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Levitt 10-K 2009 Documents found in this filing:Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549
FORM 10-K/A
Amendment No. 1
For the Year Ended December 31, 2008
Commission File Number
001-31931 Woodbridge Holdings Corporation
(Exact name of registrant as specified in its Charter)
(954) 940-4950
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, Par Value $0.01 Per Share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. YES o NO þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. YES o NO þ
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES þ NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
YES o NO o
Indicate, by check mark, if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). YES o NO þ
As of June 30, 2008, the aggregate market value of the registrant’s common stock held by
non-affiliates of the registrant was $88.2 million based on the $5.80 closing sale price as
reported on the New York Stock Exchange.
The number of shares outstanding for each of the registrant’s classes of common stock as of April
21, 2009 was as follows:
Documents Incorporated by Reference
None.
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EXPLANATORY NOTE
This Amendment No. 1 to Annual Report on Form 10-K/A is being filed by Woodbridge Holdings
Corporation (the “Company”) to amend the Company’s Annual Report on Form 10-K for the year ended
December 31, 2008 (the “Original Form 10-K”) to include the remaining information required by Items
10-14 of Part III of Form 10-K.
Woodbridge Holdings Corporation
Amendment No. 1 to
Annual Report on Form 10-K/A for the year ended December 31, 2008 TABLE OF CONTENTS
Table of Contents
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors and Executive Officers
The following table sets forth the names, ages and positions of the executive officers and
directors of the Company as of April 21, 2009.
The following additional information is provided for each of the above-named individuals. Officers
serve at the discretion of the Board of Directors. There is no family relationship between any of
the directors or executive officers, and there is no arrangement or understanding between any
director or executive officer and any other person pursuant to which the director or executive
officer was selected.
Alan B. Levan has been Chairman of the Board and Chief Executive Officer of the Company since 1985.
Mr. Levan formed the I.R.E. Group (predecessor to BFC Financial Corporation, the Company’s
controlling shareholder (“BFC”)) in 1972. Since 1978, he has been Chairman of the Board, President
and Chief Executive Officer of BFC or its predecessors. He has been Chairman of the Board and
Chief Executive Officer of BankAtlantic Bancorp, Inc. (“BankAtlantic Bancorp”) since 1994, Chairman
of the Board of BankAtlantic, BankAtlantic Bancorp’s federal savings bank subsidiary, since 1987
and Chairman of Bluegreen Corporation (“Bluegreen”) since 2002.
John E. Abdo has been Vice Chairman of the Board of the Company since April 2001 and has served as
a director of the Company since 1985. Mr. Abdo has been Vice Chairman of BankAtlantic since April
1987 and Chairman of the Executive Committee of BankAtlantic since October 1985. He has been a
director of BFC since 1988 and Vice Chairman of the Board of BFC since 1993. He has been a director
and Vice Chairman of the Board of BankAtlantic Bancorp since 1994. He is also Vice Chairman of
Benihana, Inc. (“Benihana”), a publicly-held company which operates Asian-themed restaurant chains,
and has been a director and Vice Chairman of Bluegreen since 2002. He is also a member of the Board
of Directors of the Broward Performing Arts Center Authority (PACA), and he is the former President
and a current member of the Board of Directors of the Broward Performing Arts Foundation.
Seth M. Wise was named President of the Company in July 2005 after serving as Executive Vice
President of the Company since September 2003. At the request of
the Company, Mr. Wise served as President of Levitt and Sons, LLC
(“Levitt and Sons”), the former wholly-owned homebuilding
subsidiary of the Company, prior to its filing for bankruptcy on
November 9, 2007. He also previously was Vice President of Abdo
Companies, Inc., a South-Florida-based private real estate
development company controlled by Mr. Abdo.
John K. Grelle joined the Company when he was appointed Executive Vice President, Chief Financial
Officer and principal accounting officer of the Company on May 20, 2008. Since May 20, 2008, Mr.
Grelle has also been employed by BFC as its Executive Vice President and Chief Financial Officer
after joining BFC as acting Chief Financial Officer on January 11, 2008. Prior to that time, Mr.
Grelle served as a Partner of Tatum, LLC, an executive services firm. From 2003 through October
2007, when Mr. Grelle joined Tatum, LLC, Mr. Grelle was the
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founder and principal of a business formation and strategic development consulting firm. From 1996
through 2003, Mr. Grelle served as Senior Vice President and Chief Financial Officer of ULLICO Inc.
and, from 1993 through 1995, he served as Managing Director of DCG Consulting. Mr. Grelle has also
been employed in various other executive and financial positions throughout his career, including
Chairman and Chief Executive Officer of Old American Insurance Company, Controller of the financial
services division of American Can Company (later known as Primerica), Chairman, President and Chief
Executive Officer of National Benefit Life, a subsidiary of Primerica, President of Bell National
Life, Senior Vice President and Chief Financial Officer of American Health and Life, Controller of
Sun Life America and Director of Strategic Planning and Budgeting for ITT Hamilton Life. Mr. Grelle
is a former member of the Board of Directors of the N.Y. Council of Life Insurers.
James Blosser has served as a director of the Company since 2001. He has been an attorney with the
law firm of Blosser & Sayfie since 2002. Mr. Blosser is also a member of the Board of Directors of
Mellon United National Bank.
Darwin Dornbush has served as a director of the Company since 2003. Mr. Dornbush is a senior
partner in the law firm of Dornbush Schaeffer Strongin & Venaglia, LLP. Mr. Dornbush also serves as
Secretary of Cantel Medical Corp., a healthcare company, and he previously served as Secretary of
Benihana and its predecessor since 1983. In addition, during February 2009, Mr. Dornbush rejoined
the Board of Directors of Benihana after serving as a director of Benihana from 1995 through 2005.
S. Lawrence Kahn, III has served as a director of the Company since 2003. Since 1986, he has been
the President and Chief Executive Officer of Lowell Homes, Inc., a Florida corporation engaged in
the business of homebuilding. Mr. Kahn also serves as a director of the Great Florida Bank.
Alan J. Levy has served as a director of the Company since 2005. He is the founder and, since
1980, has served as the President and Chief Executive Officer of Great American Farms, Inc., an
agricultural company involved in the farming, marketing and distribution of a variety of fresh
fruits and vegetables.
Joel Levy has served as a director of the Company since 2003. He is currently the Vice Chairman of
Adler Group, Inc., a commercial real estate company, and he served as President and Chief Operating
Officer of Adler Group, Inc. from 1984 through 2000. Mr. Levy also serves as President and Chief
Executive Officer of JLRE Consulting, Inc.
William Nicholson has served as a director of the Company since 2003. He has been a principal with
Heritage Capital Group since 2003. Since 2004, Mr. Nicholson has also served as President of WRN
Financial Corporation and, since 2008, he has been a principal with EXP Loan Services LLC.
William Scherer has served as a director of the Company since 2001. He has been an attorney in the
law firm of Conrad & Scherer, LLP or its predecessors since 1974.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of the copies of the forms furnished to the Company and written
representations that no other reports were required, the Company believes that, during the year
ended December 31, 2008, all filing requirements under Section 16(a) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), applicable to its officers, directors and greater than
10% beneficial owners were complied with on a timely basis.
Code of Ethics
The Company has a Code of Business Conduct and Ethics that applies to all directors, officers and
employees of the Company, including its principal executive officer, principal financial officer
and principal accounting officer. The Company will post amendments to or waivers from the Code of
Business Conduct and Ethics to the extent applicable to the Company’s principal executive officer,
principal financial officer or principal accounting officer on its website at
www.woodbridgeholdings.com. There were no such waivers from the Code of Business Conduct
and Ethics during 2008. During April 2008, the Company made ministerial amendments to the Code of
Business Conduct and Ethics. The amended Code of Business Conduct of Ethics is available on the
Company’s website at www.woodbridgeholdings.com.
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Audit Committee Members and Financial Expert
The Board of Directors has established an Audit Committee. The Audit Committee consists of Joel
Levy, Chairman, William Nicholson and S. Lawrence Kahn, III. The Board of Directors has determined
that Mr. Levy is qualified as an “audit committee financial expert” within the meaning of Item
407(d)(5) of Regulation S-K and is “independent” within the meaning of applicable SEC rules and
regulations relating to directors serving on audit committees and the listing standards of the New
York Stock Exchange, which listing standards the Board of Directors adopted in making its
independence determinations with respect to each of its members.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation Discussion and Analysis
Overview of Compensation Program
The Compensation Committee of the Board (for purposes of this section, the “Committee”) administers
the compensation program for the Company’s executive officers. The Committee reviews and
determines all executive officer compensation, administers the Company’s equity incentive plans
(including reviewing and approving grants to the Company’s executive officers), makes
recommendations to shareholders with respect to proposals related to compensation matters and
generally consults with management regarding employee compensation programs.
The Committee’s charter reflects these responsibilities, and the Committee and the Board of
Directors periodically review and, if appropriate, revise the charter. The Board of Directors
determines the Committee’s membership, which is composed entirely of independent directors. The
Committee meets at regularly scheduled times during the year, and it may also hold specially
scheduled meetings and take action by written consent. At Board meetings, the Chairman of the
Committee reports on Committee actions and recommendations, as he deems appropriate. Executive
compensation is reviewed at executive sessions of non-management and independent members of the
Board.
Compensation Philosophy and Objectives
Historically, the Company’s compensation program for executive officers consisted of a base salary,
cash bonuses under an annual incentive program, periodic grants of equity awards and health and
welfare benefits. The Committee believes that the most effective executive officer compensation
program is one that is designed to align the interests of the executive officers with those of
shareholders by compensating the executive officers in a manner that advances both the short- and
long-term interests of the Company and its shareholders. The Committee believes that the Company’s
compensation program for executive officers is appropriately based upon the Company’s performance,
the performance and level of responsibility of the executive officer and the market, generally,
with respect to executive officer compensation.
Pursuant to its authority under its charter to engage the services of outside advisors, experts and
others to assist the Committee, during 2008, the Committee engaged the services of Johnson
Associates, Inc., a third party compensation consultant, to meet with and advise the Committee with
respect to establishing the Company’s 2008 compensation program for Alan B. Levan, the Company’s
Chairman and Chief Executive Officer, John E. Abdo, the Company’s Vice Chairman, and Seth M. Wise,
the Company’s President.
Messrs. Levan and Abdo hold executive positions at BFC and BankAtlantic Bancorp and receive
compensation directly from those companies. In addition, John K. Grelle, the Company’s Executive
Vice President and Chief Financial Officer, also serves as Executive Vice President and Chief
Financial Officer of BFC and receives compensation directly from BFC for his services. While the
Committee does not determine the compensation paid by BFC to Messrs. Levan, Abdo and Grelle or by
BankAtlantic Bancorp to Messrs. Levan and Abdo, the Committee considers the fact that Messrs.
Levan, Abdo and Grelle devote time to the operations of those companies when determining the
compensation the Company pays to them.
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Role of Executive Officers in Compensation Decisions
The Committee makes all compensation decisions for the Named Executive Officers (as defined in the
introductory paragraph to the “Summary Compensation Table” below) and approves equity awards to all
of the Company’s employees. The Chief Executive Officer annually reviews the performance of each
of the Named Executive Officers (other than himself, whose performance is reviewed by the
Committee). The conclusions reached and recommendations based on these reviews, including those
with respect to setting and adjusting base salaries, the payment of cash bonuses under the
Company’s annual incentive program and the granting of equity awards, are presented to the
Committee. The Committee can exercise its discretion in modifying upward or downward any
recommended amounts or awards to the Named Executive Officers. In 2008, the Committee accepted
without modification the recommendations of the Chief Executive Officer with respect to the base
salaries and bonuses paid or to be paid to the Named Executive Officers. During 2008, the Company
did not grant any equity awards to the Named Executive Officers.
Executive Officer Compensation Components
For the fiscal year ended December 31, 2008, the principal components of compensation for the Named
Executive Officers were base salary and cash bonuses under the Company’s 2008 annual incentive
program. Although no equity awards were granted during 2008, the Named Executive Officers
compensation has historically also included long-term equity incentive compensation. Beginning in
2009, the compensation of certain of the Named Executive Officers will include, in lieu of cash
bonuses under the formula-based component of the Company’s annual incentive program, compensation
based on returns realized by the Company on its investments. See “New Compensation Program for
Executives Commencing in 2009” below.
Base Salary
The Committee believes that the base salaries offered by the Company are competitive based on a
review of market practices and the duties and responsibilities of each Named Executive Officer. In
setting base salaries, the Committee periodically examines market compensation levels and trends
observed in the market for executives of comparable experience and skills. Market information is
used as an initial frame of reference for establishing and adjusting base salaries. The Committee
believes that the Named Executive Officers’ base salaries should be competitive with those of other
executives with comparable experience at organizations similar to the Company.
In addition to examining market compensation levels and trends, the Committee makes base salary
decisions for the Named Executive Officers based on an annual review by the Committee with input
and recommendations from the Chief Executive Officer. The Committee’s review includes, among other
things, the functional and decision-making responsibilities of each position, the significance of
each Named Executive Officer’s specific area of individual responsibility to the Company’s
financial performance and achievement of overall goals, and the contribution, experience and work
performance of each Named Executive Officer.
With respect to base salary decisions for the Chief Executive Officer, the Committee made an
assessment of Mr. Levan’s performance as Chief Executive Officer and its expectations as to his
future contributions to the Company, as well as the factors considered in determining the
compensation of the other Named Executive Officers, including reviewing market compensation levels
and trends and evaluating his individual performance and the Company’s financial condition,
operating results and attainment of strategic objectives. As described above, during 2008, the
Committee engaged Johnson Associates, Inc., a third party compensation consultant, to assist the
Committee in establishing the compensation, including base salary, to be paid Mr. Levan (as well as
to Messrs. Abdo and Wise). In evaluating the performance of Mr. Levan for purposes of not only his
base salary, but also any cash bonus under the Company’s annual incentive program and stock option
awards under the Company’s long-term equity incentive compensation program, the Committee
considered Mr. Levan’s overall performance and his critical assessment of the issues facing the
Company during 2008.
Based on market conditions and the impact of these market conditions on the Company in 2007, at the
request of Messrs. Levan and Abdo, their respective 2007 annual base salaries were decreased to $1,
effective October 1, 2007. Effective July 28, 2008, Messrs. Levan and Abdo’s respective annual
base salaries were increased to $350,000.
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The 2008 annual base salary of Seth M. Wise, the Company’s President, remained unchanged from its
2007 level of $350,000. The annual base salary of John K. Grelle, who was appointed Executive Vice
President and Chief Financial Officer of the Company on May 20, 2008, was set at $235,200 for 2008.
For 2009, the annual base salaries of Messrs. Levan, Abdo, Wise and Grelle will remain unchanged
from their respective 2008 levels.
Effective January 11, 2008, George P. Scanlon resigned as Executive Vice President and Chief
Financial Officer of the Company. In connection with his resignation, the Company entered into an
agreement with Mr. Scanlon pursuant to which Mr. Scanlon provided certain services to the Company
through December 31, 2008, and the Company paid an aggregate of approximately $170,000 and provided
certain benefits to Mr. Scanlon during that period. Patrick M. Worsham, who served as acting Chief
Financial Officer of the Company from January 11, 2008 through May 19, 2008, received compensation
of approximately $133,000 for his services during that period.
Annual Incentive Program
The Company’s annual incentive program is a cash bonus plan designed to promote performance and
achievement of corporate strategic goals and initiatives, encourage the growth of shareholder value
and allow the Named Executive Officers to participate in the growth and profitability of the
Company. This program may include elements tied to the achievement of pre-established, objective
individual and company-wide annual financial performance goals established during the Company’s
annual budget cycle. The portion of a Named Executive Officer’s cash bonus under the program that
is related to financial performance goals may vary by individual and the impact that he has on the
financial performance of the Company as a whole and of his respective division. The Company’s
annual incentive program also includes a discretionary element under which bonuses may be paid
based on a subjective evaluation of the Named Executive Officer’s overall performance in areas
outside those that can be objectively measured from financial results. Each Named Executive
Officer’s bonus is intended to take into account corporate and individual components, which are
weighted according to the Named Executive Officer’s responsibilities.
The Committee established objective financial criteria for potential bonuses to Messrs. Levan and
Abdo under the Company’s 2008 annual incentive program tied to the achievement of goals relating to
the Company’s consolidated gross revenues, subject to reduction in the sole discretion of the
Committee. Messrs. Levan and Abdo were also eligible to receive cash bonuses under the
discretionary component of the Company’s 2008 annual incentive program. The Committee determined
that it would not be possible to establish objective financial criteria for Mr. Wise under the
Company’s 2008 annual incentive program but determined that Mr. Wise would be eligible for a
discretionary bonus of up to 60% of his 2008 annual base salary. Mr. Grelle joined the Company in
May 2008 at which point the objective financial criteria under the Company’s 2008 annual incentive
program had already been established. As a result, Mr. Grelle was only eligible to receive a
discretionary cash bonus under the Company’s 2008 annual incentive program. During 2008, a total
of $1,264,880 in cash bonuses was paid to the Named Executive Officers under the Company’s 2008
annual incentive program as follows:
Each of these bonuses was paid under the discretionary component of the Company’ 2008 annual
incentive program based on a subjective evaluation of the Named Executive Officer’s overall
performance in areas outside those that can be objectively measured from financial results. The
discretionary bonuses paid to each of Messrs. Levan, Abdo and Wise were approved by the Committee
based on the recommendation of Johnson Associates, Inc. As described above, Mr. Scanlon resigned
as Executive Vice President and Chief Financial Officer of the Company, effective January 11, 2008,
and Mr. Worsham served as acting Chief Financial Officer of the Company from January 11, 2008
through May 19, 2008. Neither of Messrs. Scanlon or Worsham was eligible to receive a bonus under
the Company’s 2008 annual incentive program.
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Beginning in 2009, the Company has decided to discontinue its annual incentive program and instead
has adopted the new compensation program discussed below under “New Compensation Program for
Executives Commencing in 2009.” However, the Named Executive Officers will remain eligible to
receive cash bonuses payable at the discretion of the Committee based upon a subjective evaluation
of their performance and contribution to the success and growth of the Company in areas outside
those that may be objectively measured based on specific financial goals. Decisions by the
Committee regarding discretionary cash bonuses to the Named Executive Officers will generally be
made based upon the recommendation of the Company’s Chief Executive Officer (other than with
respect to awards of discretionary cash bonuses to the Company’s Chief Executive Officer), the
Named Executive Officer’s position with the Company, an evaluation of the Named Executive Officer’s
performance, the Named Executive Officer’s other compensation, including compensation paid or to be
paid under the new compensation program discussed below, and discussions with the Named Executive
Officer.
Long-Term Equity Incentive Compensation
The Company’s long-term equity incentive compensation program provides an opportunity for the Named
Executive Officers to increase their stake in the Company through grants of options to purchase
shares of the Company’s Class A Common Stock (“Class A Stock”). This program encourages the Named
Executive Officers to focus on the Company’s long-term performance by aligning the Named Executive
Officers’ interests with those of the Company’s shareholders, since the ultimate value of such
compensation is directly dependent on the stock price. The Committee believes that providing its
executives with opportunities to acquire an interest in the growth and prosperity of the Company
through the grant of stock options enables the Company to attract and retain qualified and
experienced executive officers and offer additional long-term incentives.
The Committee’s grant of stock options to the Named Executive Officers is discretionary based on an
assessment of the individual’s contribution to the success and growth of the Company, subject in
any event to the limitations set by the Company’s Amended and Restated 2003 Stock Incentive Plan.
Decisions by the Committee regarding grants of stock options to the Named Executive Officers are
generally made based upon the recommendation of the Chief Executive Officer (other than with
respect to decisions by the Committee regarding grants of stock options to the Chief Executive
Officer), the level of the Named Executive Officer’s position with the Company, an evaluation of
the Named Executive Officer’s past and expected future performance and the number of outstanding
and previously granted stock options to the Named Executive Officer. Historically, stock options
granted to the Named Executive Officers have an exercise price equal to the market value of such
stock on the date of grant and vest on the fifth anniversary of the date of grant. The Committee
believes that such stock options serve as a significant aid in the retention of the Named Executive
Officers, since these stock option awards do not vest until five years after the grant date.
During 2008, the Company did not grant any stock options to the Named Executive Officers.
New Compensation Program for Executives Commencing in 2009
In place of the Company’s annual incentive program described above, commencing in 2009, the
Committee and the Board have approved the terms of a new compensation program for certain of the
Company’s employees, including Messrs. Levan, Abdo and Wise (for the purposes of this section, the
“Named Executive Officer Participants”), pursuant to which a portion of each Named Executive
Officer Participant’s compensation will be based on the cash returns realized by the Company on its
investments. Mr. Grelle is not a participant in this new compensation program.
Under the terms and conditions of the new compensation program, all of the Company’s investments
are or will be held by individual limited partnerships or other legal entities established for such
purpose. The Named Executive Officer Participants and other participating employees will have
interests in the entities, which will be the basis of their incentives under the programs. The
Named Executive Officer Participants may have interests tied both to the performance of a
particular investment as well as interests relating to the performance of the portfolio of
investments as a whole. The Company, in its capacity as investor in the program, will be entitled
to receive a return of its invested capital and a specified rate of return on its invested capital
prior to the Named Executive Officer Participants being entitled to receive any portion of the
realized profits. Once the Company receives its priority return of invested capital and the stated
return as well as certain additional amounts, the remaining proceeds will be
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available for distribution among those employees directly responsible for the relevant investments
and the Named Executive Officer Participants. The Committee will determine in advance the
allocations for each Named Executive Officer Participant and, although the Committee may alter
these allocations on a prospective basis, the total amount payable to each Named Executive Officer
Participant cannot be changed. The program contains provisions which under certain circumstances
require the Named Executive Officer Participants to return to the Company amounts previously
distributed to them. These provisions, which are often times known as “clawback” provisions, are
intended to reduce the risk that any Named Executive Officer Participant or other participating
employee will be distributed amounts under the program prior to the Company’s receipt of at least a
return of its invested capital and the stated return. The Named Executive Officer Participants’
clawback obligations relate to the performance of the portfolio of investments as a whole even if
they participate in the performance of a particular investment. The program contemplates that the
clawback obligations will be funded solely from holdback accounts established with respect to each
Named Executive Officer Participant and other participating employee. A portion of the amount to
which a Named Executive Officer Participant or other participating employee would otherwise be
entitled to (which portion has initially been set at 25% but can be increased, when appropriate, to
as high as 75%) will be deposited into holdback accounts or otherwise made available for the
Company’s benefit. There are also general vesting and forfeiture provisions applicable to each
Named Executive Officer Participant’s and other participating employee’s right to receive any share
of the realized profits under the program, the terms of which may vary by individual.
The Committee and the Board approved this new compensation program based on their belief that the
program appropriately aligns payments to the Named Executive Officer Participants and other
participating employees with the performance of the Company’s investments.
Internal Revenue Code Limits on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public
corporations for compensation over $1,000,000 paid for any fiscal year to the corporation’s chief
executive officer and four other most highly compensated executive officers as of the end of any
fiscal year. However, the statute exempts qualifying performance-based compensation from the
deduction limit if certain requirements are met.
Although the Committee has historically attempted to structure performance-based compensation,
including stock option grants or performance-based restricted stock awards and annual bonuses, to
executive officers who may be subject to Section 162(m) in a manner that satisfies the statute’s
requirements for full tax deductibility for the compensation, the Committee also recognizes the
need to retain flexibility to make compensation decisions that may not meet Section 162(m)
standards when necessary to enable the Company to meet its overall objectives, even if the Company
may not deduct all of the compensation. The Committee approved the new compensation program
described above based on its belief that the program appropriately aligns payments to the Named
Executive Officers with the performance of the Company’s investments, while recognizing that
compensation paid under the new program will most likely not satisfy the requirements of Section
162(m) for full tax deductibility. As a result, there can be no assurance that all or any portion
of the compensation that may be paid by the Company in 2009 or any future period, including
compensation that may be paid by the Company under its new compensation program, will be deductible
under Section 162(m).
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Compensation Committee Report
The following Report of the Compensation Committee does not constitute soliciting material and
should not be deemed filed or incorporated by reference into any other Company filing under the
Securities Act of 1933 or the Exchange Act, except to the extent the Company specifically
incorporates this Report by reference therein.
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and
Analysis with the Company’s management. Based on this review and discussion, the Compensation
Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be
included in this Amendment No. 1 to Annual Report on Form 10-K/A.
Submitted by the Members of the Compensation Committee:
S. Lawrence Kahn, III, Chairman
Alan Levy William Nicholson Compensation of Named Executive Officers
Summary Compensation Table
The following table sets forth certain summary information concerning compensation which, during
the fiscal years ended December 31, 2008, 2007 and 2006, the Company paid to or accrued on behalf
of (i) the Company’s Chief Executive Officer, (ii) each person who served as the Company’s Chief
Financial Officer during the fiscal year ended December 31, 2008 and (iii) the Company’s Vice
Chairman and the Company’s President, who were the only other executive officers of the Company
during the fiscal year ended December 31, 2008 (collectively, the “Named Executive Officers”).
Officers of the Company who also serve as officers or directors of affiliates receive compensation
from such affiliates for services rendered on behalf of the affiliates.
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Grants of Plan-Based Awards — 2008
The following table sets forth certain information concerning grants of awards to the Named
Executive Officers pursuant to the Company’s non-equity and equity incentive plans in the fiscal
year ended December 31, 2008.
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Outstanding Equity Awards at Fiscal Year-End — 2008
The following table sets forth certain information regarding equity-based awards of the Company
held by the Named Executive Officers as of December 31, 2008.
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Option Exercises and Stock Vested — 2008
During the fiscal year ended December 31, 2008, none of the Named Executive Officers exercised
options to purchase shares of the Company’s Class A Stock or Class B Common Stock (“Class B
Stock”). In addition, none of the Named Executive Officers held any shares of restricted Class A
Stock or Class B Stock which vested during the fiscal year ended December 31, 2008.
Potential Payments upon Termination or Change-in-Control
Effective January 11, 2008, Mr. Scanlon resigned as the Company’s Executive Vice President and
Chief Financial Officer. In connection with his resignation, the Company entered into an agreement
with Mr. Scanlon pursuant to which Mr. Scanlon provided certain services to the Company through
December 31, 2008 and, in consideration for his provision of such services, the Company paid an
aggregate of approximately $170,000 and provided certain benefits to Mr. Scanlon during that
period.
Compensation of Directors
The Compensation Committee recommends director compensation to the Board based on factors it
considers appropriate and based on the recommendations of management. Currently, each non-employee
director receives $100,000 per year for his service on the Board of Directors, payable in cash,
restricted stock or non-qualified stock options, in such combinations as the director may elect,
provided that no more than $50,000 may be paid in cash. The restricted stock and stock options are
granted in Class A Stock under the Company’s Amended and Restated 2003 Stock Incentive Plan.
Restricted stock vests monthly over a 12-month service period beginning on July 1 of each year and
stock options are fully vested on the date of grant, have a ten-year term and have an exercise
price equal to the closing market price of a share of the Class A Stock on the date of grant. The
number of stock options and restricted stock granted is determined by the Company based on
assumptions and formulas typically used to value these types of securities. In addition to
compensation paid to directors for their service on the Board generally, the Company also provides
compensation to directors for their service on the Board’s committees. Currently, this
compensation is comprised of the following. Each member of the Audit Committee, other than its
Chairman, receives an annual fee of $10,000 for his service on that committee. The Chairman of the
Audit Committee receives an annual fee of $15,000 for his service as Chairman. The Chairman of the
Compensation Committee and the Chairman of the Nominating and Corporate Governance Committee each
receive an annual fee of $3,500 for their service as Chairmen. Other than the Chairmen, members of
the Compensation Committee and the Nominating and Corporate Governance Committee do not receive
additional compensation for their service on those committees. Each non-management director who
serves on the Investment Committee receives an annual fee of $15,000. Directors who are also
officers of the Company do not receive additional compensation for their service as directors or
for attendance at Board or committee meetings.
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Director Compensation — 2008
The following table sets forth certain information regarding the compensation paid to the Company’s
non-employee directors for their service during the fiscal year ended December 31, 2008.
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Compensation Committee Interlocks and Insider Participation
The Board of Directors has designated Alan Levy, S. Lawrence Kahn, III and William R. Nicholson,
none of whom are employees of the Company or any of its subsidiaries, to serve on the Compensation
Committee. Alan B. Levan and John E. Abdo, the Company’s Chairman and Vice Chairman, respectively,
are also executive officers of BFC. In addition, Messrs. Levan and Abdo are executive officers of
BankAtlantic Bancorp and Chairman and Vice Chairman, respectively, of the Board of Directors of
Bluegreen, each of which is an affiliate of the Company. During 2008, in addition to the
compensation paid to them by the Company, each of Messrs. Levan and Abdo received compensation from
BFC and from BankAtlantic Bancorp, and each was granted stock options by Bluegreen.
Principal Shareholders of the Company
The following table sets forth, as of April 21, 2009, certain information as to the Company’s Class
A Stock and Class B Stock beneficially owned by persons owning in excess of 5% of the outstanding
shares of such stock. Management knows of no person, except as listed below, who beneficially owned
more than 5% of the outstanding Class A Stock or Class B Stock as of April 21, 2009. Except as
otherwise indicated, the information provided in the following table was obtained from filings with
the SEC and with the Company pursuant to the Exchange Act. Addresses provided are those listed in
the filings as the address of the person authorized to receive notices and communications. For
purposes of the table below and the table set forth under “Security Ownership of Management,” in
accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner of
any shares of Class A Stock or Class B Stock (1) over which he, she or it has or shares, directly
or indirectly, voting or investment power, or (2) of which he, she or it has the right to acquire
beneficial ownership at any time within 60 days after April 21, 2009. As used herein, “voting
power” is the power to vote, or direct the voting of, shares and “investment power” includes the
power to dispose, or direct the disposition of, such shares. Unless otherwise noted, each
beneficial owner has sole voting and sole investment power over the shares beneficially owned.
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Security Ownership of Management
Listed in the table below are the outstanding shares of Class A Stock and Class B Stock
beneficially owned as of April 21, 2009 by (i) each Named Executive Officer, (ii) each of the
Company’s directors as of such date and (iii) the Company’s directors and executive officers as of
such date as a group. Unless otherwise noted, the address of all parties listed below is 2100 West
Cypress Creek Road, Fort Lauderdale, Florida 33309.
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Equity Compensation Plan Information
Information with respect to the Company’s equity compensation plans is set forth under Item 12 of
Part III of the Original Form 10-K.
Review, Approval or Ratification of Transactions with Related Persons
The Company has a policy for the review and approval of transactions in which the Company was or is
to be a participant, the amount involved exceeded or will exceed $120,000 annually and any of the
Company’s directors or executive officers, or their immediate family members, had or will have a
direct or indirect material interest. Until February 2008, this policy provided for the Board of
Directors or a designated committee thereof to review and, if deemed desirable, approve all such
related person transactions. In reviewing related person transactions, the Board of Directors or
the designated committee analyzed, among other factors it deemed appropriate, whether such related
person transaction was or is to be for the benefit of the Company and upon terms no less favorable
to the Company than if the related person transaction was with an unrelated party.
During February 2008, the Board of Directors delegated to the Nominating and Corporate Governance
Committee the review and approval of related person transactions relating to directors, executive
officers and their immediate family, other than related person transactions presenting issues
regarding accounting, internal accounting controls or audit matters, the review and approval of
which was delegated by the Board of Directors to the Audit Committee. In reviewing related person
transactions, the Nominating and Corporate Governance Committee or the Audit Committee, as the case
may be, evaluates the related party transaction based on, among other factors it deems appropriate,
those factors described in the preceding paragraph.
During 2008, no related person transaction occurred where these policies were not followed.
Transactions with Related Persons
The Company and BankAtlantic Bancorp are under common control. The controlling shareholder of the
Company and BankAtlantic Bancorp is BFC. BankAtlantic Bancorp is the parent company of
BankAtlantic. Shares representing a majority of BFC’s total voting power is owned or controlled by
the Company’s Chairman and Chief Executive Officer, Alan B. Levan, and by the Company’s Vice
Chairman, John E. Abdo, both of whom are also directors of the Company and executive officers and directors of each of BFC, BankAtlantic Bancorp
and
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BankAtlantic. Messrs. Levan and Abdo are also the Chairman and Vice Chairman, respectively, of
Bluegreen, a publicly-held company in which the Company has a significant investment.
The Company, BFC, BankAtlantic Bancorp and Bluegreen are parties to a shared services arrangement,
pursuant to which BFC Shared Services Corporation, a subsidiary of BFC provides the Company,
BankAtlantic Bancorp and Bluegreen with various executive and administrative services, including
human resources, risk management and investor and public relations services. The total amount paid
for these services by the Company in 2008 was $1.1 million.
Effective May 2008, the Company entered into a sublease agreement with BFC pursuant to which BFC
leases to the Company space located at the BankAtlantic corporate office at an initial annual rate
of approximately $152,000, subject to annual 3% increases. During 2008, the Company paid BFC
approximately $101,000 under this sublease agreement.
Effective March 2008, the Company entered into an agreement with BankAtlantic pursuant to which
BankAtlantic agreed to host the Company’s information technology servers and to provide hosting and
certain other information technology services to the Company. In accordance with this agreement,
the Company paid BankAtlantic a one-time set-up charge of approximately $17,000 during 2008. This
agreement also provides for the Company to pay BankAtlantic monthly hosting fees of $10,000.
During 2008, the Company paid BankAtlantic monthly hosting fees of approximately $73,000 as well as
fees of approximately $23,000 for other information technology services provided to the Company by
BankAtlantic. Effective April 1, 2009, the monthly hosting fees increased to $15,000.
Certain of the Company’s executive officers separately receive compensation from affiliates of the
Company for services rendered to those affiliates. Members of the Board of Directors and executive
officers of the Company also have banking relationships with BankAtlantic in the ordinary course of
BankAtlantic’s business.
The Company maintains securities sold under repurchase agreements at BankAtlantic. At December 31,
2008, $4.4 million of cash and cash equivalents were held on deposit by BankAtlantic in the
Company’s accounts. Interest on deposits held at BankAtlantic for the year ended December 31, 2008
was approximately $72,000. Additionally, at December 31, 2008, BankAtlantic facilitated the
placement of $49.9 million of certificates of deposits insured by the Federal Deposit Insurance
Corporation (the “FDIC”) with other insured depository institutions on the Company’s behalf through
the Certificate of Deposit Account Registry Service (“CDARS”) program. The CDARS program
facilitates the placement of funds into certificates of deposits issued by other financial
institutions in increments of less than the standard FDIC insurance maximum to insure that both
principal and interest are eligible for full FDIC insurance coverage.
Director Independence
The Board of Directors has affirmatively determined that the following five directors, James
Blosser, S. Lawrence Kahn, III, Alan Levy, Joel Levy, and William Nicholson, who together comprise
a majority of the members of the Board of Directors, are “independent” as such term is defined in
the listing standards of the New York Stock Exchange (which listing standards the Board of
Directors adopted in making its independence determinations with respect to each of its members)
and applicable law relating to the independence of directors.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP,
the Company’s independent registered public accounting firm for fiscal 2008 and 2007 (“PwC”), for
the audit of the Company’s annual consolidated financial statements for fiscal 2008 and 2007 and
fees billed for audit-related services, tax services and all other services rendered by PwC for
fiscal 2008 and 2007.
Under its charter, the Audit Committee must review and pre-approve both audit and permitted
non-audit services provided by the independent registered public accounting firm and shall not
engage the independent registered public accounting firm to perform any non-audit services
prohibited by law or regulation. Additionally, the Audit Committee must determine whether the
independent registered public accounting firm’s provision of services other than audit services is
compatible with maintaining that firm’s independence. Each year, the independent registered public
accounting firm’s retention to audit the Company’s financial statements, including the associated
fee, is approved by the Audit Committee. Under its current practices, the Audit Committee does not
regularly evaluate potential engagements of the independent registered public accounting firm and
approve or reject such potential engagements. At each Audit Committee meeting, the Audit Committee
receives updates on the services actually provided by the independent registered public accounting
firm, and management may present additional services for pre-approval. The Audit Committee may
delegate to the Chairman of the Audit Committee the authority to evaluate and approve engagements
on behalf of the Audit Committee in the event that a need arises for pre-approval between regular
Audit Committee meetings. If the Chairman so approves any such engagements, he will report that
approval to the full Audit Committee at the next Audit Committee meeting.
The Audit Committee has determined that the provision of the services described above are
compatible with maintaining the independent registered public accounting firm’s independence.
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PART IV
The following exhibits are filed as a part of this Amendment No. 1 to Annual Report on
Form 10-K/A:
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
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EXHIBIT INDEX
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