EXHIBIT 99.A1
OFFER TO PURCHASE FOR CASH
UP TO $25,000,000
5.625% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2007
OF
BANKATLANTIC BANCORP, INC.
at
$730 per $1,000 Principal Amount
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
TENDER OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 28,
2000, UNLESS EXTENDED (THE "EXPIRATION DATE"). HOLDERS OF DEBENTURES (EACH, A
"HOLDER" AND COLLECTIVELY, THE "HOLDERS") MUST TENDER THEIR DEBENTURES ON OR
PRIOR TO THE EXPIRATION DATE IN ORDER TO RECEIVE THE TENDER OFFER
CONSIDERATION (AS DEFINED BELOW). TENDERED DEBENTURES MAY BE WITHDRAWN AT ANY
TIME ON OR PRIOR TO THE EXPIRATION DATE.
BankAtlantic Bancorp, Inc., a Florida corporation (the "Company"), upon
the terms and subject to the conditions set forth in this Offer to Purchase
(the "Offer to Purchase") and in the accompanying Letter of Transmittal (the
"Letter of Transmittal") hereby offers to purchase (the "Tender Offer") up to
$25 million aggregate principal amount of its 5.625% Convertible Subordinated
Debentures due 2007 (each, a "Debenture" and collectively, the "Debentures")
for a cash purchase price of $730 per $1,000 principal amount of Debentures,
plus accrued and unpaid interest from June 1, 2000 up to, but not including,
the date of payment (the "Tender Offer Consideration").
The Debentures are listed on the Nasdaq Small Cap Market ("NASDAQ") under
the symbol "BANCH." The last reported sale price of the Debentures on NASDAQ on
August 28, 2000 was $650 per $1,000 principal amount. The Debentures are
convertible into shares of Class A Common Stock of the Company (the "Class A
Common Stock") at a conversion price of $11.25 per share which represents a
conversion rate of 88.89 shares of Class A Common Stock per $1,000 principal
amount. The Class A Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "BBX." The closing price of the Class A Common Stock
on the NYSE on August 28, 2000 was $3.9375 per share.
SEE "RISK FACTORS" AND "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" FOR
DISCUSSIONS OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS IN
EVALUATING THE TENDER OFFER.
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Unless the Tender Offer is terminated or amended, the Company's obligation
to accept for purchase and to pay for Debentures validly tendered pursuant to
the Tender Offer is conditioned upon the satisfaction of the General Conditions
(as hereinafter defined). Unless the Tender Offer is terminated, if all of the
conditions of the Tender Offer are satisfied or waived, holders of Debentures
(each a "Holder" and, collectively, the "Holders") who validly tender their
Debentures prior to 5:00 p.m., New York City time, on September 28, 2000,
unless extended, will receive the Tender Offer Consideration. The Tender Offer
is not conditioned upon there being a minimum principal amount of Debentures
tendered.
The Company will accept for purchase up to $25 million aggregate principal
amount of the Debentures. If Debentures having an aggregate principal amount in
excess of $25 million are tendered and not withdrawn, the Company will purchase
$25 million aggregate principal amount, pro rata in an amount per Holder equal
to (i) a fraction the numerator of which is such Holder's total principal
amount of all Debentures tendered and the denominator of which is the total
principal amount of Debentures tendered, multiplied by (ii) $25 million ("Pro
Rata Acceptance").
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Requests for copies of the Tender Offer materials should be directed to
Georgeson Shareholder Communications Inc., which is acting as information agent
for the Tender Offer (the "Information Agent"), at the address and telephone
number set forth on the back cover of this Offer to Purchase or to a Holder's
broker, dealer, commercial bank or trust company. None of the Company, the
Trustee (as defined) or the Depositary (as defined) makes any recommendation as
to whether or not Holders should tender their Debentures. Holders must make
their own decision as to whether to tender Debentures pursuant to the Tender
Offer and, if so, the principal amount of Debentures to tender.
AUGUST 30, 2000
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Summary Term Sheet
The following is a brief summary of the material terms of the Tender
Offer. You should review all of the information in this Offer to Purchase
before deciding whether to participate in the Tender Offer.
Securities Tendered For:... 5.625% Convertible Subordinated Debentures due
2007. We are offering to purchase up to $25
million aggregate principal amount of outstanding
Debentures.
Cusip No.:................. 065908AC9
Aggregate Principal
Amount Outstanding:....... $74.217 million
Expiration Date:........... The Tender Offer will expire at 5:00 p.m., New
York City time, on September 28, 2000 unless we
extend this date. See "The Tender
Offer--Expiration Date; Extension; Termination;
Amendments."
Tender Offer
Consideration:............. We are offering to purchase up to $25 million
aggregate principal amount of the outstanding
Debentures (the "Maximum Tender Amount") for a
cash purchase price of $730 per $1,000 principal
amount, plus accrued and unpaid interest from June
1, 2000. See "The Tender Offer--Principal Terms of
the Tender Offer."
How to Tender:............. In order to validly tender Debentures in the
Tender Offer, you must tender the Debentures
before the Expiration Date. The procedure you must
follow will depend on whether you are the record
holder or a beneficial owner.
o If you are the record holder, deliver a
Letter of Transmittal or an Agent's Message
with your Debentures to the Depositary and
any other documents required by the
instructions in the Letter of Transmittal.
o If you are a beneficial owner of Debentures
held of record by someone else, you must
instruct the record holder to tender your
Debentures on your behalf.
See "The Tender Offer--Procedures for Tendering
Debentures."
Payment For Debentures;
Pro Rata Acceptance:...... The Company will pay for validly tendered
Debentures promptly after the Expiration Date. If
more than $25 million of Debentures are tendered,
the Company will purchase from you an amount of
Debentures based on the proportion of the
Debentures you tendered to all Debentures
tendered. See "The Tender Offer--Acceptance of
Debentures for Purchase; Payment for Debentures;
Maximum Tender Amount and Pro Rata Acceptance."
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Withdrawal of Tenders:..... You may withdraw your tender of Debentures on or
prior to the Expiration Date:
o by following the procedures described under
"The Tender Offer--Withdrawal of Tenders,"
or
o if the Tender Offer is terminated without
any Debentures being purchased.
See "The Tender Offer--Withdrawal of Tenders."
Conditions:................ The Tender Offer is conditioned upon the
satisfaction of the general conditions described
in the section "The Tender Offer--Conditions of
the Tender Offer."
Termination and
Amendment:................ We have the right to:
o terminate the Tender Offer,
o waive any unsatisfied conditions,
o extend the Expiration Date, or
o amend any terms of the Tender Offer.
See "The Tender Offer--Expiration Date;
Extension; Termination; Amendments."
Guaranteed Delivery:....... If you:
o desire to tender your Debentures but cannot
comply with the required procedures on a
timely basis, or
o your Debentures are not immediately
available,
you may tender Debentures by following the
guaranteed delivery procedures described in the
section "The Tender Offer--Procedures for
Tendering Debentures--Guaranteed Delivery" and in
the Letter of Transmittal.
Special Procedures For
Beneficial Owners......... Any beneficial owner:
o whose Debentures are registered in the name
of a broker, dealer, commercial bank, trust
company or other nominee; and
o who wishes to tender debentures
should contact promptly such registered Holder.
See "The Tender Offer--Procedures for Tendering
Debentures--Proper Tender of Debentures" and the
Letter of Transmittal.
Risk Factors:.............. You should consider the discussion under "Risk
Factors" in deciding whether to tender your
Debentures.
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Brokerage Commission:...... You will not be required to pay any commission
in tendering your Debentures.
Depositary:................ The Depositary for the Tender Offer is U.S. Bank
Trust National Association. See "Depositary."
Information Agent:......... The Information Agent for the Tender Offer is
Georgeson Shareholder Communications Inc. Requests
for copies of the Tender Offer materials may be
made by calling the Information Agent at (800)
223-2064. See "Information Agent."
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TABLE OF CONTENTS
Section Page
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IMPORTANT INFORMATION ............................................ 1
AVAILABLE INFORMATION AND INCORPORATION OF INFORMATION
BY REFERENCE .................................................... 2
FORWARD-LOOKING STATEMENTS ....................................... 3
THE COMPANY ...................................................... 4
BACKGROUND AND PURPOSE OF THE TENDER OFFER ....................... 4
RECENT DEVELOPMENTS .............................................. 5
RISK FACTORS ..................................................... 5
SOURCE AND AMOUNT OF FUNDS ....................................... 7
THE DEBENTURES ................................................... 8
MARKET AND TRADING INFORMATION ................................... 9
THE TENDER OFFER ................................................. 11
CERTAIN FEDERAL INCOME TAX CONSEQUENCES .......................... 18
DEPOSITARY ....................................................... 20
INFORMATION AGENT ................................................ 20
FEES AND EXPENSES ................................................ 20
INDEMNIFICATION .................................................. 20
MISCELLANEOUS .................................................... 20
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Subject to applicable securities laws and the terms set forth in this
Offer to Purchase, the Company reserves the right to (i) terminate the Tender
Offer, (ii) waive any and all unsatisfied conditions to the Tender Offer, (iii)
extend the Expiration Date of the Tender Offer, or (iv) otherwise amend the
Tender Offer in any respect. Any such waiver, extension or amendment may be
made by press release or such other means of announcement as the Company deems
appropriate subject to compliance with applicable laws.
IMPORTANT INFORMATION
THIS OFFER TO PURCHASE AND THE ACCOMPANYING LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE TENDER OFFER.
In order to validly tender Debentures in the Tender Offer, a Holder must,
on or prior to the Expiration Date, deliver to U.S. Bank Trust National
Association (the "Depositary") at the address set forth on the back cover of
this Offer to Purchase a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) or an Agent's Message (as
hereinafter defined), and any other documents required by the instructions to
such Letter of Transmittal, together with the Debentures (or such Debentures
must be transferred pursuant to the procedures for book-entry transfer
described therein and a confirmation of such book-entry transfer, including an
Agent's Message, must be received by the Depositary, in either case prior to
the Expiration Date). If a Holder does not deliver such documents on or prior
to the Expiration Date, the Holder will not be eligible to receive the Tender
Offer Consideration.
Only (i) those persons in whose name Debentures are registered in the
registry maintained by the Trustee under the Indenture pursuant to which the
Debentures were issued or (ii) persons, such as brokers, dealers, commercial
banks, trust companies and other nominees, who are participants in the
Depository Trust Company (the "DTC" and, each participant, a "DTC Participant")
(or a substitute book-entry transfer facility) and whose names appear on a
security listing as owners of the Debentures, will be eligible to tender
Debentures. Any beneficial owner whose Debentures are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender Debentures should contact promptly such registered Holder. See
"The Tender Offer--Procedures for Tendering Debentures" and the accompanying
Letter of Transmittal.
The Depositary and DTC have confirmed that the Tender Offer is eligible
for the DTC Automated Tender Offer Program ("ATOP"). Accordingly, DTC
Participants may electronically transmit their acceptance of the Tender Offer
by causing DTC to transfer Debentures to the Depositary in accordance with
DTC's ATOP procedures for transfer. DTC will then send an Agent's Message to
the Depositary for its acceptance. The Depositary will establish an account
with respect to the Debentures at DTC for purposes of the Tender Offer, and any
financial institution that is a participant in DTC's system may make book-entry
delivery of the Debentures by causing DTC to transfer such Debentures into the
Depositary's account at DTC in accordance with DTC's procedure for such
transfer. Although tenders of Debentures may be effected through book-entry
transfer at DTC, a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof) with any required signature guarantees
or an Agent's Message in connection with a book-entry transfer, must, in any
case, be transmitted to and received by the Depositary at the address set forth
on the back cover of this Offer to Purchase on or prior to the Expiration Date
or the Holder must comply with the guaranteed delivery procedures described
herein. See "The Tender Offer--Procedures for Tendering Debentures--Debentures
Held Through DTC."
The method of delivery of Debentures and Letters of Transmittal, any
required signature guarantees and all other required documents, including
delivery through DTC and any acceptance of an Agent's Message transmitted
through ATOP, is at the election and risk of the person tendering Debentures
and delivering the Letter of Transmittal and, except as otherwise provided in
the Letter of Transmittal, delivery will be deemed made only when actually
received by the Depositary. If delivery is
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by mail, it is suggested that the Holder use properly insured, registered mail
with return receipt requested, and that the mailing be made sufficiently in
advance of the Expiration Date to permit delivery to the Depositary on or prior
to such date.
Tendering Holders will not be obligated to pay any fees to the Information
Agent or the Depositary.
This Offer to Purchase does not constitute an offer to any person in any
jurisdiction in which such offer would be unlawful, and the Tender Offer is not
made to, and tenders will not be accepted from, Holders of Debentures in states
in which the Tender Offer or acceptance thereof would constitute a violation of
the securities or Blue Sky Laws of such jurisdiction. No person has been
authorized to make any recommendation on behalf of the Company as to whether
the Holder should tender Debentures pursuant to the Tender Offer. No person has
been authorized to give any information or to make any representation in
connection therewith, other than those contained herein or in the accompanying
Letter of Transmittal. If made or given, such recommendation or any such
information or representation must not be relied upon as having been authorized
by the Company.
Although it has no obligation to do so, the Company reserves the right in
the future to seek to acquire Debentures not tendered in the Tender Offer by
means of open market purchases, privately negotiated acquisitions, subsequent
exchange or tender offers, redemptions or otherwise, at prices or on terms
which may be higher or lower or more or less favorable than those in the Tender
Offer.
AVAILABLE INFORMATION AND INCORPORATION
OF INFORMATION BY REFERENCE
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other documents and information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other documents and information may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and Citicorp Center, Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
also maintains a Web Site located at http://www.sec.gov that contains reports,
proxy and the aforementioned statements and other information regarding
registrants that have filed electronically with the Commission, including the
Company. The Company's Class A Common Stock is listed and traded on the NYSE
and such reports, proxy statements and other documents and information
concerning the Company are also available for inspection at the offices of the
NYSE, 20 Broad Street, New York, New York 10005. Copies of the Indenture (as
defined) pursuant to which the Debentures were issued are also available from
the Company upon request.
This Offer to Purchase constitutes a part of a Tender Offer Statement on
Schedule TO (the "Schedule TO") filed with the Commission by the Company
pursuant to Section 13(e) of the Exchange Act and the rules and regulations
promulgated thereunder. The Schedule TO is incorporated herein by reference.
The Company will provide without charge to each person, including any
beneficial owner to whom this Offer to Purchase has been delivered, upon
written or oral request of such person, a copy of the Schedule TO and copies of
the Indenture. Requests for such copies should be directed to:
Corporate Communications
BankAtlantic Bancorp, Inc.
1750 East Sunrise Boulevard
Fort Lauderdale, Florida 33304
(954) 760-5402
Attn: Corporate Secretary
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FORWARD-LOOKING STATEMENTS
The Company cautions readers that certain matters discussed in this Offer
to Purchase and in the documents incorporated 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 the Company's operations and
profitability of changes in interest rates and increased
leverage,
(ii) limitations on BankAtlantic's ability to pay dividends to the
Company and the potential adverse impact of limited cash flow
at the holding company level,
(iii) economic conditions, both generally and particularly in areas
where we or our subsidiaries, including BankAtlantic, operate
or hold assets,
(iv) interest rate and credit risk associated with BankAtlantic's
loan portfolio,
(v) BankAtlantic's recent rapid growth and increased operating
expenses,
(vi) uncertainty relating to the realization of benefits from our
restructuring initiatives and the redemption of approximately
5.4 million shares of our publicly held Class B Common Stock
at a price of $6.00 per share,
(vii) our ability to manage new banking and non-banking initiatives
and investments, and
(viii) the highly competitive nature of our businesses.
Many of these factors are beyond our control and beyond the control of
BankAtlantic. The foregoing review of important factors should not be construed
as exhaustive and should be read in conjunction with other cautionary
statements that are included elsewhere in this Offer to Purchase. For a
discussion of additional factors that could cause actual results to differ,
please see the discussion under "Risk Factors" contained in this Offer to
Purchase and in other information contained in our publicly available SEC
filings.
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THE COMPANY
The Company is 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,
Hillsborough and Palm Beach Counties in South Florida. 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 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 FDIC.
Although the Company's primary activities relate to the banking activities
of BankAtlantic, the Company's other activities include (i) providing
investment banking services, capital raising and advisory services through the
Company's subsidiary, Ryan Beck & Co., Inc., and (ii) engaging in real estate
development and investment activities through the Company's subsidiary, Levitt
Corporation (formerly known as BankAtlantic Development 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, a subsidiary of BankAtlantic,
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.
BACKGROUND AND PURPOSE OF THE TENDER OFFER
The Company is making this Tender Offer for the purpose of acquiring
Debentures at what the Board of Directors believes to be an attractive price to
the Company. Under the terms of the Tender Offer, if successful, the Company
will reacquire, and thereby extinguish, a portion of its indebtedness at a
discount to its principal amount and in an amount less than that which would be
payable upon redemption or at maturity. The Company intends to retire all
Debentures purchased pursuant to the Tender Offer.
The Tender Offer will also enable Holders who currently face limitations
in the trading market for their Debentures, an opportunity to liquidate their
investment. Due to a thinly-traded market for the Debentures, Holders do not
have the benefit of an active public market. The Tender Offer will provide
Holders an opportunity to sell all or a portion of their Debentures for cash
without the usual transaction costs associated with open market sales. See
"Source and Amount of Funds."
The total amount of funds required by the Company to pay the offered price
and any related fees and expenses will be approximately $18.5 million (assuming
that Debentures with an aggregate principal amount of at least $25 million are
tendered and not withdrawn on the Expiration Date). The Company expects to use
(i) proceeds from the sale of its current offering of its Subordinated
Investment Notes (the "Investment Notes") (ii) amounts available under a $20
million credit facility, and (iii) funds from working capital, to pay these
amounts. See "Source and Amount of Funds."
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RECENT DEVELOPMENTS
Redemption and Retirement of Publicly Held Class B Common Stock
The Company announced on August 17, 2000 that the holders of a majority of
the outstanding shares of Class A Common Stock and Class B Common Stock, voting
as separate voting groups, approved a corporate transaction which resulted in
the redemption and retirement of all outstanding publicly held shares of Class
B Common Stock (the "Corporate Transaction"). The Corporate Transaction was
effected on August 18, 2000. Upon the consummation of the Corporate
Transaction, (i) each publicly held share of Class B Common Stock was converted
into the right to receive $6.00 in cash per share and (ii) the listing and all
trading of the Class B Common Stock on the Nasdaq National Market ceased. The
Class A Common Stock continues to trade on the New York Stock Exchange as the
Company's sole publicly-traded common stock. As a result of the Corporate
Transaction, BFC Financial Corporation ("BFC") owns 100% of the Class B Common
Stock, which constitutes 100% of the voting rights of the Company.
Tender Offer for Outstanding 5.625% Convertible Subordinated Debentures and
Subsequent Repurchases by the Company
In January 2000, the Company announced a tender offer for up to $25
million in principal amount of the Company's outstanding 5.625% Convertible
Subordinated Debentures due 2007 for a cash price of $750 per $1,000 principal
amount of Debentures. On February 29, 2000, the Company accepted for purchase
the maximum $25 million aggregate principal amount of Debentures under the
terms of the tender offer for an aggregate repurchase price of $18.75 million.
Upon expiration of the tender offer, approximately $60 million aggregate
principal amount of the Debentures had been validly tendered and, given that
this amount exceeded the $25 million principal amount tendered for by the
Company, all tenders of the Debentures were subject to pro ration (at a ratio
of approximately 41%) in accordance with the terms of the tender offer.
Subsequent to the January 2000 tender offer, the Company repurchased $783,000
of Debentures in the open market at prices ranging from $655 to $750 per $1,000
principal amount.
RISK FACTORS
In deciding whether to participate in the Tender Offer, each Holder should
consider carefully, in addition to the other information contained or
incorporated by reference herein, the following:
Holding Company Structure
The Company is a holding company with no direct operations. The Company
conducts business through its subsidiaries and has no significant assets other
than the stock of its subsidiaries. The Company is significantly dependant on
dividends and distributions from its subsidiaries, especially BankAtlantic, to
meet its debt obligations. The Company's subsidiaries are separate and distinct
legal entities and have no obligation, contingent or otherwise, to make funds
available to the Company, whether in the form of loans, dividends or otherwise.
Further, BankAtlantic is, and the Company's other subsidiaries may from time to
time be, subject to regulatory or contractual constraints that restrict their
ability to pay dividends or otherwise make distributions to the Company.
Substantial Leverage
At June 30, 2000, the Company had approximately $249.5 million of
indebtedness outstanding and approximately $246.8 million of stockholders'
equity. Subsequent to June 30, the Company obtained a $20 million revolving
credit facility from an unaffiliated financial institution. The facility is
secured by all of BankAtlantic's outstanding stock, matures on September 1,
2003 and bears interest at an annual rate
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equal to the prime rate minus 50 points. At August 28, 2000, the Company had
borrowed $9.0 million under the facility, which was used to fund amounts in
connection with the Corporate Transaction. The Company has 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. It is currently anticipated that no more than $50 million
of Investment Notes will be outstanding at any one time. While the terms of the
Investment Notes will be determined from time to time, approximately $31.0 of
Investment Notes had been issued at August 25, 2000 with maturity dates between
February 28, 2002 and September 30, 2002, and bearing interest at rates ranging
from 10% to 11.75% per annum. The Investment Notes will rank pari passu in
right of payment with the Debentures. A portion of the proceeds of the sale of
the Investment Notes was used to repurchase Debentures in the January 2000
tender offer and to fund the Corporate Transaction. We intend to finance this
Tender Offer through (i) proceeds from the sale of the Investment Notes, (ii)
amounts available under the $20 million credit facility and (iii) funds from
working capital.
The effect of these transactions is increased leverage and a reduction of
the Company's equity to asset ratios. 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.
Market and Trading Information
While the Debentures are currently listed for quotation on NASDAQ, the
trading market for the Debentures has been limited. The Company acquired $25
million aggregate principal amount of the Debentures pursuant to its January
2000 tender offer at a price of $750 per $1,000 principal amount and an
additional $783,000 of Debentures in the market at prices ranging between $655
and $750 per $1,000 principal amount. Although the Company expects the
Debentures to continue to be listed for quotation on NASDAQ following the
completion of the Tender Offer, to the extent that Debentures are tendered and
accepted for payment in the Tender Offer, the trading market for Debentures
that remain outstanding may be more limited than the market that currently
exists. This might have an adverse effect on the liquidity of the Debentures.
An issue of securities with a smaller float may command a lower price than
would a comparable issue of securities with a greater float. Accordingly, the
market price for Debentures that are not tendered or not purchased in the
Tender Offer may be adversely affected to the extent that the amount of the
Debentures purchased pursuant to the Tender Offer reduces the float. The
reduced float also will tend to make the trading prices of the Debentures that
are not tendered or purchased more volatile. Accordingly, there can be no
assurance that the trading market for the Debentures after consummation of the
Tender Offer will not be even more limited than the trading market before the
Tender Offer.
Pro Rata Acceptance
The Company is seeking to purchase up to $25 million in aggregate
principal amount of Debentures. To the extent that the aggregate principal
amount of the Debentures tendered exceeds that amount, the Company will
purchase the tendered Debentures on a Pro Rata Acceptance basis. There can be
no assurance, therefore, that all of a tendering Holder's tendered Debentures
will be purchased by the Company pursuant to the Tender Offer.
Certain Bankruptcy Considerations
Any payments made to Holders in consideration for their Debentures may
also be subject to challenge as a preference if such payments: (a) are made
within ninety (90) days of a bankruptcy filing by the Company (or within one
(1) year in the case of Holders who are determined to be insiders of the
Company); (b) are made when the Company is insolvent and (c) permit the Holders
to receive more than they otherwise might receive in a liquidation under
applicable bankruptcy laws. If such payments were deemed to be a preference,
the full amount of such payments could be recovered by the Company as a debtor
in possession or by the Company's trustee in bankruptcy, and the Holder would
be entitled
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to assert claims in respect of the Debentures against the Company in its
reorganization or bankruptcy case. The Company does not believe that it is
currently insolvent, will be insolvent after giving effect to the Tender Offer
or will be insolvent within one (1) year, although for purposes of the
preference laws described above, the Company would be presumed insolvent for
the ninety (90) days preceding a bankruptcy or reorganization case.
Volatility of Class A Common Stock
The market price of the Class A Common Stock has fallen over the past
year. See "Market and Trading Information." In the future, the market price of
the Class A Common Stock into which the Debentures are convertible may be
affected by factors such as: (i) actual or anticipated fluctuations in the
Company's operating results, (ii) changes in interest rates, (iii) the
performance of BankAtlantic's loan portfolio, (iv) the success of new banking
and non-banking initiatives and investments, (v) conditions in the market for
financial institutions, and (vi) general market conditions. There can be no
assurance that the market price of the Class A Common Stock issuable upon
conversion of the Debentures will not significantly change in the future from
the price prevailing at the time of the Tender Offer.
SOURCE AND AMOUNT OF FUNDS
If the Maximum Tender Amount were tendered and purchased, the funds
required to pay the Tender Offer Consideration and related expenses would be
approximately $18.5 million. The Company expects to use (i) proceeds from the
sale of its current offering of the Investment Notes, (ii) amounts available
under a $20 million credit facility, and (iii) funds from working capital, to
pay these amounts.
The Company has obtained a $20 million revolving credit facility from an
unaffiliated financial institution which may be drawn upon to fund the payment
of the Tender Offer Consideration and for other purposes. The Company currently
has $9.0 million of outstanding borrowings under this facility which were used
to fund the Corporate Transaction. The credit facility is secured by a first
priority security interest in all of the outstanding stock of BankAtlantic. The
credit facility has a three-year term and will bear interest at an annual rate
equal to the prime rate of the lending institution from time to time minus 50
basis points. The credit facility contains customary covenants including
financial covenants relating to regulatory capital and maintenance of certain
loan loss reserves at BankAtlantic.
The Company has filed a Registration Statement with the SEC for the
offering of up to $150 million of the Investment Notes which are being offered
for sale to the public. The Investment Notes are being offered from time to
time and the interest rate and maturity date is determined at the time of
issuance. It is currently anticipated that a maximum of $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 approximately
$31.0 million of Investment Notes issued through August 25, 2000 have a
maturity date between February 28, 2002 and September 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
but rank pari passu in right of payment with the Debentures.
The Company currently has no specific plans or arrangements to refinance
or repay the credit facility or the Investment Notes but expects to repay the
credit facility and the Investment Notes with operating cash flow and the
proceeds of future financings or equity or debt offerings.
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<PAGE>
THE DEBENTURES
The following summary of certain terms of the Debentures does not purport
to be complete and is qualified in its entirety by reference to the Indenture.
All capitalized terms used in this summary and not defined shall have the
meaning ascribed to them in the Indenture.
Debentures Outstanding:..... $74.217 million aggregate principal amount at
August 28, 2000.
Conversion Rights:.......... The Debentures are convertible, at the option
of the Holder, into shares of the Company's Class
A Common Stock at a conversion price of $11.25
per share (representing a conversion rate of
88.89 shares per $1,000 in principal amount of
Debentures) (subject to adjustment under
anti-dilution provisions) at any time prior to
maturity, unless previously redeemed or otherwise
purchased by the Company. Upon conversion, no
payment of accrued interest will be paid (unless
converted debentures have been called for
redemption) and no fractional shares will be
issued. On August 28, 2000, the day of the last
reported sale price of the Class A Common Stock,
the closing price of the Class A Common Stock was
$3.9375 per share.
Subordination:.............. The Debentures are subordinated and junior in
right of payment to all Senior Indebtedness (as
defined in the Indenture) of the Company. The
Debentures rank on a par with all subordinated
debt of the Company.
Unsecured Obligations:...... The Debentures are not guaranteed or secured by
any lien on the Company's assets. The Debentures
do not have the benefit of a separate fund, such
as a sinking fund, for repayment of the
Debentures at maturity.
Redemption:................. The Debentures are redeemable at the option of
the Company, in whole or in part, at any time on
or after December 1, 2000. The redemption price
payable for a redemption during the one-year
period commencing December 1, 2000 is 104% of the
principal amount, declining to 103% of the
principal amount for the one-year period
commencing December 1, 2001, declining to 102% of
the principal amount for the one-year period
commencing December 1, 2002, declining to 101% of
the principal amount for the one-year period
commencing December 1, 2003, and declining to
100% of the principal amount for any period after
December 1, 2004.
Book-Entry Delivery
and Form:................... The Debentures were issued in the form of a
fully-registered Global Certificate (as defined
in the Indenture) to DTC, which is the depository
for the Global Certificate. The Global
Certificate may be transferred, in whole or in
part, only to another nominee of DTC or to a
successor of DTC or its nominee.
Events of Default:.......... An event of default under the Indenture occurs
if the Company (i) fails to pay principal of or
premium on the Debentures at maturity or upon
redemption, (ii) fails to pay
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interest on any Debentures on the specified
interest payment date and such failures continue
for 30 days or more, (iii) fails to comply with
the provisions, covenants or other agreements in
the Indenture or (iv) becomes bankrupt or
insolvent or reorganizes.
Listing:.................... The Debentures are listed on NASDAQ under the
Symbol "BANCH." The Class A Common Stock into
which the Debentures are convertible is listed
and traded on the NYSE under the symbol "BBX."
Indenture:.................. The Indenture under which the Debentures were
issued is between the Company and U.S. Bank Trust
National Association (successor to First Trust
National Association), as Trustee, and was
entered into on November 26, 1997 (the
"Indenture").
MARKET AND TRADING INFORMATION
The Debentures
The Debentures are currently listed on NASDAQ. The following table sets
forth, for the fiscal quarters indicated, the low and high closing prices for
the Debentures. Although the Company expects the Debentures to continue to be
listed on NASDAQ, to the extent that the Debentures are traded, prices of such
Debentures may fluctuate greatly depending on the trading volume and the
balance between buy and sell orders. In addition, quotations for securities
that are not widely traded, such as the Debentures, may differ from actual
trading prices and should be viewed as approximations. The Company believes
that the trading market for the Debentures remaining outstanding after the
Tender Offer will be more limited. The last reported sale price of the
Debentures on August 28, 2000 was $650 per $1,000 principal amount. See "Risk
Factors--Market and Trading Information." The Company repurchased $25 million
in principal amount of Debentures at a price of $750 per $1,000 principal
amount pursuant to a tender offer in January 2000. In addition, subsequent to
the January 2000 tender offer, the Company repurchased $783,000 of Debentures
in the open market at prices ranging between $655 and $750 per $1,000 principal
amount.
Price
-------------------------
Low High
----------- -----------
For the Year Ended December 31, 1998
First Quarter ................................... $1072 1/2 $1221 7/8
Second Quarter .................................. 1077 1/2 1212 1/2
Third Quarter ................................... 915 1090
Fourth Quarter .................................. 715 895
For the Year Ended December 31, 1999
First Quarter ................................... 770 870
Second Quarter .................................. 770 860
Third Quarter ................................... 770 856 1/4
Fourth Quarter .................................. 585 765
For the Year Ended December 31, 2000
First Quarter ................................... 602 1/2 665
Second Quarter .................................. 610 690
Third Quarter (through August 28, 2000) ......... 637 1/2 675
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<PAGE>
Class A Common Stock
The Class A Common Stock into which the Debentures are convertible 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 for the fiscal quarters indicated. The last reported sale price of the
Class A Common Stock on August 28, 2000 was $3.9375 per share.
Price
-------------------------
Low High
----------- -----------
For the Year Ended December 31, 1998
First Quarter ................................... $10 1/16 $12 13/16
Second Quarter .................................. 9 3/4 12 1/2
Third Quarter ................................... 6 1/16 10 1/2
Fourth Quarter .................................. 4 5/16 6 31/32
For the Year Ended December 31, 1999
First Quarter ................................... 5 35/64 7 53/64
Second Quarter .................................. 5 63/64 7 29/64
Third Quarter ................................... 5 1/2 7 1/16
Fourth Quarter .................................. 3 3/4 6 1/16
For the Year Ended December 31, 2000
First Quarter ................................... 3 15/16 5 1/16
Second Quarter .................................. 3 1/2 4 5/8
Third Quarter (through August 28, 2000) ......... 3 1/16 4
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<PAGE>
THE TENDER OFFER
Principal Terms of The Tender Offer
Upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the accompanying Letter of Transmittal, the Company is offering
to purchase up to $25 million aggregate principal amount of the Debentures for
a cash purchase price of $730 per $1,000 principal amount plus accrued and
unpaid interest from June 1, 2000 up to, but not including, the date of
payment. The Company may, at its option, increase the aggregate principal
amount of Debentures it will accept for purchase. To the best knowledge of the
Company, no Debentures are to be purchased from any officer, director or
affiliate of the Company.
Conditions of The Tender Offer
Notwithstanding any other provision of the Tender Offer, the Company shall
not be required to accept for purchase, or to pay for, the Debentures tendered
pursuant to the Tender Offer, and may terminate, extend or amend the Tender
Offer or delay or refrain (subject to Rule 14e-1(c) under the Exchange Act)
acceptance for purchase or payment of Debentures so tendered if, as of the
Expiration Date, any of the following General Conditions have not been
satisfied. The General Conditions shall be deemed to have been satisfied unless
any of the following conditions shall occur on or prior to the acceptance for
payment of the Debentures tendered pursuant to the Tender Offer (each of (1)
through (7), a "General Condition" and collectively, the "General Conditions"):
(1) there shall have been threatened, instituted or pending any action or
proceeding by or before any court or governmental regulatory or administrative
authority or tribunal, domestic or foreign, which challenges the making of the
Tender Offer, the acquisition of Debentures pursuant to the Tender Offer or
otherwise relates in any manner to the Tender Offer;
(2) a statute, rule, regulation, judgment, order, stay, decree or
injunction shall have been threatened, proposed, sought, promulgated, enacted,
entered, enforced or deemed to be applicable by any court or governmental
regulatory or administrative agency, authority or tribunal, domestic or
foreign, which, in the sole judgment of the Company, would or might prohibit,
prevent, restrict or delay consummation of the Tender Offer or that will, or is
reasonably likely to, materially impair the contemplated benefits of the Tender
Offer to the Company or otherwise results in the Tender Offer not being or
reasonably likely not being in the best interests of the Company;
(3) there shall have occurred or be likely to occur any event affecting
the business or financial affairs of the Company that would or might prohibit,
prevent, restrict or delay consummation of the Tender Offer or that will, or is
reasonably likely to, materially impair the contemplated benefits of the Tender
Offer to the Company or otherwise results in the Tender Offer not being or
reasonably likely not being in the best interests of the Company;
(4) (i) any general suspension or limitation of trading in, or limitation
on prices for, securities in the financial markets of the United States; (ii)
any suspension of trading of any securities of the Company on any United States
securities exchange or interdealer quotation system; (iii) the declaration of a
banking moratorium, or any suspension of payments in respect of banks, by
Federal, Florida or New York authorities; or (iv) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of
war by the United States or any other substantial state, national, or
international calamity or emergency if the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable in the Company's view for the Company to proceed with the Tender
Offer;
(5) any change in the general political, market, economic or financial
conditions in the United States or abroad that, in the Company's sole judgment,
has or may have a material adverse effect with respect to the Company's
business, operations or prospects or the trading in the securities of the
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<PAGE>
Company, or any decline in either the Dow Jones Industrial Average or the
Standard and Poor's Index of 500 Industrial Companies by an amount in excess of
ten percent (10%), as measured from the close of business on August 28, 2000;
(6) the Company shall not have obtained all consents, approvals, waivers
or amendments from third parties, including any required regulatory approvals,
necessary to permit the consummation of the Tender Offer; or
(7) any change shall have occurred (or any development shall have occurred
involving any prospective change) in the business, assets, liabilities,
condition (financial or otherwise), operations, results of operations, or
prospects of the Company that, in the sole judgment of the Company, has or may
have a material adverse effect on the Company or that would or might prohibit,
prevent, restrict or delay consummation of the Tender Offer.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by the Company, in its sole discretion, regardless of the
circumstances giving rise to any such condition or may be waived by the
Company, in whole or in part, at any time and from time to time in the
Company's sole discretion. The failure by the Company at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time.
Expiration Date; Extension; Termination; Amendments
The Tender Offer will expire on the Expiration Date. The Company expressly
reserves the right to extend the Tender Offer on a daily basis or for such
period or periods as it may determine in its sole discretion from time to time
by giving written or oral notice to the Depositary and by making a public
disclosure prior to 9:00 a.m., New York City time, on the next business day
following the previously scheduled Expiration Date. During any extension of the
Tender Offer, all Debentures previously tendered and not accepted for purchase
will remain subject to the Tender Offer and may, subject to the terms and
conditions of the Tender Offer, be accepted for purchase by the Company or may
be withdrawn by the applicable Holder.
The Company expressly reserves the absolute right, in its sole discretion,
to (i) waive any condition to the Tender Offer, (ii) amend any terms of the
Tender Offer and (iii) modify the Tender Offer. Any waiver or amendment
applicable to the Tender Offer will apply to all Debentures tendered regardless
of when or in what order such Debentures were tendered. If the Company makes a
material change in the terms of the Tender Offer or in the information
concerning the Tender Offer or if it waives a material condition of the Tender
Offer, the Company will disseminate additional information concerning such
change or waiver and will extend the Tender Offer, in each case, to the extent
required by law.
The Company expressly reserves the right, in its sole discretion, to
terminate the Tender Offer for any reason, including if any of the applicable
conditions set forth under "--Conditions to the Tender Offer" shall exist and
shall not have been waived by the Company. In the event the Company shall
terminate the Tender Offer, it shall give immediate notice thereof to the
Depositary, and all Debentures tendered pursuant to the Tender Offer shall be
returned promptly to the tendering Holders.
Any extension, waiver of a condition, delay, termination or amendment of
the Tender Offer will be followed as promptly as practicable by a press release
or other public announcement, such announcement in the case of an extension to
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. Without limiting the manner by
which the Company may choose to make such announcement, the Company will not,
unless otherwise required by law, have any obligation to publish, advertise or
otherwise communicate any such announcement.
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<PAGE>
Acceptance of Debentures for Purchase; Payment for Debentures; Maximum Tender
Amount and Pro Rata Acceptance
Upon the terms and subject to the conditions of the Tender Offer, unless
previously terminated, promptly after the Expiration Date, the Company will,
subject to the satisfaction or waiver of all relevant conditions, accept for
purchase, and pay for, Debentures validly tendered and not withdrawn under the
Tender Offer on or prior to the Expiration Date; provided, however, that if
more than the Maximum Tender Amount of Debentures has been tendered, the
Company will purchase the Maximum Tender Amount on a Pro Rata Acceptance basis.
The Company expressly reserves the right, in its sole discretion, to delay
acceptance for purchase of Debentures tendered under the Tender Offer or the
payment for Debentures accepted for purchase (subject to Rule 14e-1(c) under
the Exchange Act, which requires that the Company pay the consideration offered
or return the Debentures deposited by or on behalf of the Holders promptly
after the termination or withdrawal of the Tender Offer), or to terminate the
Tender Offer and not accept for purchase any Debentures not theretofore
accepted for purchase, if any of the conditions set forth under "--Conditions
of the Tender Offer" shall not have been satisfied or waived by the Company or
in order to comply, in whole or in part, with any applicable law. In all cases,
payment for Debentures purchased pursuant to the Tender Offer will be made only
after timely receipt by the Depositary of (i) such Debentures, or timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Debentures into the Depositary's account at DTC pursuant to the procedures set
forth below in "--Procedures for Tendering Debentures," (ii) a properly
completed and duly executed Letter of Transmittal (or an Agent's Message in
lieu thereof) and (iii) all necessary signature guarantees and any other
documents required by the Letter of Transmittal. See "--Procedures for
Tendering Debentures" for a description of the procedures for tendering
Debentures pursuant to the Tender Offer.
For purposes of the Tender Offer, the Company will be deemed to have
accepted for payment (and therefore purchased) Debentures when and if it gives
oral, to be followed by written, notice to the Depositary of its acceptance of
such Debentures for payment pursuant to the Tender Offer. Payment for
Debentures purchased pursuant to the Tender Offer will be made by the Company
on the Payment Date by depositing the Tender Offer Consideration with the
Depositary, which will act as agent for tendering Holders for the purpose of
receiving Tender Offer Consideration from the Company and transmitting Tender
Offer Consideration to the tendering Holders. Upon transfer of the Tender Offer
Consideration to the Depositary, the Company will be obligated to buy and the
tendering Holders will be obligated to sell the tendered Debentures accepted
for payment.
Tenders with respect to the Debentures pursuant to the Tender Offer will
be accepted only in principal amounts equal to $1,000 or integral multiples
thereof.
If, for any reason whatsoever, acceptance for purchase of or payment for
validly tendered Debentures pursuant to the Tender Offer is delayed or the
Company is unable to accept for purchase or to pay for validly tendered
Debentures pursuant to the Tender Offer, then the Depositary may, nevertheless,
on behalf of the Company, retain tendered Debentures, without prejudice to the
rights of the Company described under "--Expiration Date; Extension;
Termination; Amendments," "--Conditions of the Tender Offer" and "--Withdrawal
of Tenders" (subject further to Rule 14e-1(c) under the Exchange Act, which
requires that the Company pay the consideration offered or return the
Debentures deposited by or on behalf of the Holders promptly after the
termination or withdrawal of the Tender Offer).
The Company does not expect to increase the consideration offered in the
Tender Offer, but if the consideration offered in the Tender Offer is
increased, all tendering Holders whose Debentures are accepted for payment
pursuant to the Tender Offer will be given the increased consideration
regardless of when or in what order such Debentures were tendered.
Under no circumstances will any interest be payable because of any delay
in the transmission of funds to the Holders of purchased Debentures or
otherwise. If any tendered Debentures are not
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<PAGE>
accepted for payment for any reason pursuant to the terms and conditions of the
Tender Offer or if certificates are submitted evidencing more Debentures than
are tendered, certificates evidencing unpurchased Debentures will be returned,
without expense, to the tendering Holder (or, in the case of Debentures
tendered by book-entry transfer into the Depositary's account at DTC, the
account maintained at DTC designated by the participant therein who so
delivered such Debentures), unless otherwise requested by such Holder under
"Special Delivery Instructions" in the Letter of Transmittal, promptly
following the Expiration Date or the termination of the Tender Offer.
Tendering Holders whose Debentures are purchased in the Tender Offer will
not be obligated to pay brokerage commissions or fees or to pay transfer taxes
with respect to the purchase of their Debentures unless the box entitled
"Special Payment and Issuance Instructions" or the box entitled "Special
Delivery Instructions" in the Letter of Transmittal has been completed, as
described in the instructions thereto. The Company will pay all other charges
and expenses in connection with the Tender Offer.
The Debentures purchased pursuant to the Tender Offer will cease to be
outstanding and will be delivered to the Trustee for cancellation as promptly
as practicable after such purchase. Any Debentures which remain outstanding
after consummation of the Tender Offer will continue to be obligations of the
Company in accordance with the provisions of the Indenture.
After the Expiration Date, the Company may purchase additional Debentures
in the open market, in privately negotiated transactions, through subsequent
tender or exchange offers or otherwise, subject to compliance with the
Indenture and applicable law. Any future purchases will depend on various
factors at that time and, as a result, may be on the same terms or on terms
that may be more or less favorable to Holders than the terms of the Tender
Offer.
If more than $25 million aggregate principal amount of the Debentures are
validly tendered and not withdrawn in the Tender Offer, the Company may, but is
not obligated to, increase the outstanding principal amount of Debentures being
sought and, in the event that the amount sought exceeds $25.5 million aggregate
principal amount, shall extend the Expiration Date of the Tender Offer.
Procedures for Tendering Debentures
Tendering Debentures. The tender of Debentures pursuant to any of the
procedures set forth in this Offer to Purchase and in the Letter of Transmittal
will constitute a binding agreement between the tendering Holder and the
Company upon the terms and subject to the conditions of the Tender Offer. The
tender of Debentures will constitute an agreement to deliver good and
marketable title to all tendered Debentures on the Expiration Date free and
clear of all liens, charges, claims, encumbrances, interests and restrictions
of any kind.
Except as provided in "--Guaranteed Delivery Procedures," unless the
Debentures being tendered are deposited by the Holder with the Depositary on or
before the Expiration Date (accompanied by a properly completed and duly
executed letter of Transmittal), the Company may, at its option, reject such
tender. Payment for Debentures will be made only against deposit of validly
tendered Debentures and delivery of all other required documents.
Any beneficial owner whose Debentures are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender Debentures should contact promptly such registered Holder.
Only record Holders are authorized to tender their Debentures pursuant to
the Tender Offer. Accordingly, to properly tender Debentures or cause
Debentures to be tendered, the following procedures must be followed.
Debentures held through DTC. Each beneficial owner of Debentures held
through a DTC Participant (i.e., a custodian bank, depositary, broker, trust
company or other nominee) must instruct such DTC Participant to cause its
Debentures to be tendered in accordance with the procedures set forth in this
Offer to Purchase.
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<PAGE>
To effectively tender Debentures that are held through DTC, DTC
Participants should transmit their acceptance through ATOP, for which the
transaction will be eligible, and DTC will then edit and verify the acceptance
and send an Agent's Message to the Depositary for its acceptance. Delivery of
tendered Debentures must be made to the Depositary pursuant to the book-entry
delivery procedures set forth below or the tendering DTC Participant must
comply with the guaranteed delivery procedures set forth below. No Letters of
Transmittal will be required to tender Debentures through ATOP.
The Depositary will establish an account with respect to the Debentures at
DTC for purposes of the Tender Offer within two business days after the date of
this Offer to Purchase, and any financial institution that is a participant in
DTC may make book-entry delivery of the Debentures by causing DTC to transfer
such Debentures into the Depositary's account in accordance with DTC's
procedures for such transfer. However, although delivery of Debentures may be
effected through book-entry transfer into the Depositary's account at DTC, the
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees or an Agent's Message in connection with a book-entry transfer, and
any other required documents, must, in any case, be transmitted to and received
by the Depositary at its address set forth on the last page of this Offer to
Purchase on or before the Expiration Date, or the tendering Holder must comply
with the guaranteed delivery procedures described below. Delivery of documents
to DTC does not constitute delivery to the Depositary.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of the Book-Entry Confirmation,
which states (i) that DTC has received an express acknowledgment from the DTC
Participant described in such Agent's Message, (ii) the principal amount of
Debentures which have been tendered by such DTC Participant pursuant to the
Tender Offer, (iii) that such DTC Participant has received this Offer to
Purchase and the Letter of Transmittal and agrees to be bound by the terms of
this Offer to Purchase and the Letter of Transmittal and (iv) that the Company
may enforce such agreement against such DTC Participant.
Debentures Held by Record Holders. Each record Holder must complete and
sign a Letter of Transmittal, and mail or deliver such Letter of Transmittal,
and any other documents required by the Letter of Transmittal, together with
certificate(s) representing all tendered Debentures, to the Depositary at its
address set forth on the last page of this Offer to Purchase, or the Holder
must comply with the guaranteed delivery procedures set forth in this Offer to
Purchase. See "--Guaranteed Delivery Procedures."
All signatures on a Letter of Transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on a Letter of Transmittal need not be
guaranteed if such Debentures are tendered for the account of an Eligible
Institution (as hereinafter defined). If a Letter of Transmittal or any
Debenture is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when
signing, and proper evidence satisfactory to the Company of the authority of
such person so to act must be submitted.
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, each tendering Holder waives any right to receive
any notice of the acceptance for purchase of its Debentures.
Backup Federal Income Tax Withholding. Under the "backup withholding"
provisions of federal income tax law, unless a tendering Holder, or his or her
assignee (in either case, the "Payee"), satisfies the conditions described in
Instruction 5 of the Letter of Transmittal or is otherwise exempt, the
aggregate purchase price may be subject to backup withholding tax at a rate of
31%. To prevent backup withholding, each Payee should complete and sign the
Substitute Form W-9 provided in the Letter of Transmittal or otherwise certify
such Holder's exemption from backup withholding. See Instruction 5 of the
Letter of Transmittal.
Effect of Letter of Transmittal. Subject to and effective upon the
acceptance for purchase of and payment for Debentures validly tendered thereby,
by executing and delivering a Letter of Transmittal a
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tendering Holder (i) irrevocably tenders, sells, assigns and transfers to the
Company all right, title and interest in and to all of the Debentures tendered
thereby, (ii) waives any and all rights with respect to the Debentures
(including, without limitation, any existing or past defaults and their
consequences in respect of the Debentures and the Indenture), (iii) releases
and discharges the Company from any and all claims such Holder may have now, or
may have in the future, arising out of, or related to, the Debentures
including, without limitation, any claims that such Holder is entitled to
receive additional principal or interest payments with respect to the
Debentures or to participate in any redemption or defeasance of the Debentures
and (iv) irrevocably constitutes and appoints the Depositary the true and
lawful agent and attorney-in-fact of such Holder with respect to any such
tendered Debenture, with full power of substitution and resubstitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) to (a) deliver certificates representing such Debentures, or transfer
ownership of such Debentures, on the account books maintained by DTC, together,
in any such case, with all accompanying evidences of transfer and authenticity,
to the Company, (b) present such Debentures for transfer on the relevant
security register and (c) receive all benefits or otherwise exercise all rights
of beneficial ownership of such Debentures (except that the Depositary will
have no rights to, or control over, funds from the Company, except as agent for
the Company for the Tender Offer Consideration with respect to any tendered
Debentures that are purchased by the Company), all in accordance with the terms
of the Tender Offer.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Debentures will be resolved by the Company,
in its sole discretion, and whose determination will be final and binding. The
Company reserves the absolute right to reject any or all tenders, in its sole
discretion, that are not in proper form or the acceptance of which may be
unlawful. The Company also reserves the absolute right to waive any condition
to the Tender Offer and any irregularities or conditions of tender as to
particular Debentures. The Company's interpretation of the terms and conditions
of the Tender Offer (including the instructions in the Letter of Transmittal)
will be final and binding. Unless waived, any irregularities in connection with
tenders must be cured within such time as the Company shall determine in its
sole discretion. None of the Company, the Trustee, the Depositary, the
Information Agent or any other person shall be under any duty to give
notification of defects in such tenders or incur liabilities for failure to
give such notification. Tenders of Debentures will not be deemed to have been
made until such irregularities have been cured or waived. Any Debentures
received by the Depositary that are not properly tendered and as to which the
irregularities have not been cured or waived will be returned by the Depositary
to the tendering Holder, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
Letters of Transmittal and Debentures must be sent only to the Depositary.
Do not send Letters of Transmittal or Debentures to the Company, the Trustee,
or the Information Agent.
The method of delivery of Debentures and Letters of Transmittal, any
required signature guarantees and all other required documents, including
delivery through DTC and any acceptance through ATOP, is at the election and
risk of the persons tendering and delivering acceptances or Letters of
Transmittal and, except as otherwise provided in the Letter of Transmittal,
delivery will be deemed made only when actually received by the Depositary. If
delivery is by mail, it is suggested that the Holder use properly insured,
registered mail with return receipt requested, and that the mailing be made
sufficiently in advance of the Expiration Date to permit delivery to the
Depositary on or before such date.
Guaranteed Delivery Procedures
DTC Participants. A DTC Participant who wishes to cause its Debentures to
be tendered, but who cannot transmit its acceptance through ATOP on or before
the Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution"), including (as such terms are defined
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therein): (i) a bank; (ii) a broker, dealer, municipal securities dealer,
municipal securities broker, government securities dealer or government
securities broker; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a
savings institution that is a participant in a Securities Transfer
Association recognized program; and
(b) on or before the Expiration Date, the Depositary receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail, hand delivery, facsimile transmission or
overnight courier) substantially in the form provided herewith; and
(c) Book-Entry Confirmation of the transfer into the Depositary's account
at DTC, and all other documents required by the Letter of Transmittal,
are received by the Depositary within one NYSE trading day after the
date of receipt by the Depositary of such Notice of Guaranteed Delivery.
Record Holders. A record Holder who wishes to tender its Debentures but
(i) whose Debentures are not lost, but are not immediately available and will
not be available for tendering on or before the Expiration Date or (ii) who
cannot deliver its Debentures, the Letter of Transmittal, or any other required
documents to the Depositary before the Expiration Date, may effect a tender if:
(a) the tender is made by or through an Eligible Institution; and
(b) on or before the Expiration Date, the Depositary receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail, hand delivery, facsimile transmission or
overnight courier) substantially in the form provided herewith; and
(c) a properly completed and executed Letter of Transmittal, as well as the
certificate(s) representing all tendered Debentures in proper form for
transfer, and all other documents required by the Letter of Transmittal,
are received by the Depositary within one NYSE trading day after the
date of receipt by the Depositary of such Notice of Guaranteed Delivery.
Under no circumstances will interest be paid by the Company by reason of
any delay in making payment to any person using the guaranteed delivery
procedures described above or otherwise.
Withdrawal of Tenders
Tenders of Debentures (or any portion of such Debentures in integral
multiples of $1,000 principal amount) may be withdrawn at any time before the
Expiration Date in accordance with the procedures set forth below and in the
Letter of Transmittal.
Debentures held through DTC. A DTC Participant who has transmitted its
acceptance through ATOP in respect of Debentures held through DTC may, before
the Expiration Date, withdraw the instruction given thereby by (i) withdrawing
its acceptance through ATOP or (ii) delivering to the Depositary by mail, hand
delivery or facsimile transmission a notice of withdrawal of such instruction.
Such notice of withdrawal must contain the name and number of the DTC
Participant, the principal amount of Debentures to which such withdrawal
relates and the signature of the DTC Participant. Withdrawal of such an
instruction will be effective upon receipt of such notice of withdrawal by the
Depositary.
Debentures held by Record Holders. A Holder may withdraw its tender of
Debentures before the Expiration Date by delivering to the Depositary by mail,
hand delivery or facsimile transmission a notice of withdrawal. Any such notice
of withdrawal must (i) specify the name of the person who tendered the
Debentures to be withdrawn, (ii) contain a description of the Debentures to be
withdrawn and identify the Debenture certificate number or numbers shown on the
particular certificates evidencing such Debentures and (iii) be signed by the
Holder in the same manner as the original
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signature on the Letter of Transmittal by which such Debentures were tendered
(including any required signature guarantees), or be accompanied by (x)
documents of transfer in a form acceptable to the Company, in its sole
discretion, and (y) a properly completed irrevocable proxy that authorized such
person to effect such revocation on behalf of such Holder. If the Debentures to
be withdrawn have been delivered or otherwise identified to the Depositary, a
signed notice of withdrawal is effective immediately upon receipt by the
Depositary even if physical release is not yet effected. Any Debentures
properly withdrawn will be deemed to be not validly tendered for purposes of
the Tender Offer.
All signatures on a notice of withdrawal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on the notice of withdrawal need not be
guaranteed if the Debentures being withdrawn are held for the account of an
Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be
executed by a DTC Participant or a Holder, as the case may be, in the same
manner as the person's name appears on its transmission through ATOP or Letter
of Transmittal, as the case may be, to which such withdrawal relates. If a
notice of withdrawal is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person must so indicate
when signing and must submit with the revocation appropriate evidence of
authority to execute the notice of withdrawal. A Holder or DTC Participant may
withdraw a tender only if such withdrawal complies with the provisions of this
Offer to Purchase and the Letter of Transmittal.
A withdrawal of an instruction previously given pursuant to the
transmission of an acceptance through ATOP or a withdrawal of a tender by a
Holder may be rescinded only by (i) a new transmission of acceptance through
ATOP or (ii) execution and delivery of a new Letter of Transmittal, as the case
may be, in accordance with the procedures described herein and in the Letter of
Transmittal.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding. None of the
Company, the Trustee, the Depositary, the Information Agent or any other person
shall be under any duty to give notification of any defects or irregularities
in any notice of withdrawal or incur any liabilities for failure to give any
such notification.
Absence of Appraisal Rights
There are no appraisal or similar statutory rights available to the
Holders in connection with the Tender Offer.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary is a general description of certain United States
federal income tax consequences applicable under current law to the sale of
Debentures pursuant to this Offer to Purchase. This summary describes the tax
consequences to a Holder of Debentures that is a "U.S. Holder" (which, for the
purpose of this discussion, means a beneficial owner ("Owner") of a Debenture
that is for United States federal income tax purposes (a) a citizen or resident
of the United States, (b) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof or (c) an estate or trust described in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the "Code")). This discussion
does not deal with special classes of Owners, such as dealers in securities or
currencies, banks, financial institutions, insurance companies, tax-exempt
organizations, persons subject to the alternative minimum tax, Owners that are
not U.S. Holders, Owners holding Debentures as part of a hedge, straddle or in
connection with a synthetic security transaction. In addition, this discussion
does not describe any tax consequences arising
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out of the laws of any state, local or foreign jurisdiction. This discussion
assumes that the Debentures are held as "capital assets" within the meaning of
Code Section 1221. All Holders are urged to consult their own tax advisors as
to the particular tax consequences of tendering the Debentures, including the
applicability and effect of any state, local or foreign tax laws.
Sales of Debentures Pursuant to the Tender Offer
Subject to the market discount and bond premium rules discussed below, a
Holder who receives cash for Debentures pursuant to the Tender Offer will
recognize capital gain or loss equal to the difference between the amount of
cash received (excluding any amount attributable to accrued interest) and the
Holder's adjusted tax basis in the Debentures sold. Generally, a Holder's
adjusted tax basis in a Debenture will be the cost of the Debenture to such
Holder. If applicable, a Holder's adjusted tax basis in a Debenture will be
increased by any market discount previously included in income by such Holder
pursuant to an election to include market discount in gross income as it
accrues, and generally will be reduced by the accrual of amortizable bond
premium which the Holder has previously elected to offset against interest
payments on the Debenture. The excess of net long-term capital gains over net
short-term capital losses is taxed at a lower rate than ordinary income for
certain noncorporate taxpayers. Noncorporate taxpayers are generally subject to
a maximum rate of 20% on any capital gain realized on the disposition of an
asset held for more than one year. The distinction between capital gain or loss
and ordinary income or loss is also relevant for purposes of, among other
things, limitations on the deductibility of capital losses. To the extent that
the amount paid for the Debentures represents accrued interest, it will
constitute ordinary income to the Holder unless previously included in income.
A Holder who acquired a Debenture after its original issuance at a market
discount (subject to a statutorily-defined de minimis exception) will generally
be required to treat any gain on a sale thereof pursuant to the Tender Offer as
ordinary income rather than capital gain to the extent of accrued market
discount, unless an election was made to include market discount in income as
it accrued. Market discount generally equals the excess of the stated
redemption price at maturity of a debt instrument over a Holder's initial tax
basis in the debt instrument.
If a Debenture purchased at a premium after the Debenture's original
issuance is sold pursuant to the Tender Offer, a Holder who has elected to
deduct bond premium may be able to claim as an ordinary deduction in the
taxable year of disposition an amount equal to any remaining unamortized bond
premium.
Backup Withholding
A Holder whose Debentures are tendered and accepted for payment may be
subject to backup withholding at the rate of thirty-one percent (31%) with
respect to the gross proceeds from the sale of such Debentures unless such
Holder (i) is a corporation or other exempt recipient and, when required,
establishes this exemption or (ii) accurately completes the Substitute Form W-9
included in the Letter of Transmittal. Holders that do not provide their
correct taxpayer identification number may be subject to penalties imposed by
the Internal Revenue Service (the "IRS"). Any amount withheld under these rules
will be creditable against the Holder's federal income tax liability and any
excess or overpayment of federal income taxes pursuant to the imposition of
backup withholding should be returned to the affected Holder, provided certain
required information is reported to the IRS. See "Important Tax Information" in
the Letter of Transmittal.
Information Reporting
The Company will provide information statements to tendering Holders and
to the IRS reporting the cash payments, as required by law.
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THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES DOES
NOT CONSIDER THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY HOLDER'S SITUATION OR
STATUS. THIS SUMMARY IS BASED ON THE PROVISIONS OF THE CODE, REGULATIONS,
PROPOSED REGULATIONS, RULINGS AND JUDICIAL DECISIONS NOW IN EFFECT, ALL OF WHICH
ARE SUBJECT TO CHANGE, POSSIBLY ON A RETROACTIVE BASIS.
DEPOSITARY
The Depositary for the Tender Offer is U.S. Bank Trust National
Association. All deliveries, correspondence and questions sent or presented to
the Depositary relating to the Tender Offer should be directed to the address
or telephone number set forth on the back cover of this Offer to Purchase. U.S.
Bank Trust National Association serves as the trustee for the Debentures
pursuant to the Indenture under which the Debentures are issued.
INFORMATION AGENT
Georgeson Shareholder Communications Inc. is acting as the Information
Agent for the Company in connection with the Tender Offer. Requests for copies
of the Tender Offer materials should be directed to the Information Agent at
the address or telephone number set forth on the back cover of this Offer to
Purchase.
FEES AND EXPENSES
The Company will pay the Depositary and the Information Agent reasonable
and customary compensation for their services in connection with the Tender
Offer, plus reimbursement for out-of-pocket expenses.
Brokers, dealers, commercial banks and trust companies will be reimbursed
by the Company for customary mailing and handling expenses incurred by them in
forwarding material to their customers. The Company will not pay any fees or
commissions to any broker, dealer or other person (other than the Depositary
and the Information Agent) in connection with the solicitation of tenders of
Debentures pursuant to the Tender Offer.
INDEMNIFICATION
The Company has agreed to indemnify the Depositary and the Information
Agent against certain liabilities, including, in certain cases, under the
securities laws.
MISCELLANEOUS
Directors, officers and regular employees of the Company (who will not be
specifically compensated for such services) may contact Holders by mail,
telephone, e-mails, telex, telegram messages, mailgram messages, datagram
messages and personal interviews regarding the Tender Offer and may request
brokers, dealers and other nominees to forward this Offer to Purchase and
related materials to beneficial owners of Debentures.
The Company is not aware of any jurisdiction where the making of the
Tender Offer is not in compliance with the laws of such jurisdiction. If the
Company becomes aware of any jurisdiction where the making of the Tender Offer
would not be in compliance with such laws, the Company will make a good faith
effort to comply with any such laws or seek to have such laws declared
inapplicable to the
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Tender Offer. If, after such good faith effort, the Company cannot comply with
any such applicable laws, the Tender Offer will not be made to (nor will
tenders be accepted from or on behalf of) the Holders residing in such
jurisdiction.
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal, certificates for Debentures and any other
required documents should be sent by each Holder or such Holder's broker,
dealer, commercial bank, trust company or other nominee to the Depositary at
the address set forth below:
The Depositary for this Tender Offer is:
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Attn: Specialized Finance Department
Any requests for additional copies of this Offer to Purchase, the Letter
of Transmittal and Notice of Guaranteed Delivery should be directed to the
Information Agent at the address and telephone number set forth below.
The Information Agent for the Tender Offer is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street, 10th Floor
New York, NY 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others: Call Toll-Free: (800) 223-2064
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The Information Agent for the Tender Offer is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street, 10th Floor
New York, NY 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others: Call Toll-Free: (800) 223-2064
