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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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BANKATLANTIC BANCORP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials:
[X] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $7,916.23
(2) Form, Schedule or Registration Statement No.: Schedule 13E-3
(3) Filing Party: BankAtlantic Bancorp, Inc.
(4) Date Filed: April 10, 2000
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BANKATLANTIC BANCORP, INC.
1750 EAST SUNRISE BOULEVARD
FORT LAUDERDALE, FL 33304
, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders (the
"Annual Meeting") of BankAtlantic Bancorp, Inc. (the "Company"), which will be
held at _____________________ Fort Lauderdale, Florida __________, on _________,
2000 at _______, local time.
At the Annual Meeting, we will ask (i) holders of our Class A Common Stock and
Class B Common Stock to approve the merger of BBC Sub, Inc., the Company's
wholly owned subsidiary, with and into the Company under an Amended and Restated
Agreement and Plan of Merger, dated as of March 29, 2000, between BBC Sub and
the Company and (ii) holders of our Class B Common Stock to vote upon the
election of three directors.
If the merger is approved and consummated, each share of our publicly held Class
B Common Stock will be converted into the right to receive $6.00 in cash per
share. Each share of our Class A Common Stock will remain outstanding as one
share of Class A Common Stock of the Company as the surviving corporation. The
merger will result in the redemption and retirement of all outstanding shares of
our Class B Common Stock other than shares held by BFC Financial Corporation
("BFC"). The terms of the Class A Common Stock will not be affected by the
merger.
The Board of Directors is recommending the merger because we believe it will
eliminate the complexity and market confusion caused by having two publicly
traded classes of common stock and will focus market interest on our remaining
publicly traded Class A Common Stock. The transaction will also have a positive
earnings per share impact on Class A Common Stock as a consequence of the
retirement of approximately 5 million shares of outstanding common stock.
A Special Committee of your Board of Directors, consisting of directors
independent from management and from our parent, BFC Financial Corporation,
evaluated the merits of the merger, unanimously recommended the $6.00 per share
price to be paid to the public holders of Class B Common Stock for their shares
and unanimously recommended that the Board of Directors approve the terms of the
merger. Based upon the recommendation of the Special Committee and its own
evaluation of the merits of the transaction, the Board of Directors unanimously
approved the terms of the merger and recommended that you vote FOR approval of
the merger.
The merger must be approved by the affirmative vote of the holders of at least a
majority of the outstanding shares of each of the Class A Common Stock and Class
B Common Stock, voting as separate classes. BFC, which at June 1, 2000 owned
approximately 49.8% of the outstanding Class B Common Stock and 26.2% of the
outstanding Class A Common Stock, has advised us that it intends to vote its
shares in favor of the merger.
The attached Notice of Annual Meeting of Shareholders and Proxy Statement
explain the proposed merger and provide specific information concerning the
Annual Meeting. Please read these materials (including the appendices)
carefully. You can also obtain information about us from documents we have filed
with the Securities and Exchange Commission.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN AND
PROMPTLY RETURN THE ENCLOSED PROXY CARD TO ENSURE THAT YOUR SHARES WILL BE VOTED
AT THE ANNUAL MEETING.
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On behalf of the Board of Directors, I thank you for your interest and
participation.
Sincerely,
/s/ ALAN B. LEVAN
-----------------------------------
Alan B. Levan
Chairman & Chief Executive Officer
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS: APPROVED OR DISAPPROVED THE TRANSACTION DESCRIBED IN THIS PROXY
STATEMENT; DETERMINED IF THIS PROXY STATEMENT IS ACCURATE OR COMPLETE; OR PASSED
UPON THE FAIRNESS OR MERITS OF THE TRANSACTION. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS PROXY STATEMENT IS DATED __________, 2000 AND IS FIRST BEING MAILED TO
SHAREHOLDERS ON OR ABOUT ___________, 2000.
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BANKATLANTIC BANCORP, INC.
PROXY STATEMENT FOR THE
2000 ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON ______, 2000
To the Shareholders of BankAtlantic Bancorp, Inc.:
I am pleased to give you notice of the Annual Meeting of Shareholders (the
"Annual Meeting") of BankAtlantic Bancorp, Inc. (the "Company"), which will be
held at _________________________________________, on ____________, 2000, at
_______, local time, and at any adjournment or adjournments thereof. At the
Annual Meeting, you will be asked to:
1. Consider and vote upon a proposal to approve the Amended and Restated
Agreement and Plan of Merger, dated as of March 29, 2000, between the
Company and BBC Sub, Inc., a wholly owned subsidiary of the Company,
pursuant to which, among other things BBC Sub will be merged with and
into the Company and the Company's Articles of Incorporation will be
amended in the form attached as Exhibit A to the merger agreement. As a
result of the merger, (i) each share of our Class B Common Stock will
be converted into .0000002051 of a share of Class B Common Stock of the
Company as the surviving corporation and (ii) each share of our Class A
Common Stock will remain outstanding as one share of Class A Common
Stock of the Company as the surviving corporation. No fractional shares
of Class B Common Stock will be issued in the merger and holders of
shares of Class B Common Stock who are entitled to receive less than
one whole share in the merger will instead receive $6.00 in cash for
each share of Class B Common Stock held immediately before the merger
is consummated. Approval of the merger agreement by shareholders will
also constitute the approval of the proposed amendment to the Articles
of Incorporation.
2. Elect three directors to the Company's Board of Directors who will
serve until the annual meeting in 2003.
3. Transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on _______, 2000 are
entitled to notice of, and to vote at, the Annual Meeting. The presence, either
in person or by proxy, of the holders of at least a majority of the issued and
outstanding shares of the Class B Common Stock is required to constitute a
quorum for the transaction of business at the Annual Meeting, however, the
presence, either in person or by proxy of the holders of a majority of the
issued and outstanding shares of Class A Common Stock is also required to act
with respect to approval of the Merger. The affirmative vote of the holders of a
majority of the issued and outstanding shares of each of the Class A Common
Stock and Class B Common Stock, voting as separate classes, is required to
approve the merger agreement, the affirmative vote of a plurality of the
outstanding shares of Class B Common Stock is required for the election of
directors, and the affirmative vote of the holders of a majority of the issued
and outstanding shares of the Class B Common Stock is required to approve all
other matters to be submitted for vote.
Although not required by the terms of our Articles of Incorporation or Florida
law, your Board of Directors is permitting any holder of Class B Common Stock
who does not vote in favor of the merger to dissent and to seek judicial
appraisal of the fair value of his or her shares of Class B Common Stock if the
merger is completed. In order to do so, however, holders of Class B Common Stock
must properly perfect their dissenters' rights in accordance with the procedures
under Florida law described on page 40 of the accompanying Proxy Statement.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE PAID ENVELOPE. If you sign, date and return your proxy card without
indicating how you want to vote, your proxy will be voted FOR the approval of
the merger agreement and
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will be voted in accordance with the proxy holder's best judgment as to any
other business as may properly come before the Annual Meeting. You may revoke
your proxy at any time before it is voted by submitting to the Secretary of the
Company a written revocation or a proxy bearing a later date, or by attending
the Annual Meeting and giving oral notice of your intention to vote in person.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE
NOMINEES DESCRIBED IN THE PROXY STATEMENT AND FOR APPROVAL OF THE MERGER.
By Order of the Board of Directors,
_____________, 2000 /s/ ALAN B. LEVAN
----------------------
Alan B. Levan
Chairman of the Board
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES; THEREFORE EVEN IF YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
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TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS........................................................................................9
SUMMARY TERM SHEET...............................................................................................10
WHO CAN HELP ANSWER YOUR QUESTIONS...............................................................................15
RISK FACTORS.....................................................................................................15
BFC Financial Corporation Will Possess 100% of Our Voting Rights upon Completion of the Merger..........15
The Proposed Transaction Will Increase Our Leverage.....................................................16
THE COMPANY......................................................................................................16
INFORMATION CONCERNING THE ANNUAL MEETING........................................................................16
Date, Time and Place....................................................................................16
Matters to Be Voted upon at the Annual Meeting..........................................................17
Record Date; Shares Entitled to Vote ...................................................................17
Quorum; Adjournment.....................................................................................17
Vote Required for Approval; Certain Shares Voting in Favor of the Merger................................17
Voting of Proxies.......................................................................................18
Revocability of Proxies.................................................................................18
Solicitation of Proxies.................................................................................18
SPECIAL FACTORS..................................................................................................20
Background of the Merger................................................................................20
Reasons for the Merger; Recommendation of the Special Committee and Board of Directors..................23
Fairness Opinion of Keefe Bruyette & Woods..............................................................25
Fairness Opinion of Lehman Brothers.....................................................................31
Effects of the Merger...................................................................................34
Interests of Certain Persons in the Merger; Conflicts of Interest.......................................35
Conduct of the Company's Business after the Merger......................................................36
Conduct of the Company's Business If the Merger Is Not Completed........................................36
Material Federal Income Tax Consequences of the Merger..................................................36
Fees and Expenses of the Merger; Sources of Funds.......................................................37
Dissenters' Rights......................................................................................38
PROPOSALS AT THE ANNUAL MEETING..................................................................................41
PROPOSAL ONE: THE MERGER................................................................................41
The Merger..............................................................................................41
Effective Time of the Merger............................................................................41
Conversion of Common Stock..............................................................................41
Exchange Agent; Exchange and Payment Procedures.........................................................41
Treatment of Options and Convertible Securities.........................................................42
Amendment to Articles of Incorporation..................................................................43
Conditions of the Merger................................................................................43
Termination; Amendment..................................................................................44
Accounting Treatment....................................................................................44
Management after the Merger.............................................................................44
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Charter Documents of Surviving Corporation..............................................................44
PROPOSAL TWO: ELECTION OF DIRECTORS.....................................................................45
Nominees for Election as Director.......................................................................45
Identification of Executive Officers and Significant Employees..........................................48
Directors' Fees.........................................................................................49
Director and Management Indebtedness....................................................................49
Committees of the Board of Directors and Meeting Attendance.............................................50
Timely Filing of 16(a) Reports..........................................................................50
Certain Relationships and Related Transactions .........................................................50
Summary Compensation Table..............................................................................51
Options Grants Table....................................................................................52
Aggregated Option Exercises and Year-End Option Value Table.............................................52
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION..................................................................................53
Compensation Committee Interlocks and Insider Participation.............................................53
Executive Officer Compensation..........................................................................53
Base Salary.............................................................................................53
Annual Incentive Program................................................................................53
Long-Term Incentive Plan................................................................................53
Stock Options...........................................................................................54
Compensation of the Chairman and Chief Executive Officer................................................54
Submitted by the Members of the Compensation Committee..................................................54
Retirement Benefits.....................................................................................55
Split-Dollar Life Insurance Plan .......................................................................55
Shareholder Return Performance Graph....................................................................56
Comparison of Five Year Cumulative Total Return.........................................................56
SELECTED CONSOLIDATED FINANCIAL DATA.............................................................................57
SELECTED PRO FORMA CONSOLIDATED FINANCIAL DATA
OF BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES..........................................................62
MARKET PRICE INFORMATION; DIVIDENDS..............................................................................66
Class A Common Stock....................................................................................66
Class B Common Stock....................................................................................66
Dividends...............................................................................................67
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...................................................68
DESCRIPTION OF CAPITAL STOCK.....................................................................................70
Common Stock............................................................................................70
Voting ...............................................................................................70
Dividends...............................................................................................70
Liquidation Rights......................................................................................71
Preemptive Rights.......................................................................................71
NYSE Listing............................................................................................71
Preferred Stock.........................................................................................71
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INDEPENDENT PUBLIC ACCOUNTANTS...................................................................................71
OTHER MATTERS TO BE CONSIDERED AT THE MEETING....................................................................72
WHERE YOU CAN FIND MORE INFORMATION..............................................................................72
APPENDIX A.......................................................................................................74
APPENDIX B.......................................................................................................80
APPENDIX C.......................................................................................................82
APPENDIX D.......................................................................................................84
APPENDIX E.......................................................................................................88
APPENDIX F.......................................................................................................89
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FORWARD-LOOKING STATEMENTS
The Company cautions readers that certain matters discussed in this
Proxy Statement and in the documents incorporated herein by reference include
forward-looking statements. Although not an exhaustive list, some of the
forward-looking statements can be identified by the use of words such as
"anticipate," "believe," "estimate," "plan," "intend," "expect," "will,"
"should," "seeks" and similar expressions. Forward-looking statements are based
largely on our expectations and involve inherent risks and uncertainties. A
number of important factors could cause actual results to differ materially from
those in the forward-looking statements including, but not limited to:
i. the potential adverse impact on our operations and
profitability of changes in interest rates and increased
leverage,
ii. economic conditions, both generally and particularly in areas
where we or our subsidiaries, including BankAtlantic, operate
or hold assets,
iii. interest rate and credit risk associated with BankAtlantic's
loan portfolio,
iv. BankAtlantic's recent rapid growth and increased operating
expenses,
v. our ability to manage new banking and non-banking initiatives
and investments,
vi. the highly competitive nature of our businesses,
vii. limitations on BankAtlantic's ability to pay dividends to the
Company,
viii. uncertainty relating to the realization of benefits from our
restructuring initiatives and the merger which is the subject
of this Proxy Statement, and
ix. the ability of the Company to obtain financing for the merger.
Many of these factors are beyond our control. The foregoing factors should not
be construed as exhaustive and should be read in conjunction with other
cautionary statements that are included elsewhere in this Proxy Statement and
the documents incorporated herein by reference. For a discussion of additional
factors that could cause actual results to differ, please see the discussion
under "Risk Factors" contained in this Proxy Statement and in other information
contained in our publicly available SEC filings.
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SUMMARY TERM SHEET
This summary term sheet highlights selected information from this
document and may not contain all of the information that is important to you. To
better understand the merger and for a more complete description of the terms
and conditions of the merger, you should carefully read this entire document and
its appendices and the other documents to which we refer. The actual terms of
the merger are contained in the merger agreement, which is included in this
Proxy Statement as Appendix A.
1. WHEN AND WHERE IS THE ANNUAL MEETING?
The Annual Meeting will take place on _________, 2000, at ______, local
time, at ___________. See "Information Concerning the Annual Meeting --
Date, Time and Place."
2. WHAT MATTERS WILL BE VOTED UPON AT THE ANNUAL MEETING?
At the Annual Meeting:
o the holders of the Company's Class A Common Stock and Class B
Common Stock will each consider and vote upon a proposal to
approve the merger,
o the holders of the Company's Class B Common Stock will elect
three directors to the Board of Directors of the Company, and
o the holders of the Class B Common Stock will transact such
other business as may properly come before the Annual Meeting
or any adjournment or adjournments thereof. See "Information
Concerning the Annual Meeting -- Matters to be Voted upon at
the Annual Meeting."
3. WHAT IS THE PROPOSED TRANSACTION?
We currently have two publicly traded classes of common stock.
o Our Class A Common Stock is non-voting stock which means that
a holder only has the limited statutory voting rights provided
under Florida law and does not possess any additional voting
rights. The Class A Common Stock is traded on the New York
Stock Exchange.
o Our Class B Common Stock is our only voting stock and is
traded on the Nasdaq National Market.
The merger will have the effect of eliminating the public ownership of
our Class B Common Stock. The merger agreement provides that our
wholly-owned subsidiary will merge with and into us and, as a result,
BFC Financial Corporation, which owns approximately 49.8% of our Class
B Common Stock, would be the sole holder of the Class B Common Stock.
The Class A Common Stock will continue to trade on the NYSE. Public
holders of the Class B Common Stock will receive cash for their shares.
See "Proposal One: The Merger."
4. WHAT IS THE REASON FOR THE TRANSACTION?
After review, the Board of Directors of the Company and the Special
Committee determined that having two publicly traded classes of common
stock resulted in the confusion of investors and analysts interested in
the Company and reduced liquidity in the divided markets. The Board and
the Special Committee recommended the transaction because it will
simplify the Company's capital structure and focus interest in one
market which should result in increased trading volume and liquidity.
It will also have a positive earnings per share impact on Class A
Common Stock as a result of a 5 million share decrease in our
outstanding shares. See "Special Factors -- Reasons for the Merger;
Recommendation of the Special Committee and Board of Directors."
5. WHAT WILL I RECEIVE IN THE MERGER?
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o Each public holder of Class B Common Stock will receive $6.00
in cash for each share of Class B Common Stock owned
immediately prior to the merger in lieu of the fractional
shares resulting from the merger.
o Each holder of Class A Common Stock will receive one share of
Class A Common Stock in the Company as the surviving
corporation which will have the same rights and preferences
and be identical in all other respects as our currently
outstanding Class A Common Stock.
The $6.00 cash price reflects a premium of 21% over the average closing
market price of the Class B Common Stock for the last three trading
days before we publicly announced the merger. On January 13, 2000, the
last trading day prior to the first public announcement of the merger,
the closing price per share of Class B Common Stock on the Nasdaq
National Market was $5.125. See "Proposal One: The Merger -- Conversion
of Common Stock."
6. HAS THE BOARD OF DIRECTORS RECOMMENDED THAT I VOTE FOR THE MERGER
AGREEMENT?
Your Board of Directors believes that the merger is fair to, and in the
best interests of, the Company and the holders of both the Class A
Common Stock and the Class B Common Stock. The Board of Directors
formed a Special Committee, which consisted of four directors
independent of management and BFC Financial Corporation, to evaluate
the merits of the merger and recommend the price to be paid to the
holders of Class B Common Stock who would be receiving cash for their
shares. The Special Committee unanimously recommended the $6.00 per
share price and unanimously recommended that the Board of Directors
approve the terms of the merger. The Board of Directors then
unanimously approved the transaction. For further information as to how
the Special Committee and the Board of Directors arrived at their
conclusions and the opinions that the Special Committee and the Board
of Directors received from their financial advisors, see "Special
Factors."
7. DID THE BOARD AND THE SPECIAL COMMITTEE RETAIN FINANCIAL ADVISORS?
o KEEFE, BRUYETTE & WOODS. The Special Committee retained Keefe
Bruyette & Woods, Inc. as its financial advisor in connection
with its evaluation of the merger. Keefe Bruyette delivered to
the Special Committee and the Board of Directors an opinion to
the effect that the terms of the merger are fair, from a
financial point of view, to the holders of Class A Common
Stock and Class B Common Stock. See "Special Factors --
Fairness Opinion of Keefe Bruyette & Woods."
o LEHMAN BROTHERS. The Board of Directors retained Lehman
Brothers as its financial advisor in connection with its
evaluation of the merger. Lehman Brothers delivered to the
Board of Directors an opinion to the effect that from a
financial point of view, the consideration to be paid by the
Company in the merger is fair to the Company. See "Special
Factors -- Fairness Opinion of Lehman Brothers."
We have attached as Appendices B and C to this Proxy Statement the full
text of the opinions of Keefe Bruyette and Lehman Brothers,
respectively. Each of these opinions set forth assumptions made,
matters considered and limitations on the review undertaken in
connection with each opinion. YOU SHOULD READ EACH OF THESE OPINIONS.
8. WHAT EFFECTS MAY RESULT FROM THE MERGER?
The Board expects that, immediately following the merger, the business
and operations of the Company and its subsidiaries, as they are
currently being conducted, will be continued by the Company as the
surviving
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company in the merger. The holders of Class A Common Stock and BFC
Financial Corporation will be the sole beneficiaries of any future
earnings and growth of the Company. The Public Class B Shareholders
will not benefit from any increase, and will not bear the risk of any
decrease, in the value of the Company.
As a result of the merger:
o the Class B Common Stock will cease to be listed on the Nasdaq
National Market and there will be no public market for the
Class B Common Stock,
o the Company will terminate registration of the Class B Common
Stock under the Securities Exchange Act of 1934, and
o the Class A Common Stock will continue to be listed and traded
on the New York Stock Exchange and will continue to be
registered under the Securities Exchange Act of 1934.
9. WHY WASN'T I GIVEN THE OPPORTUNITY TO EXCHANGE MY CLASS B SHARES FOR
SHARES OF CLASS A COMMON STOCK?
When the Board pursued this alternative, the Board of Directors was
advised that such an exchange offer would violate the New York Stock
Exchange's Voting Rights Policy. This Policy prohibits a company from
reducing or restricting the voting rights of existing shareholders
through any corporate action, including an offer to exchange voting
stock for non-voting stock. See "Special Factors -- Background of the
Merger."
10. DO I HAVE DISSENTERS' RIGHTS?
Although the Board of Directors believes that the $6.00 price is fair,
the Board of Directors is permitting holders of Class B Common Stock
who do not vote in favor of the merger agreement an opportunity to
dissent and seek judicial appraisal of the fair value of his or her
shares of Class B Common Stock if the merger is completed, but only if
the holder complies with all requirements of Florida law. See
"Dissenters' Rights Provisions of the Florida Business Corporation Act"
attached as Appendix D. These requirements are summarized in the
section "Special Factors - Dissenters' Rights." The appraised value of
a share as determined by a court may be more or less than $6.00.
11. DOES THE TRANSACTION INVOLVE ANY CONFLICTS OF INTEREST?
In considering the recommendation of the Special Committee and the
Board of Directors with respect to the merger, you should be aware that
certain directors and officers of the Company have interests that may
be deemed to conflict with your interests as shareholders or that are
in addition to, or different from, the interests of shareholders:
o As a result of the merger, BFC Financial Corporation ("BFC")
will own 100% of the Class B Common Stock, which will
constitute 100% of the voting rights of the Company.
o Alan B. Levan, Chairman of the Board and Chief Executive
Officer of the Company, is also Chairman of the Board and
Chief Executive Officer of BFC and may be deemed to
beneficially own 45.6% of the outstanding shares of BFC.
o John E. Abdo, a director of the Company and Vice Chairman of
the Board is also a director of BFC and Vice Chairman of its
Board and may be deemed to beneficially own 15.8% of the
outstanding shares of BFC.
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o As of June 1, 2000, members of the Special Committee owned:
o 121,570 shares of Class B Common Stock for which they
will receive payment in an aggregate amount of
$729,420 upon completion of the merger,
o 169,391 shares of Class A Common Stock,
o options to acquire an aggregate of 77,989 shares of
Class B Common Stock, each with an exercise price of
$3.39 per share, and
o options to acquire an aggregate of 178,320 shares of
Class A Common Stock.
o As of June 1, 2000, members of the Board of Directors other
than members of the Special Committee and without regard to
the shares owned by BFC Financial Corporation, owned:
o 215,183 shares of Class B Common Stock for which they
will receive payment in an aggregate amount of
$1,291,098 upon completion of merger,
o 188,405 shares of Class A Common Stock,
o options to acquire an aggregate of 789,652 shares of
Class B Common Stock, with exercise prices ranging
from $3.39 to $3.48 per share, and
o options to acquire an aggregate of 866,851 shares of
Class A Common Stock.
See "Special Factors--Interests of Certain Persons in the Merger;
Conflicts of Interest."
12. WHAT ARE THE CONDITIONS TO COMPLETING THE MERGER?
The completion of the merger is subject to various conditions,
including the following:
o approval of the merger by our shareholders,
o the absence of any injunction, statute, regulation or
proceeding which prevents or challenges consummation of the
merger,
o the availability to the Company of sufficient funds to pay all
amounts payable as a result of the merger, and
o receipt by the Company of a satisfactory opinion of counsel
with respect to the federal income tax consequences of the
merger.
13. HOW IS THE COMPANY PLANNING ON FINANCING THE MERGER?
The funds required to complete the merger and to pay related fees and
expenses are to be provided from the proceeds of:
o the Company's issuance of Subordinated Investment Notes;
o a credit facility for up to $20 million; and
o from working capital.
14. WHEN IS THE MERGER EXPECTED TO BE COMPLETED?
We are working to complete all aspects of the merger as quickly as
possible. If shareholders approve the merger at the Annual Meeting, we
currently expect the merger to be completed by _________, 2000. See
"Proposal One: The Merger."
15. WHO IS ENTITLED TO VOTE?
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Only shareholders of record at the close of business on _______, 2000,
which is the "Record Date," are entitled to notice of, and to vote at,
the Annual Meeting. However, only holders of Class B Common Stock will
be entitled to vote upon the election of directors or other matters
which may come before the Annual Meeting. Holders of Class A Common
Stock will not be entitled to vote upon the election of directors or on
other matters which may arise at the meeting except in limited cases
required by law.
16. WHAT SHAREHOLDER VOTE IS REQUIRED TO APPROVE THE MERGER AGREEMENT AND
TO ELECT DIRECTORS?
o The merger must be approved by the affirmative vote of the
holders of a majority of the outstanding shares of each of the
Class A Common Stock and Class B Common Stock, voting as
separate classes.
o Nominees for director who receive a plurality of the votes of
Class B Common Stock cast will be elected.
BFC Financial Corporation, which owns approximately 49.8% of the
outstanding Class B Common Stock and over 26.2% of the outstanding
Class A Common Stock, has advised us that it intends to vote its shares
in favor of the approval of the merger and for the nominees endorsed by
the Board of Directors. See "Information Concerning the Annual Meeting
-- Vote Required for Approval; Certain Shares Voting in Favor of the
Merger." The merger is not structured so that approval of at least a
majority of unaffiliated shareholders is required.
17. WHAT DO I NEED TO DO NOW?
First, read this Proxy Statement carefully. Then, you should complete,
sign and mail your proxy card in the enclosed return envelope as soon
as possible. If your shares are held by a broker as nominee, you should
receive a proxy card from your broker. See "Information Concerning the
Annual Meeting."
18. MAY I CHANGE MY VOTE AFTER I HAVE MAILED IN MY SIGNED PROXY CARD?
Yes. To change your vote you can:
o send in a later-dated, signed proxy card or a written
revocation to our solicitation agent, Georgeson Shareholder
Communications, Inc. before the Annual Meeting, or
o attend the Annual Meeting and give oral notice of your
intention to vote in person.
You should be aware that simply attending the Annual Meeting will not
in and of itself constitute a revocation of your proxy. See
"Information Concerning the Annual Meeting--Revocability of Proxies."
19. SHOULD I SEND IN MY STOCK CERTIFICATES NOW?
No. If the merger is completed, you will receive written instructions
on how to exchange your shares of Class B Common Stock for the merger
consideration. Holders of certificates for shares of Class A Common
Stock will not need to exchange their certificates as a result of the
merger. See "Proposal One: The Merger--Exchange Agent; Exchange and
Payment Procedures."
20. IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER
VOTE MY SHARES FOR ME?
Your broker will vote your shares only if you provide written
instructions on how to vote. You should follow the directions provided
by your broker regarding how to instruct your broker to vote your
shares. See "Information Concerning the Annual Meeting--Voting of
Proxies."
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21. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER?
The merger will be a taxable transaction to holders of Class B Common
Stock who receive cash in the transaction. The gain or loss per share
of each Class B shareholder will equal the difference between $6.00 and
the shareholder's basis in the share of Class B Common Stock. The
merger will not be a taxable transaction to the holders of Class A
Common Stock and such holders will maintain the same basis in their
shares after the merger is completed. You should consult your tax
advisor for a full understanding of the tax consequences of the merger.
See "Special Factors -- Federal Income Tax Consequences of the Merger."
22. WHAT WILL HAPPEN TO THE COMPANY'S STOCK OPTIONS AND CONVERTIBLE
DEBENTURES?
Outstanding options to purchase Class A Common Stock will remain
exercisable for the same number of shares of Class A Common Stock of
the Company as the surviving corporation for the same exercise price
and upon the same terms as in effect before the merger. Likewise, the
Company's 6-3/4% Convertible Subordinated Debentures due 2006 and
5-5/8% Convertible Subordinated Debentures due 2007 will remain
convertible into the same number of shares of Class A Common Stock of
the Company as the surviving corporation at the same conversion price
and upon the same terms as in effect before the merger. Pursuant to the
merger agreement, all outstanding options to acquire Class B Common
Stock will automatically be exchanged for options to acquire Class A
Common Stock on a basis which preserves the intrinsic value of the
option on the effective date of the merger. The options will otherwise
be on substantially the same terms and conditions as the former options
to purchase shares of Class B Common Stock, including vesting and term.
The Board of Directors determined that it was in the Company's best
interest to provide for the exchange pursuant to the merger because of
the benefits associated with providing incentives to employees through
continued option holdings. While the Company was not permitted under
NYSE rules and regulations to provide for the conversion of shares of
Class B Common Stock into Class A Common Stock in the merger, the NYSE
has indicated that providing for the exchange of Class B options into
Class A options in the merger would not violate the NYSE's Voting
Rights Policy. See "The Merger - Treatment of Options and Convertible
Securities."
WHO CAN HELP ANSWER YOUR QUESTIONS?
If you have any questions concerning the merger or the Annual Meeting,
if you would like additional copies of the Proxy Statement or if you will need
special assistance at the meeting, please call our solicitation agent, Georgeson
Shareholder Communications, Inc. at (800) 223-2064 or our Corporate
Communications office at (954) 760-5402. The summary information provided above
in "question and answer" format is for your convenience only and is merely a
brief description of material information contained in this Proxy Statement. YOU
SHOULD CAREFULLY READ THIS PROXY STATEMENT (INCLUDING THE APPENDICES) IN ITS
ENTIRETY.
RISK FACTORS
In evaluating the merger, shareholders should carefully consider the
following factors, in addition to the other information contained or
incorporated by reference in this Proxy Statement.
BFC FINANCIAL CORPORATION WILL POSSESS 100% OF OUR VOTING RIGHTS UPON
COMPLETION OF THE MERGER
The merger will result in BFC Financial Corporation increasing its
voting power in the Company from approximately 49.8% to 100%. Even though BFC is
currently in a position, through its ownership of the Class B Common Stock, to
effectively control the Company and elect a majority of the board of directors,
the merger will place BFC in a position of close to complete control of the
Company. Holders of Class A Common Stock will continue to be permitted to vote
their shares only on those limited matters where Florida law requires that all
shares be entitled to vote.
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THE PROPOSED TRANSACTION WILL INCREASE OUR LEVERAGE
At March 31, 2000, we had approximately $292.1 million of indebtedness
outstanding and approximately $240.6 million of stockholders' equity. We filed a
Registration Statement with the Securities and Exchange Commission relating to
an offering of up to $150 million of Investment Notes which are currently being
offered for sale to the public. We currently anticipate that between $25 million
and $50 million of Investment Notes will be outstanding at any one time. We used
a portion of the proceeds of the sale of the Investment Notes to repurchase $25
million in principal amount of our outstanding 5-5/8% Convertible Subordinated
Debentures due 2007 in a recently completed tender offer. While the terms of the
Investment Notes will be determined from time to time, Investment Notes issued
to date have a maturity date between February 28, 2002 and June 30, 2002, and
bear interest at a rate ranging from 10% to 11.75% per annum. We intend to
finance the merger through (i) the issuance of additional Investment Notes, (ii)
from a $20 million revolving line of credit with a floating interest rate equal
to the prime rate minus 50 basis points and a maturity date three years from the
date of issuance and (iii) with funds available from working capital. The effect
of the transaction will be to increase the Company's indebtedness and decrease
the Company's stockholders equity. Increased leverage poses risks to operations
including the risk that cash flow will not be sufficient to service outstanding
debt and that additional financing or refinancing may be unavailable.
Utilization of cash flow for the purpose of servicing debt also limits its
availability for other purposes.
THE COMPANY
We are a Florida-based savings bank holding company which owns
BankAtlantic, a federally-chartered, federally-insured savings bank.
BankAtlantic, organized in 1952, provides traditional retail banking services
and a full range of commercial banking products and related financial services
through 68 branch offices located primarily in Miami-Dade, Broward, and Palm
Beach Counties in South Florida and in the Tampa Bay area. BankAtlantic's
activities include: (i) attracting checking and savings deposits from the public
and general business customers, (ii) originating commercial real estate and
business loans, residential real estate loans and consumer loans, (iii)
purchasing wholesale residential loans from third parties and (iv) making other
permitted investments such as investments in mortgage-backed securities, tax
certificates and other investment securities. BankAtlantic is regulated and
examined by the Office of Thrift Supervision and the Federal Deposit Insurance
Corporation (the "FDIC").
Although our primary activities relate to the banking activities of
BankAtlantic, our other activities include (i) providing investment banking
services, capital raising and advisory services to the financial services
industry through our subsidiary, Ryan Beck & Co., and (ii) engaging in real
estate development and investment activities through our subsidiary, Levitt
Corporation. Ryan Beck, an investment bank whose activities include
underwriting, distributing and trading tax-exempt and financial institution
securities, was acquired by the Company in 1998. Levitt Corporation (formerly
known as BankAtlantic Development Corporation) currently owns St. Lucie West
Holding Corp., a developer of a master planned residential, commercial and
industrial community in St. Lucie County, Florida. Levitt Corporation has
several other investments in real estate development projects in South Florida
and, in December 1999, acquired Levitt and Sons, a developer of single-family
home communities, condominiums and rental apartment complexes.
INFORMATION CONCERNING THE ANNUAL MEETING
DATE, TIME AND PLACE
This Proxy Statement is being delivered to the Company's shareholders
in connection with the solicitation of proxies to be voted at the Annual Meeting
to be held on ___________, 2000 at _____ am, local time, at _________________ .
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<PAGE> 17
MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING
At the Annual Meeting, (i) the holders of the Company's Class A Common
Stock and Class B Common Stock, voting as separate classes, will each consider
and vote upon a proposal to approve the merger, (ii) the holders of the
Company's Class B Common Stock will elect 3 directors to the Board of Directors
of the Company, and (iii) the holders of the Company's Class B Common Stock will
transact such other business as may properly come before the Annual Meeting or
any adjournment or adjournments thereof.
RECORD DATE; SHARES ENTITLED TO VOTE
The Board of Directors has set the close of business on ____________,
2000 as the Record Date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting. At the Annual Meeting, each share of Class
B Common Stock outstanding on the Record Date will be entitled to one vote on
all matters submitted for vote at the Annual Meeting and each share of Class A
Common Stock will be entitled to one vote on the approval of the merger. As of
the Record Date, there were approximately _____ holders of record of Class A
Common Stock and _____ shares of Class A Common Stock issued and outstanding and
_____ holders of record of Class B Common Stock and ____ shares of Class B
Common Stock issued and outstanding.
QUORUM; ADJOURNMENT
The presence, either in person or by proxy, of the holders of at least
a majority of the issued and outstanding shares of the Class B Common Stock is
required to constitute a quorum for the transaction of business at the Annual
Meeting, however, the presence, either in person or by proxy of the holders of a
majority of the issued and outstanding shares of Class A Common Stock is also
required to act with respect to approval of the Merger. Abstentions are counted
for purposes of determining whether a quorum exists for the transaction of
business. Broker nonvotes, which are described in more detail below, are also
counted as shares present or represented at the Annual Meeting for purposes of
determining whether a quorum exists.
VOTE REQUIRED FOR APPROVAL; CERTAIN SHARES VOTING IN FAVOR OF THE MERGER
Nominees for director who receive a plurality of the votes of Class B
Common Stock cast in person or by proxy at the Annual Meeting will be elected
directors of the Company; accordingly, abstentions and broker non-votes will not
affect the outcome of the election.
The holders of Class A Common Stock and Class B Common Stock are
entitled to vote on the merger agreement as separate voting groups. Approval of
the merger agreement requires the affirmative vote of the holders of (i) a
majority of all shares of Class A Common Stock outstanding and entitled to be
voted on the merger agreement and (ii) a majority of all shares of Class B
Common Stock outstanding and entitled to be voted on the merger agreement. For
the purposes of this vote, a failure to vote, a vote to abstain and a broker
non-vote will each have the same legal effect as a vote cast AGAINST approval of
the merger agreement.
As of the Record Date, BFC Financial Corporation owned an aggregate of
approximately ___________ shares of Class B Common Stock, representing
approximately 49.8% of the issued and outstanding shares of the class, and
approximately 8,296,890 shares of Class A Common Stock, representing
approximately 26.2% of the issued and outstanding shares of the class. BFC has
indicated that it intends to vote all of its shares in favor of the merger and
for the election of the nominees endorsed by the Board. In addition, as of the
Record Date, directors and executive officers of the Company beneficially owned
(excluding currently exercisable options and shares held by BFC), an aggregate
of approximately 462,920 shares of Class A Common Stock and 383,244 shares of
Class B Common Stock, representing approximately 1.5% and 3.9% of the issued and
outstanding shares of each class, respectively. The Company believes that all of
the directors and executive officers of the Company currently intend to vote all
of their shares in favor of the merger and for the election of the nominees
endorsed by the Board.
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<PAGE> 18
VOTING OF PROXIES
Shares represented by a properly executed proxy that is received on or
before the date of the Annual Meeting, and not subsequently revoked, will be
voted at the Annual Meeting or any adjournment or postponement in the manner
directed on the proxy card. All shares represented by a properly executed proxy
on which no choice is specified will be voted by the persons named on the proxy,
to the extent applicable (i) FOR approval of the Merger Agreement, (ii) FOR the
election to the Board of Directors of those nominees endorsed by the Board of
Directors, and (iii) in accordance with the proxy holder's best judgment as to
any other business as may properly come before the Annual Meeting. Shares
represented by proxies voting for the approval of the merger agreement will be
voted for any proposal to adjourn the Annual Meeting for the purpose of
soliciting additional proxies for a shareholder vote on the proposal. Shares
represented by proxies voting against the approval of the merger agreement will
be voted against a proposal to adjourn the Annual Meeting for the purpose of
soliciting additional proxies.
Brokers who hold shares in "street name" for customers are precluded
from exercising voting discretion with respect to the approval of non-routine
matters such as the proposal to approve the merger agreement (so called "broker
non-votes"). Accordingly, absent specific instructions from the beneficial owner
of such shares, brokers are not empowered to vote such shares with respect to
the approval of the merger agreement. Since the affirmative vote of the holders
of a majority of the shares of each of the Class A Common Stock and Class B
Common Stock outstanding and entitled to vote is required for approval of the
merger agreement, a "broker non-vote" will have the same effect as a vote
against the merger agreement. Under the rules of the New York Stock Exchange,
absent instructions from the beneficial owners, brokers who hold shares in
street name for beneficial owners do have the authority to vote for the election
of directors.
Other than the election of directors and the merger, the Company's
management is not aware of any matters which may come before the Annual Meeting.
If any other matters are properly presented to the Annual Meeting for action, it
is intended that the persons named in the enclosed form of proxy and acting
thereunder vote in accordance with their best judgment on such matters.
REVOCABILITY OF PROXIES
Any shareholder of record who has given a proxy may revoke it by
attending the Annual Meeting and giving oral notice of his or her intention to
vote in person. In addition, any proxy may be revoked at any time prior to the
Annual Meeting by delivering to the Secretary of the Company a written statement
revoking it or by delivering a duly executed proxy bearing a later date.
Attendance at the Annual Meeting by a shareholder who has executed and delivered
a proxy to the Company will not in and of itself constitute a revocation of that
proxy. A Class B Shareholder who votes in favor of the merger agreement will not
have the right to dissent from and seek an appraisal of his or her shares of
Class B Common Stock.
SOLICITATION OF PROXIES
The Company will bear the cost of its solicitation of proxies. Proxies
will be solicited initially by mail. Further solicitation may be made by
directors, officers and employees of the Company and its subsidiaries
personally, by telephone or otherwise, but such persons will not be specifically
compensated for such services, although they may be reimbursed for out-of-pocket
expenses incurred in connection therewith. Upon request, the Company will
reimburse brokers, dealers, banks or similar entities acting as nominees for
reasonable expenses incurred in forwarding copies of the proxy materials
relating to the Annual Meeting to the beneficial owners of shares of Class A
Common Stock and Class B Common Stock.
The Company has retained Georgeson Shareholder Communications, Inc. to
assist it in soliciting proxies from shareholders. Georgeson Shareholder
Communications, Inc. will receive a fee of approximately $10,000 as compensation
for its services and reimbursement of its out-of-pocket expenses.
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<PAGE> 19
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED PROXY CARD PROMPTLY
SO YOUR SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING
IN PERSON.
HOLDERS OF CLASS B COMMON STOCK SHOULD NOT SEND ANY CERTIFICATES
REPRESENTING COMMON STOCK WITH THEIR PROXY CARD. IF THE MERGER IS CONSUMMATED,
HOLDERS OF CLASS B COMMON STOCK WILL RECEIVE WRITTEN INSTRUCTIONS ON HOW TO
EXCHANGE THEIR SHARES FOR THE MERGER CONSIDERATION.
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<PAGE> 20
SPECIAL FACTORS
BACKGROUND OF THE MERGER
The Company initially issued shares of Class A Common Stock in March,
1996 through an underwritten public offering of approximately 1.3 million
shares. Additional shares were subsequently issued through a series of stock
dividends of Class A Common Stock to the holders of both Class A Common Stock
and Class B Common Stock. In November 1997, the Company issued an additional
three million shares of Class A Common Stock in an underwritten public offering.
The Class A Common Stock, which was initially listed on the Nasdaq National
Market, commenced trading on the NYSE on August 20, 1997.
Accordingly, at June 1, 2000, the Company had two classes of publicly
traded common stock, the Class A Common Stock with 31,633,138 outstanding shares
traded on the NYSE and the Class B Common Stock with 9,786,896 outstanding
shares traded on Nasdaq.
The principal reason for the creation of the second class of common
stock was to enable the Company to issue equity securities for raising capital,
making acquisitions and compensating employees without significantly diluting
the voting power of the holders of Class B Common Stock. At the time of the
creation of the Class A Common Stock, the Company identified BFC Financial
Corporation as the Company's controlling shareholder and the Board of Directors
determined that it was in the best interest of the Company to eliminate customer
concerns about control of the institution and its stability and that continuity
of management and operations would assist the Company toward achieving the
Company's long term goals.
During the last quarter of 1999, the trading price of both the Class A
Common Stock and Class B Common Stock fell significantly. In reaction, the Board
of Directors of the Company began consideration of a buyback of shares of the
Company's outstanding common stock. In connection with its review of market
considerations and the potential benefits to the Company and its shareholders of
share repurchases, management had conversations with a number of investment
banking firms and analysts. In those conversations, issues were identified
relating to the relatively low volume of trading in both classes of common
stock, confusion in the market relating to the two classes and the dilution of
market interest between the two trading markets. As a consequence of the issues
raised, the Company approached Lehman Brothers for assistance.
Upon review by the Board of Directors, it was determined that the
holders of both classes of common stock were adversely impacted by having two
publicly traded common equity securities resulting from both the confusion of
investors and analysts interested in the Company and reduced liquidity in the
markets, particularly for the Class B Common Stock.
At a December 22, 1999 Board of Directors meeting, the Board discussed
a possible repurchase of shares of common stock. The possibility of a tender
offer for the Class B Common Stock was discussed with the potential benefits of
simplifying the capital structure and enhancing earnings per share identified as
appropriate goals.
Because the repurchase of Class B Common Stock would increase the
percentage of voting rights held by BFC, the Board discussed and determined the
appropriateness of establishing a Special Committee comprised of independent
outside directors. Mr. DiGiulian agreed to Chair the Special Committee. The
Board also passed a resolution authorizing Mr. Levan to pursue the negotiation
of the engagement of Lehman Brothers.
Following the December 22, 1999 Board meeting, Mr. DiGiulian took steps
to form the Special Committee and began the process of retaining independent
legal and financial advisors for the Special Committee. Mr. DiGiulian invited
the law firm of Battle, Fowler LLP and the investment banking firm of Keefe
Bruyette & Woods ("Keefe Bruyette") to the December 29, 1999 meeting.
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<PAGE> 21
On December 29, 1999, the Board of Directors met again for the purpose
of exploring a possible transaction. Also present at the meeting were
representatives of Lehman Brothers, Keefe Bruyette and Battle Fowler LLP, as
well as counsel to the Company.
The Board discussed the impact on the trading price of the common stock
of the two class capital structure, the two public trading markets and the
bifurcation of investor interest. After discussion, the Board preliminarily
concluded that a transaction should be pursued which would address these issues.
The Board considered various alternative transactions that could adequately
address these issues. The Board asked whether a merger transaction could be
structured so that Public Class B Shareholders would have the choice of
receiving cash or shares of Class A Common Stock in exchange for their Class B
Common Stock. The Board was advised by counsel that the Company had proposed
this structure to the NYSE and had been advised that such an exchange offer
would violate the NYSE's Voting Rights Policy. The Board was also advised by
counsel that such an exchange offer would also violate Nasdaq's Voting Rights
Policy. Violating this policy could result in the disqualification and delisting
of the Class A Common Stock on the NYSE. The possibility of a tender offer for
the outstanding Class B Common Stock was also discussed. The Board determined
that a tender offer would not have addressed the issue of two public trading
markets because a tender offer is voluntary and would not have resulted in the
repurchase of all publicly held shares of Class B Common Stock. The Board
decided that if the tender offer was only to be the first step in a transaction
to eliminate one of the public markets, it would be more efficient to address
the issue in a single transaction through a cash-out merger. Accordingly, it was
decided to pursue consideration of a cash-out merger of the Company's publicly
held Class B Common Stock at a price which was fair to holders of both the Class
A Common Stock and Class B Common Stock.
The potential benefits of the proposed transaction were identified as:
o simplification of the capital structure;
o moving to one public trading market;
o strengthening of the volume for and interest in the Class A
Common Stock; and
o the positive EPS impact resulting from a decrease in
approximately 5 million outstanding shares.
The Board then passed a resolution formally establishing a Special
Committee comprised of Bruno DiGiulian as Chair, Mary E. Ginestra, Steve M.
Coldren and Charlie C. Winningham, II. The Special Committee was charged with
evaluating the Company's proposed transaction, including the fairness of the
structure and the material terms and conditions of the transaction and the
consideration to be paid to the Public Class B Shareholders, and making a
recommendation to the Board of Directors as to whether to proceed with the
Company's proposed transaction and as to the price at which the Company should
reacquire the shares held by the Public Class B Shareholders. Lehman Brothers
then made a presentation to the Board regarding its proposed role in the
transaction and its background and credentials to advise the Board. Following
that presentation, the Board formally engaged Lehman Brothers as its investment
advisor.
Immediately following the Board meeting, the Special Committee held its
initial meeting, at which time the Special Committee, after due consideration of
their backgrounds and credentials, made a determination to retain Keefe Bruyette
as the financial advisor to the Special Committee, and Battle Fowler LLP as
legal counsel to the Special Committee. The Special Committee members noted that
neither of these firms had previously provided services to the Company. The
Special Committee also discussed with legal counsel the nature of the fairness
opinion that Keefe Bruyette would be asked to render and the role and legal
duties of the Special Committee in evaluating and, if appropriate, recommending
a transaction to the Board.
On January 7, 2000, the Special Committee and the full Board met
jointly for the purpose of hearing a presentation by Keefe Bruyette. Keefe
Bruyette identified the methodologies used to develop a preliminary range of
values of between $5.80 and $6.20 per share for the Class B Common Stock held by
Public Class B Shareholders and concluded that it would be possible to select a
price to be paid for the outstanding publicly held Class B Common Stock.
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<PAGE> 22
After joint questions of the Board and Special Committee were entertained, the
Board meeting was adjourned and the members of the Special Committee continued
to meet with Keefe Bruyette.
On January 10, 2000, a joint meeting of the Special Committee and the
full Board was held for the purpose of hearing a presentation by the Company's
financial advisor, Lehman Brothers. Lehman Brothers first described for the
Board the methodologies to be used by Lehman Brothers in considering the
fairness to the Company of the consideration to be paid to the Public Class B
Shareholders. These included a peer group analysis, an analysis of recent going
private transactions where a control group already existed, a discounted cash
flow analysis based on an excess equity methodology and an analysis of the pro
forma impact of the transaction on the Company's earnings per share, book value,
return on equity and capitalization. The valuations resulting from each analysis
were identified and the preliminary price range identified in the Keefe Bruyette
presentation of between $5.80 and $6.20 was identified as being within the range
of each of the methodologies considered by Lehman Brothers.
Lehman Brothers then identified a number of expected advantages of the
Company's proposed transaction which would justify the use of corporate
resources, including:
o the Public Class B Shareholders would receive a premium over
the then current market price but, even at that price, the
transaction would still be accretive to earnings per share;
o the market would be more receptive to a simplified capital
structure; and
o moving to one trading market should concentrate all trading
volume and interest in the remaining publicly traded class of
stock.
The negative impact on the Company's tangible capital ratio was
specifically discussed but it was noted that while the transaction would reduce
this ratio, the result was not expected to be perceived as unduly adverse and
based on available information would be addressed by the Company's expected
future results of operations and the contemplated tender offer for certain of
the Company's outstanding Convertible Debt.
The possibility of granting limited voting rights to the holders of
Class A Common Stock was discussed but given the complexity of the possible
structure and regulatory timing issues, it was decided not to condition any
transaction on resolving this issue.
The Board meeting was then adjourned so that the Special Committee
could meet separately with its legal and financial advisors.
On January 12, 2000, the Special Committee met to receive the
recommendation and fairness opinion of Keefe Bruyette. Representatives of Keefe
Bruyette reviewed again for the members of the Special Committee the analyses
they had performed with respect to the Company's proposed transaction and
advised the Special Committee that they had concluded that a price of $6.00 per
share of Class B Common Stock would be fair from a financial point of view to
both the holders of Class A Common Stock and Class B Common Stock. The members
of the Special Committee discussed with Keefe Bruyette its report in detail and,
after further discussion, unanimously voted to recommend to the Board of
Directors that the Company proceed with the Company's proposed transaction at
the price specified by Keefe Bruyette. Immediately following this meeting, the
members of the Special Committee met with the entire Board and Mr. DiGiulian
reported to the Board the recommendation of the Special Committee. At the
request of Mr. DiGiulian, Keefe Bruyette summarized its report and
recommendation for the entire Board. After further discussion and questions, the
Board agreed to meet on the following day to act on a proposal to approve the
Company's proposed transaction.
At a joint meeting of the Board of Directors and Special Committee held
on January 13, 2000, Keefe Bruyette reiterated its opinion that the $6.00 price
to be received by the Public Class B Shareholders is fair from a financial point
of view to the holders of both the Class A Common Stock and Class B Common Stock
and again reviewed the expected benefits to the Company from completing the
Company's proposed transaction.
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<PAGE> 23
Lehman Brothers then made a presentation to the Board reaffirming the
information previously provided the Board and reviewed the qualitative potential
benefits to the Company of the Company's proposed transaction. After concluding
their presentation, Lehman Brothers rendered its oral opinion that the
consideration to be paid in connection with the transaction is fair to the
Company from a financial point of view.
Counsel to the Company summarized the terms of the merger agreement
and, although not required by Florida law or the Company's Articles of
Incorporation, based on the Board's determination to grant such rights to the
Public Class B Shareholders, reviewed the dissenters' rights to be granted
Public Class B Shareholders in the transaction. Counsel also discussed the
treatment of outstanding options.
Thereafter, the Board of Directors determined that the Company's
proposed transaction was consistent with the long-term business strategy of the
Company and was in the best interests of the holders of the Class A Common Stock
and the holders of the Class B Common Stock, approved the transaction and merger
agreement, recommended that the Company's shareholders approve the merger and
directed that the merger be submitted for the approval of the holders of Class A
Common Stock and Class B Common Stock, each voting as a separate class.
The merger agreement was executed on January 13, 2000 and promptly
thereafter the Company issued a press release announcing the proposed merger.
On March 29, the merger agreement was amended to provide that holders
of outstanding options to acquire Class B Common Stock will, pursuant to the
terms of the merger, receive options to acquire Class A Common Stock based on
the intrinsic value of the Class B options on the date of the merger.
REASONS FOR THE MERGER; RECOMMENDATION OF THE SPECIAL COMMITTEE AND BOARD
OF DIRECTORS
The Special Committee unanimously concluded that the terms of the
merger, including the $6.00 per share price to be paid to the Public Class B
Shareholders, are fair to and in the best interest of the holders of the Class A
Common Stock and the holders of the Class B Common Stock and recommended that
the Board of Directors approve the terms of the merger. The Board of Directors,
following the recommendation of the Special Committee and its evaluation of the
terms of the merger, unanimously concluded that the terms of the merger are fair
to and in the best interests of the Company and its shareholders, approved and
adopted the merger agreement and unanimously recommended its approval by
shareholders.
The following factors were considered by the Special Committee in
reaching its determinations described above and by the Board of Directors in
reaching its decision to approve and adopt the merger agreement and recommend
that shareholders approve the merger agreement. The following discussion of
factors considered by the Special Committee and the Board of Directors is not
intended to be exhaustive but summarizes all material factors considered.
Throughout their deliberations, the Special Committee and the Board of Directors
received the advice of their respective financial and legal advisors.
o The current and historical market prices and trading volume of
the Class A Common Stock and Class B Common Stock.
o The merger would simplify the Company's capital structure by
moving from two publicly traded classes of common stock to one
publicly traded class. The Class A Common Stock, as the only
publicly traded class, would then potentially benefit from a
more focused market which should result in increased trading
volume and liquidity. The Special Committee and the Board
concluded that having two publicly-traded classes of common
stock confuses investors, creates additional complexity for
investors interested in the Company and reduces liquidity in
both classes of common stock due to bifurcated market
interest. In addition, it was believed that analyst and
research coverage of the Company is light due in large part to
the Company's complex capital structure.
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<PAGE> 24
o The fact that the $6.00 per share price to be paid to Public
Class B Shareholders represented a premium of 21% over the
average closing market price of the Class B Common Stock for
the three trading days before the public announcement of the
merger.
o The merger will have a positive earnings per share impact
resulting from a decrease in approximately 5 million
outstanding shares.
o The book value of the Company's Common Stock.
o The availability of dissenters' rights to Public Class B
Shareholders.
o The opinions of Keefe Bruyette and Lehman Brothers regarding
the fairness of the merger. The Special Committee and the
Board reviewed the independent financial analyses performed by
Keefe Bruyette and the conclusions reached based on these
analyses and found them to be reasonable. The Board also
reviewed the independent financial analyses performed by
Lehman Brothers and found its conclusions to be consistent
with those of Keefe Bruyette.
The Special Committee and the Board evaluated the advantages and opportunities
of the merger in light of certain risks or other considerations associated with
the merger, including the following:
o As a result of cashing out the shares held by Public Class B
Shareholders, BFC would control 100% of the Company's voting
securities. However, the Special Committee believed that BFC's
then current holdings of approximately 47.5% of the
outstanding shares of Class B Common Stock provided it with
effective control over the Company and, as such, the merger
would not result in a change in control of the Company.
o The Special Committee and the Board also considered that Alan
B. Levan, Chairman of the Board and Chief Executive Officer of
the Company, is also Chairman of the Board and Chief Executive
Officer of BFC and beneficially owns 45.6% of the outstanding
shares of BFC, and that John E. Abdo, a director of the
Company and Vice Chairman of the Board, is also a director of
BFC and Vice Chairman of its board and beneficially owns 15.8%
of the outstanding shares of BFC.
o Consummation of the merger would eliminate the opportunity of
the Public Class B Shareholders to participate in any
potential future increase in value of the Company or the
payment of any dividends. It was also considered that the
stock price like the trading prices of most financial
institution stock was trading at historically low levels.
However, the Special Committee and the Board considered that
the $6.00 per share price to be paid to Public Class B
Shareholders represented a significant premium over the then
current market price and that the premium should compensate
the Public Class B Shareholders for any potential lost
opportunity as well as for the relatively low market price of
the Class B Common Stock. In addition, the Special Committee
and the Board considered that the continued listing of the
Class A Common Stock on the NYSE would provide an opportunity
for any investor wishing to do so to participate as an equity
holder in the Company after the merger.
o The negative impacts of the merger on the Company's tangible
capital ratio and the increased leverage of the Company from
the issuance of the Investment Notes and other borrowings was
considered. The tangible capital ratio, which was 4.44% at
December 31, 1999, would decline to 3.61% on a pro forma basis
on that date after giving effect to the merger and completion
of the Debenture tender offer. The Special Committee and the
Board determined that the reduction in the tangible capital
ratio was not likely to be perceived as unduly adverse and
that these risks were expected to be addressed by the
Company's anticipated future results of operations.
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<PAGE> 25
In reaching its determinations, the Board of Directors also considered
the recommendation of the Special Committee, which, in the view of the Board of
Directors, supported its conclusion.
In considering the fairness of the merger, the Special Committee and
the Board of Directors did not consider the Company's liquidation value because
they believed that it was not a material indicator of the Company's value as a
going concern.
In addition, Alan B. Levan, John E. Abdo and BBC Sub (through its sole
director) reasonably believe that the terms of the merger, including the $6.00
per share price to be paid to the Public Class B Shareholders, are fair to the
Public Class B Shareholders and the holders of Class A Common Stock. Their
belief was based upon their participation in all the meetings of the Company's
Board of Directors at which the merger was considered and their consideration of
all of the factors discussed above. Further, while BFC was not involved in
either the structure of the transaction or in determining the $6.00 price per
share, BFC also reasonably believes that the terms of the merger, including the
$6.00 per share price to be paid to the Public Class B Shareholders, are fair to
the Public Class B Shareholders and the holders of Class A Common Stock. BFC's
belief was based upon its concurrence with the factors discussed above which
were presented and explained to BFC's Board of Directors by Messrs. Levan and
Abdo and its review of the reports prepared by Keefe Bruyette and Lehman
Brothers. The reports prepared by Keefe Bruyette and Lehman Brothers were not
prepared for or presented to BFC and BFC did not seek the advice of a financial
advisor.
The members of the Special Committee and the Board of Directors
(including Alan B. Levan and John E. Abdo), BBC Sub and BFC evaluated the
various factors considered in light of their knowledge of the business,
financial condition and prospects of the Company, and, as indicated, sought and
considered the advice of independent financial and legal advisors. Because of
the number and variety of factors that these parties considered in connection
with their evaluation of the merger, neither the Board of Directors nor the
Special Committee nor Messrs. Levan and Abdo and BBC Sub and BFC found it
practicable to quantify or otherwise assign relative weights to any of the
foregoing factors, and, accordingly, none of them did so.
The affirmative vote of the holders of a majority of unaffiliated
shareholders will not be required to approve the merger agreement but the
affirmative vote of the holders of at least a majority of all of the outstanding
shares of Class A Common Stock and Class B Common Stock, voting as separate
classes will be required. BFC Financial Corporation owns approximately 49.8% of
the outstanding Class B Common Stock and approximately 26.2% of the outstanding
Class A Common Stock and has indicated that it will vote all of its shares in
favor of the merger agreement.
FAIRNESS OPINION OF KEEFE BRUYETTE & WOODS
On December 30, 1999, a Special Committee of the Board of Directors
engaged Keefe Bruyette to serve as financial advisor to the Special Committee
and to render an opinion to the Special Committee and the Board of Directors as
to the fairness, from a financial point of view, to the Company's Class A and
Class B Shareholders, of the consideration of $6.00 per share (the
"Consideration") to be paid by the Company in the acquisition of the Public
Class B Shares.
Keefe Bruyette is a nationally recognized securities and investment
banking firm engaged in, among other things, the evaluation of banking and
financial service businesses and their securities in connection with mergers and
acquisitions, leveraged buyouts, negotiated underwritings, competitive bidding,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. Keefe Bruyette was
selected by the Special Committee based upon this expertise, the reputation of
Keefe Bruyette in investment banking and mergers and acquisitions, Keefe
Bruyette's expertise in providing financial advisory services to banking
institutions and the banking industry generally, and Keefe Bruyette's ability to
provide an independent arms length opinion.
On April 6, 2000, Keefe Bruyette delivered its opinion that the
consideration of $6.00 per share to be paid by the Company in the proposed
transaction is fair, from a financial point of view, to the Company's Class A
and Class B
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<PAGE> 26
shareholders. The full text of Keefe Bruyette's written opinion is attached as
Appendix B to this document and is incorporated herein by reference.
Shareholders are urged to read the opinion in its entirety for a description of
the procedures followed, assumptions made, matters considered, and
qualifications and limitations on the review undertaken by Keefe Bruyette in
connection therewith. Keefe Bruyette reconfirmed its opinion concurrently with
the mailing of this proxy statement.
KEEFE BRUYETTE'S OPINION IS DIRECTED TO THE SPECIAL COMMITTEE OF THE BOARD OF
DIRECTORS AND THE BOARD OF DIRECTORS AND ADDRESSES ONLY THE FAIRNESS OF THE
TRANSACTION TO CLASS A AND CLASS B SHAREHOLDERS. IT DOES NOT ADDRESS THE
UNDERLYING BUSINESS DECISION TO PROCEED WITH THE TRANSACTION AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY SHAREHOLDER OF THE COMPANY AS TO HOW SUCH
STOCKHOLDER SHOULD VOTE AT THE ANNUAL MEETING WITH RESPECT TO THE TRANSACTION OR
ANY OTHER MATTER RELATED THERETO.
In connection with rendering its opinion, Keefe Bruyette reviewed,
among other things:
o the Agreement and Plan of Merger dated January 13, 2000 and
amended and restated March 29, 2000;
o the Annual Reports to Stockholders and Annual Reports on Form
10-K for the three years ended December 31, 1999 of the
Company;
o certain interim reports to stockholders and Quarterly Reports
on Form 10-Q of the Company and certain other communication
from the Company to its shareholders;
o other financial information concerning the businesses and
operations of the Company furnished to Keefe Bruyette by the
Company for the purposes of its analysis;
o the publicly reported historical price and trading activity
for the Company's Class A common stock and Class B common
stock since January 1, 1996;
o a comparison of certain financial and stock market information
for the Company with similar publicly available information
for certain other companies, the securities of which are
publicly traded;
o with the senior management of the Company, the past and
current business operations, results of these operations,
regulatory relations, financial condition, and future
prospects and such other matters Keefe Bruyette deemed
relevant to its inquiry;
o the financial terms of recent "going private" transactions and
other selected transactions that Keefe Bruyette deemed
relevant, to the extent publicly available;
o the current market environment generally and the banking
environment in particular; and such other information,
financial studies, analyses and investigations and financial,
economic and market criteria as Keefe Bruyette considered
relevant; and
o the pro forma impact of the Company's proposed transaction and
other studies and analyses Keefe Bruyette considered
appropriate.
In preparing its opinion, Keefe Bruyette assumed and relied on the
accuracy and completeness of all financial and other information supplied or
otherwise made available to it by the Company, including that contemplated in
the items above, and Keefe Bruyette has not assumed responsibility for
independently verifying such information or undertaken an independent evaluation
or appraisal of the assets or liabilities, contingent or otherwise, of Keefe
Bruyette or any of their subsidiaries, nor has it been furnished any such
evaluation or appraisal. Keefe Bruyette has not been provided with, and did not
have any access to, financial projections of the Company prepared by management
of the
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<PAGE> 27
Company for any period after fiscal year 1999. Accordingly, with respect to the
future financial performance of the Company, the Company has directed Keefe
Bruyette to rely on publicly available estimates of research analysts in
performing its analysis and, based upon advice of the Company, Keefe Bruyette
assumed such estimates are a reasonable basis upon which to evaluate and analyze
the future financial performance of the Company and that the Company will
perform substantially in accordance with such estimates.
Keefe Bruyette is not an expert in the evaluation of allowances for
loan losses, and has not made an independent evaluation of the adequacy of the
allowance for loan losses of the Company, nor has Keefe Bruyette reviewed any
individual credit files and has assumed that the respective aggregate allowances
for loan losses for the Company are adequate to cover such losses and will be
adequate on a pro forma basis for the combined entity. In addition, it has not
conducted any physical inspection of the properties or facilities of the
Company. Keefe Bruyette's opinion was necessarily based on economic, market and
other conditions as in effect on, and the information made available to it as
of, the date of its opinion. Keefe Bruyette's opinion was rendered without
regard to the necessity for, or level of, any restrictions, obligations,
undertakings or divestitures which may be imposed or required in the course of
obtaining regulatory approval for the Company's proposed transaction.
In connection with rendering its opinion, Keefe Bruyette performed a
variety of financial analyses, consisting of those summarized below. The summary
set forth below does not purport to be a complete description of the analyses
performed by Keefe Bruyette in this regard, although it describes all material
analyses performed by Keefe Bruyette. The preparation of a fairness opinion
involves various determinations as to the most appropriate and relevant methods
of financial analysis and the application of these methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to a
partial analysis or summary description. Accordingly, notwithstanding the
separate factors summarized below, Keefe Bruyette believes that its analyses
must be considered as a whole and that selecting portions of its analyses and
factors considered by it, without considering all analyses and factors, or
attempting to ascribe relative weights to some or all such analyses and factors,
could create an incomplete view of the evaluation process underlying Keefe
Bruyette's opinion.
In performing its analyses, Keefe Bruyette made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters, many of which are beyond the control of the Company and Keefe
Bruyette. The analyses performed by Keefe Bruyette are not necessarily
indicative of actual values or future results, which may be significantly more
or less favorable than suggested by such analyses. Such analyses were prepared
solely as part of Keefe Bruyette's analysis of the fairness to the Class A and
Class B shareholders of the consideration in the Company's proposed transaction
and were provided to the Board in connection with the delivery of Keefe
Bruyette's opinion. Keefe Bruyette gave the various analyses described below
approximately similar weight and did not draw any specific conclusions from or
with regard to any one method of analysis. With respect to the comparison of
peer group analysis and the analysis of premiums paid in similar transactions as
summarized below, no company utilized as a comparison is identical to the
Company. Accordingly, an analysis of comparable companies and comparable
business combinations is not mathematical; rather it involves complex
considerations and judgments concerning the differences in financial and
operating characteristics of the companies and other factors that could affect
the public trading values or announced merger transaction values, as the case
may be, of the companies concerned. The analyses do not purport to be appraisals
or to reflect the prices at which the Company might actually be sold or the
prices at which any securities may trade at the present time or at any time in
the future. In addition, as described above, Keefe Bruyette's opinion is just
one of many factors taken into consideration by the Special Committee and the
Board.
The following is a summary of the material analyses presented by Keefe
Bruyette to the Company's Board on January 12, 2000 (the "Keefe Bruyette
Report") in connection with its opinion.
SUMMARY OF PROPOSAL. Keefe Bruyette calculated transaction multiples
which were based on a price of $6.00 per Company Class B share.
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<PAGE> 28
As of September 30, 1999, the Company's stated book value was $5.67,
and its stated tangible book value was $4.36. 1999 earnings per share estimates
(based on the median of Keefe Bruyette analyst estimates) were $0.60 and $0.56,
for Class A and Class B shares, respectively. 2000 earnings per share estimates
(based on the median of First Call analyst estimates) were $0.63 and $0.58, for
Class A and Class B shares, respectively. Based on this data, the following
multiples were calculated for Class B Shares:
<TABLE>
<CAPTION>
1 DAY PRIOR TO
COMMITTEE AT COMMITTEE PROPOSED
DELIBERATION DELIBERATION TRANSACTION
------------ ------------ -----------
<S> <C> <C> <C>
Price $5.00 $4.81 $6.00
Price/estimated 1999 EPS 8.9x 8.6x 10.7x
Price/estimated 2000 EPS 8.6x 8.3x 10.3x
Price/book value 88.1% 84.8% 105.8%
Price/tangible book value 114.7% 110.3% 137.6%
</TABLE>
SELECTED PEER GROUP ANALYSIS. Keefe Bruyette compared the financial
performance and market performance of the Company, based on various financial
measures of earnings performance, operating efficiency, capital adequacy and
asset quality and various measures of market performance, including market/book
values, price to earnings and dividend yields to those of a group of comparable
publicly traded savings banks and thrifts. For purposes of such analysis, the
financial information used by Keefe Bruyette was as of and for the quarter ended
September 30, 1999, and stock price information was as of January 10, 2000. The
companies in the Company's peer group were selected as deemed relevant by Keefe
Bruyette. The Company peer group was comprised of: Golden State Bancorp, Inc.,
Golden West Financial Corporation, Bank United Corporation, Greenpoint Financial
Corporation, Commercial Federal Corporation, TCF Financial Corporation, Webster
Financial Corporation, Downey Financial Corporation, Bay View Capital, MAF
Bancorp, Inc., BankUnited Financial Corporation, Coastal Bancorp, Inc.,
InterWest Bancorp, Inc., First Washington Bancorp, Inc., and Superior Financial
Corp. The results of these comparisons are set forth in the following table.
<TABLE>
<CAPTION>
CLASS B SHARES PEER PEER
1 DAY PRIOR GROUP GROUP
COMMITTEE AVERAGE MEDIAN
--------------- ------- ------
<S> <C> <C> <C>
Return on Average Assets 0.87% 0.92% 0.85%
Return on Average Equity 14.2% 13.7% 13.0%
Net Interest Margin 3.1% 3.1% 2.9%
Efficiency Ratio 63.0% 55.7% 57.9%
Tangible Equity / Tangible Assets 4.7% 5.3% 5.6%
Loan Loss Reserves / Loans 1.7% 0.9% 0.9%
Net Charge Offs / Average Loans 0.9% 0.1% 0.1%
Non-performing Assets / Loans + Other Real Estate 1.4% 0.9% 0.7%
Stock Price / Book Value 88.1% 122.9% 105.0%
Stock Price / Tangible Book Value 114.7% 175.2% 156.1%
Stock Price / 1999 Earnings per Share 8.9x 9.2x 9.5x
Stock Price / 2000 Earnings per Share 8.6x 8.2x 8.5x
Dividend Yield 1.8% 2.0% 2.0%
</TABLE>
For purposes of the above calculations, the Company's Class B 1999 and
2000 EPS estimates were from Keefe Bruyette and, all other earnings estimates
are from I/B/E/S, a nationally recognized earnings estimate consolidator.
Because of the inherent differences in the business, operations,
financial conditions and prospects of the Company and the companies included in
the peer group, Keefe Bruyette believed it was inappropriate to, and therefore
did not, rely solely on the quantitative results of the peer group analysis, and
accordingly, also made qualitative
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<PAGE> 29
judgements concerning differences between the characteristics of the peer group
and the Company that would affect the trading values of the Company and such
companies.
PREMIUMS PAID ANALYSIS. Keefe Bruyette reviewed the implied premium
paid or proposed to be paid in acquisitions relative to recent public market
pre-announcement date trading prices for two groups of announced transactions
since January 1, 1997:
o Keefe Bruyette analyzed selected recent "going private"
transactions which Keefe Bruyette deemed relevant to the
Company's proposed transaction. The proposed transactions
analyzed included, as identified by acquiror/target: Concord
Fabrics/Concord Fabrics; An Investor Group/Kentek Information
Systems; An Investor Group/Rock Bottom Restaurants; An
Investor Group/ENstar Inc.; An Investor Group/Equitrac Corp.;
PHII Inc./THT Inc.; An Investor Group/Lion Brewery Inc.; An
Investor Group/Cinergies Pictures Entertainment; Restaurant
Co./Perkins Family Restaurants; An Investor Group/Seaman
Furniture Co.; and Anthem Inc. /Acordia Inc. Based on these
transactions, Keefe Bruyette calculated the median and average
premiums to market price based on a measurement period 1 day
prior to announcement to be 25.3% and 27.6%, respectively. The
median and average premium to market price based on a
measurement period 4 weeks prior to announcement date were
30.6% and 31.6%, respectively.
<TABLE>
<CAPTION>
SELECTED "GOING PRIVATE" TRANSACTIONS
PROPOSED -------------------------------------
PRICING PERIOD TRANSACTION MEDIAN AVERAGE
-------------- ----------- ----------- ------------
<S> <C> <C> <C>
At Committee Deliberation 20.0% 25.3% 27.6%
1 Day Prior to Committee
Deliberation 24.7% 25.3% 27.6%
4 weeks average prior to
Announcement Date 23.5% 30.6% 31.6%
</TABLE>
o Keefe Bruyette analyzed selected recent "dutch tender auction"
transactions which Keefe Bruyette deemed relevant to the
Company's proposed transaction. The proposed transactions
analyzed included: First Merchant Corp.; Bancfirst Corp.; EFC
Bancorp, Inc.; First Banks Inc.; Peekskill Financial
Corporation; WesterFed Financial Corp.; Klamath First Bancorp,
Inc., First Commonwealth; First Southern Bankshares; S&T
Bancorp; TF Financial Corp.; Cortland First Financial; and
Damen Financial Corp. Based on these transactions, the median
and average effective premium to market price was 11.8% and
13.9%, respectively.
<TABLE>
<CAPTION>
SELECTED "DUTCH AUCTION
TENDER" TRANSACTIONS
PROPOSED --------------------------------
TRANSACTION MEDIAN AVERAGE
----------- ------ -------
<S> <C> <C> <C>
At Committee Deliberation 20.0% 11.8% 13.9%
1 Day Prior to Committee
Deliberation 24.7% 11.8% 13.9%
</TABLE>
o Keefe Bruyette also considered that, unlike in a pure "going
private" transaction, Class B shareholders have the ability to
retain an economic interest in the Company through the
purchase of Class A shares.
No company or transaction used as a comparison in the above analysis is
identical to the Company or the Company's proposed transaction. Accordingly, an
analysis of the results of the foregoing is not mathematical; rather, it
involves complex considerations and judgements concerning differences in, the
nature of the transactions considered, the financial and operating
characteristics of the companies and other factors that could affect the public
trading value of the companies to which the Company is being compared.
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<PAGE> 30
PRO FORMA PROPOSED TRANSACTION ANALYSIS. Keefe Bruyette analyzed the
impact of the proposed transaction on the Company's Class A shareholders:
CLASS A SHAREHOLDERS
<TABLE>
<CAPTION>
<S> <C> <C>
Earnings Per Share 2.1% increase from an estimated $0.63 to a pro forma value of $0.65.
Return on Equity 10.8% increase from an estimated 14.8% to a pro forma value of 16.4%.
Tangible Book Value 9.7% decrease from an estimated $4.35 to a pro forma value of $3.93.
</TABLE>
This analysis was based on Keefe Bruyette's estimate of the Company's
2000 earnings per share and on the assumption that the Company maintains a
consistent dividend policy. These projections were discussed with the management
of the Company. The actual results achieved by following the Company's proposed
transaction may vary from the projected results, and the variations may be
material.
DISCOUNTED CASH FLOW ANALYSIS. Keefe Bruyette estimated the present
value of the incremental future cash flows that would accrue to a holder of a
share of the Company's Class A Common Stock assuming the stockholder held the
share over a five-year period and then sold it at the end of the holding period.
This analysis was based on several assumptions, including the earnings per share
for the Company, the growth rate in earnings per share, dividend payout ratios,
and terminal value, all of which were based on values which Keefe Bruyette
believed to be reasonable for such an analysis. Keefe Bruyette presented a table
showing the analysis with a terminal multiple of 7.5x earnings per share
(equivalent to the weighted average price to earnings multiple of the Class A
and Class B shares) and a range of discount rates from 10.0% to 13.0%, resulting
in a range of present values for the incremental cash flows of $0.21 to $0.24.
These values were determined by adding (i) the present value of the incremental
estimated future dividend stream that the Company could generate over the
period, and (ii) the present value of the incremental "terminal value" of the
Company's Common Stock.
DISCOUNT RATE
-------------
Present Value of 10% 11% 12% 13%
Incremental Cash Flow $0.24 $0.23 $0.22 $0.21
Keefe Bruyette stated that the discounted cash flow analysis is a
widely used valuation methodology but noted that it relies on numerous
assumptions, including earnings growth rates, dividend payout rates, terminal
values and discount rates. The analysis did not purport to be indicative of the
actual values or expected values of the Company's Common Stock.
Keefe Bruyette has been retained by the Special Committee of the Board
of Directors of the Company as an independent contractor to render an opinion as
to the fairness, from a financial point of view, to the Class A and Class B
shareholders, of the consideration to be paid by the Company in the acquisition
of the public Class B shares. Keefe Bruyette, as part of its investment banking
business, is continually engaged in the valuation of banking businesses and
their securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes. As specialists in the securities of banking companies, Keefe
Bruyette has experience in, and knowledge of, the valuation of banking
enterprises. In the ordinary course of its business as a broker-dealer, Keefe
Bruyette may, from time to time, purchase securities from, and sell securities
to, the Company and as a market maker in securities Keefe Bruyette may from time
to time have a long or short position in, and buy or sell, debt or equity
securities of the Company for Keefe Bruyette's own account and for the accounts
of its customers.
The Company and Keefe Bruyette have entered into a letter agreement
dated December 30, 1999 relating to the services to be provided by Keefe
Bruyette in connection with the Company's proposed transaction. The Company has
agreed to pay Keefe Bruyette a cash fee ("Fee") equal to $600,000. The Company
has agreed to pay this fee as follows: $50,000 concurrent with the execution of
December 30, 1999 agreement, $180,000 promptly after the initial
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<PAGE> 31
delivery of the opinion to the Committee relating to the Company's proposed
transaction, $180,000 promptly after an updated opinion is provided for use in
the Company's proxy/consent/recommendation materials, and $190,000 at the time
of the completion of the Company's proposed transaction. Pursuant to the Keefe
Bruyette engagement agreement, the Company also agreed to reimburse Keefe
Bruyette for reasonable out-of-pocket expenses and disbursements incurred in
connection with its retention and to indemnify Keefe Bruyette against certain
liabilities, including liabilities under the federal securities laws.
Subsequent to Keefe Bruyette's presentation to the Board of Directors
on January 12, 2000, the Agreement and Plan of Merger was amended. Pursuant to
amended Agreement and Plan of Merger, dated March 29, 2000, outstanding options
to purchase Class B shares would be converted into options with the right to
purchase Class A shares with the same intrinsic value having the same term and
vesting provisions as the Class B options. Keefe Bruyette advised the Company
that this amendment would have no material impact on its analysis of the
fairness, from a financial point of view to the Company's Class A and Class B
shareholders of the consideration to be paid by the Company in the acquisition
of the publicly-held Class B shares.
FAIRNESS OPINION OF LEHMAN BROTHERS
In connection with serving as the financial advisor to the Company,
Lehman Brothers rendered a written opinion to the Company's Board of Directors
dated January 13, 2000, to the effect that as of such date, from a financial
point of view, the consideration to be paid by the Company in connection with
the acquisition of the publicly held Class B Common Stock is fair to the
Company.
The full text of the Lehman Brothers opinion is attached as Appendix C
to this document and is incorporated herein by reference. Shareholders may read
the Lehman Brothers opinion for a discussion of assumptions made, matters
considered and limitations on the review undertaken by Lehman Brothers in
rendering its opinion. The summary of the Lehman Brothers opinion set forth in
this document is qualified in its entirety by reference to the full text of the
Lehman Brothers opinion. Lehman Brothers reconfirmed its opinion concurrently
with the mailing of this proxy statement.
Except as described below, no limitations were imposed by the Company
on the scope of Lehman Brothers' investigation or the procedures to be followed
by Lehman Brothers in rendering its opinion. The form and amount of the
consideration to be received by the Company's Class B shareholders in the
Company's proposed transaction was determined by a Special Committee of
independent directors and unanimously agreed to by the entire Board of
Directors. Lehman Brothers' opinion is not intended to be and does not
constitute a recommendation to any shareholder as to how such shareholder should
vote with respect to the Company's proposed transaction. Lehman Brothers was not
requested to opine as to, and its opinion does not address, the Company's
underlying business decision to proceed with or effect the Company's proposed
transaction.
In arriving at its opinion, Lehman Brothers reviewed and analyzed: (1)
the specific terms of the Company's proposed transaction, (2) publicly available
information concerning the Company that Lehman Brothers believes to be relevant
to its analysis, including the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 and Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and September 30, 1999, (3) financial and
operating information with respect to the business and operations of the Company
furnished to us by the Company, (4) trading histories of the Company's Class A
Common Stock and Class B Common Stock from December 31, 1996 to the present and
a comparison of those trading histories with those of other companies that
Lehman Brothers deemed relevant, (5) a comparison of the historical financial
results and present financial condition of the Company with those of other
companies that Lehman Brothers deemed relevant, (6) published estimates of third
party research analysts regarding the future financial performance of the
Company, (7) a comparison of the financial terms of the Company's proposed
transaction with the financial terms of certain other recent transactions that
Lehman Brothers deemed relevant, and (8) the potential pro forma impact of the
Company's proposed transaction on the Company. In addition, Lehman Brothers has
had discussions with the management of the Company concerning its business,
operations, assets, financial
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<PAGE> 32
condition and prospects and have undertaken such other studies, analyses and
investigations as Lehman Brothers deemed appropriate.
In arriving at its opinion, Lehman Brothers relied upon the accuracy
and completeness of the financial and other information used by it without
assuming any responsibility for independent verification of such information and
have further relied upon the assurances of management of the Company that they
are not aware of any facts or circumstances that would make such information
inaccurate or misleading. Lehman Brothers has not been provided with, and did
not have any access to, financial projections of the Company prepared by
management of the Company for any period after fiscal year 1999. Accordingly,
with respect to the future financial performance of the Company, the Company has
directed Lehman Brothers to rely on publicly available estimates of research
analysts in performing its analysis and, based upon advice of the Company,
Lehman Brothers assumed that such estimates are a reasonable basis upon which to
evaluate and analyze the future financial performance of the Company and that
the Company will perform substantially in accordance with such estimates. In
arriving at its opinion, Lehman Brothers did not conduct a physical inspection
of the properties and facilities of the Company and did not make or obtain any
evaluations of appraisals of the assets or liabilities of the Company. In
addition, Lehman Brothers did not solicit any indications of interest from any
third party with respect to the purchase of all or a part of the Company
business. Its opinion necessarily is based upon market, economic and other
conditions as they existed on and could be evaluated as of the date of its
written letter.
In connection with the preparation and delivery of its opinion to the
Company, Lehman Brothers performed a variety of financial and comparative
analyses, as described below. The preparation of a fairness opinion involves
various determinations as to the most appropriate and relevant methods of
financial and comparative analysis and the application of those methods to the
particular circumstances and, therefore, such an opinion is not readily
susceptible to summary description. Furthermore, in arriving at its opinion,
Lehman Brothers did not attribute any particular weight to any analysis or
factor considered by it, but rather made qualitative judgments as to the
significance and relevance of each analysis and factor. Accordingly, Lehman
Brothers believes that its analyses must be considered as a whole and that
considering any portion of such analyses and factors, without considering all
analyses and factors, could create a misleading or incomplete view of the
process underlying its opinion. In its analyses, Lehman Brothers made numerous
assumptions with respect to industry performance, general business and economic
conditions and other matters, many of which are beyond the control of the
Company. Any estimate contained in these analyses are not necessarily indicative
of actual values or predictive of future results or values, which may be
significantly more or less favorable than as set forth therein. In addition,
analyses relating to the value of businesses do not purport to be appraisals or
to reflect the prices at which businesses may actually be sold. Certain of the
analyses include information presented in tabular format. In order to fully
understand the financial analyses used by Lehman Brothers, the tables must be
read together with the text of each summary. The tables alone do not constitute
a complete description of the financial analyses.
PURCHASE PRICE RATIO ANALYSIS. Based on price per shares of Class B
Common Stock of $6.00, Lehman Brothers calculated the price-to-market,
price-to-book, and price-to-earnings multiples in the transaction. The
transaction value per share yielded a premium of 26.3% over the closing price of
the Class B Common Stock of $4.75 as of the close of business on January 12,
2000. This analysis also yielded a price-to-book value multiple of 0.85x, a
price-to-1999 earnings multiple of 8.9x, and a price-to-estimated 2000 earnings
multiple of 8.0x based on First Call median estimates as of January 12, 2000.
First Call is a data service that monitors and publishes a compilation of
earnings estimates produced by selected research analysts regarding companies of
interest to institutional investors.
SELECTED COMPARABLE COMPANIES ANALYSIS. Using publicly available
information, Lehman Brothers compared the financial performance and stock market
valuation of the Company with the following selected thrift institutions deemed
relevant by Lehman Brothers: BankUnited Financial Corporation, Coastal Bancorp,
Inc., PFF Bancorp, Inc., Eagle Bancshares, Inc., InterWest Bancorp Inc.,
Sterling Financial Corporation, St. Francis Capital Corporation, Jefferson
Savings Bancorp, Inc., Bank United Corporation, Westerfed Financial Corporation,
WSFS Financial Corporation, Downey Financial Corp., Metropolitan Financial
Corp., and PBOC Holdings, Inc. Indications of such financial performance and
stock market valuation included the ratio of stock price to 1999 estimated
earnings based on
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First Call estimates (8.9x Company earnings and a median of 8.9x for the
comparable companies); the ratio of stock price to estimated 2000 earnings based
on First Call estimates (8.0x for the Company and a median of 8.3x for the
comparable companies), the ratio of stock price to tangible book value (1.09x
for the Company and a median of 1.10x for the comparable companies); and the
ratio of stock price to book value (0.85x for the Company and a median of 1.01x
for the comparable companies).
COMPARABLE COMPANIES
RATIO BANKATLANTIC (MEDIAN)
----- ------------ --------------------
Price/1999E Earnings(1) 8.9x 8.9x
Price/2000E Earnings(1) 8.0x 8.3x
Price/Tangible Book Value 1.09x 1.10x
Price/Book Value .85x 1.01x
---------------------
(1) Based on estimates from First Call.
Because of the inherent differences in the business, operations,
financial conditions and prospects of the Company and the companies included in
the comparable companies, Lehman Brothers believed that it was inappropriate to,
and therefore did not, rely solely on the quantitative results of the comparable
companies analysis, and accordingly, also made qualitative judgements concerning
differences between the characteristics of the comparable companies and the
Company that would affect the trading values of the Company and such companies.
SELECTED COMPARABLE TRANSACTIONS ANALYSIS. Lehman Brothers analyzed
selected recent "going private" transactions which Lehman Brothers deemed
relevant to the Company's proposed transaction. The comparable transactions
considered by Lehman Brothers in its analysis consisted of the following
transactions, identified by acquirer/target: Anthem Inc./Acordia Inc., The
Restaurant Company/Perkins Family restaurants; RB Capital/Rock Bottom
Restaurants; Gold Kist/Golden Poultry Co. Inc., An Investor Group/Seaman
Furniture Company; LinPac Mouldings/Ropak Corp.; An Investor Group/Cinergi
Pictures Entertainment; An Investor Group/ENStar Inc., PH II Inc./THT Inc.; and
Hawaii National Bancshares/Hawaii National Bancshares. Based on these
transactions, the median premium to market price based on a measurement period 1
day prior, 1 week prior and 4 weeks prior to announcement date was 27.8%, 25.9%
and 33.1% respectively compared to a premium of 26.3%, 25.5% and 21.5%
respectively in the Company's proposed transaction.
Because of the market conditions, rationale and circumstances
surrounding each of the transactions analyzed were specific to each transaction
and because of the inherent differences between the businesses, operations and
prospects of the Company and the acquired businesses analyzed, Lehman Brothers
believed that it was inappropriate to, and therefore did not, rely solely on the
quantitative results of the analysis, and accordingly, also made qualitative
judgments concerning differences between the characteristics of these
transactions and the Company's proposed transaction.
DISCOUNTED CASH FLOW ANALYSIS. Lehman Brothers discounted estimated
cash flows of the Company through the end of 2004 and an estimated terminal
value of the Company's Class B Common Stock assuming net income based on First
Call estimates for 1999 and 2000 and the long term sector growth rate of 9%
thereafter, assuming a dividend rate sufficient to maintain a ratio of book
value less goodwill of 5.0% - 6% and using a range of discount rates of 11%-13%
and assuming conversion of the convertible debt as the stock price appreciated
above the commission price assuming a growth rate in the stock price sufficient
to generate a constant price to earnings multiple. Lehman Brothers derived an
estimate of a range of terminal values by applying multiples ranging from 7x to
9x to estimated year 2004 net income.
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TERMINAL MULTIPLE DISCOUNT RATE
----------------- -------------
11.0% 12.0% 13.0%
----- ----- -----
7.0x 5.76 5.52 5.29
8.0x 6.30 6.04 5.78
9.0x 6.84 6.55 6.28
PRO FORMA ANALYSIS. Lehman Brothers analyzed the impact of the
transaction on the Company estimated earnings per share based on First Call
estimates for the 1999 and 2000 earnings of the Company. In connection with this
analysis, Lehman Brothers assumed that the Company completed the Company's
proposed transaction at $6.00 per share and included a management estimate of
transaction expenses. Based on such estimates, assumed growth rates, and
projections of transaction expenses, Lehman Brothers concluded that the
Company's proposed transaction would result in accretion of 2.8% to the
Company's earnings per share in 2000 assuming completion of the Company's
proposed transaction on March 31, 2000 and accretion of 4.3% to the Company's
earnings per share in 2001. In addition, based on the same assumptions return on
equity would increase by 2.7%. Finally, Lehman Brothers discounted cash flows of
the Company based on these assumptions with a 8x-10x terminal multiple and
yielded the following range of values for the Company's Class B Common Stock:
DISCOUNT RATE TERMINAL MULTIPLE
------------- -----------------
8.0X 9.0X 10.0X
---- ---- -----
11.0% 6.11 6.69 7.28
12.0% 5.82 6.39 6.95
13.0% 5.56 6.09 6.63
Lehman Brothers is an internationally recognized investment banking
firm and, as part of its investment banking activities, is regularly engaged in
the evaluation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive bids, secondary
distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. The Company's Board selected Lehman
Brothers because of its expertise, reputation and familiarity with the Company
in particular and the banking and finance industry in general and because its
investment banking professionals have substantial experience in transactions
similar to this merger.
As compensation for its services as financial advisor in connection
with the transaction, the Company has agreed to pay Lehman Brothers a fee of
$500,000 in connection with its engagement and the delivery of its opinion and,
additionally, a fee of $200,000 upon consummation of the transaction. In
addition, the Company has agreed to reimburse Lehman Brothers for reasonable
out-of-pocket expenses incurred in connection with the transaction and to
indemnify Lehman Brothers for certain liabilities that may arise out of its
engagement by the Company and the rendering of its opinion.
Lehman Brothers is acting as financial advisor to the Company in
connection with the transaction. In the ordinary course of its business, Lehman
Brothers may actively trade in the Company's securities for its own account and
for the accounts of its customers and, accordingly, may at any time hold a long
or short position in such securities.
EFFECTS OF THE MERGER
The principal effect of the merger is that each share of our publicly
held Class B Common Stock will be converted into the right to receive cash and
thereafter the Company will have only one publicly traded class of common stock.
This will be accomplished under the Merger Agreement by the merger of BBC Sub
with and into the Company
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with the corporate existence of BBC Sub ceasing and the Company continuing as
the surviving corporation. Following the merger, the Public Class B Shareholders
will receive $6.00 in cash in exchange for each share of Class B Common Stock
they owned immediately before the merger. As a result, BFC Financial Corporation
will become the sole holder of the Class B Common Stock and possess 100% of the
voting rights of the Company. As discussed in "- Interests of Certain Persons in
the Merger; Conflicts of Interest," Alan B. Levan, the Company's Chairman and
Chief Executive Officer, and John E. Abdo, a director and Vice Chairman of the
Company, hold similar positions in BFC and beneficially own a significant amount
of BFC's shares. Further, directors of the Company, including Mr. Levan and Mr.
Abdo, own directly approximately 336,753 shares of Class B Common Stock which
will be exchanged for cash in the merger. Accordingly, members of the Board of
Directors, including independent directors, will have a reduced equity interest
in the Company after the merger.
The shares of Class A Common Stock of the Company as the surviving
corporation to be held by holders of Class A Common Stock after the merger will
have the same relative rights and preferences that their shares currently
possess.
It is expected that, immediately following the merger, the business and
operations of the Company and its subsidiaries, as they are currently being
conducted, will be continued by the Company, as the surviving company in the
merger. The holders of Class A Common Stock and BFC Financial Corporation will
be the sole beneficiaries of any future earnings and growth of the Company. The
Public Class B Shareholders will not benefit from any increase, and will not
bear the risk of any decrease, in the value of the Company.
Upon consummation of the merger, the Class B Common Stock will cease to
be listed on the Nasdaq National Market and there will be no public market for
the Class B Common Stock. The Company will terminate registration of the Class B
Common Stock under the Exchange Act. However, the Class A Common Stock will
continue to be listed and traded on the New York Stock Exchange and will
continue to be registered under the Exchange Act. Accordingly, following the
merger the Company will continue to file all statements, reports and schedules
required to be filed under the Exchange Act.
INTERESTS OF CERTAIN PERSONS IN THE MERGER; CONFLICTS OF INTEREST
In considering the recommendation of the Special Committee and the
Board of Directors with respect to the merger, you should be aware that certain
officers and directors have interests that may be deemed to conflict with your
interests as shareholders. The Special Committee and the Board of Directors were
aware of these interests when they considered and approved the merger.
As a result of the merger, BFC Financial Corporation, which currently
owns 49.8% of the outstanding Class B Common Stock and 26.2% of the Class A
Common Stock and may be deemed to have effective control of the Company, will
own 100% of the Class B Common Stock of the Company as the surviving
corporation. These shares will constitute 100% of the voting rights of the
Company. Alan B. Levan, Chairman of the Board and Chief Executive Officer of the
Company, is also Chairman of the Board and Chief Executive Officer of BFC and
beneficially owns 45.6% of the outstanding shares of BFC. Further, John E. Abdo,
a director of the Company and Vice Chairman of the Board, is also a director of
BFC and Vice Chairman of its Board and beneficially owns 15.8% of the
outstanding shares of BFC.
Pursuant to the merger agreement, all outstanding options to acquire
Class B Common Stock will automatically be exchanged for options to acquire
Class A Common Stock on a basis which preserves the intrinsic value of the
option on the effective date of the merger. The options will otherwise be on
substantially the same terms and conditions as the former options to purchase
shares of Class B Common Stock, including vesting and term. The Board of
Directors determined that it was in the Company's best interest to provide for
the exchange pursuant to the merger because of the benefits associated with
providing incentives to employees through continued option holdings. While the
Company was not permitted under NYSE rules and regulations to provide for the
conversion of shares of Class B Common Stock into
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<PAGE> 36
Class A Common Stock in the merger, the NYSE has indicated that providing for
the exchange of Class B options into Class A options in the merger would not
violate the NYSE's Voting Rights Policy.
On June 1, 2000, the members of the Special Committee owned in the
aggregate 121,570 shares of Class B Common Stock and 169,391 shares of Class A
Common Stock. The members of the Special Committee will receive payment for
their shares of Class B Common Stock in an aggregate amount of $729,420 upon
completion of the merger. In addition, members of the Special Committee hold
options to acquire an aggregate of 77,989 shares of Class B Common Stock, each
with an exercise price of $3.39 per share. Members of the Special Committee also
hold options to acquire an aggregate of 178,320 shares of Class A Common Stock.
On June 1, 2000, members of the Board of Directors, other than members
of the Special Committee and excluding shares held by BFC, owned in the
aggregate 215,183 shares of Class B Common Stock and 188,405 shares of Class A
Common Stock. These directors will receive payment for their shares of Class B
Common Stock in an aggregate amount of $1,291,098 upon completion of the merger.
In addition, these members of the Board of Directors hold options to acquire an
aggregate of 789,652 shares of Class B Common Stock, with exercise prices
ranging from $3.39 to $3.48 per share. These members of the Board of Directors
also hold options to acquire an aggregate of 866,851 shares of Class A Common
Stock.
CONDUCT OF THE COMPANY'S BUSINESS AFTER THE MERGER
It is expected that following completion of the merger, the business
and operations of the Company and its subsidiaries will be conducted by current
management substantially as they are currently conducted. Other than as
described in this Proxy Statement, the Company has no special plans or proposals
that relate to any other significant corporate transaction. However, the Company
has in the past from time to time made acquisitions and investments in a variety
of businesses. While the Company has no present plans or commitments with
respect to any material acquisitions or investments, the Company will continue
after the merger to evaluate the Company's business and operations and may
propose or develop new plans or proposals which management believes to be in the
best interests of shareholders.
CONDUCT OF THE COMPANY'S BUSINESS IF THE MERGER IS NOT COMPLETED
If the merger is not completed for any reason, it is expected that the
business and operations of the Company and its subsidiaries will continue to be
conducted by current management substantially as they are currently conducted.
If the merger is not completed, the Company may purchase shares of Class B
Common Stock on terms more or less favorable to Public Class B Shareholders than
the terms of the merger or may purchase shares of Class A Common Stock, whether
pursuant to a merger transaction, tender offer, open market or privately
negotiated transaction or otherwise, but in each case subject to market
conditions and the Company's financial condition and results of operations.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following discussion is a summary of the material federal income
tax consequences of the merger to holders of Class A Common Stock and Class B
Common Stock. The discussion is intended only as a summary and is not a complete
analysis of all potential tax effects relevant to a decision whether to vote for
approval of the merger agreement. The discussion is based on current provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury
Regulations thereunder and applicable administrative rulings and court decisions
, all of which are subject to change (possibly with retroactive effect) and to
differing interpretations. This discussion does not address all aspects of
federal taxation that may be relevant to particular shareholders in light of
their personal circumstances or to shareholders subject to special treatment
under the Code, including financial institutions, broker-dealers, foreign
persons, individual retirement accounts and other tax-deferred accounts and
holders who acquired their shares through the exercise of employee stock options
or otherwise as compensation. In addition, the following discussion does not
include any discussion of any state, local or foreign tax consequences that may
result from the merger.
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Each shareholder is urged to consult with such shareholder's own tax
advisor as to the specific tax consequences of the merger to such person.
EFFECT OF MERGER ON THE COMPANY AND BBC SUB. Neither the Company nor
BBC Sub will realize gain or loss as a result of the merger.
EFFECT ON PUBLIC CLASS B SHAREHOLDERS. Receipt by Public Class B
Shareholders of the cash merger consideration (or the amount paid for dissenting
shares) will be treated as a taxable sale of the holder's Class B Common Stock.
Each Public Class B Shareholder's gain or loss per share will equal the
difference between $6.00 (or in the case of dissenting Class B Shareholders the
amount paid per share) and the holder's basis in the share of Class B Common
Stock exchanged therefor. This gain or loss generally will be a capital gain or
loss if the holder has held the shares of Class B Common Stock as a capital
asset. Any capital gain or loss will be treated as long-term capital gain or
loss if the holder has held the shares for more than one year, and will be
treated as short-term capital gain or loss if the holder has held the shares for
one year or less.
BACKUP WITHHOLDING. A Public Class B Shareholder may be subject to
backup withholding at the rate of 31% with respect to the cash merger
consideration received in the merger, unless the holder (a) is a corporation or
comes within certain other exempt categories or (b) provides a correct taxpayer
identification number ("TIN"), certifies as to no loss of exemption from backup
withholding, and otherwise complies with applicable requirements of the backup
withholding rules. To prevent the possibility of backup withholding, each Public
Class B Shareholder must provide the Exchange Agent with such holder's correct
TIN by completing a Form W-9 or Substitute Form W-9 or, in the case of exempt
foreign persons, with certain other information by completing the appropriate
Form W-8 or Substitute From W-8. A Public Class B Shareholder who does not
provide the above information may be subject to penalties imposed by the
Internal Revenue Service, as well as backup withholding.
EFFECT ON HOLDERS OF CLASS A COMMON STOCK. The conversion of each
outstanding share of Class A Common Stock into one share of Class A Common Stock
of the Company as the surviving corporation will not be a taxable transaction.
The basis in a holder's shares of Class A Common Stock after the merger will be
the same as the basis of the shares of Class A Common which are held immediately
before the merger. The holding period of the shares of Class A Common Stock held
after the merger will include the holding period for the shares of Class A
Common Stock held immediately before the merger.
FEES AND EXPENSES OF THE MERGER; SOURCES OF FUNDS
The aggregate cash consideration payable in the merger is approximately
$32 million, assuming that no Public Class B Shareholders exercise dissenters'
rights and that the holders of options to purchase 520,390 shares of Class B
Common Stock (representing 40% of the outstanding options to purchase Class B
Common Stock) do not elect to exercise their options before the merger is
completed. In addition, the Company expects to incur approximately $2.1 million
in costs and expenses in connection with the merger, as set forth in the table
below.
COST OR FEE ESTIMATED AMOUNT
----------- ----------------
Financial advisory fees $1,300,000
Legal fees 500,000
Accounting fees 50,000
Bank commitment fee 100,000
Printing and mailing costs 100,000
SEC filing fees 8,400
Proxy Solicitor fees 11,000
Miscellaneous 30,600
----------
TOTAL $2,100,000
==========
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All fees and expenses of the merger will be paid by the Company. It is
a condition to completion of the merger that the Company has sufficient funds
available to pay the merger consideration and related fees and expenses. The
funds required to pay these amounts are to be provided from the proceeds from
the sale of the Company's Investment Notes, from a credit facility for up to $20
million and from working capital.
The Company has filed a Registration Statement with the SEC for the
offering of up to $150 million of Investment Notes which are being offered for
sale to the public. The Investment Notes will be offered from time to time and
the interest rate and maturity date will be determined at the time of issuance.
It is currently anticipated that between $25 million and $50 million of
Investment Notes will be outstanding at any time. The Company will pay simple
interest on the Investment Notes, either monthly, quarterly, semi-annually,
annually or at maturity, at the election of the purchaser. The Investment Notes
issued to date have a maturity date between February 28, 2002 and June 30, 2002
and bear interest at rates ranging from 10% to 11.75% per annum. The Investment
Notes are unsecured obligations of the Company and are subordinated and junior
in right of payment to the existing and future senior indebtedness of the
Company.
The Company has received a commitment letter from an independent
financial institution for a revolving credit facility of up to $20 million to be
used toward payment of the merger consideration and other purposes. The credit
facility will be secured by a first priority security interest in all of the
outstanding stock of BankAtlantic. The credit facility will have a three-year
term and will bear interest at a rate equal to the prime rate of the lending
institution from time to time minus 50 basis points. The credit facility will
contain customary covenants including financial covenants relating to regulatory
capital and maintenance of certain loan loss reserves at BankAtlantic. The
commitment is subject to conditions, including the absence of regulatory
restrictions or violations, satisfactory completion of due diligence and
completion of loan documentation.
The Company currently has no specific plans or arrangements to
refinance or repay the Investment Notes or the credit facility but expects to
repay the Investment Notes and the credit facility with operating cash flow and
the proceeds of future financings or equity or debt offerings.
DISSENTERS' RIGHTS
Although not required by Florida law or the Company's Articles of
Incorporation, the Board of Directors has decided to make the provisions of
Section 607.1320 of the Florida Business Corporation Act (the "FBCA") available
to any Public Class B Shareholder who does not wish to accept the $6.00 in cash
payable per share of Class B Common Stock in the merger. If a Public Class B
Shareholder properly perfects his or her dissenters' rights, such shareholder
will be entitled to have the "fair value" of his or her shares of Class B Common
Stock judicially determined as of the date prior to the effective date of the
merger. The Company will then pay the dissenting Public Class B Shareholder that
judicially determined "fair value" in exchange for such holder's shares of Class
B Common Stock. The fair value of a share of Class B Common Stock could be
determined to be higher or lower than $6.00. Holders of Class A Common Stock
will not be entitled to exercise dissenters' rights in connection with the
merger.
In order to perfect dissenters' rights, a Public Class B Shareholder
must fully comply with the statutory procedures of Sections 607.1301, 607.1302
and 607.1320 of the Florida Business Corporation Act ("FBCA") summarized below.
Those sections are attached as Appendix D to this Proxy Statement. We urge
Public Class B Shareholders to read those sections in their entirety and to
consult with their legal advisors. Please be aware that the failure to adhere
strictly to the requirements of Florida law in any regard will result in the
forfeiture of a Public Class B Shareholder's dissenters' rights.
To exercise dissenters' rights, a Public Class B Shareholder must
deliver to the Company, before the vote on the merger agreement at the Annual
Meeting, a written notice of such shareholder's intention to demand payment of
the fair value of such shareholder's shares of Class B Common Stock. A PUBLIC
CLASS B SHAREHOLDER WILL FORFEIT SUCH SHAREHOLDER'S DISSENTERS' RIGHTS IF HE OR
SHE DOES NOT FILE THIS WRITTEN NOTICE OF INTENTION TO DISSENT. In addition, a
Public Class B Shareholder who desires to exercise dissenters' rights must not
vote his or her shares of Class B Common Stock in favor of approval of the
merger agreement. MERELY VOTING AGAINST, ABSTAINING FROM VOTING ON OR FAILING TO
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<PAGE> 39
VOTE ON THE APPROVAL OF THE MERGER AGREEMENT WILL NOT CONSTITUTE A NOTICE OF
INTENTION TO DISSENT UNDER FLORIDA LAW.
If the merger agreement is approved by shareholders at the Annual
Meeting, the Company will provide notice of such approval to each Public Class B
Shareholder who properly filed a notice of intention to demand payment for such
shareholder's shares and who did not vote in favor of approval of the merger
agreement (a "Dissenting Shareholder"). To exercise dissenters' rights, a
Dissenting Shareholder must then file with the Company a written notice of such
shareholder's election to dissent within twenty days after the Company sent the
notice of shareholder approval described in the preceding sentence. A DISSENTING
SHAREHOLDER WILL FORFEIT SUCH SHAREHOLDER'S DISSENTERS' RIGHTS IF THE DISSENTING
SHAREHOLDER DOES NOT FILE AN ELECTION TO DISSENT WITHIN THE TWENTY-DAY PERIOD
DESCRIBED ABOVE. This election to dissent is in addition to the notice of
intention to dissent that the Dissenting Shareholder was required to file with
the Company before the Annual Meeting.
An election to dissent must state:
o the Dissenting Shareholder's name and address,
o the number shares of Class B Common Stock as to which the
shareholder dissents (referred to as "dissenting shares"), and
o a demand for payment of the fair value of those shares. A
Dissenting Shareholder who files an election to dissent;
o must deposit the certificate(s) representing the dissenting
shares with the Company when the election is filed;
o will be entitled only to payment pursuant to the procedure set
forth in the FBCA; and
o will not be entitled to vote or to exercise any other rights
of a shareholder of the Company.
A Dissenting Shareholder may withdraw his or her election to dissent at
any time before the Company makes an offer to purchase the dissenting shares as
described below. If a Dissenting Shareholder withdraws his or her election to
dissent, such shareholder will lose the right to be paid the fair value of such
holder's dissenting shares, and will be reinstated to have all the rights that a
Public Class B Shareholder has with respect to those shares of Class B Common
Stock.
If a Dissenting Shareholder makes a demand to the Company as described
in this section:
o the Company may restrict the transfer of the dissenting shares
from the date the election was filed,
o within ten days after the period in which a Dissenting
Shareholder may file a notice of election to dissent expires
or ten days after the merger is completed, whichever is later,
the Company will make a written offer to Dissenting
Shareholders to pay for their dissenting shares at a specified
price that the Company deems to be the fair value of those
shares, and
o the Company will deliver with its offer a copy of the
Company's:
o balance sheet as of the latest available date, and
o income statement for the twelve-month period ended on the date
of the balance sheet provided.
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<PAGE> 40
After the Company makes its offer, a Dissenting Shareholder will have
thirty days to accept it. If accepted within that thirty-day period, the Company
will pay for those shares of Class B Common Stock within ninety days of the date
of the offer. When a Dissenting Shareholder is paid the agreed value, he or she
will cease to have any interest in those shares.
If the Company does not offer to purchase the Dissenting Shareholder's
dissenting shares, or if a Dissenting Shareholder does not accept the Company's
offer within thirty days from the day it is made, then a Dissenting Shareholder
will have sixty days from the effective date of the merger to demand that the
Company file an action in any court of competent jurisdiction in Broward County,
Florida, to determine the fair value of his or her dissenting shares. The
Company will have thirty days from the day it receives a Dissenting
Shareholder's demand to initiate the action. The Company may also commence the
action on its own initiative at any time within the sixty-day period described
above. If the Company does not initiate the action within the above-prescribed
period, a Dissenting Shareholder may do so in the Company's name.
In any court proceedings, the court's jurisdiction will be plenary and
exclusive, but the court may appoint one or more appraisers to receive evidence
and recommend a decision on the question of fair value. A Dissenting Shareholder
who has properly perfected his or her dissenters' rights will be made a party to
the proceedings as an action against the dissenting shares, regardless of where
such shareholder resides. The Company will serve a Dissenting Shareholder with a
copy of the initial pleading and, if such shareholder is a proper party to the
proceeding, he or she will be entitled to a judgment against the Company for the
amount of the fair value of his or her dissenting shares. The Court may decide,
in its discretion, that a Dissenting Shareholder is entitled to an allowance for
interest at any rate that the court may find fair and equitable. The Company
will pay the amount found to be due within ten days after the final
determination of the proceedings, at which time a Dissenting Shareholder will
cease to have any interest in his or her dissenting shares.
The costs and expenses of the proceeding are determined by the court.
The expenses will include reasonable compensation for, and expenses of, any
appraisers, but will generally exclude the fees and expenses of counsel for, and
experts employed by, any party. Generally, the costs and expenses of the
proceeding will be assessed against the Company. However, if the Company makes
an offer to pay for dissenting shares and the court finds that a Dissenting
Shareholder's refusal to accept the offer was arbitrary, vexatious or not in
good faith all or any part of those costs and expenses may be apportioned and
assessed against such shareholder and any other Dissenting Shareholders who
rejected the Company's offer.
If the court determines that the value of dissenting shares materially
exceeds the amount that the Company offered to pay for those shares then the
court may, in its discretion, award to a Dissenting Shareholder a sum that the
court determines to be reasonable compensation to any expert(s) that a
Dissenting Shareholder employed in the proceeding.
Public Class B Shareholders who hold their shares of Class B Common
Stock in brokerage accounts or other nominee forms and who wish to exercise
dissenters' rights are urged to consult with their brokers to determine the
appropriate procedures for the proper perfection of dissenters' rights by such
nominee.
BECAUSE OF THE COMPLEXITY OF THE PROVISIONS OF THE FLORIDA LAW RELATING
TO DISSENTERS' RIGHTS THE COMPANY URGES PUBLIC CLASS B SHAREHOLDERS TO CONSULT
THEIR OWN LEGAL ADVISER IF THEY ARE CONSIDERING EXERCISING DISSENTERS' RIGHTS
WITH RESPECT TO THE MERGER.
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<PAGE> 41
PROPOSALS AT THE ANNUAL MEETING
PROPOSAL ONE: THE MERGER
THE MERGER
The Merger Agreement provides that, upon the filing of Articles of
Merger with the Florida Secretary of State, BBC Sub will be merged with and into
the Company and the separate existence of BBC Sub will cease and the Company
will continue as the surviving corporation. BBC Sub is a newly-formed Florida
corporation organized for the sole purpose of effecting the merger and has not
conducted any prior business. The merger will have the legal effects specified
under Section 607.1106 of the FBCA and the separate existence of each party will
cease and all property and obligations of the parties will vest in the surviving
corporation.
EFFECTIVE TIME OF THE MERGER
The merger will become effective upon the filing of Articles of Merger
with the Florida Secretary of State in accordance with the FBCA. If the merger
agreement is approved by shareholders at the Annual Meeting, the Company expects
to file the Articles of Merger as soon as practicable after the Annual Meeting.
CONVERSION OF COMMON STOCK
At the effective time of the merger, by virtue of the merger and
without any action on the part of the holders of any shares of common stock:
o each share of Class A Common Stock issued and outstanding
immediately prior to the effective time will automatically be
converted and remain outstanding as one share of Class A
Common Stock of the Company as the surviving corporation;
o each share of Class B Common Stock issued and outstanding
immediately prior to the effective time will cease to be
outstanding and will be converted into .0000002051 of a share
of Class B Common Stock of the Company as the surviving
corporation; however, no fractional shares will be issued in
the merger and, accordingly, any holder who is entitled to
receive less than one whole share of Class B Common Stock in
the merger will instead be entitled to receive $6.00 in cash
for each share of Class B Common Stock held immediately prior
to the effective time; and
o each share of BBC Sub common stock shall be canceled and
extinguished.
Shares of Class B Common Stock outstanding immediately prior to the
effective time, and held by a Dissenting Shareholder who has properly perfected
his or her right to dissent, will not be converted, but instead will entitle
such holder to payment as provided under Section 607.1320 of the FBCA.
EXCHANGE AGENT; EXCHANGE AND PAYMENT PROCEDURES
The Company expects to appoint American Stock Transfer Trust Company,
the Company's transfer agent, to act as exchange agent for the surrender of
Class B Common Stock certificates and to make payment of the cash merger
consideration to the Public Class B Shareholders in the merger. Promptly after
the effective time, the exchange agent will mail to each Public Class B
Shareholder a Letter of Transmittal and instructions for use in effecting the
surrender of certificates representing shares of Class B Common Stock. Upon
surrender to the exchange agent of a certificate formerly representing shares of
Class B Common Stock and acceptance by the exchange agent, the holder of such
certificate will be entitled to the cash merger consideration. Each certificate
for shares of Class B Common Stock will
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<PAGE> 42
be deemed, from and after the effective time, to represent only the right to
receive the $6.00 per share cash merger consideration payable with respect
thereto under the merger. No dividends or interest will be paid or will accrue
on any amount payable as cash merger consideration.
Each certificate which represents shares of Class A Common Stock
outstanding immediately before the effective time will be deemed, from and after
the effective time, to represent an identical number of shares of Class A Common
Stock of the Company as the surviving corporation into which those shares were
converted by virtue of the merger. HOLDERS OF CLASS A COMMON STOCK WILL NOT BE
REQUIRED TO EXCHANGE THEIR EXISTING CERTIFICATES AS A RESULT OF THE MERGER.
PUBLIC CLASS B SHAREHOLDERS SHOULD NOT DELIVER THEIR CERTIFICATES NOW.
CERTIFICATES SHOULD ONLY BE SENT PURSUANT TO INSTRUCTIONS SET FORTH IN THE
LETTER OF TRANSMITTAL TO BE MAILED TO PUBLIC CLASS B SHAREHOLDERS PROMPTLY
FOLLOWING THE EFFECTIVE TIME OF THE MERGER. IN ALL CASES, THE CASH MERGER
CONSIDERATION WILL BE PROVIDED ONLY IN ACCORDANCE WITH THE PROCEDURES SET FORTH
IN THE MERGER AGREEMENT AND LETTER OF TRANSMITTAL.
The Company strongly recommends that certificates for Class B Common
Stock and Letters of Transmittal be transmitted only by registered United States
mail, return receipt requested and appropriately insured. Public Class B
Shareholders whose certificates are lost will be required to make an affidavit
claiming such certificate or certificates lost, stolen or destroyed and, if
required by the Company, the posting of a bond in such amount as the Company may
reasonably require as indemnity against any claim that may be made against it
with respect to such certificate.
TREATMENT OF OPTIONS AND CONVERTIBLE SECURITIES
Pursuant to the Merger, at the effective time, each outstanding option
to purchase shares of Class A Common Stock under the Company's stock option
plans and stock option plans of the Company's subsidiaries shall remain
outstanding under the same terms and conditions that applied immediately prior
to the effective time, except that upon exercise of each such option, one share
of Class A Common Stock of the Company as the surviving corporation shall be
issuable in lieu of each share of Class A Common Stock issuable upon the
exercise thereof immediately prior to the effective time. Shares of Class A
Common Stock reserved for future issuance under the BankAtlantic Bancorp 1996
Stock Option Plan, the BankAtlantic Bancorp 1998 Stock Option Plan, the
BankAtlantic Bancorp 1999 Non-Qualified Stock Option Plan, the BankAtlantic
Bancorp 1999 Stock Option Plan, and the BankAtlantic Bancorp - Ryan Beck
Restricted Stock Incentive Plan shall automatically be converted into an equal
number of shares of Class A Common Stock of the Company as the surviving
corporation.
Further, pursuant to the merger agreement, all outstanding options to
acquire Class B Common Stock will automatically be exchanged for options to
acquire Class A Common Stock on a basis which will preserve the intrinsic value
of the option on the effective date of the merger. Specifically, the number of
options to purchase Class A Common Stock which will be issued in connection with
the merger will be determined on the following basis:
o The aggregate intrinsic value (the difference between the
market value per share and the exercise price) of the Class A
options to be issued in connection with the merger will not be
greater than the intrinsic value of the Class B options on the
Effective Date.
o The ratio of the exercise price of the Class B option to the
market value of a Class B share on the Effective date will not
be reduced.
o The provisions regarding term and vesting of the Class A
options will be identical to the currently outstanding Class B
options.
The effect of the foregoing may be to increase the number of options
outstanding. Assuming a Class B market price of $6.00 per share and a Class A
market price of $4.00 per share and assuming that no currently outstanding Class
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<PAGE> 43
B options are exercised prior to the Effective Date, options to acquire
2,371,079 shares of Class A stock at an exercise price of $2.2844 will be issued
in exchange for the currently outstanding options to purchase 1,586,088 shares
of Class B stock. The Board of Directors determined that it was in the Company's
best interest to provide for the exchange pursuant to the merger because of the
benefits associated with providing incentives to employees through continued
option holdings. While the Company was not permitted under NYSE rules and
regulations to provide for the conversion of shares of Class B Common Stock into
Class A Common Stock in the merger, the NYSE has indicated that providing for
the exchange of Class B options into Class A options in the merger would not
violate the NYSE's Voting Rights Policy.
The obligations of the Company under its currently outstanding 6-3/4%
Convertible Subordinated Debentures due 2006 and its 5-5/8% Convertible
Subordinated Debentures due 2007 (collectively, the "Convertible Debentures") to
issue shares of Class A Common Stock upon conversion of the Convertible
Debentures and the rights of the holder to convert the Convertible Debentures
into shares of Class A Common Stock shall remain in effect upon the same terms
and conditions set forth in the instruments governing the Convertible
Debentures, except that upon the conversion of the Convertible Debentures by a
holder, one share of Class A Common Stock of the Company as the surviving
corporation shall be issuable in lieu of each share of Class A Common Stock
issuable upon the exercise immediately prior to the effective time.
At the effective time, all obligations of the Company with respect to
all rights to purchase, sell or receive Class A Common Stock and all rights to
elect to make payments in Class A Common Stock under any agreement between the
Company and any director, officer or employee or of any subsidiary or under any
plan or program of the Company or any subsidiary, shall be automatically
converted into and shall become an identical right to purchase, sell, or receive
Class A Common Stock of the Company as the surviving corporation and an
identical right to elect to make payment in such Class A Common Stock under such
agreement, plan or program.
AMENDMENT TO ARTICLES OF INCORPORATION
The merger agreement provides that, as a result of the merger, the
Company's Articles of Incorporation will be amended as set forth in the form of
Articles of Amendment attached as Exhibit A to the merger agreement. The
Articles of Incorporation currently provide that, with certain limited
exceptions regarding stock dividends, the distribution per share of Class A
Common Stock must be identical to the distribution per share of Class B Common
Stock, except that any cash dividends payable per share of Class A Common Stock
must be equal to at least 110% of the cash dividend payable per share of Class B
Common Stock. As a result of the merger, BFC Financial Corporation will hold
only one share of Class B Common Stock of the Company as the surviving
corporation as compared to the 4,876,124 shares of Class B Common Stock that it
currently holds. In order to ensure that BFC's economic equity interest in the
Company after the merger is not diluted relative to the holders of Class A
Common Stock as a consequence of the merger, the Articles of Incorporation will
be amended as part of the merger to provide that each share of Class B Common
Stock will be entitled to distributions, including upon liquidation of the
Company, equal and identical to the distribution on 4,876,124 shares of Class A
Common Stock. In addition, in order to preserve the cash dividend premium
currently payable with respect to the Class A Common Stock, the proposed
amendment also provides that in the case of cash dividends, the distribution per
share of Class A Common Stock shall be equal to at least 110% of the amount
obtained by dividing the distribution per share of Class B Common Stock by
4,876,124, preserving the same per share premium for the Class A Common Stock as
existed before the merger.
Approval of the merger by shareholders will also constitute approval of
the proposed amendment to the Company's Articles of Incorporation.
CONDITIONS OF THE MERGER
The consummation of the merger is subject to the satisfaction or waiver
of the following conditions: (i) the approval of the merger by the holders of
Class A Common Stock and Class B Common Stock, each voting as a separate
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<PAGE> 44
class; (ii) the approval of the merger by the respective Boards of Directors of
the Company and BBC Sub shall not have been revoked; (iii) the absence of any
injunction, statute, regulation or proceeding which prevents or challenges
consummation of the merger; (iv) the availability of sufficient funds to the
Company to pay all amounts payable as a result of the merger; (v) the receipt by
the Company of a satisfactory opinion of counsel with respect to the federal
income tax consequences of the merger; and (vi) the receipt by the Company of
all other consents and approvals necessary, in the opinion of the Company, for
the consummation of the merger.
TERMINATION; AMENDMENT
The merger agreement provides that it may be terminated by the Company
and the merger abandoned at any time prior to completion of the merger if, for
any reason, the Board of Directors determines in its sole discretion that it is
inadvisable to complete the merger.
Prior to the approval by the Company's shareholders, the merger
agreement may be amended or modified in any respect and at any time by mutual
written consent of the Company and BBC Sub. Once shareholders have approved the
merger agreement, the merger agreement may be amended by the Company and BBC Sub
without further shareholder approval only if such modification or amendment does
not (i) change the method of converting the Class A Common Stock and Class B
Common Stock, (ii) alter or change the Articles of Incorporation of the Company
as the surviving corporation in a way that would require approval of the
shareholders or (iii) otherwise materially adversely affect the shareholders of
the Company.
ACCOUNTING TREATMENT
Assets and liabilities transferred relating to the merger will continue
to be accounted for at historical cost in a manner similar to a pooling of
interests with the retirement of a portion of one class of stock. The Company
will continue to allocate and report results of operations as between two
classes of stock, adjusted to reflect the reduction in equity interest of the
Class B shares retired, which reduction will increase the proportionate interest
of the Class A shares in the results of operations and stockholders equity.
MANAGEMENT AFTER THE MERGER
Upon completion of the merger, the Board of Directors and officers of
the Company as the surviving corporation shall be identical to the Board of
Directors and officers of the Company immediately before the merger. The Board
of Directors and officers shall hold such offices and positions subject to the
Articles of Incorporation and By-Laws of the Company as the surviving
corporation.
CHARTER DOCUMENTS OF SURVIVING CORPORATION
The Articles of Incorporation of the Company, as in effect immediately
prior to the effective time, will be the Articles of Incorporation of the
Company as the surviving corporation, except that the Articles of Incorporation
will, as a result of the merger, be amended as set forth in the form of Articles
of Amendment attached as Exhibit A to the merger agreement. The By-laws of the
Company, as in effect immediately prior to the effective time, shall be the
By-laws of the Company as the surviving corporation.
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<PAGE> 45
PROPOSAL TWO: ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTOR
The Company's Board of Directors currently consists of nine directors
divided into three classes, each of which has three year terms which expire in
annual succession. The Company's By-Laws provide that the Board of Directors
shall consist of no less than seven nor more than twelve directors. A total of
three directors will be elected at this meeting for a term expiring in 2003 and
in each case until their successors are duly elected and qualified. Unless
otherwise directed, each proxy executed and returned by a holder of Class B
Common Stock will be voted for the election of the nominees shown in the
accompanying table. If any nominee is unable to serve, which the Board of
Directors has no reason to expect, the shares represented by a proxy will be
voted for the other named nominees and for the person, if any, who is designated
by the Board of Directors to replace such nominee.
The following table sets forth the names of the directors of the
Company including the names of directors of the Company whose terms of office
will expire at the Annual Meeting and those who are nominated for election. Each
director whose term of office is to expire at the Annual Meeting has been
nominated for reelection at the Annual Meeting. The table contains certain
information with respect to the directors, including the principal occupation or
employment for at least the previous five years and his or her positions or
offices at the Company, BankAtlantic or Ryan Beck & Co. and the number and
percentage of shares of the Company's Class A and Class B Common Stock
beneficially owned by each director or nominee for director as of June 1, 2000.
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<PAGE> 46
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP AS OF JUNE 1, 2000
------------------------------- PERCENT PERCENT
OF OF
FIRST CLASS A CLASS B
BECAME A CLASS A CLASS B COMMON COMMON
NAME AND PRINCIPAL OCCUPATION OF EMPLOYMENT(1) AGE DIRECTOR(5) COMMON STOCK COMMON STOCK STOCK STOCK
---------------------------------------------- --- ----------- ------------ ------------ ----- -----
<S> <C> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS
ENDING IN 2003
JOHN E. ABDO................................. 56 1984 20,060(2) 395,007(2)(6) * 3.93
Vice Chairman of the Company, BankAtlantic
and BFC. Elected as an officer of
BankAtlantic in 1987. President and Chief
Executive Officer of Abdo Companies, Director
of Benihana National Corporation and Chairman
of the Board and President of Levitt
Corporation (f/k/a BankAtlantic Development
Corporation).
CHARLIE C. WINNINGHAM, II.................... 67 1976 154,283(3)(6) 102,751(3)(6) * *
President of C.C. Winningham Corporation, a
land surveying firm.
IRA T. SIEGEL................................ 55 1999 5,000 0 * *
Director of eData.com since January 2000,
Vice Chairman of eData.com since June 2000
and President of eData.com from January 1999
to May 2000. President and Chief Executive
Officer of Lexis-Nexis from 1995 to 1997.
Director of Reed Elsevir USA from 1990 to
April 1998.
DIRECTORS WITH TERMS ENDING IN 2001
JARETT S. LEVAN(7)........................... 26 1999 144 0 * *
Corporate Secretary of the Company and
BankAtlantic since January 1999. President of
BankAtlantic.com, an internet banking
division of BankAtlantic, since 1999. Jarett
Levan joined BankAtlantic in January 1998 and
became Vice President-Legal Department in
September 1998 and Manager-Corporate
Communications in November 1998. Jarett Levan
has worked in various departments of
BankAtlantic on a part-time basis since 1990.
Jarett Levan joined BankAtlantic after
completing Law School.
STEVEN M. COLDREN............................ 52 1986 45,805(3)(6) 12,529(3)(6) * *
Chairman and President of Business
Information Systems, Inc., a distributor of
dictation, word processing and computer
equipment and Chairman of Medical Information
Systems Corp., a distributor of hospital
computer systems.
MARY E. GINESTRA............................. 75 1980 69,730(6) 35,854(6) * *
Private Investor
DIRECTORS WITH TERMS ENDING IN 2002
BRUNO DIGIULIAN.............................. 66 1985 77,893(4)(6) 48,425(4)(6) * *
Of counsel, Ruden McClosky Smith Schuster &
Russell, P.A., a law firm.
ALAN B. LEVAN(7)............................. 55 1984 8,331,729(2)(6) 5,485,852(2)(6) 26.3 53.2
Chairman of the Board, Chief Executive
Officer and President of the Company and
BankAtlantic. Elected as an officer of
BankAtlantic in 1987. President, Chairman of
the Board and Chief Executive Officer of BFC.
BEN A. PLOTKIN............................... 44 1998 217,699(6)(7) 100 * *
Chairman, President and Chief Executive
Officer of Ryan Beck & Co. since January
1997, Senior Executive Vice President, from
January 1996 through 1997 and Executive Vice
President, from December 1990 through January
1996.
</TABLE>
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<PAGE> 47
---------------------
* Less than one percent of the class.
(1) Except as otherwise indicated, there has been no change in principal
occupation or employment during the past five years.
(2) Mr. Alan Levan has sole voting and investment power with respect to 83,087
shares of Class B Common Stock. The security ownership indicated above for
Mr. Alan Levan includes 8,296,890 Class A common shares and 4,876,124 Class
B common shares owned by BFC (See "Security Ownership of Certain Beneficial
Owners and Management"). BFC Financial Corporation may be deemed to be
controlled by Alan B. Levan (45%) and John E. Abdo (16%) who collectively
may be deemed to have an aggregate beneficial ownership of 61% of the
outstanding common stock of BFC.
(3) Shares beneficially owned by the indicated director and his wife are: Mr.
Coldren - 1,225 Class A shares, 360 Class B shares; and Mr. Winningham -
109,703 Class A shares, 80,811 Class B shares. The indicated director
shares voting and investment power with respect to these shares.
(4) Mr. DiGiulian's wife beneficially owns 33,313 Class A shares and 26,485
Class B shares.
(5) Indicates date of becoming a director of BankAtlantic. Each director became
a director of the Company on July 13, 1994 when BankAtlantic completed its
reorganization into a holding company structure except for Mr. Plotkin who
became a director in 1998 and Mr. Jarett Levan and Mr. Siegel who became
directors in 1999.
(6) Includes beneficial ownership of the following shares which may be acquired
within 60 days pursuant to stock options: Mr. DiGiulian - 44,580 Class A
shares, 21,940 Class B shares; Mr. Coldren - 44,580 Class A shares, 12,169
Class B shares; Mrs. Ginestra - 44,580 Class A shares, 21,940 Class B
shares; Mr. Winningham - 44,580 Class A shares, 21,940 Class B shares; Mr.
Plotkin - 94,391 Class A shares; Mr. Siegel - 5,000 Class A shares; Mr.
Alan Levan - 22,008 Class A shares, 526,434 Class B shares; and Mr. Abdo
263,218 Class B shares.
(7) Jarett Levan is Alan Levan's son.
THE BOARD OF DIRECTORS RECOMMENDS THAT ALL OF THE NOMINEES
BE ELECTED AS DIRECTORS.
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<PAGE> 48
IDENTIFICATION OF EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The following individuals are executive officers of the Company and/or its
wholly-owned subsidiary, BankAtlantic:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Alan B. Levan 55 Chairman of the Board, Chief Executive Officer and President of the
Company and BankAtlantic
John E. Abdo 56 Vice Chairman of the Company and BankAtlantic, Chairman of the
Board and President of Levitt Corporation (f/k/a BankAtlantic
Development Corporation), a wholly owned subsidiary of BankAtlantic
Jay R. Fuchs 45 Executive Vice President of BankAtlantic
Frank V. Grieco 55 Senior Executive Vice President of the Company and BankAtlantic
Jay C. McClung 52 Executive Vice President and Chief Credit Officer of BankAtlantic
James A. White 56 Executive Vice President and Chief Financial Officer of the Company and
BankAtlantic
Jean E. Carvalho 65 Executive Vice President, Customer Service Manager of BankAtlantic
Lewis F. Sarrica 56 Executive Vice President and Chief Investment Officer of BankAtlantic
Marcia K. Snyder 45 Executive Vice President, Corporate Lending Division of BankAtlantic
Andrea J. Weiner-Allen 43 Executive Vice President, Operations and Technology of BankAtlantic
Jarett S. Levan 26 President of BankAtlantic.com, an internet banking division of
BankAtlantic, and Corporate Secretary of the Company and BankAtlantic
</TABLE>
All officers serve until they resign or are replaced or removed by the
Board of Directors.
The following additional information is provided for the executive
officers shown above who are not directors of the Company or nominees for
directors:
FRANK V. GRIECO joined BankAtlantic in 1991 as a Senior Executive Vice President
and Director. Mr. Grieco was a Director of the Company from 1991 to 1998.
JAY R. FUCHS joined BankAtlantic as an Executive Vice President in May 2000.
Before joining BankAtlantic Mr. Fuchs held various executive positions with
American Bankers Insurance Group, including President of American Bankers
Insurance Company from 1995 to 1999.
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<PAGE> 49
JAY C. MCCLUNG joined BankAtlantic as Executive Vice President and Chief Credit
Officer in February 2000. Before joining BankAtlantic Mr. McClung was the
Executive Vice President and Chief Credit Officer at Synovus Financial
Corporation from 1995 through 2000.
JAMES A. WHITE joined BankAtlantic and became Executive Vice President and Chief
Financial Officer in January 2000. Prior to joining BankAtlantic Mr. White was
Chief Financial Officer of BOK Financial Corporation.
JEAN E. CARVALHO joined BankAtlantic in December 1978 and became Executive Vice
President in March 1997. Ms. Carvalho was Corporate Secretary of the Company
from 1994 to 1998. Effective January 1, 1999 Ms. Carvalho became the Customer
Service Manager.
LEWIS F. SARRICA joined BankAtlantic in April 1986 and became Executive Vice
President, Chief Investment Officer in December 1986.
MARCIA K. SNYDER joined BankAtlantic in November 1987 and became Executive Vice
President, Commercial Lending Division in August 1989.
ANDREA J. WEINER-ALLEN joined BankAtlantic in May 1989 and became Executive Vice
President, Operations and Information Services Division in December 1996. From
January 1999 through April 2000, Ms. Weiner-Allen also served as Executive Vice
President of Community Banking. In May 2000, Ms. Weiner-Allen became Executive
Vice President, Operations and Technology.
DIRECTORS' FEES
Directors of the Company each received an annual retainer of 18,000 in
1999 with no additional compensation for attendance at each Board of Directors'
meeting or meeting of a committee of which he or she is a member. Directors who
are also officers of the Company, BankAtlantic or Ryan, Beck & Co. do not
receive additional compensation for attendance at Board of Directors' meetings
or committee meetings. In 1994, upon the establishment of the 1994 BankAtlantic
Stock Option Plan, non-employee directors each received a one time grant of
options to acquire 21,940 shares of the Company's Class B Common Stock. In 1996,
upon the establishment of the 1996 BankAtlantic Bancorp Stock Option Plan
non-employee directors each received a grant of options to acquire 14,040 shares
of the Company's Class A Common Stock. Additionally, under the 1996 Stock Option
Plan the non-employee directors received on May 1, 1997 an additional grant of
options to acquire 14,040 shares of the Company's Class A Common Stock. In 1998,
upon the establishment of the 1998 BankAtlantic Bancorp Stock Option Plan
non-employee directors each received a grant of options to purchase 5,750 shares
of the Company's Class A Common Stock. On May 2, 2000, non-employee directors
each received a grant of options to purchase 5,000 shares of the Company's Class
A Common Stock under the 1999 BankAtlantic Bancorp Stock Option Plan.
DIRECTOR AND MANAGEMENT INDEBTEDNESS
BankAtlantic, in the ordinary course of its business, makes mortgage
and other installment loans to its employees, officers and directors. These
loans are made pursuant to normal lending criteria and in management's judgment
do not involve more than the normal risk of collectability nor present any other
unfavorable features. Employees, officers and directors of BankAtlantic, prior
to May 31, 1990, received a preferential interest rate on home mortgage loans.
Executive officers and directors have not been entitled to reduced rates or
reduced points on any new loans granted after May 31, 1990.
The following table sets forth certain information, as of June 1, 2000,
with respect to loans made by BankAtlantic to its executive officers and
directors and members of their immediate families, who had aggregate borrowings
of $60,000 or greater from BankAtlantic at any time since January 1, 1999.
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<PAGE> 50
<TABLE>
<CAPTION>
HIGHEST AMOUNT OUTSTANDING OUTSTANDING BALANCE AT
NAME AND CAPACITY IN WHICH SERVED SINCE JANUARY 1, 1999 JUNE 1, 2000 INTEREST RATE
--------------------------------- --------------------- ------------ -------------
<S> <C> <C> <C>
Jean E. Carvalho, Executive Vice President $ 80,947 $ 79,776 (1)
Charlie C. Winningham II, Director 164,275 157,409 7.50*
</TABLE>
-----------------
* Denotes preferential rate
(1) Equity credit line is prime plus 1% and first mortgage loan with
preferential employee rate of 8.75%.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors met eleven (11) times, had two (2) Special
Meetings, and were telephonically polled once during the last fiscal year. The
Board of Directors has established a number of committees, including Audit and
Compensation Committees. The Board of Directors does not have a Nominating
Committee. Each of the members of the Board of Directors attended at least 75%
of the meetings of the Board and Committees on which he or she served.
The Audit Committee consists of: Steven M. Coldren, Chairman, Charlie
C. Winningham, II and Mary E. Ginestra. The Committee met seven (7) times during
the 1999 fiscal year. The Audit Committee recommends engagement of the
independent auditors, considers the fee arrangement and scope of the audit,
reviews the financial statements and the independent auditors' report, reviews
the activities and recommendations of BankAtlantic's internal auditors,
considers comments made by the independent auditors with respect to
BankAtlantic's and the Company's internal control structure, and reviews
internal accounting procedures and controls with BankAtlantic's financial and
accounting staff.
The Compensation Committee consists of: Bruno L. DiGiulian, Chairman,
Mary E. Ginestra, Charlie C. Winningham, II and Steven M. Coldren. The Committee
met six (6) times during the 1999 fiscal year. The Compensation Committee
establishes and implements compensation policies and programs for BankAtlantic
executives and recommends the compensation arrangements for executive management
and directors. It also served as the Stock Option Committee for the purpose of
making grants of options under all of the Company's Stock Option Plans. Ryan,
Beck & Co. administers various restricted stock issuances to its employees with
oversight functions by the Company's Compensation Committee.
TIMELY FILING OF 16(a) REPORTS
Based solely upon a review of the copies of the forms furnished to the
Company, the Company believes that during the year ended December 31, 1999, all
filing requirements under Section 16(a) of the Securities Exchange Act of 1934
applicable to its officers, directors and greater than 10% beneficial owners
were complied with on a timely basis except for a Form 3 report covering Jarett
Levan and a Form 3 report covering Ira Siegel. Further, one Form 4 report was
filed late by each of Lewis Sarrica and Bruno DiGiulian covering one transaction
each.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Alan Levan and Mr. John Abdo have investments or are partners in
real estate joint ventures with developers, that in connection with other
ventures have loans from BankAtlantic or are partners with Levitt Corporation, a
wholly owned subsidiary of the Company. Also beginning in September 1998, Levitt
agreed to pay the Abdo Companies, Inc., which is controlled by Mr. Abdo, $50,000
per month for services and management, including activities relating to
BankAtlantic, the Company, St. Lucie West Holding Corporation and the Levitt
joint ventures. Beginning during 1999, Levitt paid BFC $20,000 per quarter for
management and accounting services provided to Levitt. BFC paid the Company
approximately $62,000 during 1999 for office space used by BFC in the Company's
headquarters and for miscellaneous administrative and other related expenses.
-50-
<PAGE> 51
SUMMARY COMPENSATION TABLE
Officers of the Company receive no additional compensation other than
that paid by the Company's subsidiaries. The following table sets forth certain
summary information concerning compensation paid or accrued by BankAtlantic or
Ryan, Beck to or on behalf of BankAtlantic's Chief Executive Officer ("CEO") and
each of the four other highest paid executive officers (determined as of
December 31, 1999) for the fiscal years ended December 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------------------------------------
NUMBER OF
RESTRICTED STOCK
NAME AND PRINCIPAL OTHER ANNUAL STOCK AWARD(S) OPTIONS LTIP ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION ($) AWARDED PAYOUTS COMPENSATION
------------------- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ALAN B. LEVAN 1999 $372,705 $ 20,000 -- -- 69,000 -- $ 141,467(b)
Chairman of the Board, 1998 370,639 -- -- -- 60,000 149,747(b)
CEO, President 1997 350,574 -- -- -- 93,750 156,432(b)
FRANK V. GRIECO 1999 318,925 20,000 -- -- 34,500 -- 1,640(a)
Senior Executive 1998 305,724 -- -- -- 30,000 -- 2,100(a)
Vice President 1997 292,540 59,000 -- 46,877 1,600(a)
LEWIS F. SARRICA 1999 234,834 20,000 -- -- 17,250 -- 1,640(a)
Executive Vice 1998 225,519 -- -- -- 15,000 -- 2,100(a)
President, Chief 1997 210,812 31,251 23,440 1,600(a)
Investment Officer
MARCIA SNYDER 1999 208,998 20,000 -- -- 17,250 -- 1,640(a)
Executive Vice 1998 200,919 -- -- -- 17,250 -- 2,100(a)
President, Corporate 1997 179,970 65,500 28,956 1,600(a)
Lending
BEN A. PLOTKIN 1999 263,688 1,025,000 -- -- 34,500 150,000 42,687
Chairman, President 1998(d) 135,475 722,600 -- 1,253,944(c) -- -- --
and Chief Executive 1997 N/A -- -- -- -- --
Officer of Ryan, Beck
& Co., Director of the
Company
</TABLE>
-------------------
(a) BankAtlantic contributes $1,600 to its 401(k) savings plan on behalf of the
named executive for all years, and issued Preferred Stock with a value of
$500 by a Real Estate Investment Trust ("REIT ") controlled by BankAtlantic
during 1998. A dividend payment for the REIT for 1999 was $40.
(b) Includes $1,600 BankAtlantic contributions in each year to its 401(k)
savings plan on behalf of Mr. Alan Levan, issuance of Preferred Stock with
a value of $500 from a REIT controlled by BankAtlantic during 1998 and a
$40 dividend payment for the REIT for 1999 and $139,827 in 1999, $147,647
in 1998 and $154,832 in 1997 representing the value of the benefit received
by Mr. Alan Levan in connection with premiums paid by the Company for a
split-dollar life insurance policy. See " - Split-Dollar Life Insurance
Plan".
(c) During the year ended December 31, 1998, Mr. Plotkin was awarded 132,237
shares of restricted Class A Common Stock which at December 31, 1998 had a
fair market value of $740,520. 109,697 of the shares were issued on June
30, 1998 under the Restricted Stock Award Plan for Key Employees of Ryan,
Beck & Co. and had a fair market value on that date of $1.1 million. These
shares vest on June 30, 2002. 22,540 of the shares were issued under the
BankAtlantic Bancorp 1998 Restricted Stock Incentive Plan on December 15,
1998 and had a fair market value of $127,400 on that date. These shares
vested in January 2000. During the year ended December 31, 1999 and 1998,
Mr. Plotkin received $12,687 and $5,141 of dividends on the restricted
stock awards. The dividends were paid at the same dividend rate as the
Company's Class A Common Stock. On March 1, 2000, Mr. Plotkin exchanged his
109,697 shares of restricted Class A Common Stock for the establishment of
a $1.1 million deferred account in the BankAtlantic Bancorp-Ryan Beck
Deferred Compensation Plan.
(d) Mr. Plotkin became an Executive Officer of the Company in connection with
the Company's acquisition of Ryan, Beck & Co. on June 30, 1998.
Accordingly, amounts shown in the table for Mr. Plotkin for 1998 reflect
only amounts paid to Mr. Plotkin during the period from July 1, 1998 to
December 31, 1998.
-51-
<PAGE> 52
OPTIONS GRANTS TABLE
The following table sets forth information concerning individual grants of
stock options to the named executives in the Summary Compensation Table pursuant
to the Company's 1996 and 1998 Stock Option Plan during the fiscal year ended
December 31, 1999. The Company has not granted and does not currently grant
stock appreciation rights.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE PRICE TERM(2)
OPTIONS EMPLOYEES IN PER EXPIRATION --------------------------------
NAME GRANTED(1) FISCAL YEAR SHARE DATE 5%($) 10%($)
---- ---------- ----------- ----- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
ALAN B. LEVAN 69,000 4.49 $6.20 4-6-09 $ 274,958 $ 691,048
FRANK V. GRIECO 34,500 2.24 6.20 4-6-09 137,479 345,524
LEWIS F. SARRICA 17,250 1.12 6.20 4-6-09 68,739 172,762
MARCIA SNYDER 17,250 1.12 6.20 4-6-09 68,739 172,762
BEN A. PLOTKIN 34,500 2.24 6.20 4-6-09 137,479 345,524
</TABLE>
------------------
(1) Options vest on August 6, 2004. All option grants are in Class A Common
Stock.
(2) Amounts for the named executive have been calculated by multiplying the
exercise price by the annual appreciation rate shown (compounded for the
remaining term of the options), subtracting the exercise price per share
and multiplying the gain per share by the number of shares covered by the
options. The dollar amounts under these columns are the result of
calculations based upon assumed rates of annual compounded stock price
appreciation specified by regulation and are not intended to forecast
actual future appreciation rates of the Company's stock price.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table sets forth as to each of the named executive officers
information with respect to option exercises during 1999 and the status of their
options on December 31, 1999: (i) the number of shares of Class A and Class B
Common Stock underlying options exercised during 1999, (ii) the aggregate dollar
value realized upon the exercise of such options, (iii) the total number of
exercisable and non-exercisable stock options held on December 31, 1999 and (iv)
the aggregate dollar value of in-the-money exercisable options on December 31,
1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS ON 12/31/99 MONEY OPTIONS ON 12/31/99(1)
------------------------------- ----------------------------
NUMBER OF EXERCISABLE UNEXERCISABLE
CLASS B SHARES ----------- -------------
ACQUIRED UPON VALUE REALIZED
NAME EXERCISE OF OPTION UPON EXERCISE CLASS A CLASS B CLASS A CLASS B EXERCISABLE UNEXERCISABLE
---- ------------------ --------------- ------- ------- ------- ------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alan B. Levan 0 $ 0 22,008 263,217 392,264 263,217 $ 456,418 $ 433,966
Frank V. Grieco 34,500 122,476 0 97,113 207,140 131,612 168,394 216,989
Lewis F. Sarrica 0 0 0 65,811 103,575 65,811 114,116 108,503
Marcia Snyder 0 0 0 65,811 103,575 65,811 114,116 108,503
Ben A. Plotkin 0 0 53,557 0 61,019 0 0 0
</TABLE>
------------------
(1) Based upon fair market values of $4.13 and $5.13 at December 31, 1999 which
is the closing price for Class A and Class B Common Stock, respectively, as
reported on the New York Exchange for the Class A Common Stock and the
Nasdaq National Market for the Class B Common Stock on the last trading
date of 1999.
-52-
<PAGE> 53
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has designated Directors DiGiulian, Winningham,
Coldren and Ginestra to serve on the Compensation Committee. The Company's
executive officers are also executive officers of BankAtlantic or Ryan, Beck and
are compensated by BankAtlantic or Ryan Beck, as applicable, and receive no
additional compensation from the Company. As described under "Director and
Management Indebtedness", Director Winningham has an outstanding loan from
BankAtlantic. Ryan Beck's compensation committee determines how Ryan Beck
executive officers are compensated.
EXECUTIVE OFFICER COMPENSATION
BankAtlantic's compensation program for executive officers consists of
four key elements: a base salary, an incentive bonus, deferred compensation and
periodic grants of stock options. The Committee believes that this approach best
serves the interests of shareholders by ensuring that executive officers are
compensated in a manner that advances both the short and long term interests of
the Company and its shareholders. Thus, compensation for BankAtlantic's
executive officers involves a portion of pay which depends on incentive payments
which are earned only if corporate goals are met or exceeded, and stock options,
which directly relate a significant portion of an executive officer's long term
remuneration to stock price appreciation realized by the Company's shareholders.
BASE SALARY
The Company offers competitive salaries based on a review of market
practices and the duties and responsibilities of each officer. In setting base
compensation, the Committee annually examines market compensation levels and
trends observed in the labor market. Market information is used as an initial
frame of reference for annual salary adjustments and starting salary offers.
Salary decisions are determined in a structured annual review by the Committee
with input from the Chief Executive Officer ("CEO"). Salary recommendations take
into account the decision making responsibilities of each position, and the
contribution, experience and work performance of each executive officer.
ANNUAL INCENTIVE PROGRAM
The Company's management incentive program is designed to motivate
executives by recognizing and rewarding performance. The annual incentive
program is used to compensate executives based on the Company's profitability
and achievement of individual performance goals. Generally, a minimum
profitability threshold must be achieved before any incentive may be earned.
Each year, the Committee establishes an incentive payout schedule based
on the achievement of the Company's annual financial objectives. Each
participant has a competitive target award expressed as a percentage of salary,
which varies according to level of responsibility. Further, each participant's
target award generally includes both corporate and individual components, which
are weighted according to the executive's sphere of responsibility. No payments
were made under the annual incentive program in 1999.
LONG-TERM INCENTIVE PLAN
A Long-Term Incentive Compensation Plan is the primary vehicle for
providing long-term compensation to those officers who have a more direct impact
on creating shareholder value. Executive officers are eligible to receive on an
annual basis, subject to five (5) year vesting, deferred compensation of $10,000
each if certain corporate profits are achieved. The same individuals will be
eligible to receive, subject to 5 year vesting, deferred compensation of an
-53-
<PAGE> 54
additional $10,000 each if higher corporate profits are achieved. Amounts were
paid to executives, including the CEO, under this plan during 1999.
STOCK OPTIONS
Executive officers of BankAtlantic were granted stock options during
1999. All of the stock options were granted with an exercise price equal to at
least 100% of the market value of Class A Common Stock on the date of the grant.
As such, the higher the trading price of the Class A Common Stock, the higher
the value of the stock options. The granting of options is totally discretionary
and options are awarded based on an assessment of an employee's contribution to
the success and growth of the Company. Grants of stock options to executive
officers are generally made upon the recommendation of the CEO based on the
level of an executive's position with the Company, BankAtlantic or Ryan, Beck,
an evaluation of the executive's past and expected performance, the number of
outstanding and previously granted options and discussions with the executive.
The Board of Directors believes that providing executives with opportunities to
acquire an interest in the growth and prosperity of the Company through the
grant of stock options will enable the Company and BankAtlantic to attract and
retain qualified and experienced executive officers and offer additional long
term incentives. The Board of Directors believes that utilization of stock
options more closely aligns the executives' interests with those of the
Company's shareholders, since the ultimate value of such compensation is
directly dependent on the stock price.
COMPENSATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
As previously indicated, the Committee believes that the Company's
total compensation program is appropriately based upon business performance,
market compensation levels, and personal performance. The Committee reviews and
fixes the base salary of the CEO based on those factors described above for
other executive officers as well as the Committee's assessment of Mr. Alan
Levan's past performance as CEO and its expectation as to his future
contributions. In 1999, Mr. Alan Levan received a 4.4% base salary increase.
This increase was consistent with the increases given to other members of
executive management and was considered appropriate based on Mr. Levan's efforts
and contributions to the Company.
As discussed under "--Split-Dollar Life Insurance Plan," Mr. Alan Levan
benefitted from the establishment of a "Split-Dollar Life Insurance Plan". This
plan was originally established to restore retirement benefits which were
limited under changes to the Internal Revenue Code (the "Code"). Mr. Alan Levan
is currently the only participant under this Split-Dollar Life Insurance Plan
and his 1999 benefit is shown under the Summary Compensation Table. The Split-
Dollar Plan was not included in the freezing of the pension plan.
The Committee took note of Mr. Alan Levan's leadership during 1998, a
difficult year for the Company and BankAtlantic, and the return of profitability
in 1999. Specifically, it acknowledged his efforts to restructure BankAtlantic,
which resulted in the decision to exit unprofitable products and businesses and
the streamlining of operations. The Committee believes that the Company's 1999
results were the result of the positive steps taken in 1998 and continued
efforts in 1999. Additionally, future increases and bonuses will continue to
reflect the amounts paid to chief executive officers at other public companies,
as well as the Company's financial condition, operating results and attainment
of strategic objectives.
SUBMITTED BY THE MEMBERS OF THE COMPENSATION COMMITTEE:
Bruno L. DiGiulian, Chairman Mary E. Ginestra
Charlie C. Winningham, II Steven M. Coldren
-54-
<PAGE> 55
RETIREMENT BENEFITS
All of the individuals named in the Summary Compensation Table, except
Mr. Plotkin, are participants in the Retirement Plan for Employees of
BankAtlantic ("the Plan"), which is a defined benefit plan. The Plan is designed
to provide retirement income related to an employee's salary and years of active
service. The cost of the Plan is paid by BankAtlantic and all contributions are
actuarially determined. BankAtlantic's contributions to the Plan with respect to
the individuals named in the Summary Compensation Table cannot readily be
separated or individually calculated by the Plan actuaries. At December 31,
1999, the individuals named in the summary Compensation Table had the following
credited years of service under the Plan: Mr. Alan Levan - 26 years, Mr. Grieco
- 16 years, Mr. Sarrica - 13 years and Ms. Snyder - 11 years. Effective December
31, 1998, the company froze the benefits under the Plan and fully vested all
participants. While the Plan is frozen, there will be no future accrual for
service benefits.
In general, the Plan provides for monthly payments to or on behalf of
each covered employee upon such employee's retirement (with provisions for early
or postponed retirement), death or disability. As a result of the freezing of
benefits, the amount of the monthly payments is based generally upon the
employee's average regular monthly compensation for the highest consecutive five
years of the last ten years ended December 31, 1998 or prior retirement, death
or disability, and upon such employee's years of service with BankAtlantic, at
such date. All participants were vested on December 31, 1998. Benefits are
payable for ten-years certain and life thereafter. The benefits are not subject
to any reduction for Social Security or any other external benefits.
As permitted by the Employee Retirement Income Security Act of 1974,
BankAtlantic amended the Plan and adopted a supplemental benefit for certain
executives. This was necessary because of a previous reduction in benefit
increases under the Plan imposed by the Internal Revenue Code (the "Code"). The
Code restricts the amount of the executive's compensation that may be taken into
account for Plan purposes, regardless of the executive's actual compensation.
The amendment to the Plan enhances retirement benefits to the executives named
below by providing to the executives, to the extent permitted by the Code, the
same retirement benefits to which they would have been eligible under the Plan
had the Code limits not been enacted. The approximate targeted percentages of
pre-retirement compensation for which the executives will be eligible under the
Plan as a result of the supplemental benefit at age 65 were as follows: Mr. Alan
Levan - 33%, Mr. Grieco - 42%, and Mr. Sarrica - 39%. The supplemental benefit
was also frozen as of December 31, 1998. Because the percentage of
pre-retirement compensation payable from the Plan to Mr. Alan Levan, including
the Plan's supplemental benefit, fell short of the benefit that Mr. Alan Levan
would have received under the Plan absent the Code limits, BankAtlantic adopted
the BankAtlantic Split-Dollar Life Insurance Plan, an employee benefit plan
described below.
The following table illustrates annual pension benefits at age 65 for
various levels of compensation and years of service at December 31, 1998, the
date on which such benefits were frozen.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS
YEARS OF CREDITED SERVICE AT DECEMBER 31, 1998
----------------------------------------------------------------------------------------------------
AVERAGE FIVE YEAR
COMPENSATION AT
DECEMBER 31, 1998 5 YEARS 10 YEARS 20 YEARS 30 YEARS 40 YEARS
----------------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$120,000 $10,380 $20,760 $41,520 $62,280 $83,160
$150,000 13,005 26,010 52,020 78,030 104,160
$160,000 and above 13,880 27,760 55,520 83,280 111,160
</TABLE>
SPLIT-DOLLAR LIFE INSURANCE PLAN
BankAtlantic adopted the Split-Dollar Life Insurance Plan (the
"Split-Dollar Plan") in 1996 to restore retirement benefits to executives that
were limited under changes to the Code. Currently, because Mr. Alan Levan is
-55-
<PAGE> 56
the only executive whose reduction in benefits could not be completely addressed
through an amendment to the Plan, Mr. Alan Levan is the only participant in the
Split-Dollar Plan. Under the Split-Dollar Plan and its accompanying agreement
with Mr. Alan Levan, BankAtlantic arranged for purchase of an insurance policy
(the "Policy") insuring the life of Mr. Alan Levan. Pursuant to its agreement
with Mr. Alan Levan, BankAtlantic will make premium payments for the Policy. The
Policy is anticipated to accumulate significant cash value over time, which cash
value is expected to supplement Mr. Alan Levan's retirement benefit payable from
the Plan. Mr. Alan Levan owns the Policy but BankAtlantic will be reimbursed for
the amount of premiums the Bank pays for the Policy upon the earlier of Mr. Alan
Levan's retirement or death. The portion of the amount paid in prior years
attributable to the 1999 premium for the insurance policy that is considered
compensation to Mr. Alan Levan is included in the Summary Compensation Table.
The Split-Dollar Plan was not included in the freezing of the pension plan and
accordingly, Mr. Alan Levan has continued to receive benefits under the Plan.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total returns
(assuming reinvestment of dividends) for the Class B Common Stock, the Nasdaq
Stock Market (U.S. companies) and Nasdaq Financial Stocks and assumes $100 is
invested on December 31, 1994.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
NASDAQ BANK STOCKS VALUE BANKATLANTIC BANCORP VALUE
NASDAQ US STOCKS VALUE OF OF OF
------------------------- ------------------------ --------------------------
<S> <C> <C> <C>
12/31/94 100.00 100.00 100.00
12/31/95 141.33 149.00 120.90
12/31/96 173.89 196.73 284.20
12/31/97 213.07 329.39 226.93
12/31/98 300.25 327.11 254.50
12/31/99 542.43 314.42 168.31
</TABLE>
-56-
<PAGE> 57
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial information presented below has
been derived from the audited consolidated financial statements of the Company
for the fiscal years ended December 31, 1995 through December 31, 1999, and the
unaudited consolidated financial statements of the Company for the three months
ended March 31, 2000 and 1999, all of which are incorporated by reference in
this Proxy Statement. The audited consolidated financial statements of the
Company can be found in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999 and the unaudited consolidated financial statements of
the Company can be found in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000. See "Where You Can Find More Information." The
financial information set forth below should be read in conjunction with the
Company's consolidated financial statements.
-57-
<PAGE> 58
SELECTED CONSOLIDATED FINANCIAL DATA
OF BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
At or for the Three Months Ended
March 31,
--------------------------------------------
2000 1999
------------------- ---------------
<S> <C> <C>
OPERATING RESULTS:
Net interest income................................................. $30,052 $27,668
Provision for loan losses........................................... 10,787 5,164
Net interest income after provision for loan losses................. 19,265 22,504
Non-interest income................................................. 28,749 23,469
Non-interest expenses............................................... 41,901 32,295
Income before income taxes and extraordinary item................... 6,113 13,678
Provision for income taxes.......................................... 2,432 5,507
Income before extraordinary item.................................... 3,681 8,171
Extraordinary item, net of taxes.................................... 3,466 0
------------------- ---------------
Net income.......................................................... $7,147 $8,171
=================== ===============
CLASS A COMMON SHARES
Diluted earnings per share before extraordinary item................ $0.09 $0.16
Diluted earnings per share from extraordinary item.................. 0.06 0.00
------------------- ---------------
Diluted earnings per share.......................................... $0.15 $0.16
=================== ===============
CLASS B COMMON SHARES
Diluted earnings per share before extraordinary item................ $0.08 $0.16
Diluted earnings per share from extraordinary item.................. 0.05 0.00
------------------- ---------------
Diluted earnings per share.......................................... $0.13 $0.16
=================== ===============
</TABLE>
-58-
<PAGE> 59
SELECTED CONSOLIDATED FINANCIAL DATA
OF BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
AT OR FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------
1999 1998 1997 1996 1995
--------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net interest income ............................... $ 117,266 $ 102,285 $ 94,530 $ 76,266 $ 63,921
Provision for loan losses ......................... 30,658 21,788 11,268 5,844 4,182
Net interest income after provision for loan losses 86,608 80,497 83,262 70,422 59,739
Non-interest income ............................... 100,069 56,880 33,366 26,818 13,974
Non-interest expenses ............................. 139,779 120,665 77,722 68,221 48,785
Income before income taxes and discontinued
operations ........................................ 46,898 16,712 38,906 29,019 24,928
Provision for income taxes ........................ 18,106 6,526 15,248 11,380 8,664
Income from continuing operations ................. 28,792 10,186 23,658 17,639 16,264
Income (loss) from discontinued operations (less
applicable income taxes benefit) .................. 2,077 (18,220) 4,111 1,372 2,155
Net income (loss) ................................. 30,869 (8,034) 27,769 19,011 18,419
Total dividends on non-cumulative preferred
stock ............................................. 0 0 0 0 2,030
--------- --------- --------- --------- ---------
Net income (loss) available for common shares .... $ 30,869 $ (8,034) $ 27,769 $ 19,011 $ 16,389
CLASS A COMMON SHARES
Diluted earnings per share from continuing
operations ........................................ $ 0.59 $ 0.25 $ 0.58 $ 0.47 N/A
Diluted earnings (loss) per share from
discontinued operations ........................... 0.03 (0.45) 0.09 0.03 N/A
--------- --------- --------- --------- ---------
Diluted earnings (loss) per share ................. $ 0.62 $ (0.20) $ 0.67 $ 0.50 N/A
========= ========= ========= ========= =========
CLASS B COMMON SHARES
Diluted earnings per share from continuing
operations ........................................ $ 0.57 $ 0.23 $ 0.59 $ 0.56 $ 0.47
Diluted earnings (loss) per share from
discontinued operations ........................... 0.03 (0.41) 0.09 0.03 0.07
--------- --------- --------- --------- ---------
Diluted earnings (loss) per share ................. $ 0.60 $ (0.18) $ 0.68 $ 0.59 $ 0.54
========= ========= ========= ========= =========
</TABLE>
-59-
<PAGE> 60
<TABLE>
<CAPTION>
AT OR FOR
THE THREE
MONTHS
ENDED AT OR FOR THE YEARS ENDED DECEMBER 31,
MARCH 31, ----------------------------------------------------------------
-------------
2000 1999 1998 1997 1996 1995
-------------- ----------- ---------- ---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets ........................ $4,259,650 $4,159,901 $3,788,975 $3,064,480 $2,605,527 $1,750,689
Loans receivable-net(1) ............. 2,745,911 2,689,708 2,635,369 2,072,825 1,824,856 828,630
Securities available for sale ....... 847,407 818,308 597,520 607,490 439,345 691,803
Investment and trading securities,
net (2) ........................... 146,718 136,624 81,816 60,280 54,511 49,856
Mortgage servicing rights ........... 792 879 44,315 38,789 25,002 20,738
Cost over fair value of net assets
acquired and other intangibles .... 52,541 53,553 55,493 26,327 29,008 11,521
Deposit ............................. 2,179,709 2,027,892 1,925,772 1,763,733 1,832,780 1,300,377
Guaranteed preferred beneficial
interests in the Company's Junior
Subordinated Debentures ........... 74,750 74,750 74,750 74,750 0 0
Subordinated debentures, capital
notes, investment notes and notes
payable ........................... 217,394 228,773 177,114 179,600 78,500 21,001
Advances from FHLB, federal funds
purchased and securities sold under
agreements to repurchase .......... 1,475,776 1,527,309 1,225,165 758,923 486,288 269,222
Total stockholders' equity ......... 240,631 235,886 240,440 207,171 147,704 120,561
</TABLE>
------------------------
(1) Includes $12.8 million, $13.6 million, $9.7 million, $160.1 million and
$207,000 of banker's acceptances at March 31, 2000, December 31, 1999,
1998, 1997, and 1996, respectively.
(2) Excludes FHLB stock. Includes interest-bearing deposits in other banks,
securities purchased under agreements to resell and trading securities of
$23.3 million, $30.0 million and $5.1 million at December 31, 1999, 1998
and 1997, respectively, and $17.5 million at March 31, 2000. At March 31,
2000, December 31, 1999 and 1998, trading securities related to RBCO
operations.
-60-
<PAGE> 61
<TABLE>
<CAPTION>
AT OR FOR THE THREE
MONTHS ENDED AT OR FOR THE YEARS ENDED DECEMBER 31,
MARCH 31, -------------------------------------------------------------------
-------------------------
2000 1999 1999 1998 1997 1996 1995
----------- ---------- ---------- ---------- ---------- ---------- -----------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Loan Fundings(1)
Residential real estate loans $ 6,513 $ 40,670 $ 119,659 $ 144,586 $ 68,513 $ 133,184 $ 111,361
Commercial loans ............ 141,830 227,476 848,484 753,992 550,318 461,519 412,632
Small business loans ........ 2,383 11,653 29,898 135,239 20,467 0 0
Consumer loans(2) ........... 31,489 17,043 98,808 165,927 161,154 154,940 114,607
Lease financing ............. 10,661 7,462 34,154 19,214 0 0 0
Purchases:
Residential real estate loans 80,840 122,624 418,630 1,256,185 524,498 465,942 9,930
Commercial loans ............ 0 0 184,024 37,314 0 0 0
Lease financing ............. 0 0 0 6,054 0 0 0
Loan Sales .................... 14,348 59,986 125,889 279,034 273,901 59,408 34,153
Net interest spread (during
period)(3) .................... 2.71% 2.86% 2.88% 2.83% 3.41% 3.77% 3.57%
Interest rate margin (during
period) (3) ................... 3.07% 3.11% 3.14% 3.12% 3.72% 4.12% 4.01%
</TABLE>
------------------------
(1) Does not include banker's acceptances.
(2) Includes second mortgage loans.
(3) Restated for continuing operations.
<TABLE>
<CAPTION>
AT OR FOR THE THREE
MONTHS ENDED AT OR FOR THE YEARS ENDED DECEMBER 31,
MARCH 31, -----------------------------------------------
-------------------
2000 1999 1999 1998 1997 1996 1995
--------- -------- --------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL RATIOS:
Return on average equity(4)(5) ................... 5.58% 13.80% 11.68% 4.39% 14.85% 13.07% 14.16%
Return on average assets(4)(5) ................... 0.35 0.85 0.72 0.28 0.86 0.88 0.94
Efficiency ratio from continuing operations(3) ... 71.26 63.15 64.30 75.81 60.77 66.12 62.63
Average equity to average assets ................. 6.28 6.19 6.14 6.48 5.77 6.70 6.66
Net loan charge-offs as a percent of average
outstanding loans- annualized: ................. 1.06 0.87 0.91 0.51 0.44 0.47 0.45
Non-performing assets as a percent of: total
loans, tax certificates and real estate owned .. 1.38 1.29 1.79 1.27 1.36 1.26 2.37
Non-Performing assets as a percent of total assets
0.92 0.82 1.22 0.92 0.96 0.93 1.23
Loan loss allowance as a percent of non-
performing loans ............................... 121.10 107.58 103.01 142.95 156.18 167.37 149.49
Ratio of earnings to fixed charges: including
interest on deposits ........................... 1.13 1.35 1.27 1.11 1.33 1.37 1.37
Excluding interest on deposits ................... 1.22 1.60 1.50 1.19 1.80 2.26 2.22
</TABLE>
------------------------
(4) ROA and ROE excluding the $7.2 million SAIF one-time special assessment
would have been 1.09% and 16.33%, respectively, for the year ended December
31, 1996.
(5) ROA and ROE from continuing operations, ROA and ROE including the $3.5
million extraordinary gain would have been .68% and 10.84%, respectively
for the three months ended March 31, 2000.
-61-
<PAGE> 62
SELECTED PRO FORMA CONSOLIDATED FINANCIAL DATA
OF BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
The table below sets forth selected historical consolidated financial
data of the Company and consolidated financial data of the Company adjusted on a
pro forma basis for the effects of the merger, the recently completed tender
offer for the Company's Debentures and the use of proceeds from the assumed sale
of $25 million of Investment Notes and $20 million of borrowings under a
revolving credit facility.
The following unaudited pro forma information for the fiscal year ended
December 31, 1999 and three months ended March 31, 2000 has been prepared to
indicate what potential financial results would have occurred (i) if the Company
had completed the sale of $25 million of Investment Notes and applied the net
proceeds for the repurchase of outstanding Debentures pursuant to the Tender
Offer as of January 1, 1999 and January 1, 2000, respectively, (ii) the Company
had completed the sale of $25 million of Investment Notes and borrowed $20
million under the credit facility and applied the net proceeds for the
repurchase of outstanding Debentures pursuant to the tender offer and to
complete the merger as of January 1, 1999 and January 1, 2000, respectively. The
results of the tender offer are included in the Company's historical results as
of March 31, 2000.
You should read this together with the selected consolidated financial
data of the Company included elsewhere in this Proxy Statement and with the
consolidated financial statements of the Company incorporated by reference
herein. The Company cannot predict whether the consummation of the merger will
conform to the assumptions used in the preparation of the unaudited pro forma
information. The unaudited pro form information is provided for informational
purposes only and does not purport to be indicative of the results that would
have been reported had such events actually occurred.
-62-
<PAGE> 63
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------
PRO FORMA
PRO FORMA TENDER OFFER
HISTORICAL TENDER OFFER AND MERGER
----------------- ------------- ---------------
1999 1999 1999
----------------- ------------- ---------------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest income ...................................................... $ 117,266 $ 115,832 $ 113,427
Provision for loan losses ................................................ 30,658 30,658 30,658
Non-interest income ...................................................... 100,069 100,069 100,069
Non-interest expenses .................................................... 139,779 139,779 139,779
Income before income taxes and discontinued operations ................... 46,898 45,464 43,059
Provision for income taxes ............................................... 18,106 17,553 16,625
----------- ----------- -----------
Income from continuing operations ........................................ $ 28,792 $ 27,911 $ 26,434
=========== =========== ===========
PER SHARE DATA:
CLASS A COMMON SHARES:
Diluted earnings per share from continuing operations .................... $ 0.59 $ 0.58 $ 0.61
=========== =========== ===========
Diluted weighted average number of common and common equivalent
shares outstanding Class A common shares .............................. 48,856,323 46,634,323 47,315,872
=========== =========== ===========
CLASS B COMMON SHARES:
Diluted earnings per share from continuing operations .................... $ 0.57 $ 0.56 $ 2,837.04
=========== =========== ===========
Diluted weighted average number of common and common equivalent
shares outstanding .................................................... 10,995,037 10,995,037 1
=========== =========== ===========
BALANCE SHEET DATA:
Total Assets ............................................................. $ 4,159,901 $ 4,159,901 $ 4,159,901
Cost over fair value of net assets acquired and other intangibles ........ 53,553 53,553 53,553
Subordinated debentures capital notes, investment notes, notes payable and
guaranteed preferred beneficial interest in Company's Junior
Subordinated Debentures ............................................... 303,523 303,523 323,523
Total stockholders' equity ............................................... 235,886 238,402 201,981
FINANCIAL RATIOS:
Ratio of earnings to fixed charges including interest on deposits ........ 1.27 1.26 1.25
Ratio of earnings to fixed charges excluding interest on deposits ........ 1.50 1.40 1.34
Book value per common share (all classes) ................................ $ 5.53 $ 5.59 $ 5.42
</TABLE>
-63-
<PAGE> 64
<TABLE>
<CAPTION>
AT OR FOR THE PERIOD ENDED MARCH 31,
-------------------------------------------------
PRO FORMA
HISTORICAL MERGER
------------------- -------------------
2000 2000
------------------- -------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C>
INCOME STATEMENT DATA:
Net interest income ...................................................... $ 30,052 $ 29,235
Provision for loan losses ................................................ 10,787 10,787
Non-interest income ...................................................... 28,749 28,749
Non-interest expenses .................................................... 41,901 41,901
Income before income taxes and extraordinary item ........................ 6,113 5,296
Provision for income taxes ............................................... 2,432 2,117
----------- -----------
Income before extraordinary item ......................................... $ 3,681 $ 3,179
=========== ===========
PER SHARE DATA:
CLASS A COMMON SHARES:
Diluted earnings per share before extraordinary item ..................... $ 0.09 $ 0.09
=========== ===========
Diluted weighted average number of common and common equivalent
shares outstanding Class A common shares ............................... 48,586,052 47,640,798
=========== ===========
CLASS B COMMON SHARES:
Diluted earnings per share before extraordinary items.................... $ 0.08 $ 371.10
=========== ===========
Diluted weighted average number of common and common equivalent
share outstanding ...................................................... 10,551,290 1
=========== ===========
BALANCE SHEET DATA:
Total Assets ............................................................. $ 4,259,650 $ 4,259,650
Cost over fair value of net assets acquired and other intangibles ........ 52,541 52,541
Subordinated debentures capital notes, investment notes, notes payable and
guaranteed preferred beneficial interest in Company's Junior
Subordinated Debentures ............................................... 292,144 312,144
Total stockholders' equity ............................................... 240,631 207,235
FINANCIAL RATIOS:
Ratio of earnings to fixed charges including interest on deposits ........ 1.13 1.11
Ratio of earnings to fixed charges excluding interest on deposits ........ 1.22 1.18
Book value per common share (all classes) ................................ $ 5.80 $ 5.67
</TABLE>
-64-
<PAGE> 65
FOOTNOTES TO PRO FORMA INFORMATION:
NOTE 1 - PRO FORMA TENDER OFFER
The pro forma tender offer at and for the year ended December 31, 1999
assumes that $25.0 million of Investment Notes were issued at an average coupon
rate of 10.67% . The Investment Note offering costs were estimated at $1.0
million and amortized on a straight line basis over 2 years. The assumed net
proceeds of $24.0 million from the above transactions were assumed to have been
utilized to retire the $25.0 million of aggregate principal amount of 5 5/8%
Subordinated Convertible Debentures for a cash payment of $18.75 million and to
reduce short term borrowings. The short term borrowings assumed retired had an
interest rate of 4.78% for the year ended December 31, 1999.
The retirement of the Debentures at less than their carrying cost
resulted in an extraordinary gain of approximately $3.5 million after income
taxes, tender offer costs of $250,000 and deferred offering costs related to the
original issuance of the Debentures, which is reflected in the Company's actual
results at March 31, 2000. The extraordinary gain was not reflected in the
Income Statement Data in the above pro forma; however, the extraordinary gain
was reflected in pro forma total stockholders' equity and book value per common
share.
NOTE 2 - PRO FORMA TENDER OFFER AND MERGER
The pro forma tender offer and merger at and for December 31, 1999
assumes that $25.0 million of Investment Notes were issued at an average coupon
rate of 10.67% and that the Company borrowed $20 million under a credit facility
at an assumed rate of 8.00% for the year ended December 31, 1999. The Investment
Notes offering costs and the loan origination fees were estimated at $1.1
million and amortized on a straight line basis over 2 years. The assumed net
proceeds of $43.9 million along with the Company's working capital were utilized
as outlined above and to retire 4,954,022, and 5,388,392 shares of Class B
Common Stock at January 1, 1999 for $6.00 per share. The costs associated with
the merger were estimated at $2.1 million.
Approximately 520,390 shares of Class B Common Stock subject to
currently outstanding options were assumed to have been redeemed in connection
with the Merger and the remaining options to acquire Class B Common Stock
outstanding were assumed to have been converted into options to acquire Class A
Common Stock. Based on the assumed redemptions, the Company will realize a
compensation charge of approximately $1.7 million ($1.0 million net of income
taxes) which will be reflected in the Company's actual Statement of Operations.
The compensation charge was not reflected in the Income Statement Data in the
above pro forma; however, the compensation charge was reflected in pro forma
total stockholders equity and book value per common share.
Upon consummation of the transaction, only one share of Class B Common
Stock will remain outstanding.
NOTE 3 - PRO FORMA MERGER
The pro forma merger at and for March 31, 2000 assumes consummation
of the Merger at January 1, 2000 using the same assumptions indicated in Note 2
above but with assumed borrowings outstanding for the three months ended March
31, 2000 and an assumed interest rate under the credit facility of 8.25%. The
tender offer was consummated during the quarter ended March 31, 2000 and
accordingly is included in historical results.
-65-
<PAGE> 66
MARKET PRICE INFORMATION; DIVIDENDS
CLASS A COMMON STOCK
The Class A Common Stock is listed on the NYSE under the symbol "BBX."
The following table sets forth the high and low closing prices per share of
Class A Common Stock as reported on the NYSE during the last two years, by
fiscal quarter.
PRICE
----------------------
LOW HIGH
--- ----
For the Year Ended December 31, 1998
First Quarter 10 19/64 12 49/64
Second Quarter 9 25/32 12 9/32
Third Quarter 6 13/32 10 17/64
Fourth Quarter 4 29/64 6 29/32
For the Year Ended December 31, 1999
First Quarter 5 45/64 7 49/64
Second Quarter 6 9/64 7 25/64
Third Quarter 5 9/16 6 61/64
Fourth Quarter 3 13/16 5 15/16
For the Year Ended December 31, 2000
First Quarter 3 15/16 5 5/16
Second Quarter (through June 2, 2000) 3 1/2 3 15/16
On January 13, 2000, the last full trading day before the merger was
announced, the per share high and low sales prices were $4.00 and $3.9375 and
the closing sales price was $4.00. On ____________, 2000, the closing sales
price of the Class A Common Stock was $___ per share. As of _________, 2000,
there were _____ holders of record of the Class A Common Stock.
CLASS B COMMON STOCK
The Class B Common Stock is listed and traded on the Nasdaq National
Market under the symbol "BANC." The following table sets forth the high and low
closing prices per share of Class B Common Stock as reported on the consolidated
reporting system during the last two years, by fiscal quarter.
PRICE
-------------------
LOW HIGH
--- ----
For the Year Ended December 31, 1998
First Quarter 10 33/64 13 13/64
Second Quarter 10 21/32 13 3/8
Third Quarter 7 1/2 11 7/64
Fourth Quarter 6 9/64 7 21/32
For the Year Ended December 31, 1999
First Quarter 6 1/32 8 5/32
Second Quarter 6 9/64 7 15/16
Third Quarter 6 1/16 7 3/4
-66-
<PAGE> 67
Fourth Quarter 4 9/16 6 13/16
For the Year Ended December 31, 2000
First Quarter 4 3/4 5 15/16
Second Quarter (through June 2, 2000) 5 1/2 6 1/8
On January 13, 2000, the last full trading day before the merger was
announced, the per share high and low sales price were $5.125 and $4.75 and the
closing sales price was $5.125. On ____________, 2000, the closing sales price
of the Class B Common Stock was $___ per share. As of _________, 2000, there
were _____ holders of record of the Class B Common Stock.
DIVIDENDS
The Company has paid regular quarterly cash dividends on the Class B
Common Stock since its formation in 1994 and paid regular quarterly cash
dividends on the Class A Common Stock since its initial issuance in March 1996.
The Class A Common Stock is entitled to receive cash dividends per share equal
to at least 110% of any cash dividends declared and paid per share of Class B
Common Stock, and after the merger, the Class A Common Stock will continue to be
entitled to this 110% dividend premium. The following table sets forth the
dividends per share of Class A Common Stock and Class B Common Stock during the
last two years, by fiscal quarter.
<TABLE>
<CAPTION>
CASH DIVIDENDS PER SHARE OF CASH DIVIDENDS PER SHARE OF
CLASS B COMMON STOCK CLASS A COMMON STOCK
--------------------------- ---------------------------
<S> <C> <C>
For the Year Ended December 31, 1998
First Quarter .0209 .0230
Second Quarter .0209 .0230
Third Quarter .0217 .0239
Fourth Quarter .0217 .0239
For the Year Ended December 31, 1999
First Quarter .0217 .0239
Second Quarter .0217 .0239
Third Quarter .0217 .0239
Fourth Quarter .0230 .0253
For the Year Ended December 31, 2000
First Quarter .0230 .0253
</TABLE>
The Company currently intends to continue to declare regular quarterly
cash dividends on the Class A Common Stock and the Class B Common Stock after
the merger. However, the declaration and payment of dividends will depend upon,
among other things, the results of operations, financial condition and cash
requirements of the Company and on the ability of BankAtlantic, the Company's
principal subsidiary, to pay dividends or otherwise advance funds to the
Company, which in turn is subject to OTS regulations and is based upon
BankAtlantic's regulatory capital levels, retained net income and net income.
See "Risk Factors The Transaction will Increase Our Leverage."
-67-
<PAGE> 68
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Listed in the table below are the beneficial owners known by the
Company to hold as of June 1, 2000 more than 5% of the Company's outstanding
common stock. In addition, this table includes the outstanding securities
beneficially owned as of June 1, 2000 by (i) all directors, (ii) certain
executive officers and (iii) directors and executive officers as a group.
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK
OWNERSHIP OWNERSHIP PERCENT OF PERCENT OF
AS OF AS OF CLASS A CLASS B
JUNE 1, 2000 JUNE 1, 2000 COMMON STOCK COMMON STOCK
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BFC Financial Corporation (1)(2) 8,296,890 4,876,124 26.2 49.82%
Dimensional Fund Advisors, Inc. (11) 0 703,352 * 7.19
Alan B. Levan (1)(4)(3) 34,839 609,728 * 5.91
John E. Abdo (1)(7) 20,060 395,007 * 3.93
Bruno DiGiulian (6)(7) 77,893 48,425 * *
Charlie C. Winningham, II (5)(7) 154,283 102,751 * 1.05
Steven M. Coldren (5)(7) 45,805 12,529 * *
Mary E. Ginestra (7) 69,730 35,854 * *
Ira T. Siegel (7)(9) 5,000 0 * *
Frank V. Grieco (7) 7,609 237,824 * 2.37
Lewis F. Sarrica (7) 4,860 156,895 * 1.58
Jarett Levan (10) 144 0 * *
Marcia Snyder (7) 9,655 143,740 * 1.45
Ben Plotkin (8) 217,699 100 * *
All directors and executive officers 8,949,467 6,683,664 28.03% 59.62
of the Company and BankAtlantic, as a
group (persons, including the individuals
identified above)
</TABLE>
--------------------
* Less than one percent of the class.
(1) BFC may be deemed to be controlled by Alan B. Levan and John E. Abdo who
collectively may be deemed to have an aggregate beneficial ownership of
61.4% of the outstanding common stock of BFC. Mr. Alan Levan serves as
Chairman, President and CEO of the Company, BankAtlantic and BFC and Mr.
Abdo serves as Vice Chairman of the Company, BankAtlantic and BFC. Mr. Abdo
is also Chairman of the Board and President of Levitt Corporation
("Levitt"), a subsidiary of BankAtlantic.
(2) BFC's mailing address is 1750 East Sunrise Boulevard, Fort Lauderdale,
Florida 33304.
(3) Mr. Alan Levan may be deemed to be the beneficial owner of the shares of
Class A Common Stock and Class B Common Stock beneficially owned by BFC by
virtue of Mr. Alan Levan's control of Levan Enterprises, Ltd. Mr. Alan
Levan may also be deemed to beneficially own 526,434 shares of Class B
Stock Common and 22,008 shares of Class A Common Stock which can be
acquired within 60 days pursuant to stock options and 368 shares of Class A
Common Stock and 207 shares of Class B Common Stock held by Levan
Enterprises, Ltd.
(4) Mr. Alan Levan's business address is 1750 East Sunrise Boulevard, Fort
Lauderdale, Florida 33304.
(5) Shares beneficially owned by the indicated director and his wife are: Mr.
Coldren - 1,225 Class A shares, 360 Class B shares; and Mr. Winningham -
109,703 Class A shares, 80,811 Class B shares. These directors share voting
and investment power with respect to these shares.
(6) Mr. DiGiulian's wife beneficially owns 33,313 Class A shares and 26,485
Class B shares.
(7) Includes beneficial ownership of the following shares which may be acquired
within 60 days pursuant to stock options: Mr. DiGiulian - 44,580 Class A
shares, 21,940 Class B shares; Mr. Coldren - 44,580 Class A shares, 12,169
Class B shares; Mrs. Ginestra - 44,580 Class A shares, 21,940 Class B
shares; Mr. Winningham - 44,580 Class A shares, 21,940 Class B shares; Mr.
Abdo -0 Class A shares and 263,218 Class B shares; Mr. Grieco - 0 Class A
shares and 228,725 Class B shares; Mr. Siegel - 5,000 Class A shares and 0
Class B shares; Ms. Snyder - 0 Class A shares and 131,622 Class B shares
and Mr. Sarrica - 0 Class A shares and 131,622 Class B shares.
(8) Mr. Plotkin beneficially owns 94,391 shares of Class A Common Stock and 100
shares of Class B Common Stock. Mr. Plotkin is also the Trustee for the
benefit of Ross and Marc Plotkin under an irrevocable trust holding 38,151
shares of Class A Common Stock. Mr. Plotkin disclaims beneficial ownership
of 288 shares of Class A Common Stock held by his son. Mr. Plotkin may also
be deemed the beneficial owner of 8,772 shares of Class A Common Stock
which can be acquired within 60 days as a consequence of Mr. Plotkin's
ownership of the Company's 6-3/4% Convertible Subordinated Debentures and
53,557 shares of Class A Common Stock which may be acquired within 60 days
pursuant to stock options.
-68-
<PAGE> 69
(9) Mr. Siegel was appointed to the Board of Directors on October 1, 1999
pursuant to an agreement. The agreement was part of a strategic alliance
between the Company and eData.com and in connection with such alliance,
eData.com acquired 848,364 shares of restricted Class A Common Stock of the
Company. Mr. Siegel, the President and a Director of eData.com disclaims
beneficial ownership of the Class A Common Stock owned by eData.com.
(10) Mr. Jarett Levan is the son of Mr. Alan Levan.
(11) Dimensional Fund Advisors, Inc.'s mailing address is 1299 Ocean Avenue,
Santa Monica, CA 90401.
-69-
<PAGE> 70
DESCRIPTION OF CAPITAL STOCK
The following summary description of the Company's capital stock does not
purport to be complete and is subject to the more detailed provisions of the
Company's Articles of Incorporation and By-laws and is qualified in its entirety
by reference to those documents.
The authorized capital stock of the Company consists of 80,000,000 shares
of Class A Common Stock, par value $.01 per share, 45,000,000 shares of Class B
Common Stock, par value $.01 per share, and 10,000,000 shares of preferred
stock, par value $.01 per share. The merger and the proposed amendment to the
Company's Articles of Incorporation contained in the merger agreement do not
change the amount or designations of the authorized capital stock of the
Company.
COMMON STOCK
The Class A Common Stock and the Class B Common Stock currently have
substantially identical terms except that (i) the Class B Common Stock is
entitled to one vote per share while the Class A Common Stock has no voting
rights other than those which may be required by Florida law in certain limited
circumstances and (ii) the Class A Common Stock is entitled to receive cash
dividends per share equal to at least 110% of any per share cash dividends
declared and paid on the Class B Common Stock. The Class A Common Stock and
Class B Common Stock of the Company after the merger will, except as set forth
below, have the same rights and preferences and be identical in all other
respects to the terms of the currently authorized and outstanding Class A Common
Stock and Class B Common Stock.
VOTING
The holders of Class B Common Stock currently possess exclusive voting
rights in the Company. After the merger, BFC will own all of the outstanding
shares of Class B Common Stock and consequently control 100% of the voting
rights in the Company. Shares of preferred stock issued in the future may be
granted voting rights at the discretion of the Board of Directors. On matters
submitted to the shareholders of the Company, the holders of the Class B Common
Stock will be entitled to one vote for each share held, while holders of Class A
Common Stock will not be entitled to vote, except in limited circumstances
provided under the FBCA. Under the FBCA, holders of Class A Common Stock would
currently be entitled to vote as a separate voting group on certain amendments
to the Company's Articles of Incorporation including, without limitation,
amendments which (i) increase or decrease the authorized number of shares of
Class A Common Stock, (ii) change the designation, rights, preferences or
limitations of the Class A Common Stock, (iii) create a new class of shares, or
increase the rights, preferences or number of authorized shares, which would
have rights or preferences with respect to distributions or dissolution that are
prior, superior or substantially equal to the Class A Common Stock, or (iv)
effect an exchange or reclassification of shares of another class of stock into
shares of Class A Common Stock or of Class A Common Stock into shares of another
class. In addition, under the FBCA, holders of Class A Common Stock would
currently be entitled to vote as a separate voting group on any plan of merger
or plan of share exchange containing a provision which, if included in a
proposed amendment to the Articles of Incorporation, would require their vote as
a separate voting group. No shares have cumulative voting rights.
DIVIDENDS
Holders of shares of Class A Common Stock and Class B Common Stock are
entitled to receive dividends as may be declared by the Board of Directors out
of funds which are legally available. The holders of Class A Common Stock are
currently entitled to receive cash dividends per share in an amount equal to at
least 110% of any per share cash dividends declared and paid on the Class B
Common Stock. With respect to dividends other than cash (including stock splits
and stock dividends), the distribution per share with respect to Class A Common
Stock must be identical to the distribution per share with respect to Class B
Common Stock, except that a stock dividend or other distribution to holders of
Class A Common Stock may be declared and issued in Class A Common Stock while a
stock dividend or other distribution to holders of Class B Common Stock may be
declared and issued in either Class A Common Stock or Class B Common Stock (at
the discretion of the Board) provided that the number of any shares so issued
is, on a per share basis, the same.
-70-
<PAGE> 71
As part of the merger, the Company's Articles of Incorporation will be
amended to provide that each share of Class B Common Stock will be entitled to
distributions equal and identical to the distribution on 4,876,124 shares of
Class A Common Stock, except that in the case of cash dividends, the
distribution per share of Class A Common Stock shall be equal to at least 110%
of the amount obtained by dividing the distributions paid per share of Class B
Common Stock by 4,876,124. This proposed amendment is necessary to ensure that
the economic equity interest of BFC Financial Corporation in the Company after
the merger, which will be represented by one share of Class B Common Stock, is
not diluted relative to the Class A Common Stock as a result of the merger and
to preserve the premium payable on the Class A shares. This would occur absent
this amendment because after the merger BFC will hold only one share of Class B
Common Stock compared to the 4,876,124 shares of Class B Common Stock that it
currently holds.
The ability of the Company to pay cash dividends is significantly
dependent upon the ability of BankAtlantic to pay dividends or make other
distributions to the Company, which in turn is subject to limitations which are
imposed by law and regulation.
LIQUIDATION RIGHTS
In the event of any liquidation or dissolution of the Company, all assets
of the Company legally available for distribution after payment or provision for
payment of: (i) all debts and liabilities of the Company; (ii) any accrued
dividend claims; (iii) liquidation preferences of any Preferred Stock which may
be outstanding; and (iv) any interests in the Company's liquidation account,
will be distributed ratably, in cash or in kind, among the holders of Class A
Common Stock and Class B Common Stock, with the amount payable per share of
Class B Common Stock after the merger being equal to the amount payable on
4,876,124 shares of Class A Common Stock.
PREEMPTIVE RIGHTS
Neither the Class A Common Stock nor the Class B Common Stock is entitled
to any preemptive right to subscribe for or receive any shares of any class of
stock of the Company (or any securities convertible into shares of stock of the
Company) issued in the future.
NYSE LISTING
After the merger, the Class A Common Stock will continue to trade on the
New York Stock Exchange as the Company's sole publicly-traded common stock.
PREFERRED STOCK
By amendment to its Articles of Incorporation without shareholder vote,
the Company may provide for one or more classes of preferred stock. The shares
of any such class may be divided into and issued in series, with each series
separately designated so as to distinguish the shares from the shares of all
other series and classes. The terms of each series shall be set forth in a
supplementary section to the Company's Articles of Incorporation and may provide
for, among other things, board representation, voting rights and dividend and
liquidation preferences. All shares of the same class must be identical except
as to certain relative rights and preferences specified in the Company's
Articles of Incorporation, as to which there may be variations between different
series.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of BankAtlantic Bancorp, Inc. and
its subsidiaries as of December 31, 1999 and 1998 and for each of the years in
the three year period ended December 31, 1999, have been incorporated by
reference in this Proxy Statement, and have been audited by KPMG LLP,
independent certified public accountants, to the extent and for the periods
indicated in their report thereon. A representative of KPMG LLP will be at the
Annual Meeting to answer appropriate questions from shareholders.
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OTHER MATTERS TO BE CONSIDERED AT THE MEETING
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. However, with regard to other
business that may properly come before the Annual Meeting, execution of the
accompanying proxy confers on each designated proxy holder discretionary
authority to vote their shares in accordance with their best judgment.
WHERE YOU CAN FIND MORE INFORMATION
The Company files reports, Proxy Statements, and other information with
the SEC. You can read and copy these reports, proxy statements, and other
information concerning the Company at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. The SEC
maintains an internet site at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding issuers that file
electronically with the SEC, including the Company. The Class A Common Stock is
quoted on the New York Stock Exchange and the Class B Common Stock is quoted on
the Nasdaq Stock Market's National Market System. These reports, proxy
statements and other information are also available for inspection at the
offices of the New York Stock Exchange, 20 Broad Street, New York City, New York
10005, and the National Association of Securities Dealers, Inc., Report Section,
1735 K Street N.W., Washington, D.C. 20006.
Pursuant to the requirements of Section 13(e) and Rule 13E-3 of the
Exchange Act, the Company and BBC Sub have filed a Schedule 13E-3 with the SEC
with respect to the merger. As permitted by SEC rules, this Proxy Statement does
not contain all of the information you can find in the Schedule 13E-3 or in the
exhibits to the Schedule 13E-3. You can obtain this additional information and a
complete Schedule 13E- 3 from the SEC as indicated above, or from the Company.
The SEC allows the Company to "incorporate by reference" the information
it files with the SEC. This permits the Company to disclose important
information to you by referring to these filed documents. The information
incorporated by reference is deemed to be a part of this Proxy Statement, except
for any information superseded by information in this Proxy Statement. The
information incorporated by reference is an important part of this Proxy
Statement, and information that the Company files later with the SEC will
automatically update and supersede this information. The Company incorporates by
reference into this Proxy Statement the following documents:
o our Annual Report on Form 10-K for the year ended December 31,
1999, filed with the SEC on March 30, 1999,
o our Amended Annual Report on Form 10-K/A for the year ended
December 31, 1999, filed with the SEC on May 1, 2000,
o our Quarterly Report on Form 10-Q for the quarter ended March
31, 2000, filed with the SEC on May 15, 2000,
o our current report on Form 8-K filed with the SEC on January
25, 2000, and
o any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) under the Securities Exchange Act of 1934
until the date of the Annual Meeting.
You may request a copy of these filings (other than exhibits which are
not specifically incorporated by reference herein) at no cost by writing or
telephoning us at the following address:
Corporate Communications
BankAtlantic Bancorp
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
1-954-760-5402
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If you would like to request documents from the Company, please do so by
___________, 2000 to receive them before the Annual Meeting.
You should rely only on the information contained or incorporated by
reference in this Proxy Statement to vote on the merger agreement. The Company
has not authorized anyone else to provide you with different information. You
should not assume that the information in this Proxy Statement is accurate as of
any date other than ___________, 2000.
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APPENDIX A
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated March 29, 2000
(the "Agreement"), by and among BankAtlantic Bancorp, Inc., a Florida
corporation (the "Company"), and BBC Sub, Inc., a Florida corporation
wholly-owned by the Company ("Sub").
WITNESSETH:
WHEREAS, the Board of Directors of the Company, upon the recommendation
of the special committee established to consider the transaction contemplated
herein (the "Special Committee"), has determined that it is in the best
interests of the Company and its shareholders for the Company to effect a
recapitalization of its capital structure through the merger of Sub with and
into the Company, with the Company as the surviving corporation (the "Merger"),
the result of which will result in the elimination of the public ownership of
the Company's Class B Common Stock;
WHEREAS, the Board of Directors of the Company unanimously approved the
amendment to this Agreement providing that options to acquire Class B Common
Stock shall, based on the intrinsic value of such options at the Effective Time
(as defined below), be converted into options to acquire Class A Common Stock at
the Effective Time;
WHEREAS, the Board of Directors of Sub has unanimously approved the
Merger and deems it in the best interests of its shareholder;
WHEREAS, as of the date of this Agreement, the authorized and
outstanding capital stock of the Company is as follows: (1) 125,000,000 shares
of common stock, par value $.01 per share (the "Company Common Stock),
consisting of 80,000,000 shares designated Class A Common Stock (the "Class A
Common Stock"), of which 31,633,138 shares are issued and outstanding, and
45,000,000 shares designated Class B Common Stock (the "Class B Common Stock"),
of which 9,912,646 shares are issued and outstanding; and (2) 10,000,000 shares
of preferred stock, par value $.01 per share, no shares of which are
outstanding;
WHEREAS, the authorized and outstanding capital stock of Sub consists
of 100 shares of common stock, par value $.01 per share (the "Sub Common
Stock"), all of which are issued and outstanding and owned by the Company;
WHEREAS, the Company and Sub are entering into this Agreement to set
forth the terms and conditions of the Merger.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and intending to be legally bound, the parties hereto agree as
follows:
6. MERGER
a. The Merger. At the Effective Time (as defined in
Section 1.3 below), Sub shall be merged with and into the Company under the
terms of this Agreement and in accordance with the provisions of the Florida
Business Corporation Act (the "FBCA"), and the separate existence of Sub shall
cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation").
b. Effects of the Merger.
i. Generally. The Merger shall have the effects
as provided by the FBCA and other applicable law.
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ii. Articles of Incorporation and By-laws. The
articles of incorporation of the Company as in effect immediately prior to the
Effective Time shall be the articles of incorporation of the Surviving
Corporation, except that the articles of incorporation shall, as a result of the
Merger, be amended as set forth in the form Articles of Amendment attached to
this Agreement as Exhibit A. The By-laws of the Company as in effect immediately
prior to the Effective Time shall be the by-laws of the Surviving Corporation.
iii. Board of Directors; Officers. At the
Effective Time, the Board of Directors of the Surviving Corporation shall be
identical to the Board of Directors of the Company and the officers of the
Surviving Corporation shall be identical to the officers of the Company, in each
case until their respective successors have been duly elected or appointed and
qualified and subject to the Articles and By-laws of the Surviving Corporation.
c. Effective Time. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article 3 of this
Agreement, the parties shall file with the Secretary of State of the State of
Florida articles of merger (the "Articles of Merger") executed in accordance
with the relevant provisions of the FBCA. The Merger shall become effective at
such time as the Articles of Merger are duly filed with the Secretary of State
of the State of Florida, or at such other time as is permissible in accordance
with the FBCA and as the Company and Sub shall agree and as specified in the
Articles of Merger (the time the Merger becomes effective being the "Effective
Time").
7. CONVERSION OF STOCK; TERMINATION OF CONVERTIBLE SECURITIES
a. Conversion of Class A Common Stock. At the Effective
Time, each share of Class A Common Stock issued and outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, automatically be converted and remain
outstanding as one fully paid and non-assessable share of Class A Common Stock
of the Surviving Corporation (the "New Class A Common Stock").
b. Conversion of Class B Common Stock. At the Effective
Time, each share of Class B Common Stock issued and outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, cease to be an issued and outstanding
share of Class B Common Stock and shall become and be converted into .0000002051
of a fully paid and non-assessable share of Class B Common Stock of the
Surviving Corporation (the "New Class B Common Stock").
c. Cancellation of Sub Common Stock. At the Effective
Time, each share of Sub Common Stock issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be canceled and extinguished without any payment or
other consideration made with respect thereto.
d. Exchange of Certificates.
i. Prior to the Effective Time, the Company
shall appoint an exchange agent (the "Exchange Agent"), which may be the
Company's stock transfer agent, to act as the Company's agent for the issuance
or payment of consideration to holders of Class B Common Stock in the Merger.
ii. After the Effective Time, holders of a
certificate or certificates theretofore evidencing issued and outstanding shares
of Class A Common Stock shall not be required to exchange such certificates for
one or more certificates representing the identical number of shares of New
Class A Common Stock into which such shares were converted by virtue of the
Merger. As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of Class
B Common Stock, a letter of transmittal (which will specify that delivery will
be effected, and risk of loss and title to such certificates will pass, only
upon proper delivery of such certificates to the Exchange Agent and shall be in
such form and have such other provisions as the Exchange Agent may reasonable
specify), and instructions for use in effecting the surrender of the
certificates representing such shares of Class B Common Stock, in exchange for
the shares of New Class B Common Stock or cash, as applicable, payable as a
result of the Merger. Upon surrender to the Exchange Agent of a certificate or
certificates formerly representing shares of Class B Common Stock and acceptance
thereof by the Exchange Agent, the holder thereof shall be entitled to receive
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either (i) a certificate or certificates representing the shares of New Class B
Common Stock or (ii) a check representing the payment of cash in lieu of
fractional shares pursuant to Section 2.5 of this Agreement, into which such
shares of Class B Common Stock, formerly represented by such surrendered
certificate or certificates, shall have been converted at the Effective Time
pursuant to the Merger. The Exchange Agent shall accept such certificates upon
compliance with such reasonable terms and conditions as the Exchange Agent may
impose to effect an orderly exchange thereof in accordance with normal exchange
practices. After the Effective Time, there shall be no further transfer on the
records of the Company or its transfer agent of certificates representing shares
of Class B Common Stock and if such certificates are presented to the Company
for transfer, they shall be canceled against delivery of certificates
representing shares of New Class B Common Stock or cash in lieu of fractional
shares, as the case may be, allocable to the shares of Class B Common Stock
represented by such certificate or certificates. If any certificate representing
shares of New Class B Common Stock or cash in lieu of shares, as applicable, is
to be issued or paid to a name other than that in which the certificate for the
Class B Common Stock surrendered for exchange is registered, it shall be a
condition of such exchange that the certificate so surrendered shall be properly
endorsed, with signature guaranteed, or otherwise in proper form for transfer
and that the person requesting such exchange shall pay to the Company, or its
transfer agent, any transfer or other taxes required by reason of the issuance
of certificates in, or payment of cash to, a name other than that of the
registered holder of the certificate surrendered, or establish to the
satisfaction of the Company or its transfer agent that such tax has been paid or
is not applicable.
iii. After the Effective Time, certificates
theretofore representing shares of Class A Common Stock shall be deemed for all
purposes as evidencing ownership of the identical number of shares of New Class
A Common Stock into which such shares shall have been converted by virtue of the
Merger. After the Effective Time and until surrendered as set forth in this
Section 2.4, certificates theretofore representing shares of Class B Common
Stock shall be deemed for all purposes as evidencing ownership of the number of
shares of New Class B Common Stock into which such shares shall have been
converted by virtue of the Merger; provided, however, that any certificate
representing less than one whole share of New Class B Common Stock shall be
deemed at all times after the Effective Time to represent only the right to
receive upon surrender the amount of cash allocable to the shares represented by
such certificate as contemplated by Article 2 hereof. No interest will be paid
or accrued on any cash payable pursuant to the Merger.
iv. The Company and the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Class B Common Stock such
amounts as the Company or the Exchange Agent is required to deduct and withhold
with respect to the making of such payment under the United States Internal
Revenue Code of 1986, as amended (the "Code"), or any provision of state, local
or foreign tax law applicable to the making of such payment. To the extent that
amounts are so withheld by the Company or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holders of the shares of Class B Common Stock in respect of which such
deduction and withholding was made by the Company or the Exchange Agent.
v. No party to this Agreement shall be liable
to any person or entity in respect of any amounts paid or delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
vi. In the event any certificate or certificates
formerly representing shares of Class B Common Stock shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate or certificates to be lost, stolen or destroyed, and
if required by the Surviving Corporation and the Exchange Agent, the posting by
such person of a bond in such amount as the Surviving Corporation may reasonably
require as indemnity against any claim that may be made against it with respect
to such certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed certificate the consideration deliverable in respect thereof
as determined in accordance with this Article 2.
e. Cash in Lieu of Fractional Shares. Notwithstanding
any other provision of this Agreement to the contrary, no certificates or scrip
representing fractional shares of New Class B Common Stock shall be issued upon
the conversion of shares of Class B Common Stock in the Merger and no dividend
or distribution of the Surviving Corporation shall relate to any fractional
share otherwise issuable pursuant to the terms hereof and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
shareholder of the Surviving Corporation. In lieu
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of any fractional shares, there shall be paid to each holder of shares of Class
B Common Stock who otherwise would be entitled to receive a fractional share of
New Class B Common Stock, an amount in cash (without interest) equal to $6.00
per share of Class B Common Stock owned by such holder immediately prior to the
Effective Time which was converted into such fractional share.
f. Treatment of Options and Convertible Securities.
i. Options to Purchase Class A Common Stock.
Pursuant to the Merger, at the Effective Time, each outstanding option to
purchase shares of Class A Common Stock under the Company's stock option plans
and stock option plans of the Company's subsidiaries shall remain outstanding
under the same terms and conditions as in effect immediately prior to the
Effective Time, except that each such option shall be converted into an option
to acquire an equivalent number of shares of New Class A Common Stock and upon
exercise of each such option, one share of New Class A Common Stock shall be
issuable in lieu of each share of Class A Common Stock issuable upon the
exercise thereof immediately prior to the Effective Time. Shares of Class A
Common Stock reserved for future issuance under the BankAtlantic Bancorp 1996
Stock Option Plan, the BankAtlantic Bancorp 1998 Stock Option Plan, the
BankAtlantic Bancorp 1999 Non-Qualified Stock Option Plan and the BankAtlantic
Bancorp 1999 Stock Option Plan shall automatically be converted into an equal
number of shares of New Class A Common Stock.
ii. Options to Acquire Class B Common Stock.
Pursuant to the Merger, at the Effective Time, each outstanding option to
purchase shares of Class B Common Stock (a "Class B Option") shall be exchanged
for or converted into options to acquire Class A Common Stock on a basis which
preserves the intrinsic value (the difference between the market value per share
of Class B Common Stock at the Effective Time and the exercise price of the
Class B Option) of the Class B Option and which does not decrease the ratio of
the exercise price per share to the market value per share upon conversion.
iii. Convertible Debt Securities. The obligations
of the Company under its currently outstanding 6 3/4% Convertible Subordinated
Debentures due 2006 and its 55/8% Convertible Subordinated Debentures due 2007
(collectively, the "Convertible Debentures") to issue shares of Class A Common
Stock upon conversion of the Convertible Debentures and the rights of the
holders thereof to convert the Convertible Debentures into shares of Class A
Common Stock shall remain in effect upon the same terms and conditions set forth
in the instruments governing the Convertible Debentures, except that upon the
conversion of the Convertible Debentures by a holder thereof, one share of New
Class A Common Stock shall be issuable in lieu of each share of Class A Common
Stock issuable upon the exercise thereof immediately prior to the Effective
Time. The Company shall make appropriate amendments or supplements to the
instruments governing the Convertible Debentures to reflect this change.
iv. Other Employee Agreements and Benefit Plans.
At the Effective Time, all obligations of the Company with respect to all rights
to purchase, sell or receive Class A Common Stock and all rights to elect to
make payments in the Class A Common Stock under any agreement between the
Company and any director, officer or employee thereof or of any subsidiary or
under any plan or program of the Company or any subsidiary, shall be
automatically converted into and shall become an identical right to purchase,
sell, or receive New Class A Common Stock and an identical right to elect to
make payment in New Class A Common Stock under such agreement, plan or program.
8. CONDITIONS. The obligations of the parties hereto to
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of each of the following conditions:
a. Board Approval. The respective Boards of Directors
of the Company and Sub shall not have revoked their approval of this Agreement
and the transactions contemplated hereby.
b. Shareholder Approval. The Merger, this Agreement and
the transactions contemplated hereby shall have been duly approved by the
requisite vote of the holders of each of the Class A Common Stock and the Class
B Common Stock, voting as separate voting groups. In addition, this Agreement
and the transactions contemplated hereby shall have been duly approved and
adopted by the Company, as the sole holder of Sub Common Stock.
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c. No Injunction or Proceeding. No preliminary or
permanent injunction, temporary restraining order or other decree of a court,
legislature or other agency or instrumentality of federal, state or local
government (a "Governmental Entity") shall be in effect, no statute, rule or
regulation shall have been enacted by a Governmental Entity and no action, suit
or proceeding by any Governmental Entity shall have been instituted or
threatened, which prohibits the consummation of the Merger or materially
challenges the transactions contemplated hereby.
d. Consents. Other than filing the Articles of Merger,
all consents, approvals and authorizations of and filings with Governmental
Entities, including the Office of Thrift Supervision, required for the
consummation of the transactions contemplated hereby, shall have been obtained
or effected or filed.
e. Tax Matters. The Company shall have received an
opinion of counsel, satisfactory to it in form and substance, with respect to
the federal income tax consequences of this Agreement, the Merger and the
transactions contemplated hereby.
f. Other Approvals. All other consents and approvals and
the satisfaction of all other requirements that are necessary, in the opinion of
the Company, for the consummation of the Merger and other transactions
contemplated by this Agreement shall have been obtained.
g. Financing. The Company shall have obtained financing
for the payment of all amounts payable as a result of the Merger (together with
all fees and expenses incurred in connection therewith), upon terms satisfactory
to the Company in its sole discretion.
9. TERMINATION; AMENDMENT
a. Termination of Agreement. This Agreement may be
terminated by the Company at any time before the Effective Time if for any
reason consummation of the transactions contemplated hereby is inadvisable in
the sole discretion of its Board of Directors. Such termination shall be
effected by written notice by the Company to Sub. Upon the giving of such
notice, this Agreement shall be terminated and there shall be no liability
hereunder or on account of such termination on the part of the Company or Sub or
the directors, officers, employees, agents or stockholders of any of them.
b. Amendment. This Agreement may be amended or modified
at any time by mutual written agreement of the parties (a) in any respect prior
to the approval hereof by the shareholders of the Company entitled to vote
hereon, and (b) in any respect subsequent to such approval, provided that any
such amendment or modification subsequent to such approval shall not (i) change
the method of converting the issued and outstanding Common Stock into shares of
New Common Stock or into cash in lieu of fractional shares of New Class B Common
Stock, (ii) alter or change any provision of the Articles of Incorporation of
the Surviving Corporation that would require the approval of shareholders, or
(iii) otherwise materially adversely affect the shareholders of the Company.
10. MISCELLANEOUS
a. Successors. This Agreement shall be binding on the
successors of the Company and Sub.
b. Counterparts. This Agreement may be executed in one
or more counterparts.
c. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida, without
regard to the conflicts of laws or principles thereof.
d. No Third Party Beneficiaries. Except as provided in
Section 2.4, nothing in this Agreement is intended to confer upon any person or
entity not a party to this Agreement any rights or remedies under or by reason
of this Agreement.
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IN WITNESS WHEREOF, the Boards of Directors of the parties hereto have
approved this Agreement and the duly authorized officers of each have executed
this Agreement on their behalf as of the date first above written.
BANKATLANTIC BANCORP, INC.
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
BBC SUB, INC.
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
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APPENDIX B
KEEFE, BRUYETTE & WOODS, INC.
April 6, 2000
Special Committee of the Board of Directors and the Board of Directors
BankAtlantic Bancorp, Inc. 1750 East Sunrise Boulevard Ft. Lauderdale, FL 33304
Members of the Special Committee of the Board of Directors and the Board of
Directors:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the Class A and Class B shareholders of
BankAtlantic Bancorp, Inc. (the "Company") of the consideration to be offered to
the shareholders of the publicly held Class B shares (the "Public Class B
Shares") in the repurchase of those Public Class B Shares pursuant to the merger
(the "Merger") of BBC Sub, Inc., the Company's wholly owned subsidiary with and
into the Company under an Agreement and Plan of Merger, dated January 13, 2000,
and as amended March 29, 2000 (the "Agreement"). Pursuant to the terms of the
Agreement, each of the Public Class B Shares, par value $0.01 per share, of the
Company will be repurchased by the Company for $6.00 in cash (the
"Consideration").
Keefe, Bruyette & Woods, Inc., as part of its investment banking
business, is continually engaged in the valuation of bank and bank holding
company securities in connection with acquisitions, negotiated underwritings,
secondary distributions of listed and unlisted securities, private placements
and valuations for various other purposes. As specialists in the securities of
banking companies, we have experience in, and knowledge of, the valuation of the
banking enterprises. In the ordinary course of our business as a broker-dealer,
we may, from time to time purchase securities from, and sell securities to the
Company, and as a market maker in securities, we may from time to time have a
long or short position in, and buy or sell, debt or equity securities of the
Company for our own account and for the accounts of our customers. To the extent
we have any such position as of the date of this opinion it has been disclosed
to the Company. We have acted exclusively for the Special Committee of the Board
of Directors and the Board of Directors of the Company in rendering this
fairness opinion and will receive a fee from the Company for our services.
In connection with this opinion, we have reviewed, analyzed and relied
upon material bearing upon the financial and operating condition of the Company
and the Merger, including among other things, the following: (i) the Agreement
and Plan of Merger dated January 13, 2000 and as amended March 29, 2000; (ii)
the proxy statement for the annual meeting of stockholders of the Company to be
held in connection with the Merger dated April 6, 2000; (iii) the Annual Reports
to Stockholders and Annual Reports on Form 10-K for the three years ended
December 31, 1999 of the Company; (iv) certain interim reports to stockholders
and Quarterly Reports on Form 10-Q of the Company and certain other
communication from the Company to its stockholders; and (v) other financial
information concerning the businesses and operations of the Company furnished to
us by the Company for purposes of our analysis. We have also held discussions
with senior management of the Company regarding the past and current business
operations, regulatory relations, financial condition and future prospects of
the Company and such other matters as we have deemed relevant to our inquiry. In
addition, we have compared certain financial and stock market information for
the Company with similar information for certain other companies the securities
of which are publicly traded, reviewed the financial terms of certain recent
business combinations in the banking industry and performed such other studies
and analyses as we considered appropriate.
In preparing our opinion, we have relied upon the accuracy and
completeness of all of the financial and other information supplied or otherwise
made available to us, including that contemplated in the items above, and we
have not assumed any responsibility for independently verifying the accuracy or
completeness of any such information. KBW has not been provided with, and did
not have any access to, financial projections of the Company prepared by
management of the Company for any period after fiscal year 1999. Accordingly,
with respect to the future financial performance of the Company, the Company has
directed KBW to rely on publicly available estimates of research analysts in
performing our analysis and, based upon advice of the Company, KBW assumed such
estimates are a reasonable basis upon which to evaluate and analyze the future
financial performance of the Company and that the Company will perform
substantially in accordance with such estimates. We are not experts in the
evaluation of
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allowances for loan and lease losses have not made an independent evaluation of
the adequacy of the allowance for loan losses of the Company, nor have we
reviewed any individual credit files and have assumed that the respective
aggregate allowances for loan losses for the Company are adequate to cover such
losses and will be adequate on a pro forma basis for the combined entity. In
addition, we have not conducted any physical inspection of the properties or
facilities of the Company.
We have considered such financial and other factors as we have deemed
appropriate under the circumstances, including, among others, the following: (i)
the historical and current financial position and results of operations of the
Company; (ii) the assets and liabilities of the Company; and (iii) the nature
and terms of certain other merger transactions involving banks and bank holding
companies. We have also taken into account our assessment of general economic,
market and financial conditions and our experience in other transactions, as
well as our experience in securities valuation and knowledge of the banking
industry generally. Our opinion is necessarily based upon conditions as they
exist and can be evaluated on the date hereof and the information made available
to us through the date hereof.
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof, the Consideration to be paid to the holders of the Public Class
B Shares in the Merger is fair, from a financial point of view, to the holders
of the Class A shares and the Class B shares of the Company.
Very truly yours,
Keefe, Bruyette & Woods, Inc.
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APPENDIX C
LEHMAN BROTHERS
January 13, 2000
Board of Directors
BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
Members of the Board:
We understand that BankAtlantic Bancorp, Inc. (the "Company") proposes to
enter into an agreement with a newly-created wholly owned subsidiary of the
Company pursuant to which the Company will merge with such subsidiary and, upon
effectiveness of such merger, each outstanding share of Class B common stock
held by stockholders other than BFC Financial Corporation ("BFC") will be
converted into the right to receive $6.00 per share in cash, and each
outstanding option to purchase Class B common stock will be converted into the
right to receive $6.00 in cash less the exercise price of such option. We
further understand that the number of shares of Class B common stock to be so
converted into the right to receive cash is 5,388,392, the number of options to
be so converted into the right to receive cash is 1,762,777 and that, after
giving effect to the proposed transaction, BFC will own 100% of the voting power
of the Company. The terms and conditions of the proposed transaction are set
forth in more detail in the Agreement and Plan of Merger dated as of January 13,
2000 (the "Agreement").
We have been requested by the Board of Directors of the Company to render
our opinion with respect to the fairness, from a financial point of view, to the
Company of the consideration to be paid by the Company in the proposed
transaction. We have not been requested to opine as to, and our opinion does not
in any manner address, the Company's underlying business decision to proceed
with or effect the proposed transaction.
In arriving at our opinion, we reviewed and analyzed: (1) the specific
terms of the proposed transaction, (2) publicly available information concerning
the Company that we believe to be relevant to our analysis, including the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
and Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1999, (3) financial and operating information with respect to the
business and operations of the Company furnished to us by the Company, (4)
trading histories of the Company's Class A common stock and Class B common stock
from December 31, 1996 to the present and a comparison of those trading
histories with those of other companies that we deemed relevant, (5) a
comparison of the historical financial results and present financial condition
of the Company with those of other companies that we deemed relevant, (6)
published estimates of third party research analysts regarding the future
financial performance of the Company, (7) a comparison of the financial terms of
the proposed transaction with the financial terms of certain other recent
transactions that we deemed relevant, and (8) the potential pro forma impact of
the proposed transaction on the Company. In addition, we have had discussions
with the management of the Company concerning its business, operations, assets,
financial condition and prospects and have undertaken such other studies,
analyses and investigations as we deemed appropriate.
In arriving at our opinion, we have assumed and relied upon the accuracy
and completeness of the financial and other information used by us without
assuming any responsibility for independent verification of such information and
have further relied upon the assurances of management of the Company that they
are not aware of any facts or circumstances that would make such information
inaccurate or misleading. We have not been provided with, and did not have any
access to, financial projections of the Company prepared by management of the
Company for any period after fiscal year 1999. Accordingly, with respect to the
future financial performance of the Company, the Company has
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directed us to rely on publicly available estimates of research analysts in
performing our analysis and, based upon advice of the Company, we have assumed
that such estimates are a reasonable basis upon which to evaluate and analyze
the future financial performance of the Company and that the Company will
perform substantially in accordance with such estimates. In arriving at our
opinion, we have not conducted a physical inspection of the properties and
facilities of the Company and have not made or obtained any evaluations or
appraisals of the assets or liabilities of the Company. In addition, you have
not authorized us to solicit, and we have not solicited, any indications of
interest from any third party with respect to the purchase of all or a part of
the Company's business. Our opinion necessarily is based upon market, economic
and other conditions as they exist on, and can be evaluated as of, the date of
this letter.
Based upon and subject to the foregoing, we are of the opinion as of the
date hereof that, from a financial point of view, the consideration to be paid
by the Company in the proposed transaction is fair to the Company.
We have acted as financial advisor to the Company in connection with the
proposed transaction and will receive a fee for our services which is
contingent, in part, upon the consummation of the proposed transaction. In
addition, the Company has agreed to indemnify us for certain liabilities that
may arise out of the rendering of this opinion. In the ordinary course of our
business, we actively trade in the debt and equity securities of the Company for
our own account and for the accounts of our customers and, accordingly, may at
any time hold a long or short position in such securities.
This opinion is for the use and benefit of the Board of Directors of the
Company and is rendered to the Board of Directors in connection with its
consideration of the proposed transaction. This opinion is not intended to be
and does not constitute a recommendation to any stockholder of the Company as to
how such stockholder should vote with respect to the proposed transaction.
Very truly yours,
LEHMAN BROTHERS
By:
Managing Director
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APPENDIX D
DISSENTERS' RIGHTS PROVISIONS OF THE FLORIDA BUSINESS CORPORATION ACT
607.1301 Dissenters' rights; definitions
The following definitions apply to ss. 607.1302 and 607.1320:
(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Fair value," with respect to a dissenter's shares, means the value of the
shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(3) "Shareholders' authorization date" means the date on which the shareholders'
vote authorizing the proposed action was taken, the date on which the
corporation received written consents without a meeting from the requisite
number of shareholders in order to authorize the action, or, in the case of a
merger pursuant to s. 607.1104, the day prior to the date on which a copy of the
plan of merger was mailed to each shareholder of record of the subsidiary
corporation.
607.1302 Right of shareholders to dissent
(1) Any shareholder of a corporation has the right to dissent from, and obtain
payment of the fair value of his or her shares in the event of, any of the
following corporate actions:
(a) Consummation of a plan of merger to which the corporation is
a party:
1) If the shareholder is entitled to vote on the merger,
or
2) If the corporation is a subsidiary that is merged
with its parent under s. 607.1104, and the
shareholders would have been entitled to vote on
action taken, except for the applicability of s.
607.1104;
(b) Consummation of a sale or exchange of all, or substantially
all, of the property of the corporation, other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange pursuant to s. 607.1202, including a sale in dissolution but not
including a sale pursuant to court order or a sale for cash pursuant to a plan
by which all or substantially all of the net proceeds of the sale will be
distributed to the shareholders within 1 year after the date of sale;
(c) As provided in s. 607.0902(11), the approval of a
control-share acquisition;
(d) Consummation of a plan of share exchange to which the
corporation is a party as the corporation the shares of which will be acquired,
if the shareholder is entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the
shareholder is entitled to vote on the amendment and if such amendment would
adversely affect such shareholder by:
1) Altering or abolishing any preemptive rights attached
to any of his or her shares;
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2) Altering or abolishing the voting rights pertaining
to any of his or her shares, except as such rights
may be affected by the voting rights of new shares
then being authorized of any existing or new class or
series of shares;
3) Effecting an exchange, cancellation, or
reclassification of any of his or her shares, when
such exchange, cancellation, or reclassification
would alter or abolish the shareholder's voting
rights or alter his or her percentage of equity in
the corporation, or effecting a reduction or
cancellation of accrued dividends or other arrearages
in respect to such shares;
4) Reducing the stated redemption price of any of the
shareholder's redeemable shares, altering or
abolishing any provision relating to any sinking fund
for the redemption or purchase of any of his or her
shares, or making any of his or her shares subject to
redemption when they are not otherwise redeemable;
5) Making noncumulative, in whole or in part, dividends
of any of the shareholder's preferred shares which
had theretofore been cumulative;
6) Reducing the stated dividend preference of any of the
shareholder's preferred shares; or
7) Reducing any stated preferential amount payable on
any of the shareholder's preferred shares upon
voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of
incorporation provide that a voting or nonvoting shareholder is entitled to
dissent and obtain payment for his or her shares.
(2) A shareholder dissenting from any amendment specified in paragraph (1)(e)
has the right to dissent only as to those of his or her shares which are
adversely affected by the amendment.
(3) A shareholder may dissent as to less than all the shares registered in his
or her name. In that event, the shareholder's rights shall be determined as if
the shares as to which he or she has dissented and his or her other shares were
registered in the names of different shareholders.
(4) Unless the articles of incorporation otherwise provide, this section does
not apply with respect to a plan of merger or share exchange or a proposed sale
or exchange of property, to the holders of shares of any class or series which,
on the record date fixed to determine the shareholders entitled to vote at the
meeting of shareholders at which such action is to be acted upon or to consent
to any such action without a meeting, were either registered on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc., or held of record by not fewer than 2,000 shareholders.
(5) A shareholder entitled to dissent and obtain payment for his or her shares
under this section may not challenge the corporate action creating his or her
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
607.1320 Procedure for exercise of dissenters' rights
(1) (a) If a proposed corporate action creating dissenters' rights under s.
607.1302 is submitted to a vote at a shareholders' meeting, the meeting notice
shall state that shareholders are or may be entitled to assert dissenters'
rights and be accompanied by a copy of ss. 607.1301, 607.1302, and 607.1320. A
shareholder who wishes to assert dissenters' rights shall:
1) Deliver to the corporation before the vote is taken
written notice of the shareholder's intent to demand payment
for his or her shares if the proposed action is effectuated,
and
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2) Not vote his or her shares in favor of the proposed
action. A proxy or vote against the proposed action does not
constitute such a notice of intent to demand payment.
(b) If proposed corporate action creating dissenters' rights under s.
607.1302 is effectuated by written consent without a meeting, the corporation
shall deliver a copy of ss. 607.1301, 607.1302, and 607.1320 to each shareholder
simultaneously with any request for the shareholder's written consent or, if
such a request is not made, within 10 days after the date the corporation
received written consents without a meeting from the requisite number of
shareholders necessary to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the corporation
shall give written notice of such authorization or consent or adoption of the
plan of merger, as the case may be, to each shareholder who filed a notice of
intent to demand payment for his or her shares pursuant to paragraph (1)(a) or,
in the case of action authorized by written consent, to each shareholder,
excepting any who voted for, or consented in writing to, the proposed action.
(3) Within 20 days after the giving of notice to him or her, any shareholder who
elects to dissent shall file with the corporation a notice of such election,
stating the shareholder's name and address, the number, classes, and series of
shares as to which he or she dissents, and a demand for payment of the fair
value of his or her shares. Any shareholder failing to file such election to
dissent within the period set forth shall be bound by the terms of the proposed
corporate action. Any shareholder filing an election to dissent shall deposit
his or her certificates for certificated shares with the corporation
simultaneously with the filing of the election to dissent. The corporation may
restrict the transfer of uncertificated shares from the date the shareholder's
election to dissent is filed with the corporation.
(4) Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall not
be entitled to vote or to exercise any other rights of a shareholder. A notice
of election may be withdrawn in writing by the shareholder at any time before an
offer is made by the corporation, as provided in subsection (5), to pay for his
or her shares. After such offer, no such notice of election may be withdrawn
unless the corporation consents thereto. However, the right of such shareholder
to be paid the fair value of his or her shares shall cease, and the shareholder
shall be reinstated to have all his or her rights as a shareholder as of the
filing of his or her notice of election, including any intervening preemptive
rights and the right to payment of any intervening dividend or other
distribution or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim,
if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the
shareholders revoke the authority to effect such action;
(c) No demand or petition for the determination of fair value by a
court has been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such
shareholder is not entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which shareholders may
file their notices of election to dissent, or within 10 days after such
corporate action is effected, whichever is later (but in no case later than 90
days from the shareholders' authorization date), the corporation shall make a
written offer to each dissenting shareholder who has made demand as provided in
this section to pay an amount the corporation estimates to be the fair value for
such shares. If the corporate action has not been consummated before the
expiration of the 90-day period after the shareholders' authorization date, the
offer may be made conditional upon the consummation of such action. Such notice
and offer shall be accompanied by:
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(a) A balance sheet of the corporation, the shares of which the
dissenting shareholder holds, as of the latest available date and not more than
12 months prior to the making of such offer; and
(b) A profit and loss statement of such corporation for the 12 -month
period ended on the date of such balance sheet or, if the corporation was not in
existence throughout such 12-month period, for the portion thereof during which
it was in existence.
(6) If within 30 days after the making of such offer any shareholder accepts the
same, payment for his or her shares shall be made within 90 days after the
making of such offer or the consummation of the proposed action, whichever is
later. Upon payment of the agreed value, the dissenting shareholder shall cease
to have any interest in such shares.
(7) If the corporation fails to make such offer within the period specified
therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30 days
thereafter, then the corporation, within 30 days after receipt of written demand
from any dissenting shareholder given within 60 days after the date on which
such corporate action was effected, shall, or at its election at any time within
such period of 60 days may, file an action in any court of competent
jurisdiction in the county in this state where the registered office of the
corporation is located requesting that the fair value of such shares be
determined. The court shall also determine whether each dissenting shareholder,
as to whom the corporation requests the court to make such determination, is
entitled to receive payment for his or her shares. If the corporation fails to
institute the proceeding as herein provided, any dissenting shareholder may do
so in the name of the corporation. All dissenting shareholders (whether or not
residents of this state), other than shareholders who have agreed with the
corporation as to the value of their shares, shall be made parties to the
proceeding as an action against their shares. The corporation shall serve a copy
of the initial pleading in such proceeding upon each dissenting shareholder who
is a resident of this state in the manner provided by law for the service of a
summons and complaint and upon each nonresident dissenting shareholder either by
registered or certified mail and publication or in such other manner as is
permitted by law. The jurisdiction of the court is plenary and exclusive. All
shareholders who are proper parties to the proceeding are entitled to judgment
against the corporation for the amount of the fair value of their shares. The
court may, if it so elects, appoint one or more persons as appraisers to receive
evidence and recommend a decision on the question of fair value. The appraisers
shall have such power and authority as is specified in the order of their
appointment or an amendment thereof. The corporation shall pay each dissenting
shareholder the amount found to be due him or her within 10 days after final
determination of the proceedings. Upon payment of the judgment, the dissenting
shareholder shall cease to have any interest in such shares.
(8) The judgment may, at the discretion of the court, include a fair rate of
interest, to be determined by the court.
(9) The costs and expenses of any such proceeding shall be determined by the
court and shall be assessed against the corporation, but all or any part of such
costs and expenses may be apportioned and assessed as the court deems equitable
against any or all of the dissenting shareholders who are parties to the
proceeding, to whom the corporation has made an offer to pay for the shares, if
the court finds that the action of such shareholders in failing to accept such
offer was arbitrary, vexatious, or not in good faith. Such expenses shall
include reasonable compensation for, and reasonable expenses of, the appraisers,
but shall exclude the fees and expenses of counsel for, and experts employed by,
any party. If the fair value of the shares, as determined, materially exceeds
the amount which the corporation offered to pay therefor or if no offer was
made, the court in its discretion may award to any shareholder who is a party to
the proceeding such sum as the court determines to be reasonable compensation to
any attorney or expert employed by the shareholder in the proceeding.
(10) Shares acquired by a corporation pursuant to payment of the agreed value
thereof or pursuant to payment of the judgment entered therefor, as provided in
this section, may be held and disposed of by such corporation as authorized but
unissued shares of the corporation, except that, in the case of a merger, they
may be held and disposed of as the plan of merger otherwise provides. The shares
of the surviving corporation into which the shares of such dissenting
shareholders would have been converted had they assented to the merger shall
have the status of authorized but unissued shares of the surviving corporation.
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APPENDIX E
REVOCABLE PROXY
THIS REVOCABLE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
BANKATLANTIC BANCORP, INC.
The undersigned appoints ________ and _______ or either of them, with
full power of substitution and resubstitution, proxies of the undersigned with
all the powers that the undersigned would possess if personally present to cast
all votes which the undersigned would be entitled to vote at the Annual Meeting
of Stockholders (the "Annual Meeting") of BankAtlantic Bancorp, Inc. (the
"Company"), to be held at ___ p.m. local time, on ___________ , 2000, at
____________________________, Ft. Lauderdale, Florida ________, and at any and
all adjournments thereof, including (without limiting the generality of the
foregoing) to vote and act as indicated on the back of this card.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
Your Board of Directors unanimously recommends that you vote FOR
Item 1 set forth below and for the nominees listed below, and all as described
in the Notice of Annual Meeting and Proxy Statement.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting. This Proxy will be
voted at the Annual Meeting or any adjournment thereof. This Proxy will be voted
in accordance with the instructions set forth herein, or in the event no
instructions are set forth, this Proxy will be voted FOR Item 1 set forth
below and for the nominees listed below, and all as described in the Notice of
Annual Meeting and Proxy Statement. This Proxy hereby revokes all prior proxies
given with respect to the shares of the undersigned.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR all WITHHOLD
nominees listed AUTHORITY
to the right to vote for all
(except as nominees listed
indicated to the to the right.
contrary)
FOR AGAINST ABSTAIN
1. Approval and [ ] [ ] [ ] 2. Election of three [ ] [ ] Nominees to serve a
Adoption of the directors to serve a three year term
Amended and three year term to to expire in 2003:
Restated Agreement expire in 2003: -----------------
and Plan of Merger. John E. Abdo
Ira T. Siegel
Charlie C. Winningham, II
TO WITHHOLD AUTHORITY to vote for any
individual write that nominee's name here:
--------------------------------------------
Your Board of Directors unanimously recommends that you vote this Proxy will be voted FOR the nominees and the
FOR the approval of the Amended and Restated Plan of Merger and item set forth on this card and as described in the
FOR the election of Nominees. accompanying Notice of Annual Meeting and Proxy
Statement. This Proxy hereby revokes all prior
proxies given with respect to the shares of the
undersigned.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting. This Please complete, sign, date and return promptly this
Proxy will be voted at the Annual Meeting or any adjournment Proxy in the enclosed pre-addressed return envelope.
thereof. This Proxy will be voted in accordance with the instructions No postage is required for mailing in the United States.
set forth herein, or in the event no such instructions are set forth,
Signature(s)___________________________________ Signature(s)__________________________________Date:_________________
</TABLE>
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APPENDIX F
REVOCABLE PROXY
THIS REVOCABLE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
BANKATLANTIC BANCORP, INC.
The undersigned appoints ________ and _______ or either of them, with full
power of substitution and resubstitution, proxies of the undersigned with all
the powers that the undersigned would possess if personally present to cast all
votes which the undersigned would be entitled to vote at the Annual Meeting of
Stockholders (the "Annual Meeting") of BankAtlantic Bancorp, Inc. (the
"Company"), to be held at ___ p.m. local time, on ___________ , 2000, at
____________________________, Ft. Lauderdale, Florida ________, and at any and
all adjournments thereof, including (without limiting the generality of the
foregoing) to vote and act as indicated on the back of this card.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
Your Board of Directors unanimously recommends that you vote FOR the item set
forth below as described in the Notice of Annual Meeting and Proxy Statement.
This Proxy will be voted at the Annual Meeting or any adjournment thereof.
This Proxy will be voted in accordance with the instructions set forth herein,
or in the event no instructions are set forth, this Proxy will be voted FOR the
item set forth below as described in the Notice of Annual Meeting and Proxy
Statement. This Proxy hereby revokes all prior proxies given with respect to the
shares of the undersigned.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR AGAINST ABSTAIN
1. Approval and [ ] [ ] [ ]
Adoption of the
Amended and
Restated Agreement
and Plan of Merger.
TO WITHHOLD AUTHORITY to vote for any individual write that
nominee's name here:
------------------------------------------------------------
Your Board of Directors unanimously recommends that you vote as described in the accompanying Notice of Annual Meeting
FOR the approval of the Amended and Restated Plan of Merger. and Proxy Statement. This Proxy hereby revokes all
prior proxies given with respect to the shares of the
undersigned.
This Proxy will be voted at the Annual Meeting or any adjournment Please complete, sign, date and return promptly this Proxy
thereof. This Proxy will be voted in accordance with the instructions in the enclosed pre-addressed return envelope. No postage
set forth herein, or in the event no such instructions are set forth, is required for mailing in the United States.
this Proxy will be voted FOR the items set forth on this card and
Signature(s)___________________________________ Signature(s)__________________________________Date:_________________
</TABLE>
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