On February 28, and March 1, 2007, two identical complaints were filed in the 17
th
Judicial Circuit in and for Broward County, Florida against the Company, Levitt Corporation
(“Levitt”) and the members of Levitt’s Board of Directors in (i)
Samuel Flamholz, on behalf of
himself and all others similarly situated, v. James Blosser, Darwin Dornbush, Alan B. Levan,
William Scherer, S. Lawrence Kahn, III, Joel Levy, John E. Abdo, William Nicholson, Alan J. Levy,
Levitt Corporation, and BFC Financial Corp.
and (ii)
Elaine Mount, on behalf of herself and all
others similarly situated, v. James Blosser, Darwin Dornbush, Alan B. Levan, William Scherer, S.
Lawrence Kahn, III, Joel Levy, John E. Abdo, William Nicholson, Alan J. Levy, Levitt Corporation,
and BFC Financial Corp.
, respectively. Each complaint relates to the previously reported
definitive merger agreement entered into by the Company and Levitt, pursuant to which Levitt would,
if the merger is consummated, become a wholly-owned subsidiary of the Company. The complaints
allege that the members of Levitt’s Board of Directors breached their fiduciary duty to Levitt’s
minority shareholders by approving the merger agreement with the Company. The plaintiffs apparently are incorrectly suggesting
that the Company controls the outcome of the vote of Levitt’s shareholders with respect to the
merger agreement. However, the merger will be consummated only if, as required by Florida law, it
is approved by the holders of a majority of the outstanding shares of Levitt’s Class A Common Stock
(of which the Company holds only approximately 11%) and, as required by the terms of the merger
agreement, it is approved by the holders of a majority of Levitt’s Class A Common Stock voted at
the meeting without counting the shares of Levitt’s Class A Common Stock voted by the Company. In
both complaints, the plaintiffs seek to enjoin the merger or, if it
is completed, to rescind it. The Company believes the lawsuits are without merit.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors and Executive Officers
The following table sets forth information with respect to directors and executive officers of the
Company as of April 18, 2007.
Name
Age
Position
Alan B. Levan
62
Chairman of the Board, Chief Executive Officer, President and Director
John E. Abdo
63
Vice Chairman of the Board and Director
Phil Bakes
61
Managing Director and Executive Vice President
George P. Scanlon
49
Executive Vice President and Chief Financial Officer
Maria R. Scheker
49
Chief Accounting Officer
D. Keith Cobb
66
Director
Oscar Holzmann
64
Director
Earl Pertnoy
80
Director
Neil Sterling
55
Director
Set forth below are the names, positions held and business experience, including during the past
five years, of the Company’s directors and executive officers as of April 18, 2007. 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 formed the I.R.E. Group (predecessor to the Company) in 1972. Since 1978, he has been
the Chairman of the Board, President and Chief Executive Officer of the Company or its
predecessors. He has been Chairman of the Board and Chief Executive Officer of BankAtlantic
Bancorp, Inc. (“BankAtlantic Bancorp”) since 1994 and Chairman of the Board of BankAtlantic since
1987. He has been Chairman of the Board and Chief Executive Officer of Levitt since 1985 and
Chairman of Bluegreen Corporation (“Bluegreen”) since 2002.
2
John E. 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 the Company since 1988 and
Vice Chairman of the Board of the Company since 1993. He has been a director and Vice Chairman of
the Board of BankAtlantic Bancorp since 1994 and Vice Chairman of the Board of Levitt since April
2001. He has been President and Chief Executive Officer of Abdo Companies, Inc., a real estate
development, construction and real estate brokerage firm, for more than five years. He is also a
director of Benihana, Inc. (“Benihana”) and has been a director and Vice Chairman of Bluegreen
since 2002.
Phil Bakes joined the Company as an Executive Vice President in January 2004 and was named Managing
Director in October 2004. Immediately before joining the Company, he served from 1991-2003 as
President and co-founder of a Miami and New York-based merchant banking and advisory firm, as well
as Chairman & CEO and co-founder from 1999-2003 of an international leisure travel company, which
in September 2003 liquidated under Chapter 11 of the U.S. Bankruptcy Act. From 1980-1990, Mr. Bakes
was a senior airline industry executive, including serving as President and CEO of Continental and
Eastern Airlines. Mr. Bakes began his professional career in Washington, D.C. serving as an
assistant Watergate prosecutor, counsel to the Senate Antitrust Subcommittee and general counsel of
a federal agency. Mr. Bakes holds a Juris Doctor degree from Harvard Law School and BA degree from
Loyola University (Chicago).
George P. Scanlon joined the Company as Executive Vice President and Chief Financial Officer in
April 2007. Mr. Scanlon has served as Executive Vice President and Chief Financial Officer of
Levitt since August 2004 and now serves as Executive Vice President and Chief Financial Officer of
each of the Company and Levitt. Prior to joining Levitt, Mr. Scanlon was the Chief Financial
Officer of Datacore Software Corporation from December 2001 to August 2004. Datacore is a
privately-owned independent software vendor specializing in storage control, storage management and
storage consolidation. Prior to joining Datacore, Mr. Scanlon was the Chief Financial Officer of
Seisint, Inc. from November 2000 to September 2001. Seisint was a privately-owned technology
company specializing in providing data search and processing products. Prior to joining Seisint,
Mr. Scanlon was employed at Ryder System, Inc. from August 1982 to June 2000, serving in a variety
of financial positions, including Senior Vice President — Planning and Controller. Ryder is a
publicly-traded Fortune 500 provider of transportation, logistics and supply chain management
services.
Maria R. Scheker was appointed Chief Accounting Officer of the Company in April 2007. Ms. Scheker
joined the Company in 1985 and has held various positions with the Company during this time,
including Assistant Controller from 1993 through 2003. Ms. Scheker was appointed Controller of the
Company in 2003 and Senior Vice President of the Company in March 2006. Ms. Scheker has been a
certified public accountant in the State of Florida since 2003.
D. Keith Cobb has served as a director of the Company since 2004. Mr. Cobb has served as a
business consultant and strategic advisor to a number of companies since 1996. In addition, Mr.
Cobb completed a six-year term on the Board of the Federal Reserve Bank of Miami in 2002. Mr. Cobb
spent thirty-two years as a practicing certified public accountant at KPMG LLP, and was Vice
Chairman and Chief Executive Officer of Alamo Rent A Car, Inc. from 1995 until its sale in 1996.
Mr. Cobb also serves on the boards of BankAtlantic Bancorp, Alliance Data Systems, Inc. and several
private companies.
Oscar Holzmann has served as a director of the Company since 2002. Mr. Holzmann has been an
Associate Professor of Accounting at the University of Miami since 1980. He received his Ph.D. in
Business Administration from Pennsylvania State University in 1974.
Earl Pertnoy has served as a director of the Company or its predecessors since 1978. Mr. Pertnoy
is a real estate investor and developer.
Neil Sterling has served as a director of the Company since 2003. Mr. Sterling has been the
principal of The Sterling Resources Group, a business development-consulting firm in Fort
Lauderdale, Florida, since 1998.
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, 2006, 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 its 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.bfcfinancial.com
. There were no such waivers from the Company’s Code of Business
Conduct and Ethics during 2006. The Company made ministerial amendments to its Code of Business
Conduct and Ethics on November 6, 2006. The amended Code of Business Conduct and Ethics has been
posted on the Company’s website.
Audit Committee Members and Financial Expert
The Audit Committee consists of Oscar Holzmann, Chairman, D. Keith Cobb, Earl Pertnoy and Neil
Sterling. The Board has determined that Mr. Holzmann and Mr. Cobb are both qualified as “audit
committee financial experts” as such term is defined in Item 407(d)(5) of Regulation S-K and that
each of Mr. Holzmann and Mr. Cobb is “independent” within the meaning of the listing standards of
the NYSE Arca and applicable rules and regulations of the Securities and Exchange Commission ( the
“SEC”) relating to directors serving on audit committees.
ITEM 11. EXECUTIVE COMPENSATION.
Compensation Discussion and Analysis
Overview of Compensation Program
The Compensation Committee (referred to within this section as 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 the Board.
Throughout this Annual Report on Form 10-K/A, the term “Named Executive Officers” is used to refer
collectively to the individuals included on the Summary Compensation Table on page 8.
Compensation Philosophy and Objectives
The Company’s compensation program for executive officers consists of a base salary, an annual cash
incentive and bonus program, periodic grants of restricted stock or stock options, 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
Next Section
Previous Section