatory
constraints. The Company and BankAtlantic 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.
RISK ASSOCIATED WITH THE DEBENTURES AND THE PREFERRED SECURITIES
SOURCES OF PAYMENTS TO HOLDERS OF THE COMPANY'S SECURITIES
The Company is the holding company for BankAtlantic and owns 100% of
BankAtlantic's outstanding capital stock. The Company depends upon dividends
from BankAtlantic for a significant portion of its revenues. BankAtlantic's
ability to pay dividends or make other capital distributions to the Company is
governed by OTS regulations, which focus primarily on BankAtlantic's regulatory
capital levels and net income. OTS regulations define "capital distributions" as
(i) cash dividends, (ii) payments by a savings association or savings bank
holding company to repurchase or otherwise acquire its shares, (iii) payments to
shareholders of another entity in a cash-out merger, and (iv) 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 OTS deems it a "Tier 1 association." BankAtlantic currently qualifies as a
Tier 1 association under applicable OTS regulations. The OTS permits a Tier 1
association to make capital distributions during a calendar year of up to the
greater of (i) 100% of net income for the current calendar year, plus 50% of its
capital surplus ("surplus" being the amount of capital in excess of its
regulatory capital requirements) or (ii) 75% of its net income over the most
recent four quarters. However, the association seeking to pay the capital
distribution must first notify the OTS of its intention and the OTS 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 OTS' right to object to a distribution on
safety and soundness grounds. There is no assurance that BankAtlantic will
remain a Tier 1 association or that it will be in a position to make capital
distributions to the Company in an amount sufficient for the Company to satisfy
its obligations.
BBC Capital's ability to pay amounts due on the Preferred Securities is
solely dependent upon the Company making payments on the Junior Subordinated
Debentures. The Company's ability to pay interest on the Junior Subordinated
Debentures and the Debentures will be significantly dependent on the ability of
BankAtlantic to pay dividends, or otherwise to loan, advance or transfer funds,
to the Company in amounts sufficient to service the Company's obligations. The
Company's obligations also include making payments on the following securities
which rank senior to the Junior Subordinated Debentures and equal to the
Debentures with respect to the payment of principal, interest or dividends:
-11-
<PAGE>
/bullet/ 6 3/4% Convertible Subordinated Debentures due 2006 (the "6
3/4% Debentures") ($51.2 million outstanding principal amount
at September 30, 1998), and
/bullet/ 5 5/8% Convertible Subordinated Debentures due 2007 (the "5
5/8% Debentures") ($100.0 million outstanding principal amount
at September 30, 1998).
The Company may also become obligated to make other payments on securities which
it issues in the future which rank equal to or have a preference over the
Company's Debentures or Junior Subordinated Debentures with respect to the
payment of principal, interest or dividends.
SECURITIES ARE NOT INSURED
Neither the Debentures, the Preferred Securities nor the Junior
Subordinated Debentures are insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC or by any other governmental agency.
RISK ASSOCIATED WITH THE DEBENTURES
SUBORDINATION
The Debentures are subordinated to all Senior Indebtedness of the
Company. Senior Indebtedness is generally defined as any indebtedness or
liability of the Company, regardless of when incurred or created, which is not
expressly by its terms subordinate or equal in right of payment to the
Debentures. As of September 30, 1998, the Company had $151.2 million of
indebtedness ranking on a par with the Debentures, $74,750,000 of indebtedness
ranking junior in right of payment to the Debentures and no Senior Indebtedness.
The Indenture relating to the Debentures (the "Debenture Indenture") does not
limit the Company's ability to incur additional indebtedness, including Senior
Indebtedness, or additional indebtedness by BankAtlantic or other subsidiaries.
The Debentures are obligations of the Company only and are not
obligations of or deposits in BankAtlantic. Because the Company is a holding
company, its rights and the rights of its creditors, including the holders of
the Debentures, to participate in any distribution of the assets of BankAtlantic
(either as a shareholder or as a creditor), upon a liquidation, reorganization
or insolvency of BankAtlantic (and the consequent right of the holders of the
Debentures to participate in those assets) is subject to the claims of the
creditors of BankAtlantic (including depositors in BankAtlantic). If the Company
is a creditor of BankAtlantic, the claims of the Company would be subject to any
prior security interest in the assets of BankAtlantic and any indebtedness of
BankAtlantic senior to that of the Company. As of September 30, 1998,
BankAtlantic had approximately $3.2 billion of liabilities (including $1.9
billion of deposits).
LIMITED COVENANTS
The covenants in the Debenture Indenture are limited and do not protect
holders of Debentures in the event of a material adverse change in the Company's
financial condition or results of operations. In addition, payment of principal
of and interest on the Debentures can only be accelerated if the Company:
/bullet/ fails to pay principal of or premium, if any, on the Debentures at
maturity or upon redemption,
/bullet/ fails to pay interest on any of the Debentures and such failure
continues for a 30-day period,
/bullet/ breaches any of the provisions of the Debenture Indenture and such
breach continues for a 60-day period after receipt of notice, and
/bullet/ reorganizes or becomes bankrupt or insolvent in certain events.
The Company is not required to adhere to any financial ratios or specified
levels of liquidity. In addition, the Company is not required to repurchase,
redeem or modify the terms of the Debentures upon a change in control or other
events involving the Company which may adversely affect the creditworthiness of
the Debentures. Therefore,
-12-
<PAGE>
neither the covenants nor the other provisions of the Debenture Indenture should
be a significant factor in evaluating whether the Company will be able to comply
or will comply with its obligations under the Debentures. See "Description of
the Debentures."
ABSENCE OF MARKET FOR DEBENTURES
The Debentures have no established trading market. The Company does not
intend to have the 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 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 the Company 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 Debentures, holders of Debentures would be limited
to selling the Debentures in privately negotiated transactions. It is unlikely
that an active trading market will develop for the Debentures. If an active
trading market does develop, there can be no assurance that such trading market
will continue. If a trading market does not develop, or is not maintained,
holders of the Debentures may experience difficulty in reselling them or may be
unable to sell them at all. Additionally, since the prices of securities
generally fluctuate, there can be no assurance that purchasers of the Debentures
will be able to sell the Debentures at or above the purchase price paid for such
Debentures.
RISK ASSOCIATED WITH THE PREFERRED SECURITIES
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES
The Company's obligations under the Guarantee Agreement between the
Company and BBC Capital (the "Guarantee") and under the Junior Subordinated
Debentures are unsecured and rank subordinate and junior in right of payment to
all Senior Debt and Subordinated Debt of the Company. At September 30, 1998, the
Company had no Senior Debt outstanding and approximately $172.2 million of
Subordinated Debt outstanding, comprised of the Debentures, the 6 3/4%
Debentures and the 5 5/8% Debentures. Only the Company's capital stock is
currently junior in right of payment to the Junior Subordinated Debentures.
The Company is a holding company, and its right to participate in any
distribution of assets of a subsidiary (including BankAtlantic) upon a
liquidation or reorganization or otherwise (and thus the ability of holders of
the Preferred Securities to benefit indirectly from such distribution) is
subject to the prior claims of creditors of the subsidiary, except to the extent
that the Company may itself be recognized as a creditor of the subsidiary. If
the Company is a creditor of a subsidiary, the claims of the Company would be
subject to any prior security interest in the assets of the subsidiary and any
indebtedness of the subsidiary senior to that of the Company. The Junior
Subordinated Debentures and the Preferred Securities will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, including the rights of the depositors of BankAtlantic. At
September 30, 1998, the Company had liabilities of $3.4 billion and BankAtlantic
had liabilities of $3.2 billion (including $1.9 billion in deposits).
You should look only to the Company's assets for payments on the Junior
Subordinated Debentures and the Preferred Securities. Neither the Indenture
relating to the Junior Subordinated Debentures (the "Indenture"), the Guarantee
nor the Trust Agreement places any limitation on the amount of secured or
unsecured debt, including Senior Debt and Subordinated Debt, that the Company or
its subsidiaries may incur. See "Description of the Guarantee-Status of the
Guarantee" and "Description of the Junior Subordinated
Debentures-Subordination."
-13-
<PAGE>
RIGHT TO DEFER INTEREST PAYMENT OBLIGATION; TAX CONSEQUENCES OF ORIGINAL ISSUE
DISCOUNT ("OID"); MARKET PRICE CONSIDERATIONS
So long as no event of default under the Junior Subordinated Debentures
has occurred and is continuing, the Company may defer paying interest on the
Junior Subordinated Debentures for up to 20 consecutive quarters (an "Extended
Interest Payment Period"), but not beyond June 30, 2027 (the "Stated Maturity").
If the Company elects to defer paying interest on the Junior Subordinated
Debentures, quarterly distributions on the Preferred Securities
("Distributions") will be deferred, but Distributions will continue to
accumulate at the rate of 9 1/2% per annum, compounded quarterly from the
payment date for such Distributions. During any Extended Interest Payment
Period, the Company may not:
/bullet/ declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect
to, any of the Company's capital stock (other than under the
Guarantee) except:
/bullet/ a reclassification of any class of the Company's
capital stock into another class of capital stock,
/bullet/ dividends or distributions payable in any class of
the Company's common stock (i.e., stock dividends),
/bullet/ any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the
issuance of securities under any such plan in the
future, or the redemption or repurchase of any such
rights pursuant to any shareholder rights plan, and
/bullet/ purchases of the Company's common stock related to
the rights under any of the Company's benefit plans
for its or its subsidiaries' directors, officers or
employees.
/bullet/ make any payment of principal, interest or premium, if any, on
or repay, repurchase or redeem any of the Company's debt
securities that rank PARI PASSU with or junior in interest to
the Junior Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such
guarantee ranks PARI PASSU with 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 Preferred Securities.
Upon the termination of any Extended Interest Payment Period and the
payment of all interest then accrued and unpaid (together with interest thereon
at the annual rate of 9 1/2% compounded quarterly, to the extent permittEd by
applicable law), the Company may elect to begin a new Extended Interest Payment
Period.
These restrictions are the only limits on the number of times that the
Company may elect to begin an Extended Interest Payment Period. See "Description
of the Preferred Securities - Distributions - Extension Period" and "Description
of the Junior Subordinated Debentures-Option to Extend Interest Payment Period."
Should the Company exercise its right to defer payments of interest by
extending the interest payment period, each holder of Preferred Securities will
be required to accrue and recognize income (in the form of OID), in respect of
its pro rata share of the interest accruing on the Junior Subordinated
Debentures for United States federal income tax purposes. As a result, each such
holder of Preferred Securities would be required to include such income in gross
income for United States federal income tax purposes in advance of the receipt
of cash and will not receive the cash from BBC Capital related to such income if
such holder disposes of its Preferred Securities prior to the record date for
the payment of the related Distributions. See "Certain Federal Income Tax
Considerations-Interest Income and Original Issue Discount". See also "- Trading
Market, Trading Price and Tax Considerations."
-14-
<PAGE>
The Company has no current intention of exercising its right to defer
paying interest on the Junior Subordinated Debentures. However, if the Company
elects to exercise its right in the future, the market price of the Preferred
Securities is likely to be adversely affected. The market price of the Preferred
Securities may, therefore, be more volatile than the market prices of other
securities on which OID accrues that do not provide for such optional deferrals.
REDEMPTION DUE TO TAX EVENT, INVESTMENT COMPANY EVENT, OR CAPITAL TREATMENT
EVENT
The Company may redeem the Junior Subordinated Debentures 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 (whether occurring before
or after June 30, 2002). The Company's redemption of the Junior Subordinated
Debentures will cause a mandatory redemption of the Preferred Securities. The
exercise of this right is subject to the Company having received prior
regulatory approval (if it is required to do so under applicable law or
regulation).
"Tax Event" means the receipt by BBC Capital of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities, there is more than an insubstantial risk that:
/bullet/ BBC Capital is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with
respect to income received or accrued on the Junior
Subordinated Debentures,
/bullet/ interest payable by the Company on the Junior Subordinated
Debentures is not or, within 90 days of such opinion, will not
be, deductible by the Company, in whole or in part, for United
States federal income tax purposes, or
/bullet/ BBC Capital is, or will be within 90 days of the date of the
opinion, subject to more than a DE MINIMIS amount of other
taxes, duties or other governmental charges.
The Company must request and receive an opinion with regard to such
matters within a reasonable period of time after it becomes aware of the
possible occurrence of any of these events.
"Investment Company Event" means the receipt by BBC Capital of 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, BBC Capital is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which change
occurs or becomes effective on or after the date of original issuance of the
Preferred Securities.
"Capital Treatment Event" means the reasonable determination by the
Company that, as a result of any amendment to, or change (including any proposed
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such proposed change, pronouncement, action or decision is announced on or after
the date of original issuance of the Preferred Securities, there is more than an
insubstantial risk that the Preferred Securities would not constitute "Tier I
Capital" (or the equivalent thereof) for purposes of applicable capital adequacy
guidelines of the Federal Reserve Board (or any successor authority with
jurisdiction over bank holding companies), or any capital adequacy guidelines
then in effect and applicable to the Company.
-15-
<PAGE>
For a discussion of possible tax consequences of a redemption, see "-
Exchange of Preferred Securities for Junior Subordinated Debentures; Redemption
and Tax Consequences."
SHORTENING OF STATED MATURITY OF JUNIOR SUBORDINATED DEBENTURES
The Company has the right, at any time, to shorten the maturity of the
Junior Subordinated Debentures to a date not earlier than June 30, 2002. In
order to exercise such right, the Company must receive prior regulatory approval
if then required under applicable capital guidelines or regulatory policies. See
"Description of the Junior Subordinated Debentures-General."
RIGHTS UNDER THE GUARANTEE
To the extent not paid by BBC Capital, the Guarantee provides that you
will receive:
/bullet/ any accrued and unpaid Distributions which BBC Capital must
pay on your Preferred Securities,
/bullet/ the Redemption Price (as defined herein) with respect to your
Preferred Securities called for redemption, and
/bullet/ upon a voluntary or involuntary dissolution, winding-up or
liquidation of BBC Capital (other than in connection with the
distribution of any Junior Subordinated Debentures to you or a
redemption of all of your Preferred Securities), the lesser of
/bullet/ the amount of the Liquidation Distribution (as
defined herein), and
/bullet/ the amount of BBC Capital's assets remaining
available for distribution to holders of the
Preferred Securities in liquidation of BBC Capital,
but, in each case, only to the extent that BBC Capital has funds available to
distribute. Accordingly, if the Company defaults on its obligation to pay
amounts payable under the Junior Subordinated Debentures, BBC Capital will lack
funds for the payment of Distributions or amounts payable on redemption of your
Preferred Securities or otherwise. In that event, you would not be able to rely
upon the Guarantee for those amounts.
The holders of at least a majority in Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust power conferred
upon the Guarantee Trustee under the Guarantee. However, you may institute a
legal proceeding directly against the Company to enforce your rights under the
Guarantee without first instituting a legal proceeding against BBC Capital, the
Guarantee Trustee or any other person. If, however, an event of default under
the Junior Subordinated Debentures has occurred and is continuing and the event
is attributable to the Company's failure to pay interest on or principal of the
Junior Subordinated Debentures on the payment date on which such payment is due
and payable, then you may institute a legal proceeding directly against the
Company for enforcement of payment to you of the principal of or interest on
such Junior Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of your Preferred Securities (a "Direct Action").
The Company's exercise of its right, as described herein, to defer the payment
of interest on the Junior Subordinated Debentures does not constitute an event
of default under the Junior Subordinated Debentures.
In connection with a Direct Action, the Company may set-off any payment
it has made to you. Except as described in this Prospectus, you will not be able
to exercise directly any other remedy available to the holders of the Junior
Subordinated Debentures or assert directly any other rights in respect of the
Junior Subordinated Debentures. See "Description of the Junior Subordinated
Debentures-Enforcement of Certain Rights by Holders of Preferred Securities,"
"Description of the Junior Subordinated Debentures-Debenture Events of Default"
and "Description of the Guarantee." The Trust Agreement provides that you agree
to the provisions of the Guarantee and the Indenture by accepting your Preferred
Securities.
-16-
<PAGE>
LIMITED VOTING RIGHTS
You will have no voting rights in BBC Capital except in limited
circumstances relating only to the modification of the Preferred Securities and
the exercise of the rights of BBC Capital as holder of the Junior Subordinated
Debentures and the Guarantee. You will not be entitled to vote to appoint,
remove or replace the Property Trustee or the Delaware Trustee. Instead, those
voting rights are vested exclusively in the Company, as the holder of the Common
Securities (except upon the occurrence of certain events described in this
Prospectus). The Property Trustee, the Administrative Trustees and the Company
may amend the Trust Agreement without your consent to ensure that BBC Capital
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 Preferred Securities-Voting Rights; Amendment of Trust Agreement" and
"Description of the Preferred Securities-Removal of BBC Capital Trustees."
RECENT TAX LEGISLATION
In a currently pending case in the Tax Court, ENRON CORP. V.
COMMISSIONER, TC Dkt. No. 6194-98, the Internal Revenue Service (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
a Tax Event and a redemption of the Preferred Securities.
There can be no assurance that a Tax Event will not occur. A Tax Event
would permit the Company to cause a redemption of the Preferred Securities
before, as well as after, June 30, 2002, subject to receipt of any required
regulatory approvals. See "Description of the Junior Subordinated
Debentures-Redemption or Exchange" and "Description of the Preferred
Securities-Redemption."
EXCHANGE OF PREFERRED SECURITIES FOR JUNIOR SUBORDINATED DEBENTURES; REDEMPTION
AND TAX CONSEQUENCES
The Company holds all of the Common Securities and has the right at any
time to dissolve, wind-up or terminate BBC Capital and cause BBC Capital to
distribute your pro rata portion of the Junior Subordinated Debentures to you in
exchange for your Preferred Securities. In certain circumstances, the Company
may instead redeem the Junior Subordinated Debentures in whole or in part, in
lieu of distributing them. In this case, BBC Capital will redeem the Trust
Securities on a pro rata basis to the same extent as the Company redeems the
Junior Subordinated Debentures. Any such distribution or redemption prior to the
Stated Maturity will be subject to any required regulatory approvals. See
"Description of the Preferred Securities-Redemption or Exchange - Tax Event
Redemption, Investment Company Act Redemption or Capital Treatment Event
Redemption." If the Junior Subordinated Debentures are distributed to you upon
the liquidation of BBC Capital, the Company will use all reasonable efforts to
list the Junior Subordinated Debentures on The Nasdaq Stock Market's National
Market or SmallCap Market or such stock exchanges, if any, on which the
Preferred Securities are then listed.
Under current United States federal income tax law, a distribution of
Junior Subordinated Debentures upon the dissolution of BBC Capital would not be
a taxable event to you. If, however, BBC Capital is characterized as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to you. Moreover, upon occurrence of a Tax Event, a dissolution of BBC
Capital in which you receive cash may be a taxable event to you. See "Certain
Federal Income Tax Consequences-Receipt of Junior Subordinated Debentures or
Cash Upon Liquidation of BBC Capital."
The market prices for the Preferred Securities or the Junior
Subordinated Debentures that may be distributed in exchange for your Preferred
Securities upon a dissolution or liquidation of BBC Capital is unpredictable.
The Preferred Securities or the Junior Subordinated Debentures may, therefore,
trade at a discount to the price that you paid to purchase the Preferred
Securities. Because you may receive Junior Subordinated Debentures, you are also
-17-
<PAGE>
making an investment decision with regard to the Junior Subordinated Debentures.
Therefore, you should carefully review all the information regarding the Junior
Subordinated Debentures contained in this Prospectus.
LIMITED COVENANTS
The Indenture contains few covenants restricting the Company's actions,
and there are no covenants in the Trust Agreement. As a result, neither the
Indenture nor the Trust Agreement protects you or BBC Capital in the event of a
material adverse change in the Company's financial condition or results of
operations or limits the ability of the Company or any of its subsidiaries to
incur or assume additional indebtedness or other obligations. Additionally,
neither the Indenture nor the Trust Agreement contain any financial ratios or
specified levels of liquidity to which the Company must adhere. Therefore, you
should not consider the provisions of these governing instruments a significant
factor in evaluating whether the Company will be able to comply or will comply
with its obligations under the Junior Subordinated Debentures or the Guarantee.
TRADING MARKET, TRADING PRICE AND TAX CONSIDERATIONS
The Preferred Securities are listed on The Nasdaq Stock Market's
National Market. Ryan Beck intends to make a market in the Preferred Securities
but it is not obligated to do so and such market making may be discontinued at
any time. There is no assurance that an active trading market will develop for
the Preferred Securities or, if such market develops, that it will be
maintained. Accordingly, you may experience difficulty reselling the Preferred
Securities or may be unable to sell them at all. Prices for the Preferred
Securities are determined in the marketplace and may be influenced by many
factors, including prevailing interest rates, the liquidity of the market for
the Preferred Securities, investor perceptions of the Company and general
industry and economic conditions.
Further, should the Company exercise its option to defer any payment of
interest on the Junior Subordinated Debentures, the Preferred Securities may
trade at prices that do not fully reflect the value of accrued but unpaid
interest with respect to the underlying Junior Subordinated Debentures. During
an interest deferral period, a holder of Preferred Securities that disposes of
its Preferred Securities between record dates for payments of Distributions (and
consequently does not receive a Distribution from BBC Capital for the period
prior to such disposition) will nevertheless be required to include accrued but
unpaid interest on the Junior Subordinated Debentures through the date of
disposition in income as ordinary income and to add such amount to the adjusted
tax basis in the holder's pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. Such holder will recognize a capital loss to the
extent the selling price (which may not fully reflect the value of accrued but
unpaid interest) is less than its adjusted tax basis (which will include all
accrued but unpaid interest). Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United States federal
income tax purposes. See "Certain Federal Income Tax Consequences - Sales of
Preferred Securities."
-18-
<PAGE>
PLAN OF DISTRIBUTION
The Debentures are not listed on any securities exchange or included
for quotation on any quotation system, and therefore no established trading
market exists for the Debentures. The Preferred Securities are listed on The
Nasdaq Stock Market's National Market. Ryan Beck, a wholly-owned subsidiary and
an affiliate of the Company, intends to make a market in the Debentures and the
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.
This Prospectus will be used by Ryan Beck in connection with offers and
sales related to market making transactions in the Debentures and 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. No assurance can be made as to the liquidity of such
Debentures and Preferred Securities or that an active or liquid trading market
will develop or, if developed, that it will be sustained.
-19-
<PAGE>
DESCRIPTION OF THE DEBENTURES
The Debentures are a series of debt securities issued under the
Debenture Indenture, dated as of September 22, 1995, between the Company and
American Bank National Association (predecessor to First Star Corporate Trust
Services), as trustee (the "Debenture Trustee"). The 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 Debentures include those stated in the
Debenture Indenture and those made part of the Debenture Indenture by reference
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") as in
effect on the date of the Debenture Indenture. The Debentures are subject to all
such terms, and holders of the Debentures are referred to the Debenture
Indenture and the Trust Indenture Act for a statement thereof. The following
summary of certain provisions of the Debenture Indenture does not purport to be
complete and is qualified in its entirety by reference to the Debenture
Indenture, including the definitions therein of certain terms used below. The
Debenture Indenture is filed as an exhibit to the Registration Statement, of
which this Prospectus is a part. For purposes of this section, the term
"Company" means only BankAtlantic Bancorp, Inc. and not its subsidiaries.
GENERAL
The Debentures are general obligations of the Company limited to $23
million in aggregate principal amount. The Debentures are not secured by the
assets of the Company or otherwise and do not have the benefit of a sinking fund
for the retirement of principal. The Debentures rank on par with all
subordinated indebtedness of the Company and are subordinated in right of
payment to all Senior Indebtedness (as defined below) of the Company, which may
include obligations of the Company to BankAtlantic. The Company, or any
subsidiary of the Company including BankAtlantic, may incur additional
indebtedness constituting Senior Indebtedness or indebtedness that ranks on par
with the Debentures. The Debenture Indenture does not limit the total
indebtedness that either the Company or any of its subsidiaries may incur. The
Debentures are subordinate to all indebtedness of the Company that does not
state that it is subordinate to or on par with the Debentures. As of September
30, 1998, the Company had outstanding no Senior Indebtedness and $51.2 million
in principal amount of 6 3/4% Debentures and $100.0 million in principal amount
of 5 5/8% Debentures, each of which rank on par with the Debentures. Because the
Company is a holding company, the right of the Company to participate in any
distribution of assets of a subsidiary, including BankAtlantic, upon any
liquidation or reorganization or otherwise of such subsidiary (and thus the
ability of Holders (as defined below) of the Debentures to benefit indirectly
from such distribution), is subject to the prior claims of creditors of the
subsidiary (including depositors in BankAtlantic), except to the extent that the
Company may itself be recognized as a creditor of the subsidiary.
The Debentures mature on October 1, 2005, unless redeemed earlier at
the option of the Company. See "--Redemption or Repurchase of Debentures." The
Debentures bear interest at the rate of 9% per annum from the most recent
Debenture Interest Payment Date (as defined below) to which interest has been
paid or provided for, payable semi-annually on April 1 and October 1 of each
year to the person in whose name the Debenture (or any predecessor Debenture) is
registered at the close of business on the preceding March 15 or September 15,
as the case may be. Interest on the Debentures is computed on the basis of a
360-day year or twelve 30-day months. The Debenture Trustee serves as Debenture
Registrar and Paying Agent for the Debentures. Principal and interest are
payable by check mailed by the Debenture Trustee to the person entitled to
payment on the Debenture Interest Payment Date.
The Company's primary source of funds for the payment of principal and
interest on the Debentures is dividends from BankAtlantic. From time to time
while the Debentures are outstanding BankAtlantic may be subject to regulatory
or contractual constraints that restrict its ability to pay dividends to the
Company.
-20-
<PAGE>
REDEMPTION OR REPURCHASE OF DEBENTURES
The Debentures are redeemable at the option of the Company, 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 at the following redemption prices (expressed as
percentages of principal amount), plus accrued interest to the redemption date,
if 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%
The Company may at any time repurchase the Debentures at any price in
the open market or otherwise. Debentures so purchased by the Company may be held
or resold or, at the discretion of the Company, may be surrendered to the
Debenture Trustee for cancellation.
SUBORDINATION
The principal and premium, if any, and interest on the Debentures is
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Company. The Debenture Indenture does not limit the
amount of Senior Indebtedness or other indebtedness, secured or unsecured, that
the Company or any of its subsidiaries may incur. If payments on any Senior
Indebtedness are accelerated, the Company shall be prohibited from making any
payment of principal, premium or interest on the Debentures until payments of
the Senior Indebtedness are made or provided for. Upon any distribution of
assets of the Company in connection with any dissolution, winding up,
liquidation or reorganization of the Company, payment of principal, premium or
interest on the Debentures will be subordinated, to the extent and in the manner
set forth in the Debenture Indenture, to the prior payment in full of Senior
Indebtedness. By reason of such subordination, in the event of a distribution of
assets in any such proceeding, certain general creditors of the Company may
recover more, ratably, than Holders of the Debentures.
CERTAIN DEFINITIONS
"Capitalized Lease Obligation" means any lease obligations of a Person
incurred with respect to any property (whether real, personal or mixed) acquired
or leased by such Person and used in its business that is required to be
recorded as a capitalized lease in accordance with generally accepted accounting
principles.
"Capital Stock" means any and all shares, interests, participation
rights or other equivalents (however designated) of corporate stock.
"Debenture Interest Payment Date" means the stated maturity of an
installment of interest on the Debenture.
"Debenture Stated Maturity" when used with respect to any Debenture
means the date specified in such Debenture as the fixed date on which the
principal of and the premium, if any, and interest on such Debenture is due and
payable.
"Holder" means a Person in whose name a Debenture is registered.
-21-
<PAGE>
"Indebtedness" means (a) all Obligations of the Company for borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of the Company or only to a portion thereof), (b) all indebtedness of the
Company which is evidenced by a note, debenture, bond or other similar
instrument, including Capitalized Lease Obligations, (c) all indebtedness of the
Company representing the unpaid balance of the purchase price of any goods or
other property or balance owed for any services rendered, (d) all indebtedness
of the Company, 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, (e) any indebtedness of others
described in the preceding clauses (a), (b), (c) and (d) that the Company has
guaranteed or for which it is otherwise liable and (f) any amendment, renewal,
extension, deferral, modification, restructuring or refunding of any such
indebtedness, obligation or guarantee.
"Obligations" mean, with respect to any indebtedness, any principal,
premium, interest, penalties, fees and other liabilities payable from time to
time and obligations performable under the documentation governing such
Indebtedness.
"Senior Indebtedness" means any and all Indebtedness of the Company,
except any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall be subordinate or shall rank pari passu in right of payment
to the Debentures.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
The Debenture Indenture contains certain customary covenants found in
Debenture Indentures under the Trust Indenture Act, including covenants with
respect to the payment of principal and interest, maintenance of an office or
agency for administering the Debentures, holding of funds for payments on the
Debentures in trust, payment by the Company of taxes and other claims,
maintenance by the Company of its properties and its corporate existence and
delivery of annual certifications to the Debenture Trustee.
RESTRICTIONS ON DIVIDENDS
The Debenture Indenture provides that the Company cannot declare or pay
dividends on, or purchase, redeem or acquire for value its capital stock, return
any capital to holders of capital stock as such, or make any distribution of
assets to holders of capital stock as such, unless, from and after the date of
any such dividend declaration (a "Declaration Date") or the date of any such
purchase, redemption, payment or distribution specified above (a "Redemption
Date"), the Company retains cash, cash equivalents (as determined in accordance
with generally accepted accounting principles) or marketable securities (with a
market value as measured on the applicable Declaration Date or Redemption Date)
in an amount sufficient to cover the two consecutive semi-annual interest
payments that will be due and payable on the Debentures following such
Declaration Date or Redemption Date, as the case may be. The Debenture Indenture
further provides that the amount of any interest payment made by the Company
with respect to the Debentures after any applicable Declaration Date or
Redemption Date shall be deducted from the aggregate amount of cash or cash
equivalents which the Company shall be required to retain pursuant to the
foregoing provision.
The Debenture Indenture does not prohibit or restrict the Company from
pledging or BankAtlantic from selling any shares of BankAtlantic Capital Stock
or other debt securities of BankAtlantic. However, the Company will not permit
BankAtlantic to issue to BFC or Mr. Alan B. Levan, any of BankAtlantic's Capital
Stock or debt securities or pledge any of the Capital Stock of BankAtlantic now
or hereafter owned by the Company in favor of BFC or Mr. Levan.
-22-
<PAGE>
DEFAULTS AND REMEDIES
An "Event of Default," as defined in the Debenture Indenture, includes
(i) the failure by the Company to pay principal of or premium, if any, on the
Debentures at maturity or upon redemption (whether or not such payment is
prohibited by the subordination provisions), (ii) the failure by the Company to
pay interest on any of the Debentures on any Debenture Interest Payment Date and
such failure continues for a period of 30 days (whether or not such payment is
prohibited by the subordination provisions) (iii) the failure by the Company to
comply with any of its other agreements or covenants in, or provisions of, the
Debenture Indenture and such default continues for the period and after the
notice specified below and (iv) certain events of bankruptcy, insolvency or
reorganization of the Company.
A Default under clause (iii) above is not an Event of Default until the
Debenture Trustee notifies the Company in writing, or the Holders of at least
25% in principal amount of the Debentures then outstanding notify the Company
and the Debenture Trustee in writing, of the Default, and the Company does not
cure the Default within 60 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default". Such notice shall be given by the Debenture Trustee if so
requested in writing by the Holders of at least 25% in principal amount of the
Debentures then outstanding. Any notice required to be delivered by the
Debenture Trustee to the Company shall be given promptly after the Debenture
Trustee becomes aware of such Default or is requested by the Holders to deliver
such notice.
The Debenture Indenture provides that the Debenture Trustee will,
within 90 days after the occurrence of any Default known to it, mail to the
Holders notice of such Default, provided that, except in the case of Default in
the payment of principal of or interest on any of the Debentures, the Debenture
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.
The Debenture Indenture only permits acceleration of payment of
principal of the Debentures upon an Event of Default resulting from the failure
of the Company to pay principal or interest on the Debentures or upon certain
events of bankruptcy, insolvency or reorganization. If an Event of Default
resulting from the failure of the Company to pay principal or interest on the
Debentures or upon certain events of bankruptcy, insolvency or reorganization
shall have occurred and be continuing, the Debenture Trustee or the Holders of
not less than 30% in aggregate principal amount of the Debentures then
outstanding, by notice in writing to the Company (and to the Debenture Trustee
if given by the Holders), may declare to be immediately due and payable all
unpaid principal of all the Debentures. An acceleration and its consequences may
be rescinded and past defaults waived by Holders of a majority in principal
amount of the Debentures then outstanding upon conditions provided in the
Debenture Indenture. No Holder may pursue any remedy under the Debenture
Indenture unless such Holder has previously given to the Debenture Trustee
written notice of a continuing Event of Default and unless the Holders of at
least 30% in principal amount of the Debentures then outstanding have requested
the Debenture Trustee in writing to pursue the remedy and offered the Trust
indemnity satisfactory to the Debenture Trustee against loss, liability and
expense to be thereby incurred and the Debenture Trustee has failed so to act
within 60 days after receipt of the same.
The Debenture Indenture requires the Company to file periodic reports
with the Debenture Trustee as to the absence of defaults.
SATISFACTION, DISCHARGE AND DEFEASANCE
The Debenture Indenture provides that the Company will at its option
either (a) be deemed to have paid and discharged the entire indebtedness
represented by its obligations under the Debentures (except for the obligation
to pay the principal of, premium, if any, and interest on, the Debentures and
certain obligations to register the transfer or exchange of the Debentures, to
replace temporary or mutilated, destroyed, lost or stolen Debentures, to
maintain an office or agency in respect to the Debentures and to hold moneys for
payment in trust) ("legal defeasance") or (b) cease to be under any obligation
to comply with certain terms, provisions or conditions of the Debenture
Indenture (those terms, provisions or conditions described in the Debenture
Indenture under "Consolidation, Merger or Sale")
-23-
<PAGE>
or the terms, provisions or conditions of the Debentures ("covenant defeasance")
in either case, on the 91st day after (i) the Company has paid or caused to be
paid all other sums payable with respect to the outstanding Debentures and the
Company has delivered to the Debenture 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 Debentures have been complied with; (ii) the Company
has deposited or caused to be deposited irrevocably with the Debenture Trustee
as a trust fund specifically pledged as security for the benefit of the holders
of the Debentures, (x) dollars in an amount or (y) U.S. Government Obligations
(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
Debentures) in an amount or (z) a combination of (x) and (y), sufficient to pay
and discharge each installment of principal of and interest or premium, if any,
on the outstanding Debentures on the dates such installments of interest or
principal or premium, if any, are due; and (iii) no Event of Default has
occurred and is continuing on the date of such deposit. Among the conditions of
the Company's exercising any such option, the Company is required to deliver to
the Debenture Trustee an opinion of independent counsel of recognized standing
to the effect that the deposit and related defeasance would not cause the
holders of the Debentures to recognize income, gain or loss for United States
Federal income tax purposes and that the 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 DEBENTURE INDENTURE
The Debenture Indenture provides that the Company and the Debenture
Trustee may, without the consent of any Holders of Debentures, enter into
supplemental indentures for purposes, among other things, of: (a) evidencing the
succession of another Person to the Company and the assumption by any such
successor of the covenants of the Company; (b) making any change that does not
adversely affect the rights of any Holders; or (c) curing any ambiguity, defect
or inconsistency; provided, however, that such action shall not adversely affect
the interest of the Holders in any material respect.
Most of the terms of the Debenture Indenture and the Debentures may be
modified with the consent of the Holders of not less than two-thirds of the
principal amount of Debentures then outstanding. However, each Holder must agree
to: (i) an extension of maturity, (ii) a reduction in principal amount or the
rate of interest on the Debentures, (iii) a reduction in redemption percentage
or (iv) a reduction in the aforesaid percentage required for modification.
The Company may omit in any particular instance to comply with any
covenant or condition as set forth in the Debenture Indenture if before the time
for such compliance two-thirds of the Holders of the principal amount of
Debentures then outstanding shall either waive such compliance in such instance
or generally waive compliance with such covenant or condition, but no such
waiver may extend to or affect such covenant or condition except to the extent
so expressly waived, and until such waiver has become effective, the obligation
of the Company and the duties of the Debenture 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.
-24-
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities were issued pursuant to the terms of the Trust
Agreement. The Trust Agreement is qualified as an indenture under the Trust
Indenture Act. The Property Trustee, Wilmington Trust Company, acts as indenture
trustee for the Preferred Securities under the Trust Agreement for purposes of
complying with the provisions of the Trust Indenture Act. The terms of the
Preferred Securities include those stated in the Trust Agreement and those made
part of the Trust Agreement by the Trust Indenture Act. The following summary of
the material terms and provisions of the Preferred Securities and the Trust
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Trust Agreement, the Delaware Business Trust
Act (the "Trust Act"), and the Trust Indenture Act. Wherever particular defined
terms of the Trust Agreement are referred to, but not defined herein, such
defined terms are incorporated herein by reference. The Trust Agreement is filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part.
GENERAL
Pursuant to the terms of the Trust Agreement, the Trustees, on behalf
of BBC Capital, issued the Trust Securities. All of the Common Securities are
owned by the Company. The Preferred Securities represent preferred undivided
beneficial interests in the assets of BBC Capital and the holders thereof are
entitled to a preference in certain circumstances with respect to Distributions
and amounts payable on redemption or liquidation over the Common Securities, as
well as other benefits as described in the Trust Agreement. The Trust Agreement
does not permit the issuance by BBC Capital of any securities other than the
Trust Securities or the incurrence of any indebtedness by BBC Capital.
The Preferred Securities rank PARI PASSU, and payments are made thereon
pro rata, with the Common Securities, except as described under "-Subordination
of Common Securities." Legal title to the Junior Subordinated Debentures is held
by the Property Trustee in trust for the benefit of the holders of the Trust
Securities. The Guarantee executed by the Company for the benefit of the holders
of the Preferred Securities is a guarantee on a subordinated basis with respect
to the Preferred Securities, but does not guarantee payment of Distributions or
amounts payable on redemption or liquidation of such Preferred Securities when
BBC Capital 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 Preferred Securities. See "Description of the
Guarantee."
DISTRIBUTIONS
PAYMENT OF DISTRIBUTIONS. Distributions on each Preferred Security are
payable at the annual rate of 9 1/2% of the stated Liquidation Amount of $25,
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, to the holders of the Preferred Securities on the relevant record
dates (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). The record date will be the 15th day of the
month in which the relevant Distribution Date occurs. The first Distribution
Date for the Preferred Securities was June 30, 1997. The amount of Distributions
payable for any period is computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which Distributions are payable on
the Preferred Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (and without any additional Distributions, interest or other
payment in respect of any such delay) with the same force and effect as if made
on the date such payment was originally due and payable. "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 Debenture Trustee is closed for business.
EXTENSION PERIOD. The Company has the right under the Indenture, so
long as the Company is not in default under the Indenture (a "Debenture Event of
Default"), to defer the payment of interest on the Junior Subordinated
Debentures at any time, or from time to time (each, an "Extended Interest
Payment Period"), which, if exercised,
-25-
<PAGE>
would result in quarterly Distributions on the Preferred Securities also being
deferred during any such Extended Interest Payment Period. Distributions to
which holders of the Preferred Securities are entitled will accumulate
additional Distributions thereon at the rate per annum of 9 1/2% thereof,
compounded quarterly from the relevant Distribution Date. The term
"Distributions," as used herein, includes any such additional Distributions. The
right to defer the payment of interest on the Junior Subordinated Debentures is
limited, however, to a period, in each instance, not exceeding 20 consecutive
quarters and no Extended Interest Payment Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. During any such Extended
Interest Payment Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (other than (a) the
reclassification of any class of the Company's capital stock into another class
of capital stock, (b) dividends or distributions payable in any class of the
Company's common stock, (c) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto and (d) purchases of the Company's common stock related to the
rights under any of the Company's benefit plans for its or its subsidiaries'
directors, officers or employees), (ii) make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank PARI PASSU with or junior in interest to the Junior
Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks PARI PASSU with or junior in interest to the Junior
Subordinated Debentures (other than payments under the Guarantee), or (iii)
redeem, purchase or acquire less than all of the Junior Subordinated Debentures
or any of the Preferred Securities. Prior to the termination of any such
Extended Interest Payment Period, the Company may further defer the payment of
interest; provided that such Extended Interest Payment Period may not exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Junior
Subordinated Debentures. Upon the termination of any such Extended Interest
Payment Period and the payment of all amounts then due, the Company may elect to
begin a new Extended Interest Payment Period, subject to the above requirements.
Subject to the foregoing, there is no limitation on the number of times that the
Company may elect to begin an Extended Interest Payment Period.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures.
SOURCE OF DISTRIBUTION. The funds of BBC Capital available for
distribution to holders of its Preferred Securities are limited to payments
received from the Junior Subordinated Debentures in which BBC Capital invested
the proceeds from the issuance and sale of its Trust Securities. See
"Description of the Junior Subordinated Debentures." Distributions are paid
through the Property Trustee who holds amounts received in respect of the Junior
Subordinated Debentures in the Property Account for the benefit of the holders
of the Trust Securities. If the Company does not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Preferred Securities. The payment of
Distributions (but only if and to the extent BBC Capital has funds legally
available for the payment of such Distributions and cash sufficient to make such
payments) is guaranteed by the Company. See "Description of the Guarantee."
Distributions on the Preferred Securities are payable to the holders thereof as
they appear on the register of holders of the Preferred Securities on the
relevant record dates, which is the 15th day of the month in which the relevant
Distribution Date occurs.
REDEMPTION OR EXCHANGE
GENERAL. The Junior Subordinated Debentures will mature on June 30,
2027. The Company will have the right to redeem the Junior Subordinated
Debentures (i) on or after June 30, 2002, in whole at any time or in part from
time to time, or (ii) 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 defined in "Description of the Junior Subordinated
Debentures-Redemption or Exchange"), in each case subject to receipt of prior
regulatory approval if then required under applicable capital guidelines or
regulatory policies. Subject to the foregoing events, the Company will not have
-26-
<PAGE>
the right to purchase the Junior Subordinated Debentures, in whole or in part,
from BBC Capital until after June 30, 2002. See "Description of the Junior
Subordinated Debentures-General."
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Junior Subordinated Debentures, whether at Stated Maturity or upon
earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption will be applied by the Property Trustee to redeem a Like
Amount (as defined herein) of the Trust Securities, upon not less than 30 nor
more than 60 days notice, at a redemption price (the "Redemption Price") equal
to the aggregate Liquidation Amount of such Trust Securities plus accumulated
but unpaid Distributions thereon to the date of redemption (the "Redemption
Date"). See "Description of the Junior Subordinated Debentures-Redemption or
Exchange." If less than all of the Junior Subordinated Debentures are to be
repaid or redeemed on a Redemption Date, then the proceeds from such repayment
or redemption will be allocated to the redemption of the Trust Securities pro
rata.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES. Subject to the Company
having received prior regulatory approval if then required, the Company, as
holder of the Common Securities, will have the right at any time to dissolve,
wind-up or terminate BBC Capital and, after satisfaction of the liabilities of
creditors of BBC Capital as provided by applicable law, cause the Junior
Subordinated Debentures to be distributed to the holders of Trust Securities in
liquidation of BBC Capital. 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, the Company has the right to
redeem the Junior Subordinated Debentures in whole (but not in part) and thereby
cause a mandatory redemption of the Trust Securities in whole (but not in part)
at the Redemption Price within 180 days following the occurrence of such Tax
Event, Investment Company Event or Capital Treatment Event. In the event a Tax
Event, an Investment Company Event or a Capital Treatment Event in respect of
the Trust Securities has occurred and the Company does not elect to redeem the
Junior Subordinated Debentures and thereby cause a mandatory redemption of the
Trust Securities or to liquidate BBC Capital and cause the Junior Subordinated
Debentures to be distributed to holders of such Trust Securities in liquidation
of BBC Capital as described below under "-Liquidation Distribution Upon
Termination," such Preferred Securities will remain outstanding and Additional
Interest (as defined herein) may be payable on the Junior Subordinated
Debentures.
"Additional Interest" means the additional amounts as may be necessary
in order that the amount of Distribu tions then due and payable by BBC Capital
on the outstanding Trust Securities will not be reduced as a result of any
additional taxes, duties and other governmental charges to which BBC Capital has
become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, which will be used
to pay the Redemption Price of such Trust Securities, and (ii) with respect to a
distribution of Junior Subordinated Debentures to holders of Trust Securities in
connection with a dissolution or liquidation of BBC Capital, Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Junior Subordinated Debentures are
distributed. Each Junior Subordinated Debenture distributed pursuant to clause
(ii) above will carry with it accumulated interest in an amount equal to the
accumulated and unpaid interest then due on such Junior Subordinated Debentures.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
There can be no assurance as to the market prices of the Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Preferred Securities if a dissolution and liquidation of BBC
Capital were to occur. The Preferred Securities that an investor may purchase,
or the Junior Subordinated Debentures that
-27-
<PAGE>
an investor may receive on dissolution and liquidation of BBC Capital, may trade
at a discount to the price that the investor paid to purchase the Preferred
Securities.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date will be redeemed
at the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Junior Subordinated Debentures. Redemptions of the Preferred
Securities will be made and the Redemption Price will be payable on each
Redemption Date only to the extent that BBC Capital has funds on hand available
for the payment of such Redemption Price. See "-Subordination of Common
Securities."
If BBC Capital gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, eastern standard time, on the Redemption Date,
to the extent funds are available, the Property Trustee will irrevocably deposit
with the paying agent for the Preferred Securities funds sufficient to pay the
aggregate Redemption Price and will give the paying agent for the Preferred
Securities irrevocable instructions and authority to pay the Redemption Price to
the holders thereof upon surrender of their certificates evidencing such
Preferred Securities. Notwithstanding the foregoing, Distributions payable on or
prior to the Redemption Date for any Preferred Securities called for redemption
will be payable to the holders of such Preferred Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of such Preferred Securities so called for
redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price, but without interest on such
Redemption Price, and such Preferred Securities will cease to be outstanding. In
the event that any date fixed for redemption of Preferred Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and without any
additional Distribution, interest or other payment in respect of any such delay)
with the same force and effect as if made on such date. In the event that
payment of the Redemption Price in respect of Preferred Securities called for
redemption is improperly withheld or refused and not paid either by BBC Capital
or by the Company pursuant to the Guarantee, Distributions on such Preferred
Securities will continue to accrue at the then applicable rate, from the
Redemption Date originally established by BBC Capital for such Preferred
Securities to the date such Redemption Price is actually paid, in which 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, further provided, that the Company has not and is
not continuing to exercise its right to defer interest payments, the Company or
its subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Junior Subordinated Debentures to holders of Preferred
Securities will be made to the applicable recordholders thereof as they appear
on the register for the Preferred Securities on the relevant record date, which
date will be the date 15 days prior to the Redemption Date or liquidation date,
as applicable.
If less than all of the Trust Securities are to be redeemed on a
Redemption Date, then the aggregate Liquidation Amount of such Trust Securities
to be redeemed will be allocated pro rata to the Trust Securities based upon the
relative Liquidation Amounts of such classes. The particular Preferred
Securities to be redeemed will be selected by the Property Trustee from the
outstanding Preferred Securities not previously called for redemption, by such
method as the Property Trustee deems fair and appropriate and which may provide
for the selection for redemption of portions (equal to $25 or an integral
multiple of $25 in excess thereof) of the Liquidation Amount of Preferred
Securities of a denomination larger than $25. The Property Trustee will promptly
notify the registrar for the Preferred Securities in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of the
-28-
<PAGE>
Trust Agreement, unless the context otherwise requires, all provisions relating
to the redemption of Preferred Securities will relate to the portion of the
aggregate Liquidation Amount of Preferred Securities which has been or is to be
redeemed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the redemption price on the Junior Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on such Junior Subordinated
Debentures or portions thereof (and Distributions will cease to accrue on the
related Preferred Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, are or will be made pro rata
based on the Liquidation Amount of the Preferred Securities and Common
Securities; provided, however, that if on any Distribution Date or Redemption
Date a Debenture Event of Default has occurred and is continuing, no payment of
any Distribution on, or Redemption Price of, any of the Common Securities, and
no other payment on account of the redemption, liquidation or other acquisition
of such Common Securities, will be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all of the outstanding Preferred Securities then called for redemption,
will have been made or provided for, and all funds available to the Property
Trustee will first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Preferred Securities then due and
payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, the Company as holder of the Common Securities will be deemed to have
waived any right to act with respect to any such Event of Default under the
Trust Agreement until the effect of all such Events of Default with respect to
the Preferred Securities have been cured, waived or otherwise eliminated. Until
any such Events of Default under the Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee will act solely on behalf of the holders of the Preferred
Securities and not on behalf of the Company, as holder of the Common Securities,
and only the holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
The Company has the right at any time to dissolve, wind-up or terminate
BBC Capital and cause the Junior Subordinated Debentures to be distributed to
the holders of the Preferred Securities. Such right is subject, however, to the
Company having received prior regulatory approval if then required under
applicable capital guidelines or regulatory policies.
Pursuant to the Trust Agreement, BBC Capital will automatically
terminate upon expiration of its term and will terminate earlier on the first to
occur of (i) certain events of bankruptcy, dissolution or liquidation of the
Company, (ii) the distribution of a Like Amount of the Junior Subordinated
Debentures to the holders of its Trust Securities, if the Company, as depositor,
has given written direction to the Property Trustee to terminate BBC Capital
(which direction is optional and wholly within the discretion of the Company, as
depositor), (iii) redemption of all of the Preferred Securities as described
under "Description of the Preferred Securities-Redemption or Exchange-Mandatory
Redemption," or (iv) the entry of an order for the dissolution of BBC Capital by
a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
of the preceding paragraph, BBC Capital will be liquidated by the Trustees as
expeditiously as the Trustees determine to be possible by distributing, after
-29-
<PAGE>
satisfaction of liabilities to creditors of BBC Capital as provided by
applicable law, to the holders of such Trust Securities a Like Amount of the
Junior Subordinated Debentures, unless such distribution is determined by the
Property Trustee not to be practical, in which event such holders will be
entitled to receive out of the assets of BBC Capital available for distribution
to holders, after satisfaction of liabilities to creditors of BBC Capital as
provided by applicable law, an amount equal to, in the case of holders of
Preferred Securities, the aggregate of the Liquidation Amount plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because BBC Capital has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by BBC
Capital on the Preferred Securities will be paid on a pro rata basis. The
Company, as the holder of the Common Securities, will be entitled to receive
distributions upon any such liquidation pro rata with the holders of the
Preferred Securities, except that, if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities will have a priority over the Common
Securities. See "-Subordination of Common Securities."
After the liquidation date fixed for any distribution of Junior
Subordinated Debentures for Preferred Securities (i) such Preferred Securities
will no longer be deemed to be outstanding, and (ii) any certificates
representing Preferred Securities will be deemed to represent the Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Preferred Securities and bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on the 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 BBC Capital is treated as a grantor trust, a
distribution of the Junior Subordinated Debentures should not be a taxable event
to holders of the Preferred Securities. Should there be a change in law, a
change in legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to holders of the Preferred Securities.
See "Certain Federal Income Tax Consequences-Receipt of Junior Subordinated
Debentures or Cash Upon Liquidation of BBC Capital." If the Company elects
neither to redeem the Junior Subordinated Debentures prior to maturity nor to
liquidate BBC Capital and distribute the Junior Subordinated Debentures to
holders of the Preferred Securities, the Preferred Securities will remain
outstanding until the repayment of the Junior Subordinated Debentures. If the
Company elects to liquidate BBC Capital and thereby causes the Junior
Subordinated Debentures to be distributed to holders of the Preferred Securities
in liquidation of BBC Capital, the Company will continue to have the right to
shorten the maturity of such Junior Subordinated Debentures, subject to certain
conditions. See "Description of the Junior Subordinated Debentures-General."
LIQUIDATION VALUE
The amount of the Liquidation Distribution payable on the Preferred
Securities in the event of any liquidation of BBC Capital is $25 per Preferred
Security plus accumulated and unpaid Distributions thereon to the date of
payment, which may be in the form of a distribution of such amount in Junior
Subordinated Debentures with a like amount of accrued interest, subject to
certain exceptions. See "-Liquidation Distribution Upon Termination."
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an event of default under
the Trust Agreement (an "Event of Default") with respect to the Preferred
Securities (whatever the reason for such Event of Default and whether voluntary
or involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see
"Description of the Junior Subordinated Debentures-Debenture Events of
Default"); or
-30-
<PAGE>
(ii) default by BBC Capital in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by BBC Capital in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustee(s) in the Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clauses
(ii) or (iii) above), 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 Trustee(s) by the holders of at least 25% in
aggregate Liquidation Amount of the outstanding Preferred Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under
the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Property Trustee and the failure by the
Company to appoint a successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as depositor, unless such Event of
Default has been cured or waived. The Company, as depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities will have a preference over the Common Securities upon
termination of BBC Capital. See "-Liquidation Distribution Upon Termination."
The existence of an Event of Default does not entitle the holders of Preferred
Securities to accelerate the maturity thereof.
REMOVAL OF BBC CAPITAL TRUSTEES
Unless a Debenture Event of Default has occurred and is continuing, any
Trustee may be removed at any time by the holder of the Common Securities. If a
Debenture 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 Preferred Securities. In no event,
however, will the holders of the Preferred Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting rights are
vested exclusively in the Company as the holder of the Common Securities. No
resignation or removal of a Trustee and no appointment of a successor trustee
will be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the Trust Agreement.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of the
Guarantee-Amendments and Assignment" and as otherwise required by the Trust Act
and the Trust Agreement, the holders of the Preferred Securities have no voting
rights.
The Trust Agreement may be amended from time to time by the Company,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) with respect to acceptance of
appointment by a successor trustee, (ii) 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 (provided such amendment is not
inconsistent with the other provisions
-31-
<PAGE>
of the Trust Agreement), or (iii) to modify, eliminate or add to any provisions
of the Trust Agreement to such extent as is necessary to ensure that BBC Capital
will be classified for United States federal income tax purposes as a grantor
trust at all times that any Trust Securities are outstanding or to ensure that
BBC Capital will not be required to register as an "investment company" under
the Investment Company Act; provided, however, that in the case of clause (ii),
such action may not adversely affect in any material respect the interests of
any holder of Trust Securities, and any amendments of such Trust Agreement will
become effective when notice thereof is given to the holders of Trust
Securities. The Trust Agreement may otherwise be amended by the Trustees and the
Company with (i) the consent of holders representing not less than a majority in
the aggregate Liquidation Amount of the outstanding Trust Securities, and (ii)
receipt by the Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect BBC Capital's status as a grantor trust for
United States federal income tax purposes or BBC Capital's exemption from status
as an "investment company" under the Investment Company Act. Notwithstanding
anything in this paragraph to the contrary, without the consent of each holder
of Trust Securities, the Trust Agreement may not be amended to (a) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date, or (b) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
The Trustees will not, so long as any Junior Subordinated Debentures
are held by the Property Trustee, (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Junior Subordinated Debentures, (ii) waive any past default that is waivable
under the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Junior Subordinated Debentures will be due and
payable, or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent is required,
without, in each case, obtaining the prior approval of the holders of a majority
in aggregate Liquidation Amount of all outstanding Preferred Securities;
provided, however, that where a consent under the Indenture requires the consent
of each holder of Junior Subordinated Debentures affected thereby, no such
consent will be given by the Property Trustee without the prior consent of each
holder of the Preferred Securities. The Trustees may not revoke any action
previously authorized or approved by a vote of the holders of the Preferred
Securities except by subsequent vote of the holders of the Preferred Securities.
The Property Trustee will notify each holder of Preferred Securities of any
notice of default with respect to the Junior Subordinated Debentures. In
addition to obtaining the foregoing approvals of the holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Trustees must
obtain an opinion of counsel experienced in such matters to the effect that BBC
Capital will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
No vote or consent of the holders of Preferred Securities will be
required for BBC Capital to redeem and cancel its Preferred Securities in
accordance with the Trust Agreement.
REGISTRAR AND TRANSFER AGENT
The Property Trustee acts as the registrar and the transfer agent for
the Preferred Securities. Registration of transfers of Preferred Securities will
be effected without charge by or on behalf of BBC Capital, 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, BBC
Capital will not be required to (i) issue, register the transfer of, or exchange
any 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 Preferred
Securities called for redemption and ending at the close of business on the day
of such mailing; or (ii) register the transfer of or exchange any Preferred
Securities so selected for redemption, in whole or in part, except the
unredeemed portion of any such Preferred Securities being redeemed in part.
-32-
<PAGE>
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, after such 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. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which holders of Preferred
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee will take such action as is directed by the Company and if not so
directed, will take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate BBC Capital in such a way that BBC Capital will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States federal income tax purposes. In this connection, the Company and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of BBC Capital or the Trust
Agreement, that the Company and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes.
Holders of the Preferred Securities have no preemptive or similar
rights.
The Trust Agreement and the Preferred Securities will be governed by,
and construed in accordance with, the internal laws of the State of Delaware.
-33-
<PAGE>
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Concurrently with the issuance of the Preferred Securities, BBC Capital
invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Junior Subordinated Debentures issued
by the Company. The Junior Subordinated Debentures were issued as unsecured debt
under the Indenture, dated as of April 30, 1997 (the "Indenture"), between the
Company and Wilmington Trust Company, as trustee (the "Debenture Trustee"). The
Indenture is qualified as an indenture under the Trust Indenture Act. The
following summary of the material terms and provisions of the Junior
Subordinated Debentures and the Indenture does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the Indenture and
to the Trust Indenture Act. Wherever particular defined terms of the Indenture
are referred to, but not defined herein, such defined terms are incorporated
herein by reference. The Indenture is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
GENERAL
The Junior Subordinated Debentures are limited in aggregate principal
amount to approximately $77,061,875. The Junior Subordinated Debentures bear
interest at the annual rate of 9 1/2% of the principal amount thereof, payable
quarterly in arrears on March 31, June 30, September 30, and December 31 of each
year (each, an "Interest Payment Date"), to the Person (as defined in the
Indenture) in whose name each Junior Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the Business Day next
preceding such Interest Payment Date. The first Interest Payment Date was June
30, 1997. It is anticipated that, until the liquidation, if any, of BBC Capital,
the Junior Subordinated Debentures will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Preferred Securities. The
amount of interest payable for any period is computed on the basis of a 360-day
year of twelve 30-day months. In the event that any date on which interest is
payable on the Junior Subordinated Debentures is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay) with the same force and effect as if made on the date such
payment was originally due and payable. Accrued interest that is not paid on the
applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate per annum of 9 1/2%
thereof, compounded quarterly. The term "interest," as used herein, includes
quarterly interest payments, interest on quarterly interest payments not paid on
the applicable Interest Payment Date and Additional Interest, as applicable.
The Junior Subordinated Debentures mature on June 30, 2027 (such date,
as it may be shortened as hereinafter described, the "Stated Maturity"). Such
date may be shortened at any time by the Company to any date not earlier than
June 30, 2002, subject to the Company having received prior regulatory approval
if then required under applicable capital guidelines or regulatory policies. In
the event that the Company elects to shorten the Stated Maturity of the Junior
Subordinated Debentures, it will give notice thereof to the Debenture Trustee,
BBC Capital and to the holders of the Junior Subordinated Debentures no more
than 180 days and no less than 90 days prior to the effectiveness thereof.
The Junior Subordinated Debentures are unsecured and rank junior and
are subordinate in right of payment to all Senior Debt and Subordinated Debt (as
such terms are defined in "-Subordination") of the Company. Because the Company
is a holding company, the right of the Company to participate in any
distribution of assets of a subsidiary, including BankAtlantic, upon any
liquidation or reorganization or otherwise of such subsidiary (and thus the
ability of holders of the Junior Subordinated Debentures to benefit indirectly
from such distribution), is subject to the prior claims of creditors of the
subsidiary (including depositors in BankAtlantic), except to the extent that the
Company may itself be recognized as a creditor of the subsidiary. The Junior
Subordinated Debentures are, therefore, effectively subordinated to all existing
and future liabilities of the Company's subsidiaries, including BankAtlantic,
and holders of Junior Subordinated Debentures should look only to the assets of
the Company for payments on the Junior Subordinated Debentures. The Indenture
does not limit the incurrence or issuance of other secured or unsecured debt of
the Company, including Senior Debt and Subordinated Debt, whether under the
Indenture or any
-34-
<PAGE>
existing indenture or other indenture that the Company or any of its
subsidiaries may enter into in the future or otherwise. See "-Subordination."
The Indenture does not contain provisions that afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Indenture at any time during the
term of the Junior Subordinated Debentures, so long as no Debenture Event of
Default has occurred and is continuing, to defer the payment of interest at any
time, or from time to time (each, an "Extended Interest Payment Period"). The
right to defer the payment of interest on the Junior Subordinated Debentures is
limited, however, to a period, in each instance, not exceeding 20 consecutive
quarters and no Extended Interest Payment Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. At the end of each Extended
Interest Payment Period, the Company must pay all interest then accrued and
unpaid (together with interest thereon at the annual rate of 9 1/2%, compounded
quarterly, to the extent permitted by applicable law). During an Extended
Interest Payment Period, interest will continue to accrue and holders of Junior
Subordinated Debentures (or the holders of Preferred Securities if such
securities are then outstanding) will be required to accrue and recognize income
for United States federal income tax purposes. See "Certain Federal Income Tax
Consequences-Interest Income and Original Issue Discount."
During any such Extended Interest Payment Period, the Company may not
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock (other than (a) the reclassification of any class of the Company's
capital stock into another class of capital stock, (b) dividends or
distributions payable in any class of the Company's common stock, (c) any
declaration of a dividend in connection with the implementation of a shareholder
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto and (d) purchases
of the Company's common stock related to the rights under any of the Company's
benefit plans for its or its subsidiaries' directors, officers or employees),
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank PARI PASSU
with or junior in interest to the Junior Subordinated Debentures or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks PARI PASSU
or junior in interest to the Junior Subordinated Debentures (other than payments
under the Guarantee), or (iii) redeem, purchase or acquire less than all of the
Junior Subordinated Debentures or any of the Preferred Securities. Prior to the
termination of any such Extended Interest Payment Period, the Company may
further defer the payment of interest; provided that no Extended Interest
Payment Period may exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Junior Subordinated Debentures. Upon the termination of any such
Extended Interest Payment Period and the payment of all amounts then due on any
Interest Payment Date, the Company may elect to begin a new Extended Interest
Payment Period subject to the above requirements. No interest will be due and
payable during an Extended Interest Payment Period, except at the end thereof.
The Company must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of such Extended Interest Payment
Period at least two Business Days prior to the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities would have been
payable except for the election to begin such Extended Interest Payment Period,
or (ii) the date the Trust is required to give notice of the record date, or the
date such Distributions are payable, to The Nasdaq Stock Market's National
Market (or other applicable self-regulatory organization) or to holders of the
Preferred Securities, but in any event at least one Business Day before such
record date. Subject to the foregoing, there is no limitation on the number of
times that the Company may elect to begin an Extended Interest Payment Period.
-35-
<PAGE>
ADDITIONAL SUMS
If BBC Capital 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 (as defined below), the Company will pay as additional
amounts (referred to for purposes of this section as "Additional Interest") on
the Junior Subordinated Debentures such additional amounts as may be required so
that the net amounts received and retained by BBC Capital after paying any such
additional taxes, duties or other governmental charges will not be less than the
amounts BBC Capital would have received had such additional taxes, duties or
other governmental charges not been imposed.
REDEMPTION OR EXCHANGE
The Company will have the right to redeem the Junior Subordinated
Debentures prior to maturity (i) on or after June 30, 2002, in whole at any time
or in part from time to time, or (ii) 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, in each case at a redemption price equal to
the accrued and unpaid interest on the Junior Subordinated Debentures so
redeemed to the date fixed for redemption, plus 100% of the principal amount
thereof. Any such redemption prior to the Stated Maturity will be subject to
prior regulatory approval if then required under applicable capital guidelines
or regulatory policies.
"Tax Event" means the receipt by BBC Capital of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) interest payable by the Company on the Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, (ii) BBC Capital 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 (iii) BBC Capital 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. The Company must
request and receive an opinion with regard to such matters within a reasonable
period of time after it becomes aware of the possible occurrence of any of the
events described in clauses (i) through (iii) above.
"Investment Company Event" means the receipt by BBC Capital of 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, BBC Capital 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 of original
issuance of the Preferred Securities.
"Capital Treatment Event" means the reasonable determination by the
Company that, as a result of any amendment to, or change (including any proposed
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such proposed change pronouncement, action or decision is announced on or after
the date of original issuance of the Preferred Securities, there is more than an
insubstantial risk that the Company will not be entitled to treat an amount
equal to the Liquidation Amount of the Preferred Securities as "Tier 1 Capital"
(or the then equivalent thereof) for 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 the Company. There are currently no capital adequacy
guidelines applicable to savings bank holding companies such as the Company.
-36-
<PAGE>
Notice of any redemption will be mailed 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 the Company defaults
in payment of 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 thereof called for redemption.
The Junior Subordinated Debentures are not subject to any sinking fund.
DISTRIBUTION UPON LIQUIDATION
As described under "Description of the Preferred Securities-Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of BBC Capital, the Junior Subordinated Debentures may be
distributed to the holders of the Preferred Securities in liquidation of BBC
Capital after satisfaction of liabilities to creditors of BBC Capital as
provided by applicable law. Any such distribution will be subject to receipt of
prior regulatory approval if then required under applicable regulatory policies
or guidelines. If the Junior Subordinated Debentures are distributed to the
holders of Preferred Securities upon the liquidation of BBC Capital, the Company
will use its 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 Preferred Securities are then listed. There can be no assurance as to the
market price of any Junior Subordinated Debentures that may be distributed to
the holders of Preferred Securities.
RESTRICTIONS ON CERTAIN PAYMENTS
If at any time (i) there has occurred a Debenture Event of Default,
(ii) the Company is in default with respect to its obligations under the
Guarantee, or (iii) the Company has given notice of its election of an Extended
Interest Payment Period as provided in the Indenture with respect to the Junior
Subordinated Debentures and has not rescinded such notice, or such Extended
Interest Payment Period, or any extension thereof, is continuing, the Company
will not (1) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock (other than (a) the reclassification of any class of the
Company's capital stock into another class of capital stock, (b) dividends or
distributions payable in any class of the Company's common stock, (c) any
declaration of a dividend in connection with the implementation of a shareholder
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto and (d) purchases
of the Company's common stock related to the rights under any of the Company's
benefit plans for its or its subsidiaries' directors, officers or employees),
(2) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Company that rank PARI PASSU
with or junior in interest to the Junior Subordinated Debentures or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks PARI PASSU
or junior in interest to the Junior Subordinated Debentures (other than payments
under the Guarantee), or (3) redeem, purchase or acquire less than all of the
Junior Subordinated Debentures or any of the Preferred Securities.
SUBORDINATION
The Indenture provides that the Junior Subordinated Debentures are
subordinated and junior in right of payment to all Senior Debt and Subordinated
Debt of the Company. Upon any payment or distribution of assets to creditors
upon any liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors, marshaling of assets or any bankruptcy, insolvency,
debt restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceedings of the Company, the holders of Senior Debt and
Subordinated Debt of the Company will first be entitled to receive payment in
full of principal of (and premium, if any) and interest, if any, on such Senior
Debt and Subordinated Debt of the Company before the holders of 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.
-37-
<PAGE>
In the event of the acceleration of the maturity of any Junior
Subordinated Debentures, the holders of all Senior Debt and Subordinated Debt of
the Company outstanding at the time of such acceleration will first be entitled
to receive payment in full of all amounts due thereon (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.
No payments on account of principal or interest in respect of the
Junior Subordinated Debentures may be made if there has occurred and is
continuing a default in any payment with respect to Senior Debt and Subordinated
Debt of the Company or an event of default with respect to any Senior Debt and
Subordinated Debt of the Company resulting in the acceleration of the maturity
thereof, or if any judicial proceeding is pending with respect to any such
default.
As used herein with respect to the Junior Subordinated Debentures, the
following terms shall have the following meanings:
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person 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), (v) every capital lease obligation of such Person, and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means, with respect to the Company, the principal of (and
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 the
Company whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date of the Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Junior Subordinated
Debentures or to other Debt which is PARI PASSU with, or subordinated to, the
Junior Subordinated Debentures; provided, however, that Senior Debt will not be
deemed to include (i) any Debt of the Company 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 the Company, (ii) any Debt of
the Company to any of its subsidiaries, (iii) any Debt to any employee of the
Company, (iv) 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 (v) Debt which constitutes Subordinated Debt.
"Subordinated Debt" means, with respect to the Company, the principal
of (and 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
the Company whether or not such claim for post-petition interest is allowed in
such proceeding), on Debt, whether incurred on or prior to the date of the
Indenture or thereafter incurred, which is by its terms expressly provided to be
junior and subordinate to other Debt of the Company (other than the Junior
Subordinated Debentures).
The Indenture places no limitation on the amount of additional Senior
Debt and Subordinated Debt that may be issued or incurred by the Company. The
Company expects from time to time to issue or incur additional
-38-
<PAGE>
indebtedness constituting Senior Debt and Subordinated Debt. As of September 30,
1998, the Company had outstanding no Senior Debt and approximately $172.2
million of Subordinated Debt. Because the Company is a holding company, the
Junior Subordinated Debentures are effectively subordinated to all existing and
future liabilities of the Company's subsidiaries, including obligations to
depositors of BankAtlantic.
REGISTRAR AND TRANSFER AGENT
The Debenture Trustee acts as the registrar and the transfer agent for
the Junior Subordinated Debentures. Junior Subordinated Debentures may be
presented for registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly executed) at the
office of the registrar. The Company may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts; provided that the Company maintains a transfer agent
in the place of payment. The Company may at any time designate additional
transfer agents with respect to the Junior Subordinated Debentures. In the event
of any redemption, neither the Company nor the Debenture Trustee will be
required to (i) issue, register the transfer of or exchange Junior Subordinated
Debentures during a period beginning at the opening of business 15 days before
the day of selection for redemption of Junior Subordinated Debentures and ending
at the close of business on the day of mailing of the relevant notice of
redemption, or (ii) transfer or exchange any Junior Subordinated Debentures so
selected for redemption, except, in the case of any Junior Subordinated
Debentures being redeemed in part, any portion thereof not to be redeemed.
MODIFICATION OF INDENTURE
The Company and the Debenture 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, curing ambiguities, defects or inconsistencies and qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act.
The Indenture also contains provisions permitting the Company and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding Junior Subordinated Debentures, to modify
the Indenture; provided, that no such modification may, without the consent of
the holder of each outstanding Junior Subordinated Debenture affected by such
proposed modification, (i) extend the fixed maturity of the Junior Subordinated
Debentures, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or (ii) reduce the percentage of
principal amount of Junior Subordinated Debentures, the holders of which are
required to consent to any such modification of the Indenture; provided that so
long as any of the Preferred Securities remain outstanding, no such modification
may be made that requires the consent of the holders of the Junior Subordinated
Debentures, and no termination of the Indenture may occur, and no waiver of any
Debenture Event of Default may be effective, without the prior consent of the
holders of at least a majority of the aggregate Liquidation Amount of the
Preferred Securities and that if the consent of the holder of each Junior
Subordinated Debenture is required, such modification will not be effective
until each holder of Trust Securities has consented thereto.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures that has occurred and
is continuing constitutes an event of default (each, a "Debenture Event of
Default") with respect to the Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on the Junior
Subordinated Debentures, when due (subject to the deferral of any due date in
the case of an Extended Interest Payment Period); or
(ii) failure to pay any principal on the Junior Subordinated
Debentures when due whether at maturity, upon redemption by declaration or
otherwise; or
-39-
<PAGE>
(iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days after written
notice to the Company from the Debenture Trustee or the holders of at least 25%
in aggregate outstanding principal amount of the Junior Subordinated Debentures;
or
(iv) certain events in bankruptcy, insolvency or
reorganization of the Company.
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 Debenture
Trustee. The Debenture 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 a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the Junior
Subordinated Debentures may annul such declaration and waive the default 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
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of the Junior Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Preferred Securities will have such right.
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
If a Debenture Event of Default has occurred and is continuing, the
Property Trustee will have the right to declare the principal of and the
interest on such Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Junior Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest on or the
principal of the Junior Subordinated Debentures on the payment date on which
such payment is due and payable, then a holder of Preferred Securities may
institute a legal proceeding directly against the Company for enforcement of
payment to such holder of the principal of or interest on such Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Preferred Securities of such holder (a "Direct
Action"). In connection with such Direct Action, the Company will have a right
of set-off under the Indenture to the extent of any payment made by the Company
to such holder of Preferred Securities in the Direct Action. The Company may not
amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of the holders of all of the Preferred
Securities. If the right to bring a Direct Action is removed, BBC Capital may
become subject to the reporting obligations under the Exchange Act.
The holders of the Preferred Securities 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
Preferred Securities-Events of Default; Notice."
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture 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 Debenture 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 thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise
-40-
<PAGE>
incur personal financial liability in the performance of its duties if the
Debenture Trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.
MISCELLANEOUS
The Company has agreed, pursuant to the Indenture, for so long as Trust
Securities remain outstanding, (i) to maintain directly or indirectly 100%
ownership of the Common Securities of BBC Capital (provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities), (ii) not to voluntarily
terminate, wind up or liquidate BBC Capital without prior regulatory approval if
then so required under applicable capital guidelines or regulatory policies, and
(a) in connection with a distribution of Junior Subordinated Debentures to the
holders of the Preferred Securities in liquidation of BBC Capital, or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the Trust Agreement, and (iii) to use its reasonable efforts, consistent with
the terms and provisions of the Trust Agreement, to cause BBC Capital to remain
classified as a grantor trust and not as an association taxable as a corporation
for United States federal income tax purposes.
-41-
<PAGE>
DESCRIPTION OF THE GUARANTEE
The Preferred Securities Guarantee Agreement (the "Guarantee") was
executed and delivered by the Company concurrently with the issuance of the
Preferred Securities for the benefit of the holders of the Preferred Securities.
The Guarantee is qualified as an indenture under the Trust Indenture Act. The
Guarantee Trustee acts as indenture trustee under the Guarantee for purposes of
complying with the provisions of the Trust Indenture Act. The Guarantee Trustee,
Wilmington Trust Company, holds the Guarantee for the benefit of the holders of
the Preferred Securities. The following summary of the material terms and
provisions of the Guarantee does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of the
Guarantee and the Trust Indenture Act. Wherever particular defined terms of the
Guarantee are referred to, but not defined herein, such defined terms are
incorporated herein by reference. The Guarantee is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
GENERAL
The Guarantee is an irrevocable guarantee on a subordinated basis of
BBC Capital's obligations under the Preferred Securities, but applies only to
the extent that BBC Capital has funds sufficient to make such payments. The
Company, pursuant to the Guarantee, irrevocably agrees to pay in full on a
subordinated basis, to the extent set forth therein, the Guarantee Payments (as
defined below) to the holders of the Preferred Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that BBC Capital may
have or assert other than the defense of payment. The following payments with
respect to the Preferred Securities, to the extent not paid by or on behalf of
BBC Capital (the "Guarantee Payments"), are subject to the Guarantee: (i) any
accrued and unpaid Distributions required to be paid on the Preferred
Securities, to the extent that BBC Capital has funds available therefor at such
time, (ii) the Redemption Price with respect to any Preferred Securities called
for redemption to the extent that BBC Capital has funds available therefor at
such time, and (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of BBC Capital (other than in connection with the distribution of
Junior Subordinated Debentures to the holders of Preferred Securities or a
redemption of all of the Preferred Securities), the lesser of (a) the amount of
the Liquidation Distribution, to the extent BBC Capital has funds available
therefor at such time, and (b) the amount of assets of BBC Capital remaining
available for distribution to holders of Preferred Securities in liquidation of
BBC Capital. The obligation of the Company to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the Preferred Securities or by causing BBC Capital to pay such
amounts to such holders.
The Guarantee does not apply to any payment of Distributions except to
the extent BBC Capital has funds available therefor. If the Company does not
make interest payments on the Junior Subordinated Debentures held by BBC
Capital, BBC Capital will not pay Distributions on the Preferred Securities and
will not have funds legally available therefor.
STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of the Company and
ranks subordinate and junior in right of payment to all Senior Debt and
Subordinated Debt of the Company in the same manner as the Junior Subordinated
Debentures. The Guarantee does not place a limitation on the amount of
additional Senior Debt and Subordinated Debt that may be incurred by the
Company. The Company expects from time to time to incur additional indebtedness
constituting Senior Debt and Subordinated Debt.
The Guarantee constitutes a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the Guarantee without first instituting
a legal proceeding against any other Person). The Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent not
paid by BBC Capital or upon distribution of the Junior Subordinated Debentures
to the holders of the Preferred Securities. Because the Company is a holding
company, the right of the
-42-
<PAGE>
Company 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, except to the extent the
Company may itself be recognized as a creditor of the subsidiary. The Company's
obligations under the Guarantee, therefore, are effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, including
BankAtlantic, and claimants should look only to the assets of the Company for
payments thereunder.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against BBC Capital, the Guarantee Trustee
or any other Person.
The Company, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance
of a default by the Company in performance of the Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to 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 under
no obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of any Preferred Securities, unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
(a) full payment of the Redemption Price of the Preferred Securities, (b) full
payment of the amounts payable upon liquidation of BBC Capital, or (c)
distribution of the Junior Subordinated Debentures to the holders of the
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 Preferred
Securities must restore payment of any sums paid under such Preferred Securities
or the Guarantee.
EXPENSE AGREEMENT
The Company, pursuant to the Agreement as to Expenses and Liabilities
entered into by it under the Trust Agreement (the "Expense Agreement"),
irrevocably and unconditionally guarantees to each person or entity to whom BBC
Capital becomes indebted or liable, the full payment of any costs, expenses or
liabilities of BBC Capital, other than obligations of BBC Capital to pay to the
holders of the Preferred Securities or other similar interests in BBC Capital of
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be. Third party creditors of
BBC Capital may proceed directly against the Company under the Expense
Agreement, regardless of whether such creditors had notice of the Expense
Agreement.
-43-
<PAGE>
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent BBC Capital has funds available for the payment of
such Distributions) are irrevocably guaranteed by the Company as and to the
extent set forth under "Description of the Guarantee." The Company and BBC
Capital believe that, taken together, the obligations of the Company under the
Junior Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement, 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 Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the obligations of BBC Capital under the Preferred Securities. If and to the
extent that the Company does not make payments on the Junior Subordinated
Debentures, BBC Capital will not pay Distributions or other amounts due on the
Preferred Securities. The Guarantee does not cover payment of Distributions when
BBC Capital does not have sufficient funds to pay such Distributions. In such
event, the remedy of a holder of Preferred Securities is to institute a legal
proceeding directly against the Company for enforcement of payment of such
Distributions to such holder. The obligations of the Company under the Guarantee
are subordinate and junior in right of payment to all Senior Debt and
Subordinated Debt of the Company.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
the Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of the Junior Subordinated Debentures
will be equal to the sum of the aggregate stated Liquidation Amount of the Trust
Securities, (ii) the interest rate and interest and other payment dates on the
Junior Subordinated Debentures will match the Distribution rate and Distribution
and other payment dates for the Preferred Securities, (iii) the Company will pay
for all and any costs, expenses and liabilities of BBC Capital (except the
obligations of BBC Capital to holders of the Preferred Securities), and (iv) the
Trust Agreement further provides that BBC Capital will not engage in any
activity that is not consistent with the limited purposes of BBC Capital.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, BBC Capital
or any other Person. A default or event of default under any Senior Debt and
Subordinated Debt of the Company would not constitute a default or Event of
Default under the Preferred Securities, the Junior Subordinated Debentures or
the Guarantee. In the event, however, of payment defaults under, or acceleration
of, Senior Debt and Subordinated Debt of the Company, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Junior Subordinated Debentures until such Senior Debt and Subordinated Debt
has been paid in full or any payment default thereunder has been cured or
waived. Failure to make required payments on the Junior Subordinated Debentures
would constitute an Event of Default.
LIMITED PURPOSE OF BBC CAPITAL
The Preferred Securities evidence preferred undivided beneficial
interest in the assets of BBC Capital. BBC Capital exists for the sole purpose
of issuing the Trust Securities and investing the proceeds thereof in Junior
Subordinated Debentures. A principal difference between the rights of a holder
of a 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
-44-
<PAGE>
receive from the Company the principal amount of and interest accrued on Junior
Subordinated Debentures held, while a holder of Preferred Securities is entitled
to receive Distributions from BBC Capital (or from the Company under the
Guarantee) if and to the extent BBC Capital has funds available for the payment
of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or
liquidation of BBC Capital involving the liquidation of the Junior Subordinated
Debentures, the holders of the Preferred Securities will be entitled to receive,
out of assets held by BBC Capital, the Liquidation Distribution in cash. See
"Description of the Preferred Securi ties-Liquidation Distribution Upon
Termination." Upon any voluntary or involuntary liquidation or bankruptcy of the
Company, the Property Trustee, as holder of the Junior Subordinated Debentures,
would be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Debt and Subordinated Debt of the Company (as set forth in
the Indenture), but entitled to receive payment in full of principal and
interest before any shareholders of the Company receive payments or
distributions. Since the Company is the guarantor under the Guarantee and has
agreed to pay for all costs, expenses and liabilities of BBC Capital (other than
the obligations of BBC Capital to the holders of its Preferred Securities), the
positions of a holder of the Preferred Securities and a holder of the Junior
Subordinated Debentures relative to other creditors and to shareholders of the
Company in the event of liquidation or bankruptcy of the Company are expected to
be substantially the same.
-45-
<PAGE>
CERTAIN 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 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 the Company and BBC Capital. The conclusions expressed herein
are based upon current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), regulations thereunder and current administrative rulings
and court decisions, all of which are subject to change at any time, with
possible retroactive effect. 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 it is therefore possible that the United States federal
income tax treatment of the purchase, ownership, and disposition of Preferred
Securities may differ from the treatment described below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Preferred
Securities. Moreover, the discussion generally focuses on holders of Preferred
Securities who are individual citizens or residents of the United States and
hold Preferred Securities as capital assets. The discussion has only limited
application to dealers in securities, corporations, estates, trusts or
nonresident aliens and does not address 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 Preferred Securities as a position in a
"straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment, or as other than a
capital asset. The following summary also does not address the tax consequences
to persons that have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a holder of Preferred
Securities. Further, it does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may be applicable to the Preferred Securities.
Accordingly, each prospective investor should consult, and should rely
exclusively on, such investor's own tax advisors in analyzing the federal,
state, local and foreign tax consequences of the purchase, ownership or
disposition of Preferred Securities.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
The Company intends to take the position that the Junior Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company under current law, and, by acceptance of a Preferred
Security, each holder covenants to treat the Junior Subordinated Debentures as
indebtedness and the Preferred Securities as evidence of an indirect beneficial
ownership interest in the Junior Subordinated Debentures. Counsel for the
Company is of the opinion that, under current law, and based upon the
representations, facts and assumptions set forth herein, the Junior Subordinated
Debentures will be classified as indebtedness for United States federal income
tax purposes. No assurance can be given, however, that such position of the
Company 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 assumes that the Junior Subordinated Debentures will be classified
for United States federal income tax purposes as indebtedness of the Company.
CLASSIFICATION OF BBC CAPITAL
Under current law and assuming full compliance with the terms of the
Trust Agreement and Indenture (and certain other documents described herein),
BBC Capital 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, each holder of Preferred
Securities generally will be treated as owning an undivided beneficial interest
in the Junior Subordinated Debentures, and each holder will be required to
include in its gross income its pro
-46-
<PAGE>
rata share of interest income, including any OID (original issue discount), paid
or accrued with respect to its allocable share of the Junior Subordinated
Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under applicable Treasury regulations (the "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. The Company believes
that the likelihood of its exercising its option to defer payments of interest
is remote. Based on the foregoing, the Company believes that the Junior
Subordinated Debentures will not be considered to be issued with OID at the time
of their original issuance and, accordingly, a holder should include in gross
income such holder's allocable share of interest on the Junior Subordinated
Debentures in accordance with such holder's method of tax accounting.
Under the Regulations, if the Company exercised its option to defer any
payment of interest, the Junior Subordinated Debentures would at that time be
treated 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 the holder's taxable interest income with respect to the Junior Subordinated
Debentures would be accounted for as OID on an economic accrual basis regardless
of such holder's method of tax accounting, and actual distributions of stated
interest would not be reported as taxable income.
Consequently, a holder would be required to include in gross income OID
even though the Company would not make any actual cash payments during an
Extended Interest Payment Period.
The Regulations have not been addressed in any published rulings or
other published interpretations by the Internal Revenue Service, and it is
possible that the Internal Revenue Service could take a position contrary to the
interpretation herein.
Because income on the Preferred Securities will constitute interest or
OID, corporate holders will not be entitled to a dividends-received deduction
with respect to any income recognized with respect to the Preferred Securities.
Subsequent uses of the term "interest" in this summary include income
in the form of OID.
MARKET DISCOUNT AND ACQUISITION PREMIUM
Holders of Preferred Securities other than a holder who purchased the
Preferred Securities upon original issuance may be considered to have acquired
their 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. Such holders are advised to consult their tax
advisors as to the income tax consequences of the acquisition, ownership and
disposition of the Preferred Securities. It is important to note that 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 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 years remaining to maturity). In the case of the Junior Subordinated
Debentures, market discount would generally be the excess of (a) the issue price
of the Junior Subordinated Debentures plus OID, if any, includable in the income
of all prior holders over (b) 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, the numerator of
which is the number of days the Junior Subordinated Debentures have been held by
the holder and 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.
-47-
<PAGE>
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF BBC
CAPITAL
Under certain circumstances, as described under "Description of the
Preferred Securities-Redemption or Exchange" and "-Liquidation Distribution Upon
Termination," the Junior Subordinated Debentures may be distributed to holders
of Preferred Securities upon a liquidation of BBC Capital. Under current United
States federal income tax law, such a distribution would be treated as a
nontaxable event to each such holder and would result in such holder having an
aggregate tax basis in the Junior Subordinated Debentures received in the
liquidation equal to such holder's aggregate tax basis in the Preferred
Securities immediately before the distribution. A holder's holding period in the
Junior Subordinated Debentures so received in liquidation of BBC Capital would
include the period for which such holder held the Preferred Securities.
If, however, a Tax Event occurs which results in BBC Capital being
treated as an association taxable as a corporation, the distribution would
constitute a taxable event to holders of the Preferred Securities. Under certain
circumstances described herein, the Junior Subordinated Debentures may be
redeemed for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition of the redeemed Preferred Securities, and a holder would recognize
gain or loss as if the holder sold such Preferred Securities for cash. See
"Description of the Preferred Securities-Redemption or Exchange" and
"-Liquidation Distribution Upon Termination."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss
equal to the difference between its adjusted tax basis in the Preferred
Securities and the amount realized on the sale of such Preferred Securities. If
the Junior Subordinated Debentures are deemed to be issued with OID as a result
of the Company's deferral of any interest payment, or otherwise, a holder's tax
basis in the Preferred Securities generally will be increased by OID previously
includable in such holder's gross income to the date of disposition and
decreased by distributions or other payments received by such holder on the
Preferred Securities since and including the date of commencement of the first
Extended Interest Payment Period. Such gain or loss generally will be a capital
gain or loss (except to the extent of any accrued interest with respect to such
holder's pro rata 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 the Preferred Securities
have been held for more than one year.
Should the Company exercise its option to defer any payment of interest
on the Junior Subordinated Debentures, the 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, a holder that disposes of its Preferred Securities between
record dates for payments of distributions thereon 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, such
Securityholder will add such amount to its adjusted tax basis in the Preferred
Securities. To the extent the selling price is less than the holder's adjusted
tax basis in the Preferred Securities, such holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.
BACKUP WITHHOLDING AND INFORMATION REPORTING
The amount of interest paid or accrued on the Preferred Securities held
of record by individual citizens or residents of the United States, or certain
trusts, estates, and partnerships, will be reported to the Internal Revenue
Service on Forms 1099, which forms should be mailed to such holders of Preferred
Securities by January 31 following each calendar year. Payments made on, and
proceeds from the sale of, the Preferred Securities may be subject to a "backup"
withholding tax (currently at 31%) unless the holder complies with certain
identification and other requirements. Any amounts withheld under the backup
withholding rules will be allowed as a credit against the
-48-
<PAGE>
holder's 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
THE PARTICULAR SITUATION OF A HOLDER OF PREFERRED SECURITIES. HOLDERS OF
PREFERRED SECURITIES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE 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 Code
("Plans"), generally may purchase Preferred Securities, subject to the investing
fiduciary's determination that the investment in Preferred Securities satisfies
ERISA's fiduciary standards and other requirements applicable to investments by
the Plan.
In any case, the Company and/or any of its 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 Code) with respect to certain plans
(generally, Plans maintained or sponsored by, or contributed to by, any such
persons, or Plans with respect to which the Company or an affiliate is a
fiduciary or Plans for which the Company or an affiliate provides services). The
acquisition and ownership of Preferred Securities by a Plan (or by an individual
retirement arrangement or other Plans described in Section 4975(e)(1) of the
Code) with respect to which the Company or any of its affiliates is considered a
party in interest or a disqualified person may constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code, unless such
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 Code proposing to acquire Preferred Securities
should consult with their own counsel.
LEGAL MATTERS
The validity of the Debentures has been passed upon for the Company by
Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Miami, Florida 33130,
counsel to the Company.
Certain matters of Delaware law relating to the validity of the
Preferred Securities, the enforceability of the Trust Agreement and the
formation of BBC Capital have been passed upon by Richards, Layton & Finger,
special Delaware counsel to the Company and BBC Capital. Certain legal matters
for the Company and BBC Capital, including the validity of the Guarantee and the
Junior Subordinated Debentures, have been passed upon for the Company and BBC
Capital by Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., counsel to
the Company and BBC Capital. 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 the Company by Stearns
Weaver Miller Weissler Alhadeff & Sitterson, P.A.
-49-
<PAGE>
EXPERTS
The consolidated financial statements of BankAtlantic Bancorp, Inc. as
of December 31, 1997 and 1996, and for each of the years in the three-year
period ended December 31, 1997, have been incorporated by reference herein and
in the Registration Statement in reliance upon reports of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Securities and
Exchange Commission (the "Commission") are hereby incorporated in this
Prospectus by reference and made a part hereof:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997, filed with the Commission on March 13,
1998.
(2) The Company's Current Report on Form 8-K, dated March 13,
1998, filed with the Commission on March 19, 1998.
(3) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998, filed with the Commission on May 15,
1998.
(4) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998, filed with the Commission on August 14,
1998.
(5) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998, filed with the Commission on
November 16, 1998.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act shall be deemed to be incorporated
by reference into this Prospectus and to be a part of this Prospectus from the
date of filing thereof. Any statement contained in a document incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
the Registration Statement and this Prospectus to the extent that a statement
contained herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference, other than
certain exhibits to such documents. Written requests should be directed to
BankAtlantic Bancorp, Inc., 1750 East Sunrise Boulevard, Fort Lauderdale,
Florida 33304, Attention: Secretary, telephone: 954-760-5000.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act, and in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and
at the Commission's regional offices at Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains an Internet web site that contains
reports,
-50-
<PAGE>
proxy and information statements and other information regarding issuers who
file electronically with the Commission. The address of that site is
http://www.sec.gov.
The Company and BBC Capital have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments thereto, the
"Registration Statement"), of which this Prospectus is a part, under the
Securities Act with respect to the Preferred Securities and Debentures. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted as permitted by the rules
and regulations of the Commission. In addition, certain documents filed by the
Company with the Commission have been incorporated in this Prospectus by
reference. See "Incorporation of Certain Documents by Reference." For further
information with respect to the Company, the Preferred Securities and the
Debentures, reference is made to the Registration Statement, including the
exhibits thereto and the documents incorporated herein by reference. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission
or incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified in
its entirety by such reference. The Registration Statement may be inspected
without charge at the principal office of the Commission in Washington, D.C.,
and copies of all or part of it may be obtained from the Commission upon payment
of the prescribed fees.
No person has been authorized to give any information or to make any
representations in connection with this Prospectus other than those contained in
this Prospectus and, if given or made, such information and representations must
not be relied upon as having been authorized by the Company. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to the date hereof. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy such securities in any circumstances in which such offer or solicitation is
unlawful.
-51-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
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
=======
</TABLE>
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 either are filed herewith or incorporated by
reference to documents previously filed or will be filed by amendment, as
indicated below:
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
- -------- -----------
<S> <C>
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)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
- -------- -----------
<S> <C>
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
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 L.L.P.
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))
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))
</TABLE>
II-2
<PAGE>
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 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-3
<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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lauderdale, State of Florida, on the 11th day
of February, 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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lauderdale, State of Florida, on the 11th day of
February, 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
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Alan B. Levan and Frank V. Grieco and
each of them acting alone, his true and lawful attorneys-in-fact and agents,
each with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each said attorneys-in-fact and agents or any
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/S/ ALAN B. LEVAN Chairman of the Board February 11, 1999
- ----------------------------- Chief Executive Officer
Alan B. Levan and President
/S/ JOHN E. ABDO Vice-Chairman of the February 11, 1999
- ----------------------------- Board
John E. Abdo
/S/ FRANK V. GRIECO Senior Executive Vice February 11, 1999
- ----------------------------- President and Principal Financial
Frank V. Grieco and Accounting Officer
/S/ BEN A. PLOTKIN Director February 11, 1999
- -----------------------------
Ben A. Plotkin
/S/ STEVEN M. COLDREN Director February 11, 1999
- -----------------------------
Steven M. Coldren
/S/ MARY E. GINESTRA Director February 11, 1999
- -----------------------------
Mary E. Ginestra
/S/ BRUNO DIGIULIAN Director February 11, 1999
- -----------------------------
Bruno DiGiulian
/S/ CHARLIE C. WINNINGHAM, II Director February 11, 1999
- -----------------------------
Charlie C. Winningham, II
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION NUMBERED PAGE
- -------------------- -------------
<S> <C> <C>
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 and 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
23.3 Consent of KPMG L.L.P.
</TABLE>
II-6
EXHIBIT 5.1
[letterhead of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.]
February 11, 1999
Mr. Alan B. Levan
BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
RE: BankAtlantic Bancorp, Inc.
$21,000,000 OF SUBORDINATED DEBENTURES
Dear Mr. Levan:
As counsel to BankAtlantic Bancorp, Inc. (the "Corporation"), we have
examined the Amended and Restated Articles of Incorporation and Bylaws of the
Corporation as well as such other documents and proceedings as we have
considered necessary for the purposes of this opinion. We have also examined and
are familiar with the proceedings taken by the Corporation to issue and sell up
to $21,000,000 of 9% subordinated debentures due 2005 of the Corporation (the
"Debentures"). In addition, we have examined a copy of the Corporation's
Registration Statement on Form S-2, File No. 33-96184, the Corporation's and BBC
Capital Trust I's Registration Statement on Form S-3 of which this opinion is an
exhibit (the "Registration Statement"), and that certain Indenture between the
Corporation and American Bank National Association (predecessor to First Star
Corporate Trust Services), as Trustee, filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and the Trust Indenture
Act of 1939.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, we are of the opinion that the Debentures have been
validly issued and are binding obligations of the Corporation.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the use
of our name under the heading "Legal Matters" in the Registration Statement.
Very truly yours,
/s/ STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
EXHIBIT 5.2
[letterhead of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.]
February 11, 1999
BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, FL 33304
Attention: Board of Directors
BBC Capital Trust I
c/0 BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, FL 33304
Attention: Administrative Trustees
Re: BBC CAPITAL TRUST I
Gentlemen:
We have acted as counsel to BankAtlantic Bancorp, Inc., a Florida
corporation (the "Company"), and BBC Capital Trust I, a Delaware statutory
business trust ("BBC Capital"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement") to be filed by
the Company and BBC Capital with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, concerning certain
previously registered 9% subordinated debentures due 2005 (the "Subordinated
Debentures") of the Company, 9 1/2% cumulative trust preferred securities (the
"Preferred Securities") of BBC Capital, 9 1/2% junior subordinated debentures of
the Company (the "Junior Subordinated Debentures"), and a guarantee of the
Company with respect to the Preferred Securities (the "Guarantee"). The
Registration Statement relates to market making transactions by and through Ryan
Beck & Co., Inc., an affiliate of the Company.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate of
trust (the "Certificate of Trust") filed by BBC Capital with the Secretary of
State of the State of Delaware on March 21, 1997, (ii) the Trust Agreement dated
as of March 21, 1997, with respect to BBC Capital; (iii) the Amended and
Restated Trust Agreement with respect to BBC Capital; (iv) the form of the
Preferred Securities of BBC Capital, (v) the form of Junior Subordinated
Debentures, (vi) the Guarantee between the Company and Wilmington Trust Company,
as trustee, (vii) the Indenture (the "Indenture") between the Company and
Wilmington Trust Company, as trustee, (viii) the Company's and BBC Capital's
registration statement on Form S-3 (Registration No. 333-23771) filed on March
21, 1997, as amended on April 22, 1997, relating to the Preferred Securities,
Junior Subordinated Debentures and the Guarantee, and (ix) the Registration
Statement. We have also examined originals or copies, certified, or otherwise
identified to our satisfaction, of such documents, certificates and records as
we have deemed necessary or appropriate as a basis for the opinions set forth
herein.
<PAGE>
BankAtlantic Bancorp, Inc.
BBC Capital Trust I
February 11, 1999
Page 2
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as copies and the authenticity of the originals of
such copies. In examining documents executed by parties other than the Company
or BBC Capital, we have assumed that such parties had the power, corporate or
otherwise, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action, corporate or otherwise,
and execution and delivery by such parties of such documents and that such
documents constitute valid and binding obligations of such parties. As to any
facts material to the opinions express herein which were not independently
established or verified, we have relied upon oral or written statements of
officers, trustees, and other representatives of the Company, BBC Capital and
others.
We are qualified to practice law only in the State of Florida and we do
not purport to be experts on, or to express any opinion herein concerning, any
law other than the law of the State of Florida and the federal law of the United
States. Accordingly, the opinions contained herein are expressly limited to the
matters of the law of the State of Florida and the federal law of the United
States.
Based upon and subject to the foregoing and other qualifications and
limitations set forth herein, we are of the opinion that:
1. The Junior Subordinated Debentures are valid and binding
obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity regardless of whether
enforceability is considered in a proceeding at law or in equity.
2. The Guarantee is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity regardless of whether
enforceability is considered in a proceeding at law or in equity.
We consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the use of our name under the
heading "Legal Matters" in the Registration Statement.
Very truly yours,
/s/ STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
EXHIBIT 5.3
[Letterhead of Richards, Layton & Finger]
February 11, 1999
BBC Capital Trust I
c/o BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
Re: BBC CAPITAL TRUST I
Ladies and Gentlemen:
We have acted as special Delaware counsel for BBC Capital
Trust I, a Delaware business trust (the "Trust"), and BankAtlantic Bancorp,
Inc., a Florida corporation (the "Company"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated March 21,
1997 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on March 21, 1997;
(b) The Trust Agreement of the Trust, dated as of March 21,
1997, as amended by the Amended and Restated Trust Agreement, dated as of April
30, 1997 (collectively, the "Trust Agreement"), among BBC and the trustees of
the Trust named therein (collectively, the "Trustees");
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a prospectus (the "Prospectus") relating to the 9.1/2%
Cumulative Trust Preferred
<PAGE>
BBC Capital Trust I
BankAtlantic Bancorp, Inc.
February 11, 1999
Page 2
Securities of the Trust representing preferred undivided beneficial interests in
the Trust (each, a "Preferred Security" and collectively, the "Preferred
Securities"), as filed by the Company and the Trust with the Securities and
Exchange Commission on February 11, 1999; and
(d) A Certificate of Good Standing for the Trust, dated
February 9, 1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed above, and we have assumed that there
exists no provision in any document that we have not reviewed that bears upon or
is inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely upon
the foregoing documents, the statements and information set forth therein and
the additional matters recited or assumed herein, all of which we have assumed
to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security was issued by the Trust (collectively, the "Preferred
Security Holders") of a Preferred Security Certificate for such Preferred
Security and the payment for the Preferred Security acquired by it, in
accordance with the Trust Agreement and the Prospectus, and (vii) that the
Preferred Securities were authenticated, issued and sold to the Preferred
Security Holders in accordance with the Trust Agreement and the Prospectus. We
have not participated in the preparation of the Registration Statement or the
Prospectus and assume no responsibility for their contents.
<PAGE>
BBC Capital Trust I
BankAtlantic Bancorp, Inc.
February 11, 1999
Page 3
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, 12 DEL.
C. ss. 3801, ET SEQ.
2. The Preferred Securities represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, are entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus. In giving the foregoing consents, we do not thereby
admit that we come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Richards, Layton & Finger
EAM/wrm
EXHIBIT 8.1
[letterhead of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.]
February 11, 1999
BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, FL 33304
Attention: Board of Directors
Gentlemen:
We have acted as counsel to BankAtlantic Bancorp, Inc., a Florida
corporation (the "Company"), and BBC Capital Trust I, a Delaware statutory
business trust ("BBC Capital"), in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement"), of which a
prospectus ("Prospectus") is a part, to be filed by the Company and BBC Capital
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, concerning certain previously registered 9% subordinated debentures due
2005 of the Company, 9 1/2% cumulative trust preferred securities of BBC
Capital, 9 1/2% junior subordinated debentures of the Company, and a guarantee
of the Company with respect to the trust preferred securities. The Registration
Statement relates to market making transactions by and through Ryan Beck & Co.,
Inc., an affiliate of the Company This opinion is furnished pursuant to the
requirements of Item 601(b) (8) of Regulation S-K.
For purposes of rendering this opinion, we have reviewed and relied
upon the Registration Statement and such other documents and instruments as we
deemed necessary for the rendering of this opinion. In our examination of
relevant documents, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies, the authenticity
of such copies and the accuracy and completeness of all corporate records made
available to us by the Company and BBC Capital.
Based solely on our review of such documents, and upon such information
as the Company has provided to us (which we have not attempted to verify in any
respect), and reliance upon such documents and information, we hereby adopt and
incorporate by reference the opinion set forth in the Prospectus under the
caption "Certain Federal Income Tax Consequences."
Our opinion is limited to the federal income tax matters described
above and does not address any other federal income tax considerations or any
state, local, foreign, or other tax considerations. If any of the information on
which we have relied is incorrect, or if changes in the relevant facts occur
after the date hereof, our opinion could be affected thereby. Moreover, our
opinion is based on the Internal Revenue Code of 1986, as amended, applicable
Treasury
<PAGE>
BankAtlantic Bancorp, Inc.
February 11, 1999
Page2
regulations promulgated thereunder, and Internal Revenue Service rulings,
procedures, and other pronouncements published by the United States Internal
Revenue Service. These authorities are all subject to change, and such change
may be made with retroactive effect. We can give no assurance that, after such
change, our opinion would not be different. We undertake no responsibility to
update or supplement our opinion. This opinion is not binding on the Internal
Revenue Service, and there can be no assurance, and none is hereby given, that
the Internal Revenue Service will not take a position contrary to one or more of
the positions reflected in the foregoing opinion, or that our opinion will be
upheld by the courts if challenged by the Internal Revenue Service.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name in the Prospectus
under the caption "Certain Federal Income Tax Consequences."
Very truly yours,
/s/ STEARNS, WEAVER, MILLER, WEISSLER
ALHADEFF & SITTERSON, P.A.
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED FOR THE YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
------------ ----------------------------------------------------
1998 1997 1996 1995 1994 1993
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(In Thousands)
Earnings (loss) before income taxes and
extraordinary items ........................... $ 23,897 $ 38,906 $ 29,019 $ 24,928 $ 25,233 $ 23,572
Fixed interest charges ........................... 115,068 117,048 77,637 67,087 42,491 34,427
------------ -------- -------- -------- -------- --------
Earnings (loss):
Including fixed interest charges .............. 138,965 155,954 106,656 92,015 67,724 59,999
Excluding interest expense on deposits ........ 89,285 87,723 52,010 45,369 36,078 28,201
Fixed interest charges excluding interest
expense on deposits ........................... 65,388 48,817 22,991 20,441 10,845 4,629
Ratios:
Earnings including fixed interest charges
to fixed interest charges ..................... 1.21 1.33 1.37 1.37 1.59 1.65
Earnings to fixed interest excluding
interest on deposits .......................... 1.37 1.80 2.26 2.22 3.33 6.09
Dollar deficiency of earnings to fixed
interest charges .............................. $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
============ ======== ======== ======== ======== ========
</TABLE>
EXHIBIT 23.3
ACCOUNTANTS' 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
February 9, 1999
